File #: 0-12600

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

for the Quarter ending December 31, 2004

NORSAT INTERNATIONAL INC.

(Registrant's Name)

300-4401 Still Creek Drive

Burnaby, BC  V5C 6G9

Canada

(Address of principal executive offices)

Indicate by check mark whether the Registrant files or will file annual reports under cover of Form 20-F or Form 40-F

Form 20-F

   X

Form 40-F

Indicate by check mark whether the Registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes

No

X

If 'Yes' is marked, indicate below the file number assigned to the Registrant in connection with Rule 12g3-2(b).

Not applicable

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Norsat International Inc.

(Registrant)

Date:

August 12, 2005

By: Signed "Constantine McQuade"

Constantine McQuade

Acting Chief Financial Officer and Controller, Norsat International

_____________________________________________________________

Financial Statements (Unaudited)

For the Quarter Ended June 30, 2005

August 12, 2005

Norsat International Inc.

Consolidated Balance Sheets

(Expressed in Canadian Dollars)

(Unaudited)

			June 30,	December 31,
			2005	2004
			(Unaudited)	(Audited)
Assets
Current assets:
	Cash and cash equivalents		$               2,340,267	$                4,978,210
	Short-term investments		37,000	72,000
	Accounts receivable		5,349,694	1,966,298
	Inventories		2,981,847	3,433,155
	Prepaid expenses and other		189,766	228,178
			10,898,574	10,677,841
Property and equipment			918,378	1,049,267
Goodwill			440,095	440,095
Other assets			25,157	31,727
			$            12,282,204	$             12,198,930
Liabilities and Shareholders' Equity
Current liabilities:
	Accounts payable		$                1,532,765	$                  729,661
	Accrued liabilities		1,420,606	1,780,970
	Current liabilities from discontinued operations		52,112	51,648
		Deferred revenue	342,721	73,271
			3,348,204	2,635,550
Long-term debt			1,669,457	1,467,594
Shareholders' equity:
	Share capital (note 2)		41,374,544	40,901,057
	Contributed surplus		1,860,995	1,220,009
	Equity component of long-term debt		1,909,127	1,909,127
	Deficit		(37,880,124)	(35,934,407)
			7,264,543	8,095,786
			$             12,282,204	$             12,198,930
See accompanying notes to consolidated financial statements.

Norsat International Inc.

Consolidated Statements of Operations and Deficit
(Expressed in Canadian Dollars)

(Unaudited)

Norsat International Inc.

Consolidated Statements of Cash Flows
(Expressed in Canadian Dollars)

(Unaudited)

			Three months ended June 30,			Six months ended June 30,
				2005	2004		2005	2004
Cash provided by (used in):
Operations:
	Loss from continuing operations			$         (758,077)	$         (354,991)		$      (1,945,205)	$         (343,419)
	Items not involving cash:
		Amortization		174,523	154,226		333,789	304,404
		Gain on disposal of property *  and equipment		-	(3,935)		-	(7,087)
		Interest accreted on long-term *  debt and deferred finance cost *  amortization		143,903	82,497		231,947	158,622
		Foreign exchange loss (gain)		(261)	(4,110)		(9,445)	10,115
		Stock-based compensation		568,074	45,610		604,305	80,139
	Changes in non-cash working *  capital (note 6)			(1,982,519)	(773,631)		(2,181,485)	(655,837)
	Cash used in continuing *  operations			(1,854,357)	(854,334)		(2,966,094)	(453,063)
	Recovery from discontinued*  operations			-	-		(512)	720,444
	Changes in non-cash working *  capital			137	(25,360)		464	(885,356)
				(1,854,220)	(879,694)		(2,966,142)	(617,975)
Investments:
	Net purchase of property and *  equipment			(71,074)	(52,898)		(204,425)	(52,430)
	Sale (purchase) of short-term *  investments			-	900,000		35,000	(800,000)
				(71,074)	847,102		(169,425)	(852,430)
Financing:
	Proceeds on exercise of warrants			473,488	77,000		473,488	518,101
				473,488	77,000		473,488	518,101
Effect of change in exchange *  rates on cash				7,120	25,910		24,136	67,405
Increase (decrease) in cash and *  cash equivalents				(1,444,686)	70,318		(2,637,943)	(884,899)
Cash and cash equivalents, *  beginning of period				3,784,953	1,625,924		4,978,210	2,581,141
Cash and cash equivalents, *  end of period				$        2,340,267	$        1,696,242		$        2,340,267	$       1,696,242
Supplemental cash flow and other disclosures (note 6).
See accompanying notes to consolidated financial statements.

