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**Washington,      D.C. 20549**

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| **(Mark                One)**                            |                                                                                                                                      |
|----------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------|
| x                                                        | QUARTERLY                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE                ACT                OF 1934  |
|                                                     |
| FOR                THE PERIOD ENDING September 30, 2005  |
|                                                     |
| OR                                                       |
|                                                     |                                                                                                                                      |
| o                                                        | TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE                ACT                OF 1934 |
|                                                     |                                                                                                                                      |
|                                                     | FOR                THE TRANSITION PERIOD FROM __________ TO                __________                                                     |
|                                                     |
| COMMISSION                FILE NUMBER 0 - 1325 |
|                                                     |                                                                                                                                      |

**MINNESOTA**

**41 - 1255001**

**9449      Science Center Drive, New Hope, Minnesota 55428**

**Telephone      (763) 504-3000 Fax (763) 504-3060**

**Internet:**

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**PART      I. FINANCIAL INFORMATION**

**ITEM      1. CONSOLIDATED FINANCIAL STATEMENTS**

|                                                                                                                                           |   |                                         |       |                                                        |   |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|------------|-------------------------------------------------------------|--------|
|                                                                                                                                           |   | Three                Months Ended            |       | Nine                Months Ended                            |   |
|                                                                                                                                           |   | September                30, 2005(unaudited) |       | September                30,                2004(unaudited) |   | September                30, 2005(unaudited) |   | September                30, 2004(unaudited) |   |
|                                                                                                                                           |   |                                         |       |                                                        |   |   |   |   |   |
| REVENUES                                                                                                                                       |   | $                                            | 4,257,660  |                                                        | $      | 3,918,342 |   | $ | 12,148,142 |   | $ | 7,592,258 |   |
|                                                                                                                                           |   |                                         |       |                                                        |   |   |   |   |   |   |   |   |   |
| COSTS                AND EXPENSES                                                                                                              |   |                                         |       |                                                        |   |   |   |   |   |   |   |   |   |
| Cost                of products and services (exclusive of depreciation and amortization                shown                separately below) |   |                                         | 2,303,357  |                                                        |   | 1,937,644 |   |   | 5,886,382 |   |   | 4,060,886 |   |
| Selling,                general and administrative                                                                                             |   |                                         | 2,453,410  |                                                        |   | 1,871,764 |   |   | 6,977,897 |   |   | 3,837,697 |   |
| Depreciation                and amortization                                                                                                   |   |                                         | 1,255,188  |                                                        |   | 1,048,031 |   |   | 3,622,922 |   |   | 2,550,953 |   |
| Total                Costs and Expenses                                                                                                        |   |                                         | 6,011,955  |                                                        |   | 4,857,439 |   |   | 16,487,201 |   |   | 10,449,536 |   |
|                                                                                                                                           |   |                                         |       |                                                        |   |   |   |   |   |   |   |   |   |
| LOSS                FROM OPERATIONS                                                                                                            |   |                                         | (1,754,295 | )                                                           |   | (939,097 | ) |   | (4,339,059 | ) |   | (2,857,278 | ) |
|                                                                                                                                           |   |                                         |       |                                                        |   |   |   |   |   |   |   |   |   |
| OTHER                EXPENSE                                                                                                                   |   |                                         |       |                                                        |   |   |   |   |   |   |   |   |   |
| Interest                expense                                                                                                                |   |                                         | (536,000   | )                                                           |   | (254,314 | ) |   | (1,594,714 | ) |   | (672,634 | ) |
| Other                income (expense)                                                                                                          |   |                                         | 77,737     |                                                        |   | (4,192 | ) |   | 160,029 |   |   | 17,521 |   |
| Total                Other Expense                                                                                                             |   |                                         | (458,263   | )                                                           |   | (258,506 | ) |   | (1,434,685 | ) |   | (655,113 | ) |
|                                                                                                                                           |   |                                         |       |                                                        |   |   |   |   |   |   |   |   |   |
| LOSS                FROM CONTINUING OPERATIONS                                                                                                 |   |                                         | (2,212,558 | )                                                           |   | (1,197,603 | ) |   | (5,773,744 | ) |   | (3,512,391 | ) |
|                                                                                                                                           |   |                                         |       |                                                        |   |   |   |   |   |   |   |   |   |
| INCOME                (LOSS) FROM DISCONTINUED OPERATIONS                                                                                      |   |                                         | 248,249    |                                                        |   | (653,989 | ) |   | (70,127 | ) |   | (1,307,540 | ) |
|                                                                                                                                           |   |                                         |       |                                                        |   |   |   |   |   |   |   |   |   |
| NET                LOSS                                                                                                                        |   |                                         | (1,964,309 | )                                                           |   | (1,851,592 | ) |   | (5,843,871 | ) |   | (4,819,931 | ) |
|                                                                                                                                           |   |                                         |       |                                                        |   |   |   |   |   |   |   |   |   |
| Preferred                Stock Dividends                                                                                                       |   |                                         | (1,364,180 | )                                                           |   | (83,714 | ) |   | (2,964,898 | ) |   | (541,640 | ) |
| LOSS                ATTRIBUTABLE TO COMMON STOCKHOLDERS                                                                                        |   | $                                            | (3,328,489 | )                                                           | $      | (1,935,306 | ) | $ | (8,808,769 | ) | $ | (5,361,571 | ) |
|                                                                                                                                           |   |                                         |       |                                                        |   |   |   |   |   |   |   |   |   |
| BASIC                AND DILUTED - LOSS PER COMMON SHARE                                                                                       |   |                                         |       |                                                        |   |   |   |   |   |   |   |   |   |
| Loss                from continuing operations                                                                                                 |   |                                         | (.08       | )                                                           |   | (.05 | ) |   | (.21 | ) |   | (.16 | ) |
| Income                (Loss) from discontinued operations                                                                                      |   |                                         | .01        |                                                        |   | (.02 | ) |   | (.00 | ) |   | (.05 | ) |
| Net                Loss                                                                                                                        |   |                                         | (.07       | )                                                           |   | (.07 | ) |   | (.21 | ) |   | (.21 | ) |
| LOSS                ATTRIBUTABLE TO COMMON STOCKHOLDERS                                                                                        |   |                                         | (.11       | )                                                           |   | (.08 | ) |   | (.31 | ) |   | (.24 | ) |
|                                                                                                                                           |   |                                         |       |                                                        |   |   |   |   |   |   |   |   |   |
| WEIGHTED                AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED                                                                         |   |                                         | 29,352,257 |                                                        |   | 25,480,077 |   |   | 28,408,934 |   |   | 22,494,250 |   |
|                                                                                                                                           |   |                                         |       |                                                        |   |   |   |   |   |   |   |   |   |
|                                                                                                                                           |   |                                         |       |                                                        |   |   |   |   |   |   |   |   |   |

