UNITED STATES
                SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C. 20549

                           FORM 10-QSB

[X]    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
       Exchange Act of 1934.

          For the Quarterly Period ended March 31, 2005

[ ]    Transition Report Pursuant to Section 13 or 15(d) of the Securities
       Exchange Act of 1934.

       For the transitional period ________ to __________.

                 Commission File Number: 0-13316

                  BROADCAST INTERNATIONAL, INC.
                  -----------------------------
(Exact name of small business issuer as specified in its charter)

          Utah                               87-0395567
          ----                               ----------
(State of Incorporation)            (IRS Employer Identification No.)

      7050 Union Park Ave. #600, Salt Lake City, Utah  84047
      ------------------------------------------------------
       (Address of Principal Executive Offices) (Zip Code)

                          (801) 562-2252
                          -------------
         (Issuer's telephone number, including area code)

      Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. ( x ) Yes  (  ) No

      State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date.

          Class                        Outstanding as of April 26, 2005
          -----                        --------------------------------
       Common Stock                          20,672,852 shares

Transitional Small Business Disclosure Format: Yes [  ] No [ X ]


<PAGE>


                  Broadcast International, Inc.
      Form 10-QSB for the three months ended March 31, 2005


                        Table of Contents




Part I - Financial Information                                            Page
                                                                          ----

     Item 1.  Financial Statements                                         3

     Item 2.  Management's Discussion and Analysis or Plan of Operation    10

     Item 3.  Controls and Procedures                                      13

Part II - Other Information

     Item 1.  Legal Proceedings                                            15

     Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds  15

     Item 3.  Defaults Upon Senior Securities                              15

     Item 4.  Submission of Matters to a Vote of Security Holders          15

     Item 5.  Other Information                                            15

     Item 6.  Exhibits                                                     15

Signatures                                                                 17


                                2

<PAGE>



Item 1. Financial Information

          BROADCAST INTERNATIONAL, INC. AND SUBSIDIARIES
               CONSOLIDATED CONDENSED BALANCE SHEET
                           (Unaudited)

                                                                   March 31,
ASSETS                                                              2005
------                                                           -------------
Current assets
  Cash and cash equivalents                                      $    277,581
  Trade receivable (net)                                              283,992
  Inventory                                                            22,499
  Prepaid expenses                                                    190,364
                                                                 -------------
  Total current assets                                                774,436
                                                                 -------------
Non-current assets
  Equipment and leasehold improvements, net                           681,717
  Patents                                                             185,279
  Other assets                                                          7,824
                                                                 -------------
Total assets                                                     $  1,649,256
                                                                 =============
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
Current liabilities
  Accounts payable                                               $    115,221
  Accrued Payroll & related expenses                                  233,695
  Other accrued liabilities                                            57,120
  Unearned revenue                                                    204,089
  Current portion of long-term obligations                             70,187
                                                                  ------------
  Total current liabilities                                           680,312
                                                                  ------------
Long-term debt
  Long-term obligations                                               802,924
  Deferred bonus                                                      600,000
                                                                  ------------
Total liabilities                                                   2,083,236
                                                                  ------------

Commitments and contingencies                                               -

Stockholders' deficit
  Preferred stock, no par value, 10,000,000 shares
    authorized; no shares issued                                            -
  Common stock, $.05 par value, 40,000,000 shares
    authorized; 20,672,852 shares issued and outstanding            1,033,643
  Additional paid-in capital                                       19,832,847
  Accumulated deficit                                             (21,300,470)
                                                                  ------------

Total stockholders' deficit                                          (433,980)
                                                                  ------------

Total liabilities and stockholders' deficit                       $ 1,649,256
                                                                  ============



See accompanying notes to consolidated condensed financial statements

                                3

<PAGE>


          BROADCAST INTERNATIONAL, INC. AND SUBSIDIARIES
         CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                           (Unaudited)

