SECURITIES
      AND EXCHANGE COMMISSION


**Washington,
      D.C. 20549**


**___________**


FORM
      10-Q





**(Mark
                One)**
              x
            QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
                ACT
                OF 1934FOR
                THE PERIOD ENDING MARCH 31, 2006ORo
            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


___________





MULTIBAND
      CORPORATION


(Exact
      name of registrant as specified in its charter)





**MINNESOTA**


(State
      or
      other jurisdiction of incorporation or organization)





**41 - 1255001**


(IRS
      Employer Identification No.)





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


(Address
      of principal executive offices)





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


**Internet:**  www.multibandusa.com


(Registrant's
      telephone number, facsimile number, and Internet address)





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
      during the preceding 12 months (or for such shorter period that the
      registrant was required to file such reports), and (2) has been subject to
      such filing requirements for the past 90 days.





Yes x No o





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange
      Act:





Large
      accelerated filer o Accelerated filer o Non-accelerated filer x





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).





Yes o No x





On
      May 1,
      2006 there were 32,539,170 shares outstanding of the registrant's common stock,
      no par value, and 446,098 outstanding shares of the registrant's convertible
      preferred stock.











**PART
      I. FINANCIAL INFORMATION**





**ITEM
      1. CONSOLIDATED FINANCIAL STATEMENTS**





**MULTIBAND
      CORPORATION AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS**





Three
                Months EndedMarch
                31, 2006 (unaudited)
            
            
            March
                31, 2005
              (unaudited)**REVENUES**
            
            $
            4,404,044
            
            $
            3,706,876**COSTS
                AND EXPENSES**Cost
                of products and services (exclusive of depreciation and amortization
                shown
                separately below)
            
            
            2,056,527
            
            
            1,872,268Selling,
                general and administrative
            
            
            2,972,223
            
            
            2,146,912Depreciation
                and amortization
            
            
            1,302,456
            
            
            1,148,867Total
                costs and expenses
            
            
            6,331,206
            
            
            5,168,047**LOSS
                FROM OPERATIONS**
            
            
            (1,927,162
            )
            
            (1,461,171
            )**OTHER
                EXPENSE**Interest
                expense
            
            
            (304,681
            )
            
            (685,701
            )Other
                income (expense)
            
            
            41,437
            
            
            4,932Total
                other expense
            
            
            (263,244
            )
            
            (680,769
            )**LOSS
                FROM CONTINUING OPERATIONS**
            
            
            (2,190,406
            )
            
            (2,141,940
            )**GAIN
                (LOSS) FROM DISCONTINUED OPERATIONS**
            
            
            2,200
            
            
            (441,268
            )**NET
                LOSS**
            
            
            (2,188,206
            )
            
            (2,583,208
            )Preferred
                stock dividends
            
            
            263,106
            
            
            931,084**LOSS
                ATTRIBUTABLE TO COMMON STOCKHOLDERS**
            
            $
            (2,451,312
            )
            $
            (3,514,292
            )**BASIC
                AND DILUTED LOSS PER COMMON SHARE:****LOSS
                FROM CONTINUING OPERATIONS**
            
            $
            (.07
            )
            $
            (.08
            )**LOSS
                FROM DISCONTINUED OPERATIONS**
            
            $
            -
            
            $
            (.01
            )**NET
                LOSS**
            
            $
            (.07
            )
            $
            (.09
            )**LOSS
                ATTRIBUTABLE TO COMMON STOCKHOLDERS**
            
            $
            (.08
            )
            $
            (.13
            )**WEIGHTED
                AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED**
            
            
            32,155,873
            
            
            27,216,574





See
      notes
      to condensed consolidated financial statements




2


**MULTIBAND
      CORPORATION AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS**




***ASSETS***


March
                31, 2006(unaudited)
            
            
            December
                31, 2005(audited)**CURRENT
                ASSETS**Cash
                and cash equivalents
            
            $
            2,100,540
            
            $
            3,100,427Accounts
                receivable, net
            
            
            2,102,391
            
            
            2,367,864Inventories
            
            
            222,698
            
            
            241,015Prepaid
                expenses and other
            
            
            211,525
            
            
            216,885Current
                portion of notes receivable
            
            
            6,000
            
            
            11,316Total
                Current Assets
            
            
            4,643,154
            
            
            5,937,507**PROPERTY
                AND EQUIPMENT, NET**
            
            
            5,235,877
            
            
            5,247,240**OTHER
                ASSETS**Goodwill
            
            
            954,871
            
            
            954,871Intangible
                assets, net
            
            
            13,061,724
            
            
            13,923,542Notes
                receivable - long-term, net
            
            
            65,451
            
            
            61,341Other
                assets
            
            
            163,744
            
            
            146,904Total
                Other Assets
            
            
            14,245,790
            
            
            15,086,658**TOTAL
                ASSETS**
            
            $
            24,124,821
            
            $
            26,271,405


***LIABILITIES
      AND STOCKHOLDERS' EQUITY***


**CURRENT
                LIABILITIES**Checks
                issued in excess of cash in bank
            
            $
            -
            
            $
            93,005Mandatory
                redeemable preferred stock, 28,000 and 33,334 Class F preferred
                shares
            
            
            280,000
            
            
            333,334Current
                portion of long-term debt
            
            
            523,314
            
            
            616,260Current
                portion of note payable - stockholder
            
            
            30,000
            
            
            32,837Current
                portion of capital lease obligations
            
            
            179,434
            
            
            179,932Accounts
                payable
            
            
            1,951,326
            
            
            1,761,249Accrued
                liabilities
            
            
            2,860,840
            
            
            2,741,054Customer
                deposits
            
            
            62,685
            
            
            64,161Current
                liabilities of discontinued operations
            
            
            500,000
            
            
            500,000Deferred
                service obligations and revenue
            
            
            637,475
            
            
            587,093Total
                Current Liabilities
            
            
            7,025,074
            
            
            6,908,925**LONG-TERM
                LIABILITIES**Long-term
                debt, net
            
            
            3,778,088
            
            
            3,816,536Capital
                lease obligations, net of current portion
            
            
            416,434
            
            
            452,649Long-term
                liabilities of discontinued operations
            
            
            -
            
            
            125,000Total
                Liabilities
            
            
            11,219,596
            
            
            11,303,110**COMMITMENTS
                AND CONTINGENCIES****STOCKHOLDERS'
                EQUITY**Cumulative
                convertible preferred stock, no par value:8%
                Class A (27,651 and 27,931 shares issued and outstanding, $290,336
                and
                $293,276 liquidation preference)
            
            
            416,952
            
            
            419,75210%
                Class B (8,300 and 8,390 shares issued and outstanding, $87,150 and
                $88,095 liquidation preference)
            
            
            58,000
            
            
            58,90010%
                Class C (124,960 and 125,050 shares issued and outstanding, $1,249,600
                and
                $1,250,500 liquidation preference)
            
            
            1,606,705
            
            
            1,607,60510%
                Class F (150,000 and 150,000 shares issues and outstanding, $1,500,000
                and
                $1,500,000 liquidation preference)
            
            
            1,500,000
            
            
            1,500,0008%
                Class G (45,245 and 45,245 shares issued and outstanding, $452,450
                and
                $452,450 liquidation preference)
            
            
            179,897
            
            
            179,8976%
                Class H (2.0 and 2.0 shares issued and outstanding, $200,000 and
                $200,000
                liquidation preference)
            
            
            -
            
            
            -Variable
                rate % Class I (90,000 and 90,000 shares issued and outstanding,
                $9,000,000 and $9,000,000 liquidation preference)
            
            
            -
            
            
            -Common
                stock, no par value (32,172,891 and 32,134,558 shares issued and
                outstanding)
            
            
            22,836,072
            
            
            22,801,405Stock
                subscriptions receivable
            
            
            (285,173
            )
            
            (297,105
            )Options
                and warrants
            
            
            44,575,922
            
            
            44,259,540Unamortized
                compensation
            
            
            -
            
            
            (29,861
            )Accumulated
                deficit
            
            
            (57,983,150
            )
            