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|                                                                                                                                                           |   |                              |        |                             |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|-------------|----------------------------------|--------|
|                                                                                                                                                           |   | September                30, 2005 |        | December                31, 2004 |   |
| **ASSETS**                                                                                                                                                     |   | (unaudited)                       |        | (audited)                        |   |
| **CURRENT                ASSETS**                                                                                                                              |   |                              |        |                             |   |
| Cash                and cash equivalents                                                                                                                       |   | $                                 | 3,383,326   |                             | $      | 726,553 |   |
| Certificate                of deposit                                                                                                                          |   |                              | 650,000     |                             |   | 650,000 |   |
| Accounts                receivable, net                                                                                                                        |   |                              | 2,194,768   |                             |   | 2,783,774 |   |
| Inventories                                                                                                                                                    |   |                              | 219,871     |                             |   | 231,993 |   |
| Current                assets of discontinued operations                                                                                                       |   |                              | —     |                             |   | 634,307 |   |
| Current                portion of notes receivable                                                                                                             |   |                              | 411,504     |                             |   | — |   |
| Other                current assets                                                                                                                            |   |                              | 325,128     |                             |   | 146,334 |   |
| TOTAL                CURRENT ASSETS                                                                                                                            |   |                              | 7,184,597   |                             |   | 5,172,961 |   |
| **PROPERTY                AND EQUIPMENT, NET**                                                                                                                 |   |                              | 5,385,939   |                             |   | 4,372,474 |   |
|                                                                                                                                                           |   |                              |        |                             |   |   |   |
| **OTHER                ASSETS**                                                                                                                                |   |                              |        |                             |   |   |   |
| Goodwill                                                                                                                                                       |   |                              | 1,154,871   |                             |   | 812,366 |   |
| Intangible                assets, net                                                                                                                          |   |                              | 14,636,237  |                             |   | 16,081,635 |   |
| Other                assets of discontinued operations                                                                                                         |   |                              | —     |                             |   | 47,975 |   |
| Notes                receivable, net of current portion                                                                                                        |   |                              | 63,996      |                             |   | — |   |
| Other                assets                                                                                                                                    |   |                              | 132,465     |                             |   | 146,301 |   |
| TOTAL                OTHER ASSETS                                                                                                                              |   |                              | 15,987,569  |                             |   | 17,088,277 |   |
| **TOTAL                ASSETS**                                                                                                                                |   | $                                 | 28,558,105  |                             | $      | 26,633,712 |   |
|                                                                                                                                                           |   |                              |        |                             |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS' EQUITY**                                                                                                        |   |                              |        |                             |   |   |   |
| **CURRENT                LIABILITIES**                                                                                                                         |   |                              |        |                             |   |   |   |
| Checks                issued in excess of cash in bank                                                                                                         |   | $                                 | 79,585      |                             | $      | 234,348 |   |
| Short-term                debt                                                                                                                                 |   |                              | 333,334     |                             |   | 4,481,099 |   |
| Wholesale                line of credit                                                                                                                        |   |                              | —     |                             |   | 926,201 |   |
| Current                portion of long-term debt                                                                                                               |   |                              | 990,370     |                             |   | 1,524,527 |   |
| Current                portion of note payable, stockholder                                                                                                    |   |                              | 32,837      |                             |   | 84,801 |   |
| Current                portion of capital lease obligations                                                                                                    |   |                              | 223,335     |                             |   | 201,530 |   |
| Accounts                payable                                                                                                                                |   |                              | 1,955,697   |                             |   | 2,561,611 |   |
| Accrued                liabilities                                                                                                                             |   |                              | 3,514,372   |                             |   | 3,030,024 |   |
| Contingent                liability                                                                                                                            |   |                              | 222,700     |                             |   | 222,700 |   |
| Customer                deposits                                                                                                                               |   |                              | 60,170      |                             |   | 59,875 |   |
| Current                liabilities of discontinued operations                                                                                                  |   |                              | 500,000     |                             |   | 370,921 |   |
| Deferred                subscription revenue                                                                                                                   |   |                              | 623,630     |                             |   | 406,738 |   |
| TOTAL                CURRENT LIABILITIES                                                                                                                       |   |                              | 8,536,030   |                             |   | 14,104,375 |   |
|                                                                                                                                                           |   |                              |        |                             |   |   |   |
| **LONG-TERM                LIABILITIES**                                                                                                                       |   |                              |        |                             |   |   |   |
| Long-term                debt, net                                                                                                                             |   |                              | 3,653,786   |                             |   | 3,498,657 |   |
| Capital                lease obligations, net of current portion                                                                                               |   |                              | 488,789     |                             |   | 481,249 |   |
| Long                term liabilities of discontinued operations                                                                                                |   |                              | 250,000     |                             |   | — |   |
| TOTAL                LIABILITIES                                                                                                                               |   |                              | 12,928,605  |                             |   | 18,084,281 |   |
| **STOCKHOLDERS'                EQUITY**                                                                                                                        |   |                              |        |                             |   |   |   |
| Cumulative                convertible preferred stock, no par value:                                                                                           |   |                              |        |                             |   |   |   |
| 8%                Class A (27,931 shares issued and outstanding, $293,276 liquidation                preference)                                               |   |                              | 419,752     |                             |   | 419,752 |   |
| 10%                Class B (8,550 and 8,700 shares issued and outstanding, $89,775 and                $91,350 liquidation preference)                          |   |                              | 60,500      |                             |   | 62,000 |   |
| 10%                Class C (125,210 and 125,400 shares issued and outstanding, $1,252,100                and                $1,254,000 liquidation preference) |   |                              | 1,609,205   |                             |   | 1,611,105 |   |
| 10%                Class F (150,000 shares issued and outstanding, $1,500,000 liquidation                preference)                                           |   |                              | 1,500,000   |                             |   | 1,500,000 |   |
| 8%                Class G (45,245 shares issued and outstanding, $452,450 liquidation                preference)                                               |   |                              | 179,897     |                             |   | 179,897 |   |
| 6%                Class H (2.0 and 11.5 shares issued and outstanding, $200,000 and                $1,150,000 liquidation preference)                          |   |                              | —     |                             |   | — |   |
| Variable                rate Class I (90,000 and 0 shares issued and outstanding , $9,000,000                and                $0 liquidation preference)     |   |                              | —     |                             |   | — |   |
| Common                stock, no par value (30,988,618 and 25,784,490 shares issued; 30,988,618                and 25,781,818 shares outstanding)               |   |                              | 21,243,680  |                             |   | 16,888,291 |   |
| Stock                subscriptions receivable                                                                                                                  |   |                              | (319,864    | )                                |   | (391,264 | ) |
| Options                and warrants                                                                                                                            |   |                              | 44,541,771  |                             |   | 32,985,983 |   |
| Unamortized                compensation                                                                                                                        |   |                              | (92,063     | )                                |   | (1,724 | ) |
| Accumulated                deficit                                                                                                                             |   |                              | (53,513,378 | )                                |   | (44,704,609 | ) |
| TOTAL                STOCKHOLDERS’ EQUITY                                                                                                                |   |                              | 15,629,500  |                             |   | 8,549,431 |   |
| **TOTAL                LIABILITIES AND STOCKHOLDERS’ EQUITY**                                                                                            |   | $                                 | 28,558,105  |                             | $      | 26,633,712 |   |
|                                                                                                                                                           |   |                              |        |                             |   |   |   |