                                                      Three Months Ended
                                                  -------------------------
                                                     March 31,    March 31,
                                                       2005         2004
                                                  ------------- ------------
REVENUES:
  Net sales                                       $    977,652  $ 1,375,856
  Interest and other income                              3,500        2,445
                                                  ------------- ------------
                                                       981,152    1,378,301
COSTS AND EXPENSES:

  Cost of sales                                      1,103,350    1,358,047
  Research and development in process                        -    1,175,432
  Administrative and general                           273,516      692,521
  Selling and marketing                                148,419      193,180
  Interest                                             249,914      349,649
                                                  ------------- ------------
                                                     1,525,285    3,768,829
                                                  ------------- ------------

LOSS FROM OPERATIONS BEFORE INCOME TAXES              (794,047)  (2,390,528)
Income tax benefit                                           -            -
                                                  ------------- ------------

NET LOSS                                          $   (794,047) $(2,390,528)
                                                  ============= ============
TOTAL NET LOSS PER SHARE
  - Basic and diluted                             $       (.04) $      (.13)
                                                  ============= ============
WEIGHTED AVERAGE NUMBER OF SHARES
OF COMMON STOCK OUTSTANDING
  - Basic and diluted                               20,681,000   18,307,000
                                                  ============= ============


See accompanying notes to consolidated condensed financial statements

                                4
<PAGE>


          BROADCAST INTERNATIONAL, INC. AND SUBSIDIARIES
         CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                           (Unaudited)

                                                      Three Months Ended
                                                  --------------------------
                                                     March 31,    March 31,
                                                       2005         2004
                                                  ------------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES

  Net loss                                        $   (794,047) $(2,390,528)
  Adjustments to reconcile net loss to net cash
   used in operating activities:
    Depreciation and amortization                       91,287       99,085
    Beneficial conversion                              249,914      349,580
    Common stock issued for services                         -      795,000
    Options issued for services                              -      800,432
    Provision for losses on accounts receivable          5,000        6,500
    (Increase) decrease in:
       Receivables                                     190,340     (259,942)
       Inventories                                      (2,434)      19,286
       Other assets                                      2,567      (10,036)
    Increase (decrease) in:
       Accounts payable and accrued expenses            19,488      258,586
       Unearned revenue                                   (989)      24,580
                                                  ------------- ------------
       Net cash used in operating activities            (238,874)    (307,457)

CASH FLOWS FROM INVESTING ACTIVITIES:

  Purchase of equipment                                 (8,233)     (18,337)
  Technology patents                                    (6,195)    (124,324)
  Related party note receivable                              -     (112,800)
                                                  ------------- ------------
       Net cash used in investing activities           (14,428)    (255,461)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Principal payments on debt                           (17,547)      (2,872)
  Proceeds from the sale of stock                      124,980      375,000
  Loan proceeds                                        249,914      349,580
                                                  ------------- ------------
       Net cash provided by financing activities       357,347      721,708
                                                  ------------- ------------

NET INCREASE IN CASH AND CASH EQUIVALENTS              104,045      158,790

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD         173,536      314,667
                                                  ------------- ------------

CASH AND CASH EQUIVALENTS, END OF PERIOD          $    277,581  $   473,457
                                                  ============= ============





See accompanying notes to consolidated condensed financial statements

                                5

<PAGE>

          BROADCAST INTERNATIONAL, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)
                          March 31, 2005


NOTE A - BASIS OF PRESENTATION

         The accompanying unaudited consolidated condensed financial
statements have been prepared in accordance with U.S. generally accepted
accounting principles for interim financial information and the instructions
to Form 10-QSB and Item 310 of Regulation S-B.  Accordingly, they do not
include all of the information and footnote disclosures required by accounting
principles generally accepted in the United States of America.  In the opinion
of management, all adjustments (consisting only of normal recurring
adjustments) considered necessary, in order to make the financial statements
not misleading have been included.  Operating results for the three months
ended March 31, 2005 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2005.  For further information,
refer to the consolidated financial statements and footnotes thereto for the
year ended December 31, 2004 included in the Company's Annual Report on Form
10-KSB (file number 000-13316).