            (55,531,838
            )Total
                Stockholders' Equity
            
            
            12,905,225
            
            
            14,968,295**TOTAL
                LIABILITIES AND STOCKHOLDERS' EQUITY**
            
            $
            24,124,821
            
            $
            26,271,405


See
      notes
      to condensed consolidated financial statements





3


**MULTIBAND
      CORPORATION AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**





**THREE
                MONTHS ENDED MARCH
                31,****2006**
            
            
            **2005**(unaudited)
            
            
            (unaudited)**OPERATING
                ACTIVITIES**Net
                loss
            
            $
            (2,188,206
            )
            $
            (2,583,208
            )Adjustments
                to reconcile net loss to net cash flows from operating
                activities:Depreciation
                and amortization
            
            
            1,345,846
            
            
            1,273,112Amortization
                of deferred compensation
            
            
            29,480
            
            
            17,761Amortization
                of original issue discount
            
            
            114,908
            
            
            500,098Gain
                on sale of segment
            
            
            -
            
            
            (103,491
            )Common
                stock issued for services
            
            
            -
            
            
            19,200Increase
                in notes receivable allowance
            
            
            -
            
            
            89,051Reserve
                for stock subscriptions and interest receivable
            
            
            5,932
            
            
            -Stock
                based compensation expense
            
            
            316,763
            
            
            -Change
                in allowance for doubtful accounts on accounts receivable
            
            
            (191,450
            )
            
            -Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            456,923
            
            
            (515,012
            )Inventories
            
            
            18,317
            
            
            (323,069
            )Prepaid
                expenses and other
            
            
            5,360
            
            
            (62,252
            )Other
                assets
            
            
            (16,840
            )
            
            -Wholesale
                line of credit
            
            
            -
            
            
            (926,201
            )Accounts
                payable and accrued liabilities
            
            
            (13,656
            )
            
            (377,715
            )Deferred
                service obligations and revenue
            
            
            50,382
            
            
            73,564Liabilities
                of discontinued operations
            
            
            (125,000
            )
            
            -Customer
                deposits
            
            
            (1,476
            )
            
            265,249Net
                cash flows from operating activities
            
            
            (192,717
            )
            
            (2,652,913
            )**INVESTING
                ACTIVITIES**Purchases
                of property and equipment
            
            
            (362,006
            )
            
            (141,150
            )Purchase
                of intangible assets
            
            
            (10,750
            )
            
            (120,000
            )Purchase
                of Ultravision
            
            
            -
            
            
            (287,050
            )Proceeds
                from sale of business segment
            
            
            -
            
            
            1,682,184Collections
                on notes receivable
            
            
            1,206
            
            
            -Net
                cash flows from investing activities
            
            
            (371,550
            )
            
            1,133,984**FINANCING
                ACTIVITIES**Checks
                issued in excess of cash in bank
            
            
            (93,005
            )
            
            1,003Payments
                on short-term debt
            
            
            -
            
            
            (2,295,000
            )Payments
                on long-term debt
            
            
            (246,302
            )
            
            (2,064,077
            )Payments
                on capital lease obligations
            
            
            (36,713
            )
            
            (27,079
            )Payments
                on note payable to stockholder
            
            
            (2,837
            )
            
            (51,964
            )Payments
                on mandatory redeemable preferred stock
            
            
            (53,334
            )
            
            -Proceeds
                from issuance of stock and warrants
            
            
            -
            
            
            11,116,458Payments
                received on stock subscriptions receivable
            
            
            6,000
            
            
            66,399Redemption
                of preferred stock
            
            
            (4,600
            )
            
            (800
            )Preferred
                stock dividends
            
            
            (22,829
            )
            
            (24,455
            )Exercise
                of stock options
            
            
            18,000
            
            
            -Net
                cash flows from financing activities
            
            
            (435,620
            )
            
            6,720,485INCREASE
                (DECREASE) IN CASH AND CASH EQUIVALENTS
            
            
            (999,887
            )
            
            5,201,556CASH
                AND CASH EQUIVALENTSBeginning
                of period
            
            
            3,100,427
            
            
            726,553End
                of period
            
            $
            2,100,540
            
            $
            5,928,109SUPPLEMENTAL
                DISCLOSURE OF CASH FLOW INFORMATIONCash
                paid for interest, net of amortization of original issue
                discount
            
            $
            132,433
            
            $
            255,060SUPPLEMENTAL
                DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIESNote
                receivable recorded on sale of discontinued operations
            
            $
            -
            
            $
            339,051Conversion
                of preferred stock and accrued dividends into common stock
            
            
            -
            
            
            673,335Current
                liabilities converted to common stock
            
            
            -
            
            
            10,603Conversion
                of notes payable into common stock
            
            
            -
            
            
            548,001Conversion
                of accrued dividends into common stock
            
            
            16,667
            
            
            94,748




See
      notes
      to condensed consolidated financial statements





4




**MULTIBAND
        CORPORATION AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2006 AND 2005**


Note
      1 - Unaudited Consolidated Financial Statements





The
      information furnished in this report is unaudited and reflects all adjustments
      which are normal recurring adjustments and, which in the opinion of management,
      are necessary to fairly present the operating results for the interim periods.
      The operating results for the interim periods presented are not necessarily
      indicative of the operating results to be expected for the full fiscal year.
      The
      consolidated financial statements should be read in conjunction with the
      consolidated financial statements and footnotes thereto included in the
      Company's Annual Report on Form 10-K for the year ended December 31, 2005,
      previously filed with the Securities and Exchange Commission.





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





*Nature
      of Business*





Multiband
      Corporation and subsidiaries (the Company) was incorporated in Minnesota in
      September 1975. The Company provides voice, data and video services to
      multi-dwelling unit customers. The Company's products and services are sold
      to
      customers located throughout the United States of America.





The
      accompanying consolidated financial statements have been prepared assuming
      the
      Company will continue as a going concern that contemplates the realization
      of
      assets and satisfaction of liabilities in the normal course of business. For
      the
      three months ended March 31, 2006 and 2005, the Company incurred net losses
      of
      $2,188,206 and $2,583,208, respectively. At March 31, 2006, the Company had
      an
      accumulated deficit of $57,983,150. The Company's ability to continue as a
      going
      concern is dependent on it ultimately achieving profitability and/or raising
      additional capital. Management intends to obtain additional debt or equity
      capital to meet all of its existing cash obligations and fund commitments on
      planned Multiband projects; however, there can be no assurance that the sources
      will be available or available on terms favorable to the Company. Management
      anticipates that the impact of the actions listed below will generate sufficient
      cash flows to pay current liabilities, long-term debt and capital lease
      obligations and fund the Company's future operations:





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


2.
            Continue
                to market Multiband services and obtain additional multi-dwelling
                unit
                customers.


3.
            Control
                capital expenditures by contracting Multiband services and equipment
                through a landlord-owned equipment program or by financing equipment
                build-outs through a leasing
                program.


4.
            Establish
                market for wireless internet
                services.


5.
            Solicit
                additional equity investment in the Company by either issuing preferred
                or
                common stock.





*Principles
      of Consolidation*





The
      consolidated financial statements include the accounts of Multiband Corporation
      (MB) and its wholly owned subsidiaries, Corporate Technologies, USA, Inc. (CTU),
      URON Inc.(URON), Multiband USA, Inc. (MB USA), Minnesota Digital, Inc. (MDU),
      Rainbow Satellite Group, LLC (Rainbow) and Multiband Subscriber Services, Inc.
      (Multiband) which provides voice, data and video services to residential
      multi-dwelling units. All significant intercompany transactions and balances
      have been eliminated in consolidation.





On
      January 1, 2004, the Company merged Multiband into CTU. On April 1, 2005, the
      continuing operations of CTU terminated (see Note 8.)





*Discontinued
      Operations*





During
      the first quarter of 2005, the Company sold certain assets and transferred
      certain liabilities related to its Multiband Business Services (a/k/a CTU).
      In
      accordance with appropriate accounting rules, the Company reclassified the
      previously reported financial results to exclude the results of the Multiband
      Business Services and these results are presented on a historical basis as
      a
      separate line in the consolidated statements of operations and the consolidated
      balance sheets entitled “Discontinued Operations”. All of the financial
      information in the consolidated financial statements and notes to the
      consolidated financial statements has been revised to reflect only the results
      of continuing operations (see Note 8).