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|                                                                                                                                                              |   |                                               |       |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|------------|
|                                                                                                                                                              |   | **NINE                MONTHS ENDED SEPTEMBER 30,** |       |
|                                                                                                                                                              |   | **2005**                                           |       | **2004** |   |
|                                                                                                                                                              |   | (unaudited)                                        |       | (unaudited) |   |
| OPERATING                ACTIVITIES                                                                                                                               |   |                                               |       |   |   |
| Net                loss                                                                                                                                           |   |                                               | (5,843,871 | ) | $ | (4,819,931 | ) |
| Adjustments                to reconcile net loss to net cash flows from operating                activities                                                       |   |                                               |       |   |   |   |   |
| Depreciation                and amortization                                                                                                                      |   |                                               | 3,896,131  |   |   | 2,344,853 |   |
| Amortization                of deferred compensation                                                                                                              |   |                                               | 128,354    |   |   | 212,935 |   |
| Amortization                of original issue discount                                                                                                            |   |                                               | 913,339    |   |   | 541,873 |   |
| Gain                on sale of segment                                                                                                                            |   |                                               | (253,356   | ) |   | — |   |
| Common                stock issued for services                                                                                                                   |   |                                               | 20,580     |   |   | 291,220 |   |
| Warrants                issued for services                                                                                                                       |   |                                               | 6,256      |   |   | — |   |
| Impairment                of goodwill                                                                                                                             |   |                                               | —    |   |   | 527,879 |   |
| Loss                (gain) on sale of property and equipment                                                                                                      |   |                                               | (94,277    | ) |   | 26,217 |   |
| Reduction                of note payable in connection with reimbursement of seller                expenses                                                       |   |                                               | —    |   |   | (273,900 | ) |
| Changes                in operating assets and liabilities:                                                                                                       |   |                                               |       |   |   |   |   |
| Accounts                receivable, net                                                                                                                           |   |                                               | 574,006    |   |   | (2,134,902 | ) |
| Inventories                                                                                                                                                       |   |                                               | (189,220   | ) |   | 610,119 |   |
| Other                current assets                                                                                                                               |   |                                               | 113,991    |   |   | 17,987 |   |
| Other                assets                                                                                                                                       |   |                                               | 5,000      |   |   | (87,135 | ) |
| Wholesale                line of credit                                                                                                                           |   |                                               | (1,000,987 | ) |   | 93,045 |   |
| Accounts                payable and accrued liabilities                                                                                                           |   |                                               | (1,336,387 | ) |   | 620,817 |   |
| Deferred                subscription revenue                                                                                                                      |   |                                               | 184,995    |   |   | 98,133 |   |
| Liabilities                of discontinued operations                                                                                                             |   |                                               | (250,000   | ) |   | — |   |
| Customer                deposits                                                                                                                                  |   |                                               | 295        |   |   | — |   |
| Net                cash flows from operating activities                                                                                                           |   |                                               | (3,125,151 | ) |   | (1,930,790 | ) |
|                                                                                                                                                              |   |                                               |       |   |   |   |   |
| INVESTING                ACTIVITIES                                                                                                                               |   |                                               |       |   |   |   |   |
| Purchases                of property and equipment                                                                                                                |   |                                               | (698,269   | ) |   | (483,810 | ) |
| Purchase                of intangible assets                                                                                                                      |   |                                               | (209,225   | ) |   | — |   |
| Purchase                of Dinamo Entertainment, LLC                                                                                                              |   |                                               | (726,525   | ) |   | — |   |
| Purchase                of Ultravision                                                                                                                            |   |                                               | (287,050   | ) |   | — |   |
| Purchase                of Satellite Broadcasting Corporation                                                                                                     |   |                                               | (200,000   | ) |   | (187,424 | ) |
| Purchase                of Minnesota Digital Universe, Inc.                                                                                                       |   |                                               | —    |   |   | (1,100,000 | ) |
| Purchase                of Rainbow Satellite Group, LLC                                                                                                           |   |                                               | —    |   |   | (1,000,000 | ) |
| Purchase                of 21st                Century Satellite Communication, Inc.                                                                              |   |                                               | —    |   |   | (250,000 | ) |
| Proceeds                from sale of business segment                                                                                                             |   |                                               | 1,682,184  |   |   | — |   |
| Proceeds                from sale of property and equipment                                                                                                       |   |                                               | 91,500     |   |   | 649 |   |
| Collections                on notes receivable                                                                                                                    |   |                                               | —    |   |   | 3,172 |   |
| Net                cash flows from investing activities                                                                                                           |   |                                               | (347,385   | ) |   | (3,017,413 | ) |
| FINANCING                ACTIVITIES                                                                                                                               |   |                                               |       |   |   |   |   |
| Checks                issued in excess of cash in bank                                                                                                            |   |                                               | (154,760   | ) |   | (74,068 | ) |
| Payments                on short-term debt                                                                                                                        |   |                                               | (4,147,765 | ) |   | — |   |
| Payments                on long-term debt                                                                                                                         |   |                                               | (2,456,305 | ) |   | (1,215,788 | ) |
| Payments                on capital lease obligations                                                                                                              |   |                                               | (137,040   | ) |   | (63,066 | ) |
| Payments                on note payable to stockholder                                                                                                            |   |                                               | (51,964    | ) |   | (19,598 | ) |
| Payments                for debt issuance costs                                                                                                                   |   |                                               | (25,000    | ) |   | — |   |
| Proceeds                from issuance of long term debt                                                                                                           |   |                                               | 2,000,000  |   |   | 750,021 |   |
| Proceeds                from issuance of stock and warrants                                                                                                       |   |                                               | 11,084,783 |   |   | 2,888,836 |   |
| Payments                received on stock subscriptions receivable                                                                                                |   |                                               | 66,399     |   |   | — |   |
| Redemption                of common stock                                                                                                                         |   |                                               | —    |   |   | (62,975 | ) |
| Redemption                of preferred stock                                                                                                                      |   |                                               | (3,400     | ) |   | — |   |
| Exercise                of warrants                                                                                                                               |   |                                               | 6,960      |   |   | 390,279 |   |
| Preferred                stock dividends                                                                                                                          |   |                                               | (52,599    | ) |   | (125,513 | ) |
| Net                cash flows from financing activities                                                                                                           |   |                                               | 6,129,309  |   |   | 2,468,128 |   |
| INCREASE                (DECREASE) IN CASH AND CASH EQUIVALENTS                                                                                                   |   |                                               | 2,656,773  |   |   | (2,480,075 | ) |
| CASH                AND CASH EQUIVALENTS                                                                                                                          |   |                                               |       |   |   |   |   |
| Beginning                of period                                                                                                                                |   |                                               | 726,553    |   |   | 2,945,960 |   |
| End                of period                                                                                                                                      |   |                                               | 3,383,326  |   |   | 465,885 |   |
| SUPPLEMENTAL                DISCLOSURE OF CASH FLOW INFORMATION                                                                                                   |   |                                               |       |   |   |   |   |
| Cash                paid for interest, net of amortization of original issue                discount                                                              |   |                                               | 658,429    |   |   | 447,548 |   |
| SUPPLEMENTAL                DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES                                                                            |   |                                               |       |   |   |   |   |
| Note                receivable recorded on sale of discontinued operations                                                                                        |   |                                               | 400,000    |   |   | — |   |
| Issuance                of common stock for acquisition of assets, MBUSA and URON                                                                                 |   |                                               | —    |   |   | 274,800 |   |
| Conversion                of preferred stock and accrued dividends into common stock                                                                              |   |                                               | 1,834,001  |   |   | 776,500 |   |
| Current                liabilities converted to common stock                                                                                                      |   |                                               | 93,297     |   |   | 136,581 |   |
| Conversion                of notes payable into common stock                                                                                                      |   |                                               | 1,436,062  |   |   | 510,908 |   |
| Conversion                of dividend into common stock                                                                                                           |   |                                               | 185,045    |   |   | 78,591 |   |
| Note                receivable recorded on sale of intangibles to Satellite Broadcasting                Corporation                                               |   |                                               | 75,500     |   |   | — |   |
| Capital                lease obligation entered into as part of the purchase of intangibles                from                Satellite Broadcasting Corporation |   |                                               | 105,000    |   |   | — |   |
| Issuance                of common stock for purchase of SBC intangibles                                                                                           |   |                                               | 105,000    |   |   | — |   |
| Note                payable issued in relation to acquisition of Dinamo Entertainment,                LLC                                                         |   |                                               | 600,000    |   |   | — |   |
| Common                stock issued in relation to acquisition of Dinamo Entertainment,                LLC                                                         |   |                                               | 702,500    |   |   | — |   |
| Issuance                of common stock for acquisition of 21st                Century                                                                            |   |                                               | —    |   |   | 364,583 |   |
| Issuance                of preferred stock and notes payable for acquisition of assets -                Rainbow                                                   |   |                                               | —    |   |   | 6,519,999 |   |
| Purchase                of property and equipment as a reduction of accounts                receivable                                                            |   |                                               | —    |   |   | 40,714 |   |
| Capitalized                construction costs in accrued expenses                                                                                                 |   |                                               | —    |   |   | 20,000 |   |
| Issuance                of common stock of $3,850,000 and notes payable of $2,750,000 for                acquisition of assets - MDU                              |   |                                               | —    |   |   | 6,600,000 |   |
| Capital                lease assumed in acquisition of equipment from 21st                Century                                                                 |   |                                               | —    |   |   | 416,666 |   |
| Common                stock issued in lieu of cash for deferred financing costs                                                                                   |   |                                               | 36,000     |   |   | — |   |
| Common                stock issued in lieu of cash for other current assets                                                                                       |   |                                               | 218,000    |   |   | — |   |
| Warrants                issued for deferred compensation                                                                                                          |   |                                               | 213,120    |   |   | — |   |
| Issuance                of accrued liabilities for debt issuance costs                                                                                            |   |                                               | 125,000    |   |   | — |   |
|                                                                                                                                                              |   |                                               |       |   |   |   |   |
|                                                                                                                                                              |   |                                               |       |   |   |   |   |