Norsat International Inc.

Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)

(Unaudited)

1 Significant accounting policies:

(a)

Basis of presentation:

These financial statements have been prepared in accordance with Canadian generally accepted accounting principles ("GAAP") for interim financial reporting, and the accounting polices used, except as noted, are consistent with the most recent annual financial statements.  These financial statements do not contain all disclosures required by Canadian GAAP for annual financial statements, and accordingly, should be read together with the audited annual consolidated financial statements, accompanying notes and management discussion and analysis included in the Company's 2003 Annual Report.

(b)

Stock-based compensation:

The Company accounts for its stock-based compensation using the fair value method.  The Canadian Institute of Chartered Accountants (“CICA”) section 3870, “Stock-Based Compensation and Other Stock-Based Payments” permitted, and the Company has adopted the fair value method to be applied to all stock-based compensation awards for fiscal years beginning on or after January 1, 2003.  The Company’s cost with the fair value for the three and six months ended June 30, 2005 was $589,755 and  $625,986 respectively, and is included in selling, general and administrative expense.

If compensation cost for the Company's employee awards issued on or after January 1, 2002 had been determined based on the fair value method at the applicable grant dates, the Company’s pro forma net loss for the three months ended June 30, 2005 would have increased by $7,000 to $765,000 and the Company’s pro forma net loss for the six months ended June 30, 2005 would have increased by $17,000 to $1,962,717.  The Company’s basic and diluted net loss of $.02 and  $0.05 per common share would remain unchanged for the three and six months ended June 30, 2005, respectively.  The weighted average fair value of options granted during 2002 was $0.90.  The fair value of options was determined using the Black-Scholes valuation model assuming an average option life of three years, no dividends, expected average annual volatility of 77%, and risk-free interest rates of 3% except for those with no vesting period.

2 Share capital:

During the quarter zero warrants were exercised for proceeds of $ 0, and 581,250 options were exercised for proceeds of $473,487.50.  

3 Other expenses:

	Three months ended June 30,				Six months ended June 30,
		2005		2004		2005		2004
Net interest - cash		$             43,429		$           77,217		$            83,218		$          153,783
Interest - non-cash		96,570		82,497		184,614		158,622
Foreign currency loss (gain)		120,674		(9,150)		85,799		(57,056)
Gain on disposal of property *  and equipment				(3,935)				(7,087)
$		260,673	$	146,629	$	353,631	$	248,262

Norsat International Inc.

Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)

(Unaudited)

4 Earnings per share:

As the Company has a net loss from continuing operations in each of the periods presented, basic and diluted net loss per share are the same, as the exercise of in the money warrants or options would be anti-dilutive.  The weighted average number of shares used in calculating basic and diluted net loss per share for the three and six months ended June 30, 2005 were 42,051,832 (2003 – 39,879,755) and 42,633,082 (2003 – 39,797,438) respectively.

5 Segmented information:

The following tables set forth information by operating segments from continuing operations for the three and six months ended June 30, 2005 and 2004 respectively.

Three months ended June 30, 2005	Microwave	Satellite Systems	Consolidated
Sales	$        1,937,923	$       4,217,320	$       6,155,243
Gross profit	831,377	2,267,324	3,098,701
Three months ended June 30, 2004	Microwave	Satellite Systems	Consolidated
Sales	$        2,238,378	$       1,133,007	$        3,371,385
Gross profit (loss)	987,362	598,296	1,585,658
Six months ended June 30, 2005	Microwave	Satellite Systems	Consolidated
Sales	$       3,883,107	$        4,791,255	$       8,674,362
Gross profit	1,528,860	2,528,638	4,057,498
Total assets related to continuing operations	4,396,031	7,886,173	12,282,204
Property and equipment	105,607	812,771	918,378
Six months ended June 30, 2004	Microwave	Satellite Systems	Consolidated
Sales	$       4,892,828	$        2,836,068	$         7,728,896
Gross profit	2,183,807	1,451,600	3,635,407
Total assets related to continuing operations	4,820,500	6,642,248	11,462,748
Property and equipment	249,909	987,948	1,237,857

Norsat International Inc.