5


**MULTIBAND
        CORPORATION AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2006 AND 2005**
  *Revenues
      and Cost Recognition*





The
      Company recognizes revenue in accordance with the Securities Exchange
      Commission’s Staff Accounting Bulletin No. 104 (SAB 104) “Revenue Recognition”,
      which requires that four basic criteria be met before revenue can be recognized:
      (i) persuasive evidence of a customer arrangement exists; (ii) the price is
      fixed or determinable; (iii) collectibility is reasonable assured; and (iv)
      product delivery has occurred or services have been rendered. The Company
      recognizes revenue (included in discontinued operations) as products are shipped
      based on FOB shipping point terms when title passes to customers.





The
      Company earns revenues from six sources: 1) Video and computer technology
      products which are sold but not installed, 2) Voice, video and data
      communication products which are sold and installed, 3) Service revenues related
      to communication products which are sold and both installed and not installed
      4)
      Multiband user charges to multiple dwelling units 5) MB USA user charges to
      timeshares, and 6) MDU earns revenue primarily through the activation of and
      residual fees on video programming services.





Revenues
      from video and computer technology products, which are sold but not installed,
      are recognized when delivered and the customer has accepted the terms and has
      the ability to fulfill the terms. Product returns and customer discounts are
      netted against revenues. This revenue has been included with discontinued
      operations.





Customers
      contract for both the purchase and installation of voice and data networking
      technology products and certain video technologies products on one sales
      agreement, as installation of the product is essential to the functionality
      of
      the product. Revenue is recognized when the products are delivered and installed
      and the customer has accepted the terms and has the ability to fulfill the
      terms. This revenue has been included with discontinued operations. Service
      revenues related to technology products including consulting, training and
      support are recognized when the services are provided. Service revenues
      accounted for less than 10% of total revenues for the three months ended March
      31, 2006 and 2005. The Company, if the customer elects, enters into equipment
      maintenance agreements for products sold once the original manufacturer's
      warranty has expired. Revenues from all equipment maintenance agreements are
      recognized on a straight-line basis over the terms of each contract. Costs
      for
      services are expensed as incurred. This revenue has been included with
      discontinued operations.





Revenue
      generated from activation on video programming services is earned in the month
      of activation. According to the Company's agreement with DirecTV, in the event
      that a customer cancels within the first 12 months of service, DirecTV has
      the
      right to chargeback the Company for a portion of the activation fees received.
      In accordance with Securities Exchange Commission SAB 104, the Company has
      estimated the potential charge back of commissions received on activation fees
      during the past 12 months based on historical percentages of customer
      cancellations and has included that amount as a reduction of revenue. Residual
      income is earned as services are provided by DirecTV through its system
      operators. As a master system operator for DirecTV, the Company earns a fixed
      percentage based on net cash received by DirecTV for recurring monthly services
      and a variable amount depending on the number of activations in a given month.
      The Company’s master system operator contract with DirecTV also permits the
      Company to earn revenues through its control of other system operators who
      are
      unable to provide DirecTV video programming services without the Company’s
      performance.





The
      Company has determined that the accounting policies for income recognition
      described above were in accordance with the Financial Accounting Standards
      Board
      Emerging Issues Task Force (“EITF”) Issue No. 99-19, “Reporting Revenue Gross as
      a Principal versus Net as an Agent”. EITF No. 99-19 employs multi-factor tests
      to determine whether amounts charged to customers in respect of certain expenses
      incurred should be included in revenues or netted against such
      expenses.





The
      Company reports the aforementioned voice, data, and video revenues on a gross
      basis based on the following factors: the Company has the primary obligation
      in
      the arrangement with its customers; the Company controls the pricing of its
      services; the Company performs customer service for the agreements; the Company
      approves customers; and the Company assumes the risk of payment for services
      provided. The Company reports DirecTV revenue on a net basis.





Multiband,
      Rainbow, MDU and MB USA user charges are recognized as revenues in the period
      the related services are provided in accordance with SAB 104. Any amounts billed
      prior to services being provided are reported as deferred service obligations
      and revenues.





Warranty
      costs incurred on new product sales are substantially reimbursed by the
      equipment suppliers.




6


**MULTIBAND
        CORPORATION AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2006 AND 2005**


*Cash
      and Cash Equivalents*





The
      Company includes as cash equivalents, investments with original maturities
      of
      three months or less when purchased, which are readily convertible into known
      amounts of cash. The Company deposits its cash in high credit quality financial
      institutions. The balances, at times, may exceed federally insured
      limits.





*Goodwill
      and Other Intangible Assets*





Impairment
      of Goodwill


We
      periodically evaluate acquired businesses for potential impairment indicators.
      Our judgments regarding the existence of impairment indicators are based on
      legal factors, market conditions and operational performance of our acquired
      businesses. Future events could cause us to conclude that impairment indicators
      exist and that goodwill associated with our acquired businesses is impaired.
      Any
      resulting impairment loss could have a material adverse impact on our financial
      condition and results of operations. Goodwill related to continuing operations
      was $954,871 at both March 31, 2006 and December 31, 2005.





Components
      of intangible assets are as follows:


March
                31, 2006
            
            
            December
                31, 2005Gross
                Carrying
            
            
            Accumulated
            
            
            Gross
                Carrying
            
            
            AccumulatedAmount
            
            
            Amortization
            
            
            Amount
            
            
            AmortizationIntangible
                assets subject to amortizationDomain
                name
            
            $
            83,750
            
            $
            76,771
            
            $
            83,750
            
            $
            72,583Right
                of entry contracts
            
            
            9,139,778
            
            
            2,724,579
            
            
            9,129,028
            
            
            2,300,664Subscriber
                lists
            
            
            10,151,809
            
            
            3,662,558
            
            
            10,151,809
            
            
            3,261,483Debt
                issuance costs
            
            
            499,837
            
            
            349,542
            
            
            499,837
            
            
            306,152Total
            
            $
            19,875,174
            
            $
            6,813,450
            
            $
            19,864,424
            
            $
            5,940,882Intangible
                assets not subject to amortizationGoodwill
            
            $
            954,871
            
            $
            -
            
            $
            954,871
            
            $
            -





The
      Company amortizes a domain name over its estimated useful life of five years
      using the straight-line method. The Company amortizes the right of entry
      contracts and subscriber lists, over their estimated useful lives ranging from
      24 to 120 months. Debt issuance costs are amortized over the life of the loan
      of
      approximately three years using the straight-line method, which approximates
      the
      interest method.





Amortization
      of intangible assets was $872,568 and $865,123 for the three months ended March
      31, 2006 and 2005, respectively. Amortization of debt issuance costs of $43,390
      and $65,312 for the three months ended March 31, 2006 and 2005, respectively,
      is
      included in interest expense. Estimated amortization expense of intangible
      assets for the years ending December 31, 2006, 2007, 2008, 2009, 2010 and 2011
      is $3,471,792, $3,206,869, $3,023,563, $2,897,993, $1,106,176 and $54,266,
      respectively. The weighted average remaining life of the intangibles is 5.4
      years with right of entry average life of 6.5 years and subscriber lists average
      life of 2.5 years.





*Stock-Based
      Compensation*





Effective
      January 1, 2006, the Company adopted SFAS No. 123R *Accounting
      for Stock-Based Compensation* (SFAS
      123R), which requires companies to measure and recognize compensation expense
      for all stock-based payments at fair value. SFAS 123R is being applied on the
      modified prospective transition method and therefore the Company has not
      restated results for prior periods. The financial statements for the three
      months ended March 31, 2006 recognize compensation cost for the portion of
      outstanding awards which have vested during the period. The Company recognizes
      stock-based compensation
      costs on a straight-line basis over the requisite service period of the award,
      which is generally the option vesting term. For the three months ended
      March 31, 2006, total stock-based compensation expense of $316,763 ($.01
      per
      share) was included in selling, general and administrative
      expenses.




7




**MULTIBAND
        CORPORATION AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2006 AND 2005**


The
      following table illustrates the effect on net loss and net loss per share if
      the
      Company had applied the fair value recognition provisions of SFAS No. 123, *Accounting
      for Stock-Based Compensation* ,
      to its
      stock-based employee compensation for the three months ended March 31,
      2005.