----

----

**Note      1 - Unaudited Consolidated Financial Statements **

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----

**NOTE      2 - Summary of Significant Accounting Policies **

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*Nature      of Business*

| 1. | Continued                reduction of operating expenses by controlling payroll, professional                fees                and other general and administrative                expenses. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

| 2. | Solicit                  additional equity investment in the Company by either issuing preferred                  or                  common stock. The Company, in February 2005 issued $10,000,000                  worth of                  Class I Preferred Stock to a group of accredited                  investors. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

| 3. | Continue                to market Multiband services and acquire additional multi-dwelling                unit                customers. |
|----|------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

| 4. | Control                  capital expenditures by contracting Multiband services and equipment                  through a landlord-owned equipment                  program. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

| 5. | Establish                market for wireless internet                services. |
|----|--------------------------------------------------------------------------------|

|   |   |
|--------|--------|

| 6. | Discontinuation                  of Multiband business services segment which was unprofitable in                  2004. |
|----|--------------------------------------------------------------------------------------------------------------------------|

----

**MULTIBAND        CORPORATION AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**SEPTEMBER        30, 2005 AND 2004**

*Principles      of Consolidation*

*Discontinued      Operations*

*Revenues      and Cost Recognition*

----

**MULTIBAND        CORPORATION AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**SEPTEMBER        30, 2005 AND 2004**

*Goodwill      and Other Intangible Assets*

----

**MULTIBAND        CORPORATION AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**SEPTEMBER        30, 2005 AND 2004**

|                                                         |   |                              |       |                             |   |
|--------------------------------------------------------------|--------|-----------------------------------|------------|----------------------------------|--------|
|                                                         |   | September                30, 2005 |       | December                31, 2004 |   |
|                                                         |   | Gross                Carrying     |       | Accumulated                      |   | Gross                Carrying |   | Accumulated |   |
|                                                         |   | Amount                            |       | Amortization                     |   | Amount |   | Amortization |   |
| Intangible                assets subject to amortization     |   |                              |       |                             |   |   |   |   |   |
| Domain                name                                   |   | $                                 | 83,750     |                             | $      | 68,395 |   | $ | 83,750 |   | $ | 55,833 |   |
| Access                contracts                              |   |                              | 60,000     |                             |   | 48,333 |   |   | 60,000 |   |   | 33,333 |   |
| Debt                issuance costs                           |   |                              | 499,837    |                             |   | 251,675 |   |   | 313,837 |   |   | 47,214 |   |
| Right                of entry                                |   |                              | 17,376,709 |                             |   | 4,083,988 |   |   | 17,226,759 |   |   | 1,933,294 |   |
| Customer                cable lists                          |   |                              | 1,608,469  |                             |   | 540,137 |   |   | 753,930 |   |   | 286,967 |   |
| Total                                                        |   | $                                 | 19,628,765 |                             | $      | 4,992,528 |   | $ | 18,438,276 |   | $ | 2,356,641 |   |
| Intangible                assets not subject to amortization |   |                              |       |                             |   |   |   |   |   |   |   |   |   |
| Goodwill                                                     |   | $                                 | 1,154,871  |                             | $      | — |   | $ | 812,366 |   | $ | — |   |
|                                                         |   |                              |       |                             |   |   |   |   |   |   |   |   |   |

*Stock-Based      Compensation*

----

**MULTIBAND        CORPORATION AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**SEPTEMBER        30, 2005 AND 2004**

|                                                                       |   |                                                                |       |                                                               |   |                                                             |   |                                                              |       |
|----------------------------------------------------------------------------|--------|---------------------------------------------------------------------|------------|--------------------------------------------------------------------|--------|------------------------------------------------------------------|--------|-------------------------------------------------------------------|------------|
|                                                                       |   | Three                months ended September                30, 2005 |       | Three                months endedSeptember                30, 2004 |   | Nine                months endedSeptember                30,2005 |   | Nine                months endedSeptember                30, 2004 |       |
|                                                                       |   |                                                                |       |                                                               |   |                                                             |   |                                                              |       |   |   |   |   |
| Loss                attributable to common stockholders                    |   |                                                                | (3,328,489 | )                                                                  |   | (1,935,306                                                       | )      |                                                              | (8,808,769 | ) |   | (5,361,571 | ) |
| Pro                forma loss attributable to common shares                |   |                                                                | (3,361,016 | )                                                                  |   | (1,965,794                                                       | )      |                                                              | (9,226,215 | ) |   | (5,887,093 | ) |
|                                                                       |   |                                                                |       |                                                               |   |                                                             |   |                                                              |       |   |   |   |   |
| Basic                and diluted loss attributable to common shareholders: |   |                                                                |       |                                                               |   |                                                             |   |                                                              |       |   |   |   |   |
| As                reported                                                 |   |                                                                | (.11       | )                                                                  |   | (.08                                                             | )      |                                                              | (.31       | ) |   | (.24 | ) |
| Pro                forma loss attributable to common shares                |   |                                                                | (.11       | )                                                                  |   | (.08                                                             | )      |                                                              | (.32       | ) |   | (.26 | ) |
|                                                                       |   |                                                                |       |                                                               |   |                                                             |   |                                                              |       |   |   |   |   |
| Stock-based                compensation:                                   |   |                                                                |       |                                                               |   |                                                             |   |                                                              |       |   |   |   |   |
| As                reported                                                 |   |                                                                | —    |                                                               |   | 15,448                                                           |   |                                                              | —    |   |   | 212,935 |   |
| Pro                forma                                                   |   |                                                                | 32,527     |                                                               |   | 30,488                                                           |   |                                                              | 417,446    |   |   | 525,522 |   |