Notes to the Consolidated Financial Statements
(Expressed in Canadian dollars)

(Unaudited)

6 Supplemental cash flow and other disclosures:

	Three months ended June 30,			Six months ended June 30,
		2005	2004		2005	2004
Changes in non-cash operating *  working capital:
Accounts receivable		$      (3,479,350)	$            162,232		$      (3,383,395)	$         (124,044)
Inventories		961,698	(1,554,886)		451,308	(1,990,695)
Prepaid expenses and other		(32,066)	(121,743)		38,411	(211,142)
Accounts payable and accrued *  liabilities		292,077	740,766		442,741	1,670,044
Deferred revenue		275,122	3,479,350		269,451	-
		$      (1,982,519)	$        2,705,719		$      (2,181,484)	$         (655,837)
Supplementary information:
Interest paid		$                      -	-		96,936	$           104,800
Income taxes paid	$		$               2,349		$	$            43,734

7 Comparative figures:

Certain comparative figures have also been reclassified to conform with the financial statement presentation adopted in 2005.

Norsat International Inc.

Management Discussion and Analysis

_____________________________________________________________

Management Discussion and Analysis

For the Quarter Ended June 30, 2005

August 12, 2005

Norsat International Inc.

Management Discussion and Analysis

August 12, 2005

The following information should be read in conjunction with the Company's unaudited interim consolidated financial statements and related notes included therein for the three months endedJune 30 , 2005, and the audited consolidated financial statements, related notes included therein and Management Discussion and Analysis for the year ended December 31, 2004 included in the Company's 2004 Annual Report.  All of the Company's financial statements are prepared in accordance with generally accepted accounting principles in Canada (Canadian GAAP).  All amounts following are expressed in Canadian Dollars unless otherwise indicated. Additional information relating to the Company, including the Company's annual information form for the year ended December 31, 2004, may be found on the Company's web page at www.norsat.com and at www.sedar.com.

Forward Looking Statements

Statements in this report relating to matters that are not historical fact are forward-looking statements based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Factors that could cause or contribute to such differences include, but are not limited to, general economic conditions, changes in technology, reliance on third party manufacturing, managing rapid growth, global sales risks, limited intellectual property protection and other risks and uncertainties described in Norsat's public filings with securities regulatory authorities.  

Introduction

Over the past 26 years Norsat International Inc. has developed a reputation for technical excellence and innovative design. It has successfully positioned itself as a leader in providing high quality microwave product to the satellite industry with customers in 87 countries around the world. More recently the Company has expanded its expertise to include the development and production of complete satellite terminals, baseband software management systems and integration services which allow the Company to deliver higher quality value-added satellite systems. Since 2002 Norsat International Inc. has focused its marketing and development efforts on producing high-speed portable satellite terminals geared to meet customers' needs in several promising new areas.

Today the Company generates revenue from two business units: Microwave Products and Satellite Systems:

The Microwave business supplies satellite signal receivers, transmitters and other ground station products for the worldwide commercial market. Over the past several years, the Microwave business has been maturing. The Company is committed to maintaining its strong position in this market, while continuing to generate positive cash flow. The Company maintains its competitiveness by focusing on our customer needs, providing new strategic product offerings such as transmitters, solid-state power amplifiers and low noise blockers to satisfy the continued emergence of two-way networks around the world.

The Satellite Systems business designs, manufactures and markets the OmniLink family of products. The includes portable satellite terminal products that provide rapidly deployable broadband satellite data and video connectivity in areas where traditional communications infrastructure is insufficient, damaged or non-existent. In 2004 the Company has two core products available: a "video" version named the Norsat NewsLinkTM and the data version named the Norsat SecureLinkTM. In the future you will see continued refinements of these products and development into even more compact and portable terminals and other strategic offerings.

Norsat International Inc.