Three
                months ended March 31, 2005Loss
                attributable to common stockholders
            
            $
            (3,514,292
            )Pro
                forma loss attributable to common stockholders
            
            
            (3,814,386
            )Basic
                and diluted loss attributable to common stockholders:As
                reported
            
            $
            (.13
            )Pro
                forma loss attributable to common stockholders
            
            
            (.14
            )Stock-based
                compensation:As
                reported
            
            $
            0Pro
                forma
            
            
            300,094





In
      determining the compensation cost of the options granted during the three months
      ended March 31, 2006 and 2005, as specified by SFAS No. 123, the fair value
      of
      each option grant has been estimated on the date of grant using the
      Black-Scholes option pricing model and the weighted average assumptions used
      in
      these calculations are summarized as follows:





Three
                months endedMarch
                31, 2006
            
            
            Three
                months endedMarch
                31, 2005Risk-free
                interest rate
            
            
            4.50%
            
            
            3.38%Expected
                life of options granted
            
            
            10
                Years
            
            
            10
                YearsExpected
                volatility range
            
            
            214%
            
            
            203%Expected
                dividend yield
            
            
            0%
            
            
            0%





The
      Company uses the Black-Scholes option-pricing model (Black-Scholes model) for
      the Company’s pro forma information required under SFAS 123 and stock based
      compensation expense recognized under SFAS 123(R). The Company’s determination
      of fair value of share-based payment awards on the date of grant using an
      option-pricing model is affected by the Company’s stock price as well as
      assumptions regarding a number of variables. These variables include, but are
      not limited to the Company’s expected stock price volatility, and actual and
      projected stock option exercise behaviors and forfeitures.





*Net
      Loss per Common Share*





Basic
      net
      loss per common share is computed by dividing the loss attributable to common
      stockholders by the weighted average number of common shares outstanding for
      the
      reporting period. Diluted net loss per common share is computed by dividing
      loss
      attributable to common stockholders by the sum of the weighted average number
      of
      common shares outstanding plus all additional common stock that would have
      been
      outstanding if potentially dilutive common shares related to common share
      equivalents (stock options, stock warrants, convertible preferred shares, and
      issued but not outstanding restricted stock) had been issued. All options,
      warrants, convertible preferred shares, and restricted stock outstanding during
      the three months ended March 31, 2006 and 2005 were excluded from the
      calculation as their effects were anti-dilutive.




8


**MULTIBAND
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**MARCH
      31, 2006 AND 2005**


*Segment
      Reporting*





A
      business segment is a distinguishable component of an enterprise that is engaged
      in providing an individual product or service or a group of related products
      or
      services and that is subject to risks and returns that are different from those
      of other business segments. Management believes that the Company has two
      operating segments: 1) MCS, which acts as a principal in billing voice, data
      and
      cable revenues to subscribers; and 2) MDU, Inc. which collects net revenue
      from
      DirecTV.





*Reclassifications*





Certain
      accounts in the prior quarters' consolidated financial statements have been
      reclassified for comparative purposes to conform to the presentation in the
      current quarter consolidated financial statements. These reclassifications
      had
      no effect on net loss or stockholders' equity.




**NOTE
      3 - Business Acquisitions**





Effective
        April 1, 2005, the Company purchased certain video assets (equipment and
        video
        subscribers) from Ultravision, Inc. for $287,050 cash including a finder’s fee
        of $12,050.




On
      August
      26, 2005, the Company completed its acquisition of certain assets of Dinamo
      Entertainment, Inc. for $2,074,225, $652,500 of which was paid for in Company
      stock, valued at $1.50 per share (as negotiated between buyer and seller),
      $475,000 of which was paid for in cash, and the remaining balance of $600,000
      as
      a note payable to the former owner payable in monthly payments of $14,091
      including interest at 6% with a balloon payment of $317,933 due in November
      2007. The note is collateralized by the sellers assets acquired as part of
      the
      purchase. The Company also assumed debt of $170,200 of which $75,000 in cash
      was
      paid at closing and 40,000 shares of Company stock were issued at fair market
      value of $50,000 to the debtor. The Company has assumed the lease payments
      for
      the remaining balance of $45,200. The Company assumed monthly payments on the
      remaining $45,200 balance outstanding related to ceased equipment. The Company
      has agreed to repurchase the 40,000 shares one year from closing if the fair
      market value in the 5 consecutive trading days immediately subsequent to the
      one
      year period falls below $1.25. In connection with the acquisition, the Company
      incurred a $176,525 finder’s fee paid in cash at closing. The consideration paid
      was based on the Company’s analysis of the value of the acquired video equipment
      and related video subscribers totaling about 3,000.





**Dinamo**Allocation
                of Purchase Price:Total
                Cash/Stock/Notes Payable Consideration
            
            $
            1,727,500Add:
                Transaction Costs
            
            
            176,525Add:
                Liabilities assumed
            
            
            170,200Total
                Consideration
            
            
            2,074,225Less:
                Tangible assets
            
            
            1,450,000Less:
                Goodwill
            
            
            150,000Intangible
                assets
            
            $
            474,225





Effective
      September 30, 2005, the Company sold certain video subscriber assets located
      in
      Ohio, Oklahoma and Texas to Satellite Broadcasting Corporation (SBC). The
      Company sold 152 video subscribers for $167,000; $91,500 in cash and the balance
      in a three year note. Terms of this note include variable monthly payments
      at 7%
      with a balloon payment in October 2008. Effective the same date, the Company
      purchased approximately 550 video subscribers in Minnesota from SBC for a total
      purchase price of $420,125, paid as follows: $200,000 cash at closing; $105,000
      in Company common stock valued at $1.50 per share (as negotiated by buyer and
      seller); and the assumption of a capital lease obligation. Terms of this capital
      lease obligation include monthly payments of $3,223 including interest at 7%
      through November 2008 and are collateralized by assets purchased. Included
      in
      the purchase price is $10,125 related to a finder’s fee. The purchase price was
      allocated to the acquired assets based on the estimated fair values as of the
      acquisition date. The Company allocated the purchase price to intangibles of
      a
      right of entry contracts with a value of $315,125 and equipment of $105,000.
      The
      rights of entry contract will be amortized over its estimated useful life of
      108
      months.




9


**MULTIBAND
        CORPORATION AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2006 AND 2005**


The
      unaudited pro forma results of operations for the three months ended March
      31,
      2005 as a result of the SBC, Ultravision, and Dinamo acquisitions of video
      subscribers and video equipment is not material to the historical financial
      statements.





**NOTE
      4 - Stockholder Equity**





Stock
      warrants activity is as follows for the three months ended March 31,
      2006:





Number
                of Warrants
            
            
            Weighted
                - Average Exercise PriceOutstanding,
                December 31, 2005
            
            
            18,715,979
            
            $
            1.68Granted
            
            
            -
            
            
            -Exercised
            
            
            -
            
            
            -Cancelled/Expired
            
            
            (375,000
            )
            
            (4.00
            )Outstanding,
                March 31, 2006
            
            
            18,340,979
            
            $
            1.63





No
      warrants were granted during the quarter ended March 31, 2006.





**NOTE
      5 - Accrued Liabilities**





Accrued
      liabilities consisted of the following:





**March
                31, 2006**
            
            
            **December
                31,2005**Payroll
                and related taxes
            
            $
            428,374
            
            $
            391,707Accrued
                preferred stock dividends
            
            
            730,146
            
            
            506,535Accrued
                liability-vendor charge backs
            
            
            1,347,673
            
            
            1,347,673Other
            
            
            354,647
            
            
            495,139**Total**
            
            $
            2,860,840
            
            $
            2,741,054





**NOTE
      6 - Business Segments**





The
      Company has the following business segments. Multiband Corp. includes corporate
      expenses (e.g. corporate administrative costs), interest income, interest
      expense, depreciation and amortization. The MDU segment represents results
      as
      the master service operator for DirecTV. The MCS segment provides voice, data
      and video services to residential multi-dwelling units as the principal to
      subscribers. The discontinued operations segment includes the Multiband Business
      Services segment which was sold effective after the close of business March
      31,
      2005 (see Note 8).




10


**MULTIBAND
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**MARCH
      31, 2006 AND 2005**




Segment
      disclosures are as follows:


MultibandCorp.
                