|                                            |   |                                                                     |                    |                                                                     |   |                                                              |   |                                                              |                    |
|-------------------------------------------------|--------|--------------------------------------------------------------------------|-------------------------|--------------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|-------------------------------------------------------------------|-------------------------|
|                                            |   | Three                months ended September                30, 2005 |                    | Three                months ended September                30, 2004 |   | Nine                months endedSeptember                30, 2005 |   | Nine                months endedSeptember                30, 2004 |                    |
|                                            |   |                                                                     |                    |                                                                     |   |                                                              |   |                                                              |                    |   |   |   |   |
| Risk-free                interest rate          |   |                                                                     | 4.12%                   |                                                                     |   | 3.50%                                                             |   |                                                              | 3.75%                   |   |   | 3.50% |   |
| Expected                life of options granted |   |                                                                     | 10                Years |                                                                     |   | 10                Years                                           |   |                                                              | 10                Years |   |   | 10                Years |   |
| Expected                volatility range        |   |                                                                     | 211%                    |                                                                     |   | 184%                                                              |   |                                                              | 207%                    |   |   | 184% |   |
| Expected                dividend yield          |   |                                                                     | 0%                      |                                                                     |   | 0%                                                                |   |                                                              | 0%                      |   |   | 0% |   |

*Net      Loss per Common Share*

----

**MULTIBAND        CORPORATION AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**SEPTEMBER        30, 2005 AND 2004**

*Segment        Reporting*

*Reclassifications*

*Recent      Accounting Pronouncement*

----

**MULTIBAND        CORPORATION AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**SEPTEMBER        30, 2005 AND 2004**

----

**NOTE      3 - Business Acquisitions **

----

----

**MULTIBAND        CORPORATION AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**SEPTEMBER        30, 2005 AND 2004**

----

**MULTIBAND        CORPORATION AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**SEPTEMBER        30, 2005 AND 2004**

|                                                        |   |    |      |        |   |                    |   |       |      |
|-------------------------------------------------------------|--------|---------|-----------|-------------|--------|-------------------------|--------|------------|-----------|
|                                                        |   | **MDU** |      | **Rainbow** |   | **21****st****Century** |   | **Dinamo** |      |
| Allocation                of Purchase Price:                |   |    |      |        |   |                    |   |       |      |
|                                                        |   |    |      |        |   |                    |   |       |      |
| Total                Cash/Stock/Notes Payable Consideration |   | $       | 7,000,000 |        | $      | 7,219,999               |   | $          | 987,000   |   | $ | 1,727,500 |   |
| Add:                Transaction Costs                       |   |    | 726,550   |        |   | 361,850                 |   |       | 93,754    |   |   | 176,525 |   |
| Add:                Liabilities assumed                     |   |    | 2,030,373 |        |   | 319,921                 |   |       | —   |   |   | 170,200 |   |
| Total                Consideration                          |   |    | 9,756,923 |        |   | 7,901,770               |   |       | 1,080,754 |   |   | 2,074,225 |   |
| Less:                Cash and accounts receivable           |   |    | 59,044    |        |   | —                 |   |       | —   |   |   | — |   |
| Less:                Tangible assets                        |   |    | —   |        |   | 773,000                 |   |       | 372,420   |   |   | 1,450,000 |   |
| Less:                Goodwill                               |   |    | —   |        |   | 800,000                 |   |       | —   |   |   | 350,000 |   |
| Intangible                assets                            |   | $       | 9,697,879 |        | $      | 6,328,770               |   | $          | 708,334   |   | $ | 274,225 |   |
|                                                        |   |    |      |        |   |                    |   |       |      |   |   |   |   |

----

**MULTIBAND        CORPORATION AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**SEPTEMBER        30, 2005 AND 2004**

|                                                                       |   |                                               |       |                                          |   |                                               |   |                                          |       |
|----------------------------------------------------------------------------|--------|----------------------------------------------------|------------|-----------------------------------------------|--------|----------------------------------------------------|--------|-----------------------------------------------|------------|
|                                                                       |   | **2005**                                           |       | **2005**                                      |   | **2004**                                           |   | **2004**                                      |       |
|                                                                       |   | **Consolidated****as                    reported** |       | **Pro                    Forma****Disclosed** |   | **Consolidated****as                    reported** |   | **Pro                    Forma****Disclosed** |       |
| Three                    months ended September 30, 2005 and 2004          |   |                                               |       |                                          |   |                                               |   |                                          |       |
| Revenues                                                                   |   | $                                                  | 4,257,660  |                                          | $      | 4,257,660                                          |   | $                                             | 3,918,342  |   | $ | 3,984,174 |   |
|                                                                       |   |                                               |       |                                          |   |                                               |   |                                          |       |   |   |   |   |
| Loss                    from continuing operations                         |   |                                               | (2,212,558 | )                                             |   | (2,212,558                                         | )      |                                          | (1,197,603 | ) |   | (1,197,897 | ) |
|                                                                       |   |                                               |       |                                          |   |                                               |   |                                          |       |   |   |   |   |
| Income                    (loss) from discontinued operations              |   |                                               | 248,249    |                                          |   | 248,249                                            |   |                                          | (653,989   | ) |   | (653,989 | ) |
|                                                                       |   |                                               |       |                                          |   |                                               |   |                                          |       |   |   |   |   |
| Net                    loss                                                |   | $                                                  | (1,964,309 | )                                             | $      | (1,964,309                                         | )      | $                                             | (1,851,592 | ) | $ | (1,851,886 | ) |
|                                                                       |   |                                               |       |                                          |   |                                               |   |                                          |       |   |   |   |   |
| Basic                    and diluted loss per share:                       |   |                                               |       |                                          |   |                                               |   |                                          |       |   |   |   |   |
| Loss                    from continuing operations                         |   | $                                                  | (.08       | )                                             | $      | (.08                                               | )      | $                                             | (.05       | ) | $ | (.05 | ) |
| Income                    (loss) from discontinued operations              |   | $                                                  | .01        |                                          | $      | .01                                                |   | $                                             | (.02       | ) | $ | (.02 | ) |
| Net                    loss                                                |   | $                                                  | (.07       | )                                             | $      | (.07                                               | )      | $                                             | (.07       | ) | $ | (.07 | ) |
|                                                                       |   |                                               |       |                                          |   |                                               |   |                                          |       |   |   |   |   |
| Weighted                    average shares outstanding - basic and diluted |   |                                               | 29,352,257 |                                          |   | 29,352,257                                         |   |                                          | 25,480,077 |   |   | 25,480,077 |   |