NOTE B - GOING CONCERN

         The accompanying financial statements have been prepared under the
assumption that the Company will continue as a going concern.  Such assumption
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. The financial statements do not include any
adjustments that might be necessary should the Company be unable to continue
as a going concern.

         The Company's continuation as a going concern is dependent upon its
ability to generate sufficient cash flow to meet its obligations on a timely
basis, to obtain additional financing as may be required, and ultimately to
attain profitability.  Potential sources of cash include external debt and the
sale of new shares of company stock or alternative methods such as mergers or
sale transactions.  No assurances can be given, however, that the Company will
be able to obtain any of these potential sources of cash.


NOTE C - RECLASSIFICATIONS

         Certain 2004 financial statement amounts have been reclassified to
conform to 2005 presentations.


NOTE D - WEIGHTED AVERAGE SHARES

         The computation of basic earnings (loss) per common share is based on
the weighted average number of shares outstanding during each period.

         The computation of diluted earnings per common share is based on the
weighted average number of common shares outstanding during the period, plus
the common stock equivalents that would arise from the exercise of stock
options and warrants outstanding, using the treasury stock method and the
average market price per share during the period.  Options to purchase
6,457,317 and 4,330,903 shares of common stock at prices ranging from $.02 to


                                6

<PAGE>

$60.63 per share were outstanding at March 31, 2005 and 2004, respectively,
but were excluded for the calculation of diluted earnings per share because
the effect of stock options was anti-dilutive.


NOTE E - STOCK COMPENSATION

         The Company accounts for stock-based compensation under the
recognition and measurement principles of APB Opinion No. 25, Accounting for
Stock Issued to Employees, and related interpretations.  No common stock was
issued for compensation during the quarter ended March 31, 2005, however
during the quarter ended March 31, 2004, 5,000 shares of common stock were
issued to an individual of the management of the Company. The amount of
expense recognized on the 2004 income statement was $20,000, which is included
in the $795,000 of common stock issued for services. No options to purchase
shares of the Company's common stock were granted during the quarter ended
March 31, 2005, however, options to purchase 258,000 shares of the Company's
common stock were granted to employees and management for the quarter ended
March 31, 2004. All options granted had an exercise price equal to or greater
than the market value of the underlying common stock on the date of grant. The
options vested during the three months ended March 31, 2004 would have the
following effect on net income and earnings per share if the Company had
applied the fair value recognition provisions of FASB Statement No. 123,
Accounting for Stock-Based Compensation:


                                                  Three Months Ended March 31,
                                                       2005          2004
                                                 -------------- -------------
    Net loss, as reported                        $    (794,047) $ (2,390,528)
    Addback:
      Stock-based employee compensation expense
      determined under intrinsic value based method
      for all awards, net of related tax effects             -             -
    Deduct:
      Total stock- based employee compensation
      expense determined under fair value based
      method for all awards, net of related
      tax effects                                     (124,767)     (117,206)
                                                 -------------- -------------
    Pro forma net loss                           $    (918,814) $(2,5607,734)
                                                 ============== =============
    (Loss) earnings per share:
      Basic and diluted - as reported            $        (.04) $       (.13)
                                                 ============== =============
      Basic and diluted - pro forma              $        (.05) $       (.14)
                                                 ============== =============

         The weighted average fair value of options granted during the three
months ended March 31, 2004 was $2.32 per share. The fair value for the
options granted in 2004 were estimated at the date of grant using a Black
Scholes option pricing model with the following weighted average assumptions:

     Risk free interest rate      3.67%
     Expected life (in years)     8
     Expected volatility          48.74%
     Expected dividend yield      0.00%


                                7

<PAGE>

NOTE F - SIGNIFICANT ACCOUNTING POLICIES

Patents
         Patents represent legal costs incurred to apply for US and
international patents on the CodecSys technology, and are amortized on a
straight-line basis over their useful life of approximately 15 years.

         Amortization expense recognized on all patents totaled $0 for the
quarter ended March 31, 2005.