                
                MDU
                
                
                MCS
                
                
                DiscontinuedOperations
                
                
                Total
 Three
                  months ended March 31, 2006:Revenues
              
              $
              -
              
              $
              2,512,172
              
              $
              1,891,872
              
              $
              -
              
              $
              4,404,044Income
                  (loss) from operations
              
              
              (1,144,181
              )
              
              904,943
              
              
              (1,687,924
              )
              
              -
              
              
              (1,927,162
              )Total
                  assets
              
              
              4,455,981
              
              
              7,578,677
              
              
              12,090,163
              
              
              -
              
              
              24,124,821Depreciation
                  and amortization
              
              
              59,797
              
              
              401,076
              
              
              841,583
              
              
              -
              
              
              1,302,456Capital
                  expenditures
              
              
              23,809
              
              
              -
              
              
              338,197
              
              
              -
              
              
              362,006
  MultibandCorp.
              
              
              MDU
              
              
              MCS
              
              
              DiscontinuedOperations
              
              
              TotalThree
                  months ended March 31, 2005:Revenues
              
              $
              -
              
              $
              1,911,505
              
              $
              1,795,371
              
              $
              -
              
              $
              3,706,876Income
                  (loss) from operations
              
              
              (560,301
              )
              
              352,083
              
              
              (1,252,953
              )
              
              -
              
              
              (1,461,171
              )Total
                  assets
              
              
              9,653,316
              
              
              9,377,707
              
              
              12,390,479
              
              
              -
              
              
              31,421,502Depreciation
                  and amortization
              
              
              7,843
              
              
              401,079
              
              
              739,945
              
              
              -
              
              
              1,148,867Capital
                  expenditures
              
              
              -
              
              
              -
              
              
              102,792
              
              
              38,358
              
              
              141,150





Segment
      disclosures are provided by entity to the extent practicable under the Company's
      accounting system. Depreciation and amortization above does not include
      depreciation and amortization related to discontinued operations. The cash
      flow
      statements presentation of depreciation and amortization includes the
      depreciation and amortization from discontinued operations.





**NOTE
      7 - Commitments and Contingencies**





*Legal
      Proceedings*





The
      Company is involved in legal actions in the ordinary course of its business.
      As
      of March 31, 2006, management believes that there are no pending legal
      proceedings against or involving the Company for which the outcome is likely
      to
      have a material adverse effect upon the Company’s consolidated financial
      position, results of operations, or cash flows.





*Significant
      Relationship*





The
      Company is a master agent for DirecTV pursuant to a system operator agreement
      with DirecTV dated August, 2005. The initial term of the agreement is for three
      years and provides for two additional two-year renewals if the Company has
      a
      minimum number of paying video subscribers in its system operator network.
      Termination of the Company's DirecTV agreement would have a material adverse
      impact on the Company's on-going operations.   Revenues generated from
      DirecTV were 57.0% and 51.6% of total revenue for the three months ended March
      31, 2006 and 2005, respectively.




11




**MULTIBAND
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**MARCH
      31, 2006 AND 2005**





*Guaranty*





On
      March
      1, 2006, Corporate Technologies, LLC (CTLLC), a subsidiary of North Central
      Equity, LLC, the purchaser of the MBS business segment, signed a lease with
      Lexstar Tower I Limited Partnership whereby CTLLC assumed the lease obligation
      for substantially all of the first floor space the Company is renting in Fargo,
      North Dakota for the period beginning March 1, 2006 to February 28, 2011.
      Pursuant to the aforementioned lease, the Company entered into a guaranty
      whereby the Company, in the event of a default or early termination of the
      lease
      by CTLLC, is obligated to perform CTLLC’s lease obligation during months 43-60
      of the lease. The Company remains obligated to provide free rent to CTLLC
      through March 31, 2007 as defined in the purchase agreement of MBS (see Note
      8).
      This guaranty has no effect on the Company’s consolidated financial statements
      for the period ended March 31, 2006. However, should Multiband eventually have
      to perform on the guaranty in the future, it could be liable for $348,881 worth
      of rent payments plus any associated charges such as property taxes and common
      area maintenance.




**NOTE
        8 - Sale of Multiband Business Services segment**
 
  After
        the
        close of business on March 31, 2005, the Company completed the sale of certain
        assets and liabilities relating to its Multiband Business Services (MBS,
        a/k/a
        Corporate Technologies USA) division. The buyer was North Central Equity
        LLC
        (“Buyer”).
 
 The
        original purchase price paid by the Buyer was $2,550,000 which consisted
        of
        $1,682,184 in cash at closing, $349,817 in assumed vacation pay and warranty
        liabilities, and the balance of $517,999 in the original note receivable
        at 7%
        interest due on December 31, 2005. The amount of the note receivable was
        subject
        to adjustment based on certain representations and warranties and estimated
        presale customer service obligations the Buyer assumed liability for in the
        purchase agreement. Due to the aforementioned representations and warranties
        and
        estimated liabilities, the Company, at the notes inception established a
        reserve
        of $178,948 against the collectibility of the note receivable. In November
        2005,
        the note was paid by the buyer in the amount of $400,000 which included the
        net
        adjustment for the actual amount of presale customer service obligations.
        The
        Company’s gain on sale was increased $149,865 accordingly as of September 30,
        2005 to reflect this prepayment and the resolution of estimated assumed
        liabilities.
 
 In
        connection with the purchase agreement, the Company entered into an interim
        services agreement whereby the Buyer is able to sublease space at no charge
        at
        the Company’s Minneapolis and Fargo locations and obtain access to certain
        aspects of the Company’s information technology resources for one year. Services
        provided will be charged by either party at fair value and is estimated by
        management to be insignificant. In addition, the services agreement is explicit
        that the Company has no control over the buyer’s operations. The buyer also
        receives additional free rent for a second year due to the results of a post
        closing inventory appraisal (see Note 7).
   12
 **MULTIBAND
          CORPORATION AND SUBSIDIARIES**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
          31, 2006 AND 2005**
 The
        gain
        on sale of MBS business services segment is as follows as adjusted at December
        31, 2005:
 
 **Sale
                  Price**Cash
                  proceeds
              
              
              
              
              $
              1,682,184Note
                  receivable
              
              
              
              
              
              400,000Assumed
                  liabilities
              
              
              
              
              
              438,868Total
                  sale price
              
              
              
              
              
              2,521,052**Assets
                  sold**Inventory,
                  net of reserve
              
              
              
              
              
              1,045,110Property
                  and equipment
              
              
              
              
              
              52,351Net
                  assets sold
              
              
              
              
              
              1,097,461**Less
                  costs and expenses**Broker’s
                  fee
              
              
              
              
              
              122,500Other
                  selling expense
              
              
              
              
              
              10,135Sublease
                  for one year at no charge
              
              
              
              
              
              500,000Additional
                  free rent related to inventory adjustment
              
              
              
              
              
              500,000Legal
                  and accounting costs
              
              
              
              
              
              37,600Total
                  costs
              
              
              
              
              
              1,170,235**Net
                  gain on sale**
              
              
              
              
              $
              253,356
 
 The
        following are condensed statements of operations of the discontinued operations
        for the three months ended March 31:
 **Statement
                    of Operations**
                
                
                2006
                
                
                2005Revenues
                
                $
                -
                
                $
                3,684,875Cost
                    of sales
                
                
                -
                
                
                2,712,781Selling,
                    general and administrative
                
                
                (2,200
                )
                
                1,414,410Depreciation
                    and amortization
                
                
                -
                
                
                56,188Income
                    (loss) from operations
                
                
                2,200
                
                
                (498,504
                )Other
                    income (expense)
                
                
                -
                
                
                (46,255
                )Net
                    income (loss)
                
                
                2,200
                
                
                (544,759
                )Gain
                    on sale
                
                
                -
                
                
                103,491Income
                    (loss) from discontinued operations
                
                $
                2,200
                
                $
                (441,268
                )
 
 The
        Company has recorded $1 million in deferred rent liability in relation to
        the
        sale of the MBS business segment. This liability is amortized over the 24
        month
        term of the sublease. Amortization has been netted with rent expense and
        the
        resulting income of $16,100 is included in other income (expense) included
        in
        continuing operations for the three months ended March 31, 2006.
 