|                                                                         |   | **2005**                                             |       | **2005**                                        |   | **2004**                                             |   | **2004**                                        |       |
|------------------------------------------------------------------------------|--------|------------------------------------------------------|------------|-------------------------------------------------|--------|------------------------------------------------------|--------|-------------------------------------------------|------------|
|                                                                         |   | **Consolidated****as                      reported** |       | **Pro                      Forma****Disclosed** |   | **Consolidated****as                      reported** |   | **Pro                      Forma****Disclosed** |       |
| Nine                      months ended September 30, 2005 and 2004           |   |                                                 |       |                                            |   |                                                 |   |                                            |       |
| Revenues                                                                     |   | $                                                    | 12,148,142 |                                            | $      | 12,148,142                                           |   | $                                               | 7,592,258  |   | $ | 11,087,407 |   |
|                                                                         |   |                                                 |       |                                            |   |                                                 |   |                                            |       |   |   |   |   |
| Loss                      from continuing operations                         |   |                                                 | (5,773,744 | )                                               |   | (5,773,744                                           | )      |                                            | (3,512,391 | ) |   | (3,478,538 | ) |
|                                                                         |   |                                                 |       |                                            |   |                                                 |   |                                            |       |   |   |   |   |
| Loss                      from discontinued operations                       |   |                                                 | (70,127    | )                                               |   | (70,127                                              | )      |                                            | (1,307,540 | ) |   | (1,307,540 | ) |
|                                                                         |   |                                                 |       |                                            |   |                                                 |   |                                            |       |   |   |   |   |
| Net                      loss                                                |   | $                                                    | (5,843,871 | )                                               | $      | (5,843,871                                           | )      | $                                               | (4,819,931 | ) | $ | (4,821,889 | ) |
|                                                                         |   |                                                 |       |                                            |   |                                                 |   |                                            |       |   |   |   |   |
| Basic                      and diluted loss per share:                       |   |                                                 |       |                                            |   |                                                 |   |                                            |       |   |   |   |   |
| Loss                      from continuing operations                         |   | $                                                    | (.21       | )                                               | $      | (.21                                                 | )      | $                                               | (.16       | ) | $ | (.16 | ) |
| Loss                      from discontinued operations                       |   | $                                                    | (.00       | )                                               | $      | (.00                                                 | )      | $                                               | (.05       | ) | $ | (.05 | ) |
| Net                      loss                                                |   | $                                                    | (.21       | )                                               | $      | (.21                                                 | )      | $                                               | (.21       | ) | $ | (.21 | ) |
|                                                                         |   |                                                 |       |                                            |   |                                                 |   |                                            |       |   |   |   |   |
| Weighted                      average shares outstanding - basic and diluted |   |                                                 | 28,408,934 |                                            |   | 28,408,934                                           |   |                                            | 22,494,250 |   |   | 22,494,250 |   |

----

**MULTIBAND        CORPORATION AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**SEPTEMBER        30, 2005 AND 2004**

----

**NOTE      4 - Stockholder Equity **

----

|                                           |   | Number                of Warrants |       | Weighted                - Average Exercise Price |   |
|------------------------------------------------|--------|-----------------------------------|------------|--------------------------------------------------|--------|
| Outstanding,                December 31, 2004  |   |                              | 11,795,641 |                                             |   | 1.64 |   |
| Granted                                        |   |                              | 8,887,273  |                                             |   | 1.70 |   |
| Exercised                                      |   |                              | (33,066    | )                                                |   | .91 |   |
| Cancelled                                      |   |                              | (1,621,219 | )                                                |   | 1.80 |   |
| Outstanding,                September 30, 2005 |   |                              | 19,028,629 |                                             |   | 1.66 |   |

----

**NOTE      5 - Accrued Liabilities **

----

|                                                 |   | **September                30, 2005** |      | **December                31, 2004** |   |
|------------------------------------------------------|--------|---------------------------------------|-----------|--------------------------------------|--------|
| Payroll                and related taxes             |   | $                                     | 337,982   |                                 | $      | 389,394 |   |
| Accrued                preferred stock dividends     |   |                                  | 1,353,461 |                                 |   | 415,120 |   |
| Accrued                liability-vendor charge backs |   |                                  | 1,347,673 |                                 |   | 1,901,972 |   |
| Other                                                |   |                                  | 475,256   |                                 |   | 323,538 |   |
| **Total**                                            |   | $                                     | 3,514,372 |                                 | $      | 3,030,024 |   |

----

**MULTIBAND        CORPORATION AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**SEPTEMBER        30, 2005 AND 2004**

----

**NOTE      6 - Business Segments **

----

|                                                      |   |                             |       |   |   |      |   |                                     |       |   |   |
|-----------------------------------------------------------|--------|----------------------------------|------------|--------|--------|-----------|--------|------------------------------------------|------------|--------|--------|
|                                                      |   | Multiband                  Corp. |       | MDU    |   | MCS       |   | Discontinued                  Operations |       | Total  |   |
|                                                      |   |                             |       |   |   |      |   |                                     |       |   |   |
| Three                  months ended September 30, 2005:   |   |                             |       |   |   |      |   |                                     |       |   |   |
| Revenues                                                  |   |                             | 0          |   |   | 2,091,442 |   |                                     | 2,166,218  |   |   | 0 |   |   | 4,257,660 |   |
| Income                  (loss) from continuing operations |   |                             | (1,315,992 | )      |   | 475,511   |   |                                     | (1,372,077 | )      |   | 0 |   |   | (2,212,558 | ) |
| Identifiable                  assets                      |   |                             | 5,980,426  |   |   | 8,807,015 |   |                                     | 13,770,664 |   |   | 0 |   |   | 28,558,105 |   |
| Depreciation                  and amortization            |   |                             | 71,360     |   |   | 401,079   |   |                                     | 782,749    |   |   | 0 |   |   | 1,255,188 |   |
| Capital                  expenditures                     |   |                             | 20,707     |   |   | 0         |   |                                     | 258,015    |   |   | 4,482 |   |   | 283,204 |   |

|                                                          |   | Multiband                      Corp. |      | MDU    |   | MCS        |   | Discontinued                      Operations |       | Total  |   |
|---------------------------------------------------------------|--------|--------------------------------------|-----------|--------|--------|------------|--------|----------------------------------------------|------------|--------|--------|
|                                                          |   |                                 |      |   |   |       |   |                                         |       |   |   |
| Three                      months ended September 30, 2004:   |   |                                 |      |   |   |       |   |                                         |       |   |   |
| Revenues                                                      |   |                                 | 0         |   |   | 2,122,375  |   |                                         | 1,795,967  |   |   | 0 |   |   | 3,918,342 |   |
| Income                      (loss) from continuing operations |   |                                 | (651,907  | )      |   | 467,222    |   |                                         | (1,012,918 | )      |   | 0 |   |   | (1,197,603 | ) |
| Identifiable                      assets                      |   |                                 | 2,491,401 |   |   | 10,412,321 |   |                                         | 12,252,604 |   |   | 4,857,792 |   |   | 30,014,118 |   |
| Depreciation                      and amortization            |   |                                 | 7,636     |   |   | 394,911    |   |                                         | 645,484    |   |   | 0 |   |   | 1,048,031 |   |
| Capital                      expenditures                     |   |                                 | 3,083     |   |   | 0          |   |                                         | 203,113    |   |   | 37,201 |   |   | 243,397 |   |