         Estimated amortization expense on patents for each of the next five
years is as follows:

         Year ending December 31:
               2005                              $    5,965
               2006                                  11,930
               2007                                  11,930
               2008                                  11,930
               2009                                  11,930

Long-Lived Assets

         We review our long-lived assets, including patents, whenever events
or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable.  Recoverability of assets held and used is measured by a
comparison of the carrying amount of an asset to future un-discounted net cash
flows expected to be generated by the asset.  If such assets are considered to
be impaired, then the impairment to be recognized is measured by the amount by
which the carrying amount of the assets exceeds the estimated fair value of
the assets.  Fair value is determined by using cash flow analyses and other
market valuations.

NOTE G - SUPPLEMENTAL CASH FLOW INFORMATION

         For the quarter ended March 31, 2004, a non-cash expense of $795,000
was recorded of which $420,000 recorded in administrative and general expense
was for services rendered by consultants paid by the issuance of 105,000
shares of common stock, and $375,000 recorded in research and development in
process expense by the issuance of 187,500 shares of common stock sold below
fair market value to Streamware Solutions AB, a Swedish Corporation, pursuant
to a Stock Purchase and Option Grant Agreement dated February 6, 2004.
Additionally, the agreement granted Streamware options to purchase 1,312,500
shares of common stock of the Company at an exercise price of $4.50 per share,
expiring February 6, 2006 and were immediately exercisable, resulting in an
$800,432 non-cash expense recorded in research and development in process
expense.

         On December 23, 2003, the Company entered into a convertible line of
credit for up to $1,000,000 with Meridel LTD and Pascoe Holdings LTD, both
foreign corporations. The Company may obtain advances as needed to fund
operating expenses. On June 30, 2004, the line of credit was amended to
increase the limit from $1,000,000 to $2,000,000 with the original due date of
the line of credit extended from March 31, 2005 to April 1, 2006. Any

                                8
<PAGE>

portion of the note under the line of credit is convertible at the lenders
sole discretion, for common shares of the Company at the rate of $1.00 per
share. During the quarters ending March 31, 2005 and 2004, the Company
borrowed $249,914 and $349,580, respectively. The balance of the note at March
31, 2005 was $645,004.

         The note bears an annual interest rate of 6%. Accrued interest,
however, is forgiven upon conversion pursuant to the terms of the line of
credit. The Company believes the entire amount of the note will be converted,
whereby it has recorded only the immediately exercisable beneficial conversion
feature of the note into interest expense. During the quarters ended March 31,
2005 and 2004, the Company recorded $249,914 and $349,580, respectively, as
there is an immediately convertible beneficial conversion feature associated
with the advances made under the line of credit. These amounts are included in
interest expense.

         The Company paid no cash for income taxes or interest expense during
the quarters ended March 31, 2005 and 2004.

NOTE H - RECENT ACCOUNTING PRONOUNCEMENTS

         In December 2003, the FASB issued Interpretation No. 46 ("FIN 46R")
(revised December 2003), Consolidation of Variable Interest Entities, an
Interpretation of Accounting Research Bulletin No. 51 ("ARB 51"), which
addresses how a business enterprise should evaluate whether it has a
controlling interest in an entity though means other than voting rights and
accordingly should consolidate the entity. FIN 46R replaces FASB
Interpretation No. 46 ("FIN 46"), which was issued in January 2003. Before
concluding that it is appropriate to apply ARB 51 voting interest
consolidation model to an entity, an enterprise must first determine that the
entity is not a variable interest entity. As of the effective date of FIN 46R,
an enterprise must evaluate its involvement with all entities or legal
structures created before February 1, 2003, to determine whether consolidation
requirements of FIN 46R apply to those entities. There is no grandfathering of
existing entities. Public companies must apply either FIN 46 or FIN 46R
immediately to entities created after January 31, 2003 and no later than the
end of the first reporting period that ends after March 15, 2004. The adoption
of FIN 46 had no effect on the Company's consolidated financial position,
results of operations or cash flows.