 **NOTE
          9 - Subsequent Events**
  As
        of May
        1, 2006, certain Multiband shareholders of record and certain contingent
        rights
        holders became eligible for a distribution of URON common stock based on
        the
        holder’s ownership of Multiband shares or rights as of that date. The holders
        will receive .05 shares of URON common stock for each share or right to a
        share
        of Multiband common stock held on the record date.
 
 In
        May
        2006, 25,000 shares of Class I preferred stock with a value of $2.5 million
        were
        converted into 1,666,667 shares of common stock.
  13
 
 **FORWARD-LOOKING
        STATEMENTS**
 
 From
        time
        to time, the Company may publish forward-looking statements relating to such
        matters as anticipated financial performance, business prospects, product
        pricing, management for growth, integration of acquisitions, technological
        developments, new products, and similar matters. The Private Securities
        Litigation Reform Act of 1995 provides a safe harbor for forward-looking
        statements including those made in this statement. In order to comply with
        the
        terms of the Private Securities Litigation Reform Act, the Company notes
        that a
        variety of factors could cause the Company's actual results and experience
        to
        differ materially from the anticipated results or Company's forward-looking
        statements.
 
 The
        risks
        and uncertainties that may affect the operations, performance, developments
        and
        results of the Company's business include the following: national and regional
        economic conditions; pending and future legislation affecting IT and
        telecommunications industries; market acceptance of the Company's products
        and
        services; the Company's products and services; the Company's continued ability
        to provide integrated communication solutions for customers in a dynamic
        industry; and other competitive factors.
 
 Because
        these and other factors could affect the Company's operating results, past
        financial performance should not necessarily be considered as a reliable
        indicator of future performance and anticipated future period results.
 
 **ITEM
        2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF
        OPERATION**
  **OUR
        COMPANY**
 
 Multiband
        Corporation (Multiband), is a Minnesota corporation formed in
        September 1975. Multiband has two operating segments: 1) Multiband Consumer
        Services (MCS, legally known as Multiband Subscriber Services, Inc.), which
        encompasses the subsidiary corporations, Multiband USA, Inc., URON, Inc.,
        and
        Rainbow Satellite Group, LLC;
 and
        2)
        Minnesota Digital Universe, Inc. (MDU).
 
 Multiband
        completed an initial public offering in June 1984. In November 1992,
        Multiband became a non-reporting company under the Securities Exchange Act
        of
        1934. In July 2000, Multiband regained its reporting company status. In
        December, 2000, Multiband stock began trading on the NASDAQ stock exchange
        under
        the symbol VICM. In July 2004, the symbol was changed to MBND concurrent
        with
        the Company’s name change from Vicom, Incorporated to Multiband
        Corporation.
 
 Multiband’s
        website is located at : www.multibandusa.com .
 
 From
        its
        inception until December 31, 1998, Multiband operated as a telephone
        interconnect company only. Effective December 31, 1998, Multiband acquired
        the assets of the Midwest region of Enstar Networking Corporation (ENC),
        a data
        cabling and networking company. In late 1999, in the context of a forward
        triangular merger, Multiband to expand its range of computer products and
        related services, purchased the stock of Ekman, Inc. d/b/a Corporate
        Technologies, and merged Ekman, Inc. into the newly formed surviving
        corporation, Corporate Technologies, USA, Inc. (MBS). MBS provided voice,
        data and video systems and services to business and government. The MBS business
        segment was sold effective April 1, 2005. All references to financial
        information and descriptions of business in this registration have been revised
        to reflect only our continuing operations and all references to our now
        discontinued Multiband Business Services have been eliminated from the
        Management's Discussion and Analysis of Financial Condition and Results of
        Operation. MCS segment began in February 2000. MCS, the Company’s continuing
        operating division, provides voice, data and video services to multiple dwelling
        units (MDU), including apartment buildings, condominiums and time share resorts.
        During 2004, the Company purchased video subscribers in a number of separate
        transactions, the largest one being Rainbow Satellite Group, LLC. During
        2004,
        the Company also purchased the stock of Minnesota Digital Universe, Inc.,
        (MDU
        segment) which made the Company the largest master service operator in MDU’s for
        DirecTV satellite television in the United States.
 
 At
        March
        31, 2006, MCS had 42,167 subscriptions for its services (1,341 voice
        subscriptions, 36,673 video subscriptions and 4,153 internet subscriptions).
        At
        March 31, 2006, MDU had approximately 75,331 video subscriptions managed
        through
        its network of system operators.
  14
 **SELECTED
          CONSOLIDATED FINANCIAL DATA**
  
 DOLLAR
                  AMOUNTS AS A PERCENTAGE OF REVENUESTHREE
                  MONTHS ENDEDMarch
                  31, 2006
                (unaudited)
              
              March
                  31, 2005 (unaudited)REVENUES
              100%
              
              100%COST
                  OF PRODUCTS & SERVICES (Exclusive of depreciation and amortization
                  shown below)
              46.7%
              
              50.7%SELLING,
                  GENERAL & ADMINISTRATIVE
              67.5%
              
              57.9%DEPRECIATION
                  & AMORTIZATION
              29.5%
              
              31.0%LOSS
                  FROM OPERATIONS
              -43.7%
              
              -39.6%INTEREST
                  EXPENSE & OTHER, NET
              -6.0%
              
              -18.2%LOSS
                  FROM CONTINUING OPERATIONS
              -49.7%
              
              -57.8%INCOME
                  (LOSS) FROM DISCONTINUED OPERATIONS
              -
              
              -11.9%NET
                  LOSS
              -49.7%
              
              -69.7%
 
 **RESULTS
        OF OPERATIONS**
 
 *Revenues*
 
 Total
        revenues increased 18.8% to $4,404,044 for the quarter ended March 31, 2006
        as
        compared to $3,706,876 for the quarter ended March 31, 2005. This increase
        is
        primarily due to an increase in agent fees and revenue generating subscriptions
        during the comparable periods. The Company expects revenues to continue to
        increase in 2006 over 2005 as the Company adds additional services and thus
        additional revenue generating subscriptions to new and existing
        properties.
 
 Revenues
        in the first quarter of fiscal year 2006, for the MCS segment, increased
        5.4% to
        $1,891,872 as compared to $1,795,371 in the first quarter of fiscal 2005.
        This
        increase is primarily due to an increase in revenue generating subscriptions
        during the comparable periods.
 
 Revenues
        in the first quarter of 2006 for the MDU segment increased 34.6% to
        $2,512,172 as compared to $1,911,505 in the first quarter of fiscal 2005.
        This
        increase is primarily due to the number of managed subscribers and a related
        increase in agent fees during the comparable period.
 
 *Cost
        of Products and Services (Exclusive of depreciation and
        amortization)*
 
 The
        Company's cost of products and services, exclusive of depreciation and
        amortization, increased by 9.8% to $2,056,527 for the quarter ended March
        31,
        2006 as compared to $1,872,268 for the similar quarter last year. Costs of
        products and services for the MCS segment for the quarter were $1,011,436
        compared to $916,032 in the same quarter last year, a 10.4% increase. Costs
        of
        products and services for the MDU segment for the quarter were $1,045,091
        compared to $956,236 in the same quarter last year, a 9.3% increase. The
        increase in costs of services in both segments is directly related to the
        increase in services revenues. The Company anticipates that, on a percentage
        basis, revenues throughout 2006 will increase slightly ahead of costs due
        to the
        expectation that customer penetrations in given properties will grow as
        additional services are added to those properties. The Company’s past operating
        performance indicates that performance on a property level improves when
        the
        Company offers two or three services at a property versus a single
        service.
  15
 
 *Selling,
        General and Administrative Expenses*
 
 Selling,
        general and administrative expenses increased 38.4% to $2,972,223 in the
        quarter
        ended March 31, 2006, compared to $2,146,912 in the prior year quarter. Selling,
        general and administrative expenses were, as a percentage of revenues, 67.5%
        for
        the quarter ended March 31, 2006 and 57.9% for the similar period a year
        ago.
        This increase is primarily a result of increased expenses related to an increase
        in revenue and due to stock option expense of $316,763 required to be recognized
        in the current quarter versus $0 stock option in expense in the comparable
        period. The Company anticipates that selling, general and administrative
        expenses, exclusive of stock option expenses, will remain relatively constant
        in
        future periods as the Company has now largely integrated various billing
        and
        customer service activities related to its acquisitions in 2004 and
        2005.
 