Management Discussion and Analysis

Overall Performance

Quarterly sales were robust at $6.2 million, 83% higher or $2.8 million higher than the second quarter last year.  Gross margins were up slightly to 50.3%, and net loss was $0.8 million, compared to gross margins of 47.0% and net loss of $0.4 million in the same period in 2004.  Microwave sales were in line with expectations and slightly down by $0.3 million or 13%.  Sales of Satellite Systems increased by $3.1 million or 272% primarily due to the U.S. Army Central Command awarding the Company another contract worth US $3.3 million in the second quarter of 2005. This award reflects the continuing and growing need for Norsat's capabilities within the U.S. Armed Services.

Year to date sales were up $0.9 million or 12% higher for the first six months of 2005 as compared to the first six months of 2004.  For the six months ended June 30, 2005, sales were $8.7 million, gross margins were 47% and the net loss was $1.9 million compared to sales of $7.7 million, gross margins of 47% and a profit of $0.4 million.

Highlights

• George King was appointed to the Norsat Board on April 8 and appointed Chairman May 2.  Mr. King sits on a number of executive boards, has served as a Section 16 officer of a U.S. public company and is a director or trustee of five private companies and two universities.  Mr. King has previously served as an executive at Universal Access, which he assisted in doing a successful initial public offering (IPO). In addition, Mr. King has had successes in the legal and financial services business.  

• Mr. William J. Coyne III joined the Company on May 16, 2005 as President & Chief Executive Officer. Mr. Coyne previously held executive level positions at several international telecommunications organizations including Sprint and Cable & Wireless. During his nearly 10-year tenure with Sprint, he was the Vice President General Manager - Northeast Division, the largest division in the mid-markets segment. Mr. Coyne was then recruited by Cable & Wireless to turn around the fortunes of the U.S. sales operation.  Mr. Coyne's 9 years with Cable & Wireless included multiple executive level positions culminating in being named COO of the U.S. operation.  Mr. Coyne then went on to assist several private, entrepreneurial companies in their efforts to be more efficient and productive in their Sales, Marketing and Customer Service business units.

• Mr. James Sharpe was appointed to the Company's Board of Directors, and as Chair of The Audit Committee on May 20, 2005. James Sharpe has over twenty-five years of senior-level management experience in the public and private sectors as a chief executive officer and as a chief financial officer for small to large complex organizations. He is currently the President of Sharpe Associates, a Washington State firm that provides a wide spectrum of financial management services to small and medium-sized private firms, and public entities.

• The Company created a Board of Advisors. This group reports to the Directors, and its members are highly experienced business people in their own right. The group's mandate is to review the Company's market and positioning, with a view to introducing potential opportunities to grow the Company's market presence and profile through mergers, acquisitions or joint ventures. The Strategy Committee of the Board Directors evaluates all merger and acquisition possibilities.

• The Company also established Norsat's first Global Development Council (GDC) to assist in growing revenues throughout the remainder of 2005 and 2006.  The GDC reports directly to the President & CEO and is comprised of senior business executives, primarily ex-Chairmen, Presidents, CEOs and Executive Vice Presidents.  The GDC includes current or former executives from the Telecommunications, Satellite, Equipment and Services providers including Stuart Hinkley, President & CEO of MZINA, Alan Peyser, Chairman of Aptela a Virtual PBX & VOIP Company, Nick Antonoff, an expert in Homeland security related issues, Ray O'Brien, President and CEO of Verastar and Ken Napier, senior executive with Universal Access.  The role of the GDC members is to identify Norsat enterprise sales opportunities and new channels for the Company's products and services.

Norsat International Inc.

Management Discussion and Analysis

• The Company engaged an outside consulting firm specializing in CRM deployment to assist it in implementing a Customer Relationship Management  (CRM) System in order to increase overall productivity and access to important customer and prospect information.

• In June 2005 the Board of Directors announced that it was expanding its focus beyond the microwave business and the mobile satellite communication market for the military and media.  The intention of this expansion in focus is to enlarge the sources of revenue streams, to expand the Company beyond military and other existing business, and to complement existing revenue streams.

• As part of this expanded focus announced by the Board of Directors in June, the Company began an extensive overhaul of its web site to be a more accurate representation of the revised focus on its enhanced market efforts including HealthCare, Emergency Services (Homeland Security & Disaster Recovery), Military, Media and Telecommunications.