         In December 2003, the Securities and Exchange Commission ("SEC")
issued Staff Accounting Bulletin ("SAB") No. 104, Revenue Recognition. SAB 104
revises or rescinds portions of the interpretive guidance included in Topic 13
of the codification of staff accounting bulletins in order to make this
interpretive guidance consistent with current authoritative accounting and
auditing guidance and SEC rules and regulations. The adoption of SAB 104 did
not have a material effect on the Company's results of operations or financial
condition

         In December 2004, the FASB issued SFAS No. 153, Exchanges of
Nonmonetary Assets, which amends Accounting Principles Board (APB) Opinion No.
29, Accounting for Nonmonetary Transactions.  The guidance in APB Opinion 29
is based on the principle that exchanges of nonmonetary assets should be
measured based on the fair value of the assets exchanged.  The guidance in APB
Opinion 29, however, included certain exceptions to that principle.  SFAS 153
amends APB Opinion 29 to eliminate the exception for nonmonetary exchanges of
similar productive assets and replaces it with a general


                                9
<PAGE>


exception for exchanges of nonmonetary assets that do not have commercial
substance.  A nonmonetary exchange has commercial substance if the future cash
flows of the entity are expected to change significantly as a result of the
exchange.  SFAS 153 is effective for fiscal periods beginning after June 15,
2005.  We do not expect that the adoption of SFAS 153 will have a material
impact on our financial position or results of operations.

         In December 2004, the FASB issued SFAS No. 123R, Share Based Payment,
which requires companies to measure and recognize compensation expense for all
stock based payments at fair value.  SFAS 123R is effective for small business
insurers for interim periods or the fiscal year beginning after December 15,
2005 and, thus, will be effective for us beginning with the first quarter of
2006.  Early adoption is encouraged and retroactive application of the
provisions of SFAS 123R to the beginning of the fiscal year that includes the
effective date is permitted, but not required.  We are currently evaluating
the impact of SFAS 123R and expect the adoption to have a material impact on
our financial position and results of operations. See Stock Compensation in
Note 2 of our Notes to Consolidated Financial Statements for more information
related to the pro forma effects on our reported net income and net income per
share of applying the fair value recognition provisions of the previous SFAS
123, Accounting for Stock Based Compensation, to stock based employee
compensation.


Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Forward-Looking Information

      This quarterly report on Form 10-QSB includes "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934.  These forward-looking
statements may relate to such matters as anticipated financial performance,
future revenues or earnings, business prospects, projected ventures, new
products and services, anticipated market performance and similar matters.
When used in this report, the words "may," "will," "expect," "anticipate,"
"continue," "estimate," "project," "intend," and similar expressions are
intended to identify forward-looking statements regarding events, conditions,
and trends that may affect the Company's future plans of operations, business
strategy, operating results, and financial position.  The Private Securities
Litigation Reform Act of 1995 provides a safe harbor for forward-looking
statements.  To comply with the terms of the safe harbor, we caution readers
that a variety of factors, including various risks and uncertainties, could
cause our actual results to differ materially from the anticipated results or
other matters expressed in forward-looking statements.  These risks and
uncertainties, many of which are beyond our control, include (i) the
sufficiency of existing capital resources and the Company's ability to raise
additional capital to fund cash requirements for future operations; (ii)
uncertainties involved in the rate of growth of the Company's business and
acceptance of the Company's products and services, including the CodecSys
technology; (iii) the ability of the Company to achieve and maintain a
sufficient customer base to generate revenues sufficient to fund and maintain
operations; (iv) volatility of the stock market, particularly within the
technology sector;(v) general economic conditions; and (vi) other factors
identified in the heading "Risk Factors" beginning on page 7 of the Company's
annual report on Form 10-KSB for the year ended December 31, 2004. Although
the Company believes the expectations reflected in these forward-looking
statements are reasonable, such expectations may prove to be incorrect.
Accordingly, readers should not place undue reliance on such forward-looking
statements. The Company disclaims any obligation to update or revise any
forward-looking statements or any underling assumptions.

