Broadcast International Closes On $15 Million Offering To Expand Development Of Breakthrough Video Compression Technology

January 2, 2008

Broadcast International, Inc. today announced that it has closed and received the funding from the sale of approximately $15.0 million of its 6.25% senior secured convertible promissory notes, due December 21, 2010. The notes are convertible into shares of Broadcast common stock at an initial conversion price of $5.45 per share. Additional terms and conditions of the transaction were previously announced. As part of this offering, Broadcast also issued to the purchasers of the notes an aggregate of 1,000,000 shares of its common stock and warrants to purchase up to 1,875,000 shares of Broadcast common stock at a price of $5.00 per share. The funding will be used to finalize development of the CodecSys technology on IBM's Cell Broadband Engine(TM) (Cell/B.E.) multi-core processor and the IBM BladeCenter(R) QS21 server and to fund the market launch of the combined IBM/BI encoder beginning the first quarter of 2008. In addition, Broadcast will use these resources to fund other CodecSys development projects, as well as further develop and market key strategic corporate initiatives. "This round of funding is the latest in a series of significant company milestone this year, which include our license agreement with IBM and receiving the U.S. Patent for CodecSys," said Rod Tiede, President and CEO of Broadcast International. "We are confident that 2008 will bring major new customers for the IBM video encoder, featuring our CodecSys compression engine, as well as additional CodecSys licensing agreements and positive results from other promising corporate developments." About Broadcast International Broadcast International is a leading provider of video-powered broadcast solutions, including IP, and digital satellite, Internet streaming and other types of wired/wireless network distribution. BI's patented CodecSys software is a breakthrough, artificial intelligence-based video compression technology that cuts video bandwidth requirements more than 80% over satellite, cable, IP and wireless networks. By slashing bandwidth needs, CodecSys enables a new generation of applications such as streaming video to cell phones, and offers unprecedented price/ performance benefits for existing applications such as HD video. Broadcast International is a public company (OTCBB: BCST) headquartered in Salt Lake City, UT. For more information go to http://www.brin.com and http://www.codecsys.com.

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