• On June 21, 2005, the audit firm KPMG informed the Company of its determination to not accept the appointment as auditors of the Company for the fiscal year ending December 31, 2005. The Company's Board of Directors and Audit Committee of the Board are currently considering a global accounting firm to serve as its successor auditor. There has been no reservation on the Company's financial statements on which KPMG issued a report KPMG's decision does not result from any disagreement with Company management

• On June 24, 2005 the Company announced it had reduced the conversion price of its outstanding US $2 million 8% unsecured convertible notes due March 31, 2007 from US $1.70 per common share to US $1.25 per common share.  The convertible notes were issued on a private placement basis in March 2002 and are convertible at any time at the option of the holder into Norsat common shares.

• On June 30, 2005, the Company announced it had been awarded a US $3.3 million order by the U.S. Army Forces Central Command.  The order called for the supply of Norsat Newslink TM portable satellite terminals, spares, training and maintenance to support the expansion of the U.S. Army's Digital Video and Imagery Distribution System.

Norsat International Inc.

Management Discussion and Analysis

Highlights (continued)

Results of Operations

Sales ($000's)	Three Months Ended June 30 (Unaudited)			Six Months Ended June 30 (Unaudited)
		2005	2004		2005	2004
Microwave		$1,938	$2,238		$3,883	$4,893
Satellite Systems		4,217	1,133		4,791	2,836
		$6,155	$3,371		$8,674	$7,729

Second quarter sales were $6.2 million, up 83% from $3.4 million in the second quarter of 2004.  The increase is primarily due to a US $3.3 million order by the U.S. Army Forces Central Command received in the second quarter of 2005.  The order called for the supply of Norsat Newslink TM portable satellite terminals, spares, training and maintenance to support the expansion of the U.S. Army's Digital Video and Imagery Distribution System.

 Microwave revenue was $1.9 million, down 13% and Satellite Systems revenue was $4.2 million, up 272% over the prior year.   Six-month revenue was $8.7 million, with Satellite Systems representing 55% of total sales, versus 37% for the prior year.  

Gross Profit Margin	Three Months Ended June 30 (Unaudited)			Six Months Ended June 30 (Unaudited)
		2005	2004		2005	2004
Microwave		43%	44%		39%	45%
Satellite Systems		54%	53%		53%	51%
		50%	47%		47%	47%

The overall gross margin improved slightly compared to the second quarter of 2004 due to product mix. On an YTD basis the increase in Gross profit margins for Satellite systems was offset by the decrease in the gross profit margin for Microwave.

Operating Costs ($000's)	Three Months Ended June 30 (Unaudited)			Six Months Ended June 30 (Unaudited)
		2005	2004	2005	2004
Selling, general and   administrative		$2,921	$1,205	$4,399	$2,630
Product development		506	435	914	796
Amortization		174	154	334	305
		$3,601	$1,794	$5,647	$3,371

                                                                                                                                                               &n bsp;                                                        

Norsat International Inc.

Management Discussion and Analysis

The Company made investments in its sales and marketing efforts and we experienced a number of one-time expenses in the hiring and setup of new offices, upgrading our website and implementing a new Enterprise Resource Planning (ERP) financial and engineering system software.  During the second quarter, the Company expanded its sales and marketing initiatives into the Homeland Security market in the United States and certain European Union countries, expanded its sales and marketing initiatives in the Health Care market, created the Company's Advisory Board and the Global Development Council, and took other steps that it believes will result in increased revenue in the near and mid-term.  The Company incurred higher sales commissions as a result of higher sales.  The Company also incurred a one-time severance cost of $0.3 million.  These factors resulted in selling, general and administrative costs increasing by $1.7 million compared to the same quarter in the prior year, with $0.6 million of these being non-cash items related to stock based compensation

Product development costs are anticipated to increase as the Company continues to work on developing products that will provide superior performance at lower cost to our customers.

	Three Months Ended June 30 (Unaudited)			Six months Ended June 30 (Unaudited)
		2005	2004	2005	2004
Earnings (loss) from continuing operations before other expenses and income taxes		$(763)	$(355)	$(1,943)	$(343)

Loss from continuing operations before other expenses and income taxes was $0.8 million in the second quarter of 2005, compared to a loss of  $0.4 million in 2004, due primarily from increased SG&A expenses of  $1.7 million and partially offset by higher gross profit of  $1.5 million.