                                10
<PAGE>

Results of Operations for the Three Months ended March 31, 2005 and March 31,
2004

Revenues

      The Company generated $ 977,652 in revenue during the three months ended
March 31, 2005.  During the same three-month period in 2004, the Company
generated revenue of  $1,375,856.  The decrease in revenue of $398,204 was due
primarily to two factors. In the first quarter of 2004, the Company recognized
revenue related to the sale and installation of equipment for two customers
that was not duplicated in the quarter ended March 31, 2005. In addition, the
Company's production studio was engaged more fully in 2004 as compared to 2005
and as a result the revenues from studio production decreased.

      The Company's accounts receivable include three customers whose combined
balances represent approximately 52% and 26% of trade receivables as of March
31, 2005 and 2004, respectively, and whose related sales revenues account for
approximately 74% and 53% of total revenues for the quarters ended March 31,
2005 and 2004, respectively. Any material reduction in revenues generated from
any one of these customers could have a material adverse effect on the
Company's results of operations, financial condition and liquidity.

      A contract with one of the Company's largest customers expires on May
31, 2005. The contract contains a covenant not to compete, which would have
affected the Company's plans to perform certain services for new Company
customers. Therefore, the Company would not have been willing to extend the
contact under these same conditions. The Company anticipates to continue to
provide limited services to this customer; however, revenue generated from
this customer is expected to be significantly reduced beginning June 1, 2005.
Total revenue generated from this customer represented approximately $263,953
and $305,559 of the total revenue for the quarters ended March 31, 2005 and
2004, respectively.

Cost of Revenues

      Costs of Revenues decreased by approximately $255,000 to $1,103,350 for
the three months ended March 31, 2005, from $1,358,047 for the three months
ended March 31, 2004.  The decrease was due primarily to a decrease in sales
of equipment, which resulted in a decrease in the cost of equipment sold to
the Company's customers. There was not a decrease in the cost of equipment
relative to the sales price of the equipment. In addition the general
operations department costs decreased by approximately $88,000 due to the
decrease in installation of customer equipment. The other cost components were
relatively unchanged.

Expenses

      Administrative and general, selling and marketing, and research and
development in process expenses for the three months ended March 31, 2005 were
$421,935 compared with the same expenses for the three months ended March 31,
2004 of $2,061,133.  The decrease of approximately $1,639,198


                                11
<PAGE>

resulted largely from two non-cash items being included in operations for
2004; 1) $795,000 from the issuance of common stock for services rendered from
Streamware Solutions and outside consultants assisting the Company in
positioning the development and deployment of the Company's CodecSys
technology, and 2) $800,432 to record the value of options granted to
Streamware to purchase 1,312,500 shares of common stock of the Company at an
exercise price of $4.50 per share. There was also a decrease of approximately
$45,000 in sales and marketing expenses.

Interest Expense

      For the three months ended March 31, 2005, the Company incurred interest
expense of $249,914 compared to interest expense for the three months ended
March 31, 2004 of $349,649.  The full amount of the decrease resulted from the
Company recording less interest expense related to the convertible line of
credit's beneficial conversion feature than was recorded in the previous year
due to less borrowings being required by the Company.  The interest expense
related to the convertible line of credit is recorded because the conversion
price of $1.00 per share was less than the average trading price of the
Company's stock during the quarter and assuming that the note holder will
exercise its option to convert and satisfy the obligation through conversion.

Net Loss

      The Company realized a net loss for the three months ending March 31,
2005 of $794,047 compared with a net loss for the three months ended March 31,
2004 of $2,390,528. The decrease in the net loss of $1,596,481 is due
primarily to 1) a decrease of approximately $99,735 in interest expense as
described above, and 2) the issuance of company stock and options valued at
fair market value of approximately $1,595,432 in 2004,also described above.

Liquidity and Capital Resources


      At March 31, 2005, the Company had cash of approximately $277,581 and
total current assets of approximately $774,436 compared to total current
liabilities of approximately $680,312 and total stockholder's deficit of
approximately $433,980.