 *Interest
        Expense*
 
 Interest
        expense was $304,681 for the quarter ended March 31, 2006, versus $685,701
        for
        the similar period a year ago, primarily reflecting a decrease in the Company’s
        debt and original issue discount expense. Amortization of original issue
        discount was $114,908 and $500,098 for the three months ended March 31, 2006
        and
        2005.
 
 *Loss
        from Operations*
 
 The
        Company, in the first quarter of 2006, incurred a loss from operations for
        its
        combined operating business segments of $1,927,162 versus a loss of $1,461,171
        during the prior year’s period. The MDU segment showed a profit from operations
        of $904,943 during the first quarter of 2006 versus profits of $352,083 for
        the
        three months ended March 31, 2005. For the first quarter of 2006, the MCS
        segment showed a loss from operations of $1,687,924 versus a loss of $1,252,953
        for the prior year period. The Multiband Corporation segment, which has no
        revenues, showed a loss from operations of $1,144,181 for the three months
        ended
        March 31, 2006 versus a loss of $560,301 for the same period last
        year.
 
 *Net
        Loss*
 
 In
        the
        first quarter of fiscal 2006, the Company incurred a net loss of $2,188,206
        compared to a net loss
 of
        $2,583,208 for the first fiscal quarter of 2005.
 
 *Liquidity
        and Capital Resources*
 
 During
        the three months ended March 31, 2006 and 2005, the Company recorded a net
        loss
        of $2,188,206 and $2,583,208, respectively. Net cash used by operations during
        the three months ended March 31, 2006 was $192,717 as compared to cash used
        by
        operations during the three months ended March 31, 2005 of $2,652,913. Operating
        cash flows improved significantly during the comparable periods. This
        improvement in cash flows is primarily due to a reduction of accounts payable
        and accrued liabilities and retirement of a wholesale line of credit for
        the
        three months ended March 31, 2005 related to the Company’s sale of the MBS
        segment. Management believes that over the next 12 months there will be a
        decrease in accrued liabilities and no significant change in accounts payable.
        Principal payments on current long-term debt over the next 12 months is expected
        to be $799,630.
 
 Cash
        and
        cash equivalents totaled $2,100,540 at March 31, 2006 versus $3,100,427 at
        December 31, 2005. Available working capital deficit for the three months
        ended
        March 31, 2006 increased to $2,381,920 as compared to $971,418, at December
        31,
        2005, primarily due to funds invested in project build-outs and the operating
        loss for the quarter. Total debt was reduced in the three months ended March
        31,
        2006 as the Company continued to retire financing debt and debt related to
        acquisitions. The Company had a material increase in accounts receivables
        for
        the period ended March 31, 2006 reflecting increased revenues over the
        comparable quarter ended March 31, 2005. Net cash flows from investing
        activities totaled ($371,550) compared to $1,133,984 for the comparable period
        reflecting the sale of the MBS segment.
 
 The
        Company continues to experience growth, primarily due to increased subscribers
        and recurring revenues acquired from the various transactions previously
        mentioned herein.
 
 Management
        of Multiband believes that cash on hand, capital resources and cash from
        operations as of March 31, 2006, will be adequate to meet the
        anticipated liquidity and capital resource requirements of its business for
        the
        next 12 months.
  16
  *Capital
        Expenditures*
 
 The
        Company used $362,006 for capital expenditures during the three months ended
        March 31, 2006, as compared to $141,150 in the similar period last year.
        Capital
        expenditures consisted of project build-outs and equipment acquired for internal
        use. We estimate capitalized expenditures for the remainder of 2006 will
        be
        approximately $500,000.
 
 **CRITICAL
        ACCOUNTING POLICIES AND ESTIMATES**
 
 Impairment
        of Long-Lived Assets
 The
        Company’s long-lived assets include property, equipment and leasehold
        improvement. At March 31, 2006, the Company had net property and equipment
        of
        $5,235,877, which represents approximately 22% of the Company’s total assets.
        The estimated fair value of these assets is dependent on the Company’s future
        performance. In assessing for potential impairment for these assets, the
        Company
        considers future performance. If these forecasts are not met, the Company
        may
        have to record an impairment charge not previously recognized, which may
        be
        material. During the three months ended March 31, 2006 and 2005, the Company
        did
        not record any impairment losses related to long-lived assets.
 
 Impairment
        of Goodwill
 We
        periodically evaluate acquired businesses for potential impairment indicators.
        Our judgments regarding the existence of impairment indicators are based
        on
        legal factors, market conditions and operational performance of our acquired
        businesses. Future events could cause us to conclude that impairment indicators
        exist and that goodwill associated with our acquired businesses is impaired.
        Any
        resulting impairment loss could have a material adverse impact on our financial
        condition and results of operations. During the three months ended March
        31,
        2006 and 2005, the Company did not record any impairment losses related to
        goodwill.
 
 Amortization
        of Intangible Assets
 The
        Company amortizes a domain name over its estimated useful life of five years
        using the straight-line method. The Company amortizes right of entry contracts
        and subscriber lists over their estimated useful lives ranging from 24 to
        120
        months.
 
 **ITEM
        3. QUANTITIVE AND QUALITIVE DISCLOSURE ABOUT MARKET RISK**
 
 Multiband
        is not subject to any material interest rate risk as any current lending
        agreements are at a fixed rate of interest except for the notes payable to
        Laurus Master Fund, Ltd., which is three percent over the prime interest
        rate
        and the Convergent Capital note of $2,500,000, which varies from 11% to 14%,
        dependent on the Company’s common stock price. Multiband also has variable rate
        % of Class I convertible preferred stock which pays dividends on a basis
        of
        prime rate.
 
 **ITEM
        4. CONTROLS AND PROCEDURES**
 
 As
        of the
        end of the period covered by this quarterly report, the Company carried out
        an
        evaluation, under the supervision and with the participation of the Company’s
        management, of the effectiveness of the design and operation of the Company’s
        disclosure controls and procedures pursuant to Rule 13a-14(c) of the Securities
        Exchange Act of 1934. Based upon that evaluation, the Company’s Chief Executive
        Officer and Chief Financial Officer concluded that the Company’s disclosure
        controls and procedures are effective in alerting them in a timely basis
        to
        material information relating to the Company required to be disclosed in
        the
        Company’s periodic SEC reports. There have been no significant changes in the
        Company’s internal controls or in other factors which could significantly affect
        internal controls subsequent to the date the Company carried out its evaluation.
        There was no change in the Company’s internal control over financial reporting
        during the Company’s most recently completed fiscal quarter that has materially
        affected, or is reasonably likely to materially affect, the Company’s internal
        control over financial reporting.
 
 17
 
 **PART
        II. OTHER INFORMATION**
 
 **ITEM
        1. LEGAL PROCEEDINGS**
 
 As
        of
        March 31, 2006, Multiband was not engaged in any pending legal proceedings
        where, in the opinion of the Company, the outcome is likely to have a material
        adverse effect upon the business, operating results and financial condition
        of
        the Company.
 
 **ITEM
        1A. RISK FACTORS**
 
 Our
        operations and our securities are subject to a number of risks, including
        but
        not limited to those described below. If any of the following risks actually
        occur, the business, financial condition or operating results of Multiband
        and
        the trading price or value of our common stock could be materially adversely
        affected.
 
 **General**
 
 Multiband,
        since 1998, has taken several significant steps to reinvent and reposition
        itself to take advantage of opportunities presented by a shifting economy
        and
        industry environment.
 
 Recognizing
        that voice, data and video technologies in the late twentieth century were
        beginning to systematically integrate as industry manufacturers were evolving
        technological standards from "closed" proprietary networking architectures
        to a
        more "open" flexible and integrated approach, Multiband, between 1998 and
        2001,
        purchased three competitors which, in the aggregate, possessed expertise
        in data
        networking, voice and data cabling and video distribution technologies.
 