Other expenses for the second quarter were $0.3 million compared to the prior year of $0.1 million.

The net effect of the above factors was a net loss from continuing operations for the quarter of $0.8 million or ($0.02) per share basic and diluted, compared to a loss of $0.4 million in the second quarter of 2004 or ($0.01) per share basic and diluted.

Norsat International Inc.

Management Discussion and Analysis

Quarterly Financial Data (Unaudited) (In $000's, except per share amounts)
	Three Months Ended
	Mar 31	Jun 30	Sep 30	Dec 31
2005
Sales	$2,519	$6,155
Loss from continuing operations	($1,187)	($758)
Net loss	($1,188)	($758)
Loss per share from continuing operations                   - Basic and diluted	($0.03)	($0.02)
Net loss per share - basic and diluted	($0.03)	($0.02)
Weighted average common shares outstanding                   - Basic and diluted	42,052	42,633
2004
Sales	$4,358	$3,371	$5,005	$4,787
Earnings (loss) from continuing operations	$     12	($355)	$1,006	($233)
Net earnings (loss)	$   732	($355)	$1,008	($232)
Earnings (loss) per share from continuing operations                   - Basic	$0.00	($0.01)	$0.03	($0.01)
- Diluted	$0.00	($0.01)	$0.02	($0.01)
Earnings (loss) per share                  - Basic	$0.02	($0.01)	$0.03	($0.01)
- Diluted	$0.02	($0.01)	$0.02	($0.01)
Weighted average common shares outstanding                  - Basic	39,715	39,880	40,037	41,512
- Diluted	41,495	39,880	40,638	41,512
2003
Sales	$3,367	$2,512	$3,701	$3,400
Loss from continuing operations	($2,706)	($2,685)	($2,130)	($648)
Net loss	($2,706)	($2,685)	($2,130)	($724)
Loss per share from continuing operations                   - Basic and diluted	($0.08)	($0.07)	($0.06)	($0.02)
Net loss per share - basic and diluted	($0.08)	($0.07)	($0.06)	($0.02)
Weighted average common shares outstanding                   - Basic and diluted	34,177	36,023	36,177	37,983

Liquidity and Capital Resources

The Company's cash and short-term investments balance at June 30, 2005 was $2.4 million, compared to $3.8 million at March 31, 2005.  This change resulted primarily from cash used in operations of $1.25 million.  Separately, accounts receivable increased by $3.3 million due to a significant sale being made late in the quarter. Capital purchases were $0.2 million and proceeds resulting from the exercise of warrants were $0.5 million.

The Company entered into a credit facility with a Canadian bank in the third quarter of 2004.  The Company never utilized the facility.  During the second quarter of 2005 the bank withdrew the facility due

Norsat International Inc.

Management Discussion and Analysis

to the Company failing to meet a covenant related to maintaining a positive EBIT during the period of first quarter 2004 to first quarter 2005.

As the Company continues to invest in developing new products and expanding its markets for those products, the Company will utilize cash until positive earnings are achieved.  The Company anticipates having sufficient funds to meet projected core operational needs but foresees a need for either revenue growth or capital financing to provide funds for expenses beyond core operations.  

Tabular Disclosure of Contractual Obligations

As of June 30, 2005, the impact that our contractual obligations are expected to have on our liquidity and cash flow in future periods is as follows:

($000's)	Total	Less than 1 year	1-3 years	4-5 years	After 5 years
Operating Lease Obligations	$1,331	$1,073	$   258	-	-
Inventory Purchase Obligations	$5,116	$5,116	-	-	-
Long Term- Debt Obligations	$2,420	-	$2,420	-	-
	$8,867	$6,189	$2,678	-	-

Outstanding Share Data

As of June 30, 2005, the Company had issued and outstanding 42,633,082 common shares.  During the quarter ended June 30 2005, 581,250 additional common shares were issued on the exercising of outstanding options.  As of June 30, 2005 there were a total of 2,840,900 options and 3,146,811 share purchase warrants outstanding that entitle the holders to purchase one common share of the Company at various prices ranging from  $.50 to $15.00.

Unaudited Interim Financial Statements

The unaudited consolidated financial statements for the period ended June 30, 2005 have not been reviewed by independent auditors.