      For the three months ended March 31, 2005, the Company used
approximately $238,874 of cash for operating activities as compared to cash
used for operating activities for the quarter ended March 31, 2004 of
$307,457. The cash used for operations was provided in both quarters primarily
from proceeds from sales of Company common stock and from loan financing.

      The Company's Annual Report filed on Form 10-KSB for the year ended
December 31, 2004 contained a "going concern" qualification.  The Company has
incurred losses and has not demonstrated the ability to generate sufficient
cash flows from operations to satisfy its liabilities and sustain operations.
These factors raise substantial doubt about the Company's ability to continue
as a going concern.

      The Company will continue to have the need for infusions of capital over
an undetermined period of time.  Based on the cash flow statement, the Company
experienced negative cash flow of approximately $125,000 per month during the
year ended December 31, 2004 and approximately $80,000 per month during the
three months ended March 31, 2005, and its development plan calls for
additional expenditures of approximately $100,000 per month to complete

                                12

<PAGE>

the development initiatives identified at this time.  The Company believes it
is important to increase expenditures for development to take advantage of the
opportunities currently available and delay in implementing the increased
expenditures of the CodecSys technology could adversely affect the Company's
ability to bring products to market and take a meaningful market share. To
date, the Company has met its working capital needs through sale of common
stock under subscription agreements and through a convertible line of credit,
and anticipates that availability of such capital will continue over the next
year.  The Company is actively engaged in raising additional equity capital to
meets its development and operational needs.  The Company entered into a
senior secured convertible note as of May 12, 2005, which the Company feels
is a placement of sufficient size to satisfy estimated short term liquidity
needs.  Additional investor capital will result in future dilution to the
existing shareholders.   Future investment may depend, to some extent, on
results of operations, but there can be no assurance that the Company will be
able to attract new investors or that the current investors and lenders will
continue to fund operations.  In the event capital is not secured or if
additional loans are not secured, the Company would be in immediate need of
another source of capital.  There can be no assurance that, in such event, the
Company will be able to locate a source of capital, or on terms acceptable to
the Company or to reduce costs sufficient to maintain the operations of the
Company at its current level.


Off-Balance Sheet Arrangements

      The Company has no off-balance sheet arrangements.

Item 3.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

       We maintain disclosure controls and procedures as defined in Rule
13a-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act").  Our disclosure controls and procedures include controls and procedures
designed to ensure that information required to be disclosed in our reports
filed or submitted under the Exchange Act is accumulated and communicated to
our management, including our Chief Executive Officer and Chief Financial
Officer, as appropriate to allow timely decisions regarding required
disclosures.

       As required by Rule 13a-15(b) of the Exchange Act, we conducted an
evaluation, under the supervision of our Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures as of March 31, 2005.  Based on this
evaluation, our Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures were effective as of March 31,
2005 in ensuring that information required to be disclosed in our reports
filed or submitted under the Exchange Act is recorded, processed, summarized,
and reported within the time periods specified in the SEC's rules and forms.

       For the quarter ended March 31, 2005, management of the Company, under
the supervision and with the participation of our Chief Executive Officer and
Chief Financial Officer, implemented corrective action with respect to a
significant deficiency previously identified regarding new and recent
accounting pronouncements and required disclosures.  This action included
changes to the way we obtain and process required information pursuant to
which we have acquired and implemented a financial statement disclosure and


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procedure checklist that will be updated on a regular basis through review of
authoritative information sources and consultation with professional service
providers.

Changes in Internal Control Over Financial Reporting

      Except as noted above, there has been no change in our internal control
over financial reporting for the quarter ended March 31, 2005 that has
materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.