 In
        early
        2000, Multiband created its MCS division, employing the aforementioned
        expertise, to provide communications and entertainment services (local dial
        tone, long distance, high-speed internet and expanded satellite television
        services) to residents in MDUs on one billing platform, which the Company
        developed internally.
 
 The
        specific risk factors, as detailed below, should be analyzed in the context
        of
        the Company's anticipated MCS related growth.
 
 **Net
        Losses**
 
 The
        Company had net losses of $2,188,206 for the three months ended March 31,
        2006,
        $7,475,000 for the year ended December 31, 2005, $9,783,962 for the year
        ended
        December 31, 2004. Multiband may never be profitable.
  The
        prolonged effects of generating losses without additional funding may restrict
        our ability to pursue our business strategy. Unless our business plan is
        successful, an investment in our common stock may result in a complete loss
        of
        an investor's capital.
 
 If
        we
        cannot achieve profitability from operating activities, we may not be able
        to
        meet:
 o  our
        capital expenditure objectives;
 o  our
        debt
        service obligations; or
 o  our
        working capital needs.
  18
  **Goodwill**
 
 In
        June
        2001, the Financial Accounting Standards Board (FASB) adopted Statement of
        Financial Accounting Standards (SFAS) 142, "Goodwill and Other Intangible
        Assets" which changed the amortization rules on recorded goodwill from a
        monthly
        amortization to a periodic "impairment" analysis for fiscal years beginning
        after December 15, 2001. As of December 31, 2005, the Company had remaining
        recorded goodwill of $954,871 primarily related to the purchase of Rainbow
        Satellite Group, LLC. and the purchase of certain assets of Dinamo
        Entertainment, Inc. At March 31, 2006, the Company did not note any indications
        of impairment related to goodwill.
 
 **Deregulation**
 
 Several
        regulatory and judicial proceedings have recently concluded, are underway
        or may
        soon be commenced that address issues affecting operations and those of our
        competitors, which may cause significant changes to our industry. We cannot
        predict the outcome of these developments, nor can we assure you that these
        changes will not have a material adverse effect on us. Historically, we have
        been a reseller of products and services, not a manufacturer or carrier
        requiring regulation of its activities. Pursuant to Minnesota statutes, our
        Multiband activity is specifically exempt from the need to tariff our services
        in MDU's. However, the Telecommunications Act of 1996 provides for significant
        deregulation of the telecommunications industry, including the local
        telecommunications and long-distance industries. This federal statute and
        the
        related regulations remain subject to judicial review and additional
        rule-makings of the Federal Communications Commission, making it difficult
        to
        predict what effect the legislation will have on us, our operations, and
        our
        competitors.
 
 **Dependence
        on Strategic Alliances**
 
 Several
        suppliers or potential suppliers of Multiband, such as McLeod, WorldCom,
        WS Net,
        XO Communications and others have filed for bankruptcy in recent years. While
        the financial distress of its suppliers or potential suppliers could have
        a
        material adverse effect on Multiband's business, Multiband believes that
        enough
        alternate suppliers exist to allow the Company to execute its business plans.
        The Company is also highly dependent on its Master System Operator agreement
        with DirecTV. The initial term of the agreement, which expires in August
        2008,
        is for three years and provides for two additional two-year renewals if the
        Company has a minimum number of paying video subscribers in its system operator
        network. Although an alternate provider of satellite television services,
        Echostar, exists, the termination of its agreements with DirecTV could have
        a
        material adverse effect on Multiband's business.
 
 **Changes
        in Technology**
 
 A
        portion
        of our projected future revenue is dependent on public acceptance of broadband
        and expanded satellite television services. Acceptance of these services
        is
        partially dependent on the infrastructure of the internet and satellite
        television which is beyond Multiband's control. In addition, newer technologies,
        such as video-on-demand, are being developed which could have a material
        adverse
        effect on the Company's competitiveness in the marketplace if Multiband is
        unable to adopt or deploy such technologies.
 
 **Attraction
        and Retention of Employees**
 
 Multiband's
        success depends on the continued employment of certain key personnel, including
        executive officers. If Multiband were unable to continue to attract and retain
        a
        sufficient number of qualified key personnel, its business, operating results
        and financial condition could be materially and adversely affected. In addition,
        Multiband's success depends on its ability to attract, develop, motivate
        and
        retain highly skilled and educated professionals with a wide variety of
        management, marketing, selling and technical capabilities. Competition for
        such
        personnel is intense and is expected to increase in the future.
  19
  **Intellectual
        Property Rights**
 
 Multiband
        relies on a combination of trade secret, copyright, and trademark laws, license
        agreements, and contractual arrangements with certain key employees to protect
        its proprietary rights and the proprietary rights of third parties from which
        Multiband licenses intellectual property. Multiband also relies on agreements
        with owners of MDUs which grant the Company rights of access for a specific
        period to MDU premises whereby Multiband is allowed to offer its voice, data,
        and video services to individual residents of the MDUs. If it was determined
        that Multiband infringed the intellectual property rights of others, it could
        be
        required to pay substantial damages or stop selling products and services
        that
        contain the infringing intellectual property, which could have a material
        adverse effect on Multiband's business, financial condition and results of
        operations. Also, there can be no assurance that Multiband would be able
        to
        develop non-infringing technology or that it could obtain a license on
        commercially reasonable terms, or at all. Multiband's success depends in
        part on
        its ability to protect the proprietary and confidential aspects of its
        technology and the products and services it sells. There can be no assurance
        that the legal protections afforded to Multiband or the steps taken by Multiband
        will be adequate to prevent misappropriation of Multiband's intellectual
        property.
 
 **Variability
        of Quarterly Operating Results**
 
 Variations
        in Multiband's revenues and operating results occur from quarter to quarter
        as a
        result of a number of factors, including customer engagements commenced and
        completed during a quarter, the number of business days in a quarter, employee
        hiring and utilization rates, the ability of customers to terminate engagements
        without penalty, the size and scope of assignments and general economic
        conditions. Because a significant portion of Multiband's expenses are relatively
        fixed, a variation in the number of customer projects or the timing of the
        initiation or completion of projects could cause significant fluctuations
        in
        operating results from quarter to quarter.
 
 **Certain
        Anti-Takeover Effects**
 
 Multiband
        is subject to Minnesota statutes regulating business combinations and
        restricting voting rights of certain persons acquiring shares of Multiband.
        These anti-takeover statutes may render more difficult or tend to discourage
        a
        merger, tender offer or proxy contest, the assumption of control by a holder
        of
        a large block of Multiband's securities, or the removal of incumbent management.
 
 **Volatility
        of Multiband's Common Stock**
 
 The
        trading price of our common stock has been and is likely to be volatile.
        The
        stock market has experienced extreme volatility, and this volatility has
        often
        been unrelated to the operating performance of particular companies. We cannot
        be sure that an active public market for our common stock will continue.
        Investors may not be able to sell the common stock at or above the price
        they
        paid for their common stock, or at all. Prices for the common stock will
        be
        determined in the marketplace and may be influenced by many factors, including
        variations in our financial results, changes in earnings estimates by industry
        research analysts, investors' perceptions of us and general economic, industry
        and market conditions.
 
 **Future
        Sales of Our Common Stock May Lower Our Stock Price**
 
 If
        our
        existing shareholders sell a large number of shares of our common stock,
        the
        market price of the common stock could decline significantly. The perception
        in
        the public market that our existing shareholders might sell shares of common
        stock could depress our market price.
 
 **Competition**
 
 We
        face
        competition from others who are competing for a share of the MDU market,
        including other satellite companies, cable companies and telephone companies.
        Some of these companies have significantly greater assets and resources than
        we
        do.
  20
  
 **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.
 
 **SIGNATURES**
  Pursuant
          to the requirements of the Securities Exchange Act of 1934, the registrant
          has
          duly caused this report to be signed on its behalf by the undersigned thereunto
          duly authorized.
 
 MULTIBAND
                  CORPORATION
                RegistrantDate:
                  May 15, 2006
              By:
              /s/
                  James L. Mandel
                *Chief
                  Executive Officer*Date:
                  May 15, 2006
              By:
              /s/
                  Steven M. Bell
                *Chief
                  Executive Officer*
                *(Principal
                  Financial and Accounting
                  Officer)*
 
 21