Significant Accounting Policies and Estimates

Significant accounting policies are described in note 2 to the Consolidated Financial Statements included in Norsat's 2004 Annual Report. A discussion of the critical accounting policies and the related estimates are included in Management Discussion and Analysis in the 2004 Annual Report. There were no significant changes in accounting policies or estimates since the fiscal year ended December 31, 2004.

               NEWS RELEASE

      For Immediate Release

Norsat Posts Strong Revenue Gain, Positions Itself for Growth In Second Half of 2005

(Vancouver, Canada)  August 12, 2005, 7:00 PM EST -Norsat International Inc. (TSX - NII.TO; OTC BB -NSATF.OB) has announced it generated CAD$6.2 million in total revenue for the three months ending June 30, 2005, an 83 percent increase over the same period in the previous year.

Norsat's transition under a new management team led by Board of Directors Chair George King and President and CEO William Coyne III also saw Satellite Systems revenue up 270 percent over the comparable period in 2004, to CAD$4.2 million.  The Company's year-to-date sales totaled CAD$8.7 million, a 12 percent increase over the six months ended June 30, 2004.

With investments in sales and marketing, non-recurring non-cash expenses, upgrades to its website and other selling, general and administrative costs, the Company incurred a net loss from continuing operations of CAD $0.8 million, compared to a net loss of CAD $0.4 million over the same period in 2004.

"The strong revenue growth is encouraging, but most important, we're making the investments necessary to build on our strengths and take advantage of emerging opportunities," Coyne said.  "We're positioning this Company for growth over the long term while also recognizing the need to realize positive cash flow quickly."

George King was appointed on to the Norsat Board on April 8 and was appointed Chairman May 2, and Bill Coyne joined as President and CEO May 16^th.  King sits on a number of executive boards, has served as a Section 16 officer of a U.S. public company and is a director or trustee of five private companies and two universities.  Coyne has extensive operational experience with operating large enterprises such as Sprint and Cable & Wireless and possesses a distinguished history of fostering growth in small technology businesses.  James Sharpe, who has a strong financial management and organizational development history, was appointed to the Board of Directors and named Chairman of the Audit Committee on May 20.

"We created our Global Development Council and Board of Advisors with senior professionals from a broad array of compatible industries as a strategic decision designed to take advantage of multiple opportunities for growth," King said.  "This expertise, combined with hard work, our sector leading technology and reliability, superior service and strong relationships, should serve us well."

The Company created the Advisory Board and Global Development Council during the second quarter while expanding its sales and marketing initiatives in the Health Care market and into the Homeland Security market in the United States and certain European Union countries.  The Company believes these and other steps will result in increased revenue in the near and mid term.

The external Board of Advisors, comprised of consultants with industry expertise and experienced executives with strong industry ties, is responsible for evaluating strategic initiatives such as joint ventures and opportunities for inorganic growth.  The Global Development Council includes external senior industry executives, primarily ex-Chairmen, Presidents and CEOs within the telecommunications, satellite, equipment and services industries.   Its members are responsible for introducing new sales opportunities and channels through the use of their extensive network of contacts.

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During the second quarter, Microwave revenue decreased to CAD$1.9 million, down 13 percent over the three months ended June 30, 2004, as margins eroded slightly and demand fluctuated.  The Company has initiated a win-back program to renew relationships with previous Microwave Customers.Satellite Systems represented 55 percent of total sales for the three months ended June 30, 2005, compared to 37 percent for the same period in the prior year.

On June 30, 2005, the Company announced it had been awarded a USD$3.3 million order by the U.S. Army Forces Central Command. The Company is providing its NewslinkTM portable satellite terminals, training and maintenance to support the expansion of the U.S. Army's Digital Video and Imagery Distribution System.

In other developments:

• On June 21, 2005, the audit firm KPMG informed the Company of its determination to not accept the appointment as auditors of the Company for the fiscal year ending December 31, 2005. The Company's Board of Directors and Audit Committee of the Board are currently considering a global accounting firm to serve as its successor auditor. There has been no reservation on the Company's financial statements on which KPMG issued a report. KPMG's decision does not result from any disagreement with Company management.
  
  

• Norsat has engaged an outside consulting firm specializing in Customer Relationship Management to increase overall productivity and access to important customer and prospect information.