Important Considerations

      The effectiveness of our disclosure controls and procedures and our
internal control over financial reporting is subject to various inherent
limitations, including cost limitations, judgments used in decision making,
assumptions about the likelihood of future events, the soundness of our
systems, the possibility of human error, and the risk of fraud.  Moreover,
projections of any evaluation of effectiveness to future periods are subject
to the risk that controls may become inadequate because of changes in
conditions and the risk that the degree of compliance with policies or
procedures may deteriorate over time.  Because of these limitations, there can
be no assurance that any system of disclosure controls and procedures or
internal control over financial reporting will be successful in preventing all
errors or fraud or in making all material information known in a timely manner
to the appropriate levels of management.

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<PAGE>



                   Part II - Other Information

Item 1.   Legal Proceedings

      None.

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds

      During the quarter ended March 31, 2005, a total of 22,801 shares of
common stock were returned to the Company. These shares were not repurchased
by the Company, but resulted from the voluntary return by former debt holders
of Interact Devices, Inc. ("IDI") who were issued common shares on the Company
in connection with IDI's bankruptcy reorganization.

      In January 2005 the Company issued a total of 41,667 shares of common
stock of the Company to two corporations in exchange for $124,980, which
proceeds were used in the operations of the Company.

      In each of the forgoing transactions, the Company relied on the
exemption from registration under the 1933 Act set forth in Section 4(2)
thereof.

      The Company's working capital restrictions currently prevent it from
paying dividends. Moreover, management intends to retain any and all earnings
to finance the development of its business, at least in the foreseeable
future.


Item 3.   Defaults Upon Senior Securities

      None.

Item 4.   Submission of Matters to Vote of Security Holders.

      None.

Item 5.   Other Information

      None.

Item 6.   Exhibits

      Exhibit No.

      3.1  Articles of Incorporation, as amended, of the Company
           (Incorporated by reference to Exhibit No. 3.1 of the Company's
           Annual Report on Form 10-KSB for the year ended December 31, 2003
           filed with the SEC on March 30, 2004.)

      3.2  Bylaws of the Company

      4.1  Specimen Stock Certificate of common stock

                                15
<PAGE>

      10.1 Employment Agreement of Rodney M. Tiede dated April 28, 2004
           (Incorporated by reference to Exhibit No. 10.1 of the Company's
           Quarterly Report on Form 10-QSB for the quarter ended March 31,
           2004 filed with the SEC on May 12, 2004.)

      10.2 Employment Agreement of Randy Turner dated April 28, 2004
           (Incorporated by reference to Exhibit No. 10.2 of the Company's
           Quarterly Report on Form 10-QSB for the quarter ended March 31,
           2004 filed with the SEC on May 12, 2004.)

      10.3 Employment Agreement of Reed L. Benson dated April 28, 2004
           (Incorporated by reference to Exhibit No. 10.3 of the Company's
           Quarterly Report on Form 10-QSB for the quarter ended March 31,
           2004 filed with the SEC on May 12, 2004.)

      10.4 Stock Option Plan (Incorporated by reference to Exhibit No. 10.4 of
           the Company's Annual Report of Form 10-KSB for the year ended
           December 31, 2003 filed with the SEC on March 30, 2004.)

      31.1 Certification of Chief Executive Officer pursuant to Rule
           13a-14(a) of the Securities Exchange Act of 1934, as amended, as
           adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

      31.2 Certification of Chief Financial Officer pursuant to Rule 13a-14(a)
           of the Securities Exchange Act of 1934, as amended, as adopted
           pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

      32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C.
           Section 1350, as adopted pursuant to Section 906 of the
           Sarbanes-Oxley Act of 2002

      32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C.
           Section 1350, as adopted pursuant to Section 906 of the
           Sarbanes-Oxley Act of 2002



                                16

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                            SIGNATURES

       In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.


                               Broadcast International, Inc.


Date: May 16, 2005                  /s/  Rodney M. Tiede
                               By:  Rodney M. Tiede
                               Its: President and Chief Executive Officer
                                    (Principal Executive Officer)

Date: May 16, 2005                  /s/  Randy Turner
                               By:  Randy Turner
                               Its: Chief Financial Officer (Principal
                               Financial and Accounting Officer)



                                17

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