|                                                          |   | Multiband                      Corp. |       | MDU  |   | MCS  |   | Discontinued                      Operations |       | Total  |   |
|---------------------------------------------------------------|--------|--------------------------------------|------------|-----------|--------|-----------|--------|----------------------------------------------|------------|-------------|--------|
| Nine                      months ended September 30, 2005:    |   |                                 |       |      |   |      |   |                                         |       |        |   |
| Revenues                                                      |   |                                 | 0          |      |   | 6,105,405 |   |                                         | 6,042,737  |        |   | 0 |   |   | 12,148,142 |   |
| Income                      (loss) from continuing operations |   |                                 | (3,599,284 | )         |   | 1,817,807 |   |                                         | (3,992,267 | )           |   | 0 |   |   | (5,773,744 | ) |
| Identifiable                      assets                      |   |                                 | 5,980,426  |      |   | 8,807,015 |   |                                         | 13,770,664 |        |   | 0 |   |   | 28,558,105 |   |
| Depreciation                      and amortization            |   |                                 | 143,131    |      |   | 1,203,237 |   |                                         | 2,276,554  |        |   | 0 |   |   | 3,622,922 |   |
| Capital                      expenditures                     |   |                                 | 26,136     |      |   | 0         |   |                                         | 629,293    |        |   | 42,840 |   |   | 698,269 |   |

----

**MULTIBAND        CORPORATION AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**SEPTEMBER        30, 2005 AND 2004**

|                                                    |   |                                 |       |   |   |       |   |                                   |       |   |   |
|---------------------------------------------------------|--------|--------------------------------------|------------|--------|--------|------------|--------|----------------------------------------|------------|--------|--------|
|                                                    |   | Multiband                Corp.  |       | MDU    |   | MCS        |   | Discontinued                Operations |       | Total  |   |
| Nine                months ended September 30, 2004:    |   |                                 |       |   |   |       |   |                                   |       |   |   |
| Revenues                                                |   |                                 | 0          |   |   | 3,998,039  |   |                                   | 3,594,219  |   |   | 0 |   |   | 7,592,258 |   |
| Income                (loss) from continuing operations |   |                                 | (2,196,055 | )      |   | 591,573    |   |                                   | (1,907,909 | )      |   | 0 |   |   | (3,512,391 | ) |
| Identifiable                assets                      |   |                                 | 2,491,401  |   |   | 10,412,321 |   |                                   | 12,252,604 |   |   | 4,857,792 |   |   | 30,014,118 |   |
| Depreciation                and amortization            |   |                                 | 527,930    |   |   | 795,406    |   |                                   | 1,227,617  |   |   | 0 |   |   | 2,550,953 |   |
| Capital                expenditures                     |   |                                 | 9,773      |   |   | 0          |   |                                   | 338,195    |   |   | 135,842 |   |   | 483,810 |   |

----

**NOTE      7 - Commitments and Contingencies **

----

*Legal      Proceedings*

*Significant      Relationship*

----

**NOTE      8 - Related Party **

----

----

**NOTE      9 -Sale of Multiband Business Services segment**

----

----

**MULTIBAND      CORPORATION AND SUBSIDIARIES**

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**SEPTEMBER        30, 2005 AND 2004**

|                                                                  |   |
|-----------------------------------------------------------------------|--------|
| **Sale                  Price**                                       |   |
| Cash                  proceeds                                        |   | $ | 1,682,184 |   |
| Note                  receivable                                      |   |   | 400,000 |   |
| Assumed                  liabilities                                  |   |   | 438,868 |   |
| Total                  sale price                                     |   |   | 2,521,052 |   |
|                                                                       |
| **Assets                  sold**                                      |
| Inventory,                  net of reserve                            |   |   | 1,045,110 |   |
| Property                  and equipment                               |   |   | 52,351 |   |
| Net                  assets sold                                      |   |   | 1,097,461 |   |
|                                                                  |
| **Less                  costs and expenses**                          |
| Broker’s                  fee                                   |   |   | 122,500 |   |
| Other                  selling expense                                |   |   | 10,135 |   |
| Sublease                  for one year at no charge                   |   |   | 500,000 |   |
| Additional                  free rent related to inventory adjustment |   |   | 500,000 |   |
| Legal                  and accounting costs                           |   |   | 37,600 |   |
| Total                  costs                                          |   |   | 1,170,235 |   |
| **Net                  gain on sale**                                 |   | $ | 253,356 |   |

----

**MULTIBAND        CORPORATION AND SUBSIDIARIES**

**NOTES          TO CONSOLIDATED FINANCIAL STATEMENTS**

**SEPTEMBER          30, 2005 AND 2004**

|                                                      |   |                                                          |    |                                                          |   |
|-----------------------------------------------------------|--------|---------------------------------------------------------------|---------|---------------------------------------------------------------|--------|
|                                                      |   | Three                Months EndedSeptember                30, |    | Nine                months ended September                30, |   |
| **Statement                of Operations**                |   | 2005                                                          |    | 2004                                                          |   | 2005 |   | 2004 |   |
| Revenues                                                  |   | $                                                             | 1,056   |                                                          | $      | 5,123,926 |   | $ | 3,699,983 |   | $ | 15,106,352 |   |
| Cost                of sales                              |   |                                                          | — |                                                          |   | 3,847,266 |   |   | 2,701,664 |   |   | 11,519,594 |   |
| Selling,                general and administrative        |   |                                                          | (97,328 | )                                                             |   | 1,232,561 |   |   | 1,210,174 |   |   | 3,794,751 |   |
| Depreciation                and amortization              |   |                                                          | — |                                                          |   | 71,537 |   |   | 56,188 |   |   | 278,405 |   |
| Impairment                of goodwill                     |   |                                                          | — |                                                          |   | 527,879 |   |   | — |   |   | 527,879 |   |
| Income                (loss) from operations              |   |                                                          | 98,834  |                                                          |   | (555,317 | ) |   | (268,043 | ) |   | (1,014,277 | ) |
| Other                income (expense)                     |   |                                                          | — |                                                          |   | (98,672 | ) |   | (55,440 | ) |   | (293,263 | ) |
| Net                income (loss)                          |   |                                                          | 98,384  |                                                          |   | (653,989 | ) |   | (323,483 | ) |   | (1,307,540 | ) |
| Gain                on sale                               |   |                                                          | 149,865 |                                                          |   | — |   |   | 253,356 |   |   | — |   |
| Income                (loss) from discontinued operations |   | $                                                             | 248,249 |                                                          | $      | (653,989 | ) | $ | (70,127 | ) | $ | (1,307,540 | ) |
|                                                      |   |                                                          |    |                                                          |   |   |   |   |   |   |   |   |   |