• The Company also expanded its focus beyond the microwave and mobile satellite communication market for the military and media to increase sources of revenue streams, reduce dependency on military business and complement existing revenue streams.

"This first 100 days of transition has been invigorating, and we expect the second half of the year to see us on a continued growth curve," Coyne said.

Forward statements

Statements in this report relating to matters that are not historical fact are forward-looking statements based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. Factors that could cause or contribute to such differences include, but are not limited to, general economic conditions, changes in technology, reliance on third party manufacturing, managing rapid growth, global sales risks, limited intellectual property protection and other risks and uncertainties described in Norsat's public filings with securities regulatory authorities.

The information should be read in conjunction with the Company's unaudited interim consolidated financial statements and related notes includes therein for the three months ended June 30, 2005, and the audited consolidated financial statements, related notes included therein and Management Discussion and Analysis for the year ended December 31, 2004 included in the Company's 2004 Annual Report.  All the Company's financial statements are prepared in accordance with generally accepted accounting principles in Canada (Canadian GAAP).  Additional information from the year ended December 31, 2004, and other information related to the Company, may be found on the Company's website at www.norsat.com.

About Norsat International, Inc.

Norsat International Inc. designs, engineers and markets intelligent satellite solutions for high-speed data transmission.  For more than 25 years, Norsat has built a strong reputation in the field of satellite technology by providing its customers with innovative products and has now sold over 2.5 million products in 87 countries around the world. Norsat's latest innovation is the Norsat OmniLinkTM line of portable satellite terminal products that provide rapidly deployable broadband satellite data and video

connectivity in areas where traditional communications infrastructure is insufficient, damaged, or non-existent. Norsat's sectors of concentration include Health Care, Military, Emergency Services and Media. Additional investor information is available through email at communications_investorrelations@Norsat.com or by phone, 1-604-292-9000 or toll-free in Canada and the U.S., 1-888-667-7281.

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300-4401 Still Creek Drive Burnaby, British Columbia Canada  V5C 6G9   Tel:  604.292.9000 Fax: 604.292.9100 www.norsat.com

Norsat International Inc. ("Norsat")

Notice of No Auditor Review of Interim Financial Statements

Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The accompanying unaudited interim financial statements of Norsat have been prepared by and are the responsibility of Norsat's management.

An independent auditor has not performed a review of these financial statements in accordance with the standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity's auditor.

William J. Coyne III
President and Chief Executive Officer

August 12, 2005

300-4401 Still Creek Drive Burnaby, British Columbia Canada  V5C 6G9   Tel:  604.292.9000 Fax: 604.292.9100 www.norsat.com

Norsat International Inc. ("Norsat")

Form 52-109FT2- Certification of Interim Filing During Transition Period

I, Constantine McQuade, Controller and Acting Chief Financial Officer of Norsat International Inc. certify that:

1.

I have reviewed the interim filings (as this term is defined in Multilateral Instrument 52-109 Certification of Disclosure in Issuers'Annual and Interim Filings) of Norsat International Inc., (the issuer) for the interim period ending June 30, 2005;

2.

Based on my knowledge, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings;

3.

Based on my knowledge, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of operations and cash flows of the issuer, as of the date and for the periods presented in the interim filings;

Dated August 12, 2005

Signed "Constantine McQuade "

Signature

Title: Controller and Acting Chief Financial Officer

300-4401 Still Creek Drive Burnaby, British Columbia Canada  V5C 6G9   Tel:  604.292.9000 Fax: 604.292.9100 www.norsat.com

Norsat International Inc. ("Norsat")

Form 52-109FT2- Certification of Interim Filing During Transition Period

I, William J. Coyne III, Chief Executive Officer of Norsat International Inc. certify that:

1.

I have reviewed the interim filings (as this term is defined in Multilateral Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings) of Norsat International Inc., (the issuer) for the interim period ending June 30, 2005;

2.

Based on my knowledge, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings;

3.

Based on my knowledge, the interim financial statements together with the other financial information included in the interim filings fairly present in all material respects the financial condition, results of operations and cash flows of the issuer, as of the date and for the periods presented in the interim filings;

Dated August 12, 2005

Signed "William J. Coyne III "

Signature

Title: President and Chief Executive Officer