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**FORWARD-LOOKING      STATEMENTS**

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**ITEM      2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS      OF      OPERATION **

**OUR      COMPANY**

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**SELECTED      CONSOLIDATED FINANCIAL DATA**

|                                                                                                                   |   |                                                                    |   |                                                                    |   |
|------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------|--------|-------------------------------------------------------------------------|--------|
|                                                                                                                   |   | DOLLAR                AMOUNTS AS APERCENTAGE                OF REVENUES |   | DOLLAR                AMOUNTS AS APERCENTAGE                OF REVENUES |   |
|                                                                                                                   |   | THREE                MONTHS ENDED                                       |   | NINE                MONTHS ENDED                                        |   |
|                                                                                                                   |   | September                30, 2005(unaudited)                            |   | September                30, 2004(unaudited)                            |   | September                30, 2005(unaudited) |   | September                30, 2004(unaudited) |   |
|                                                                                                                   |   |                                                                    |   |                                                                    |   |   |   |   |   |   |   |   |   |
| REVENUES                                                                                                               |   |                                                                    | 100%   |                                                                    |   | 100% |   |   | 100% |   |   | 100% |   |
|                                                                                                                   |   |                                                                    |   |                                                                    |   |   |   |   |   |   |   |   |   |
| COST                OF PRODUCTS & SERVICES (Exclusive of depreciation and amortization                shown below) |   |                                                                    | 54.1%  |                                                                    |   | 49.5% |   |   | 48.5% |   |   | 53.5% |   |
|                                                                                                                   |   |                                                                    |   |                                                                    |   |   |   |   |   |   |   |   |   |
| SELLING,                GENERAL & ADMINISTRATIVE                                                                   |   |                                                                    | 57.6%  |                                                                    |   | 47.8% |   |   | 57.4% |   |   | 50.6% |   |
|                                                                                                                   |   |                                                                    |   |                                                                    |   |   |  |   |   |  |   |   |   |
| DEPRECIATION                & AMORTIZATION                                                                         |   |                                                                    | 29.5%  |                                                                    |   | 26.7% |   |   | 29.8% |   |   | 33.6% |   |
|                                                                                                                   |   |                                                                    |   |                                                                    |   |   |   |   |   |   |   |   |   |
| LOSS                FROM OPERATIONS                                                                                    |   |                                                                    | -41.2% |                                                                    |   | -24.0% |   |   | -35.7% |   |   | -37.7% |   |
|                                                                                                                   |   |                                                                    |   |                                                                    |   |   |   |   |   |   |   |   |   |
| INTEREST                EXPENSE & OTHER, NET                                                                       |   |                                                                    | -10.7% |                                                                    |   | -6.6% |   |   | -11.8% |   |   | -8.6% |   |
|                                                                                                                   |   |                                                                    |   |                                                                    |   |   |   |   |   |   |   |   |   |
| LOSS                FROM CONTINUING OPERATIONS                                                                         |   |                                                                    | -51.9% |                                                                    |   | -30.6% |   |   | -47.5% |   |   | -46.3% |   |
|                                                                                                                   |   |                                                                    |   |                                                                    |   |   |   |   |   |   |   |   |   |
| INCOME                (LOSS) FROM DISCONTINUED OPERATIONS                                                              |   |                                                                    | 5.8%   |                                                                    |   | -16.7% |   |   | -0.6% |   |   | -17.2% |   |
|                                                                                                                   |   |                                                                    |   |                                                                    |   |   |   |   |   |   |   |   |   |
| NET                LOSS                                                                                                |   |                                                                    | -46.1% |                                                                    |   | -47.3% |   |   | -48.1% |   |   | -63.5% |   |

**RESULTS      OF OPERATIONS**

*Revenues*

----

*Cost      of Products and Services (Exclusive of depreciation and      amortization)*

*Selling,      General and Administrative Expenses*

*Interest      Expense*

----

*Income(loss)      from Operations*

*Net      Loss*

*Liquidity      and Capital Resources*

----

*Capital      Expenditures*

**CRITICAL      ACCOUNTING POLICIES AND ESTIMATES**

**ITEM      3. QUANTITIVE AND QUALITIVE DISCLOSURE ABOUT MARKET RISK**

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**ITEM      4. CONTROLS AND PROCEDURES**

**PART      II. OTHER INFORMATION**

**ITEM      1. LEGAL PROCEEDINGS**

**ITEM      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**

|  | (a) | An                  annual meeting of Multiband Corporation shareholders was held on                  August                  31, 2005. There were present or present by proxy at the meeting                  10,692,303                  votes, the majority necessary to hold a                  quorum. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |   |
|--------|--------|--------|

|  | (b) | The                    meeting resulted in the following votes related to the following                    proxy                    items: |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------|

|  | 1. | Election                of Directors: |
|--|----|---------------------------------------|

|                                        |   | For    |       | Against |   | Abstain |   |
|---------------------------------------------|--------|--------|------------|---------|--------|---------|--------|
| Bennett                                     |   |   | 10,690,353 |    |   | 1,250   |   |   | 0 |   |
| Mandel                                      |   |   | 10,689,386 |    |   | 2,917   |   |   | 0 |   |
| Bell                                        |   |   | 10,689,386 |    |   | 2,917   |   |   | 0 |   |
| Miller,                Dodge, Harris, Weiss |   |   | 10,690,353 |    |   | 1,250   |   |   | 0 |   |

|  | 2. | Ratify                  the election of Virchow, Krause & Company, LLP as independent auditors                  of the Company for Fiscal Year                  2004. |
|--|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| For        |   | Against |   | Abstain |   |
|------------|--------|---------|--------|---------|--------|
| 10,692,303 |   |    | 0      |    |   | 0 |   |

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**ITEM      6. EXHIBITS **

|   | (a) | Exhibits |
|--------|-----|----------|

|   |   |   |
|--------|--------|--------|

|  | 31.1 | Certification                  of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14                  of the                  Exchange Act. |
|--|------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 31.2 | Certification                  of Chief Financial Officer pursuant to Rules 13a-14 and 15d-14                  of the                  Exchange Act. |
|--|------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 32.1 | Certification                  of Chief Executive Officer pursuant to 18 U.S.C. Section                  1350. |
|--|------|----------------------------------------------------------------------------------------------------------------|

|  | 32.2 | Certification                  of Chief Financial Officer pursuant to 18 U.S.C. Section                  1350. |
|--|------|----------------------------------------------------------------------------------------------------------------|

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**SIGNATURES**

|                                      |                                                   |                                  |
|-------------------------------------------|--------------------------------------------------------|---------------------------------------|
|                                      | **MULTIBAND                CORPORATION****Registrant** |
|                                 |                                              |                             |
| Date: November              21, 2005 | By:                                          | /s/ James              L. Mandel |
|                                      |                                                        |
|                                      | *Chief              Executive Officer*                 |

|                                        |                                                                                                      |                                   |
|---------------------------------------------|-----------------------------------------------------------------------------------------------------------|----------------------------------------|
| Date: November                21, 2005 | By:                                                                                             | /s/ Steven                M. Bell |
|                                        |                                                                                                           |
|                                        | *Chief                  Executive Officer**(Principal Financial and Accounting                  Officer)* |

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