UNITED
      STATES


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 1934


FOR
        THE
        PERIOD ENDING MARCH 31, 2007


OR


o
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
                ACT
                OF 1934




FOR
                THE TRANSITION PERIOD FROM ________________TO ________________


COMMISSION
        FILE NUMBER 0 - 1325





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
      10, 2007 there were 35,405,880 shares outstanding of the registrant's common
      stock, no par value, and 401,905 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, 2007
            
            March
                31, 2006(unaudited)
            
            
            (unaudited)**REVENUES**
            
            $
            4,384,955
            
            $
            4,404,044**COSTS
                AND EXPENSES**Cost
                of products and services (exclusive of depreciation and amortization
                shown
                separately below)
            
            
            2,178,046
            
            
            2,056,527Selling,
                general and administrative
            
            
            2,389,256
            
            
            2,972,223Depreciation
                and amortization
            
            
            1,049,698
            
            
            1,302,456Total
                costs and expenses
            
            
            5,617,000
            
            
            6,331,206**LOSS
                FROM OPERATIONS**
            
            
            (1,232,045
            )
            
            (1,927,162
            )**OTHER
                EXPENSE**Interest
                expense
            
            
            (153,407
            )
            
            (304,681
            )Other
                income (expense)
            
            
            23,057
            
            
            41,437Total
                other expense
            
            
            (130,350
            )
            
            (263,244
            )**LOSS
                FROM CONTINUING OPERATIONS**
            
            
            (1,362,395
            )
            
            (2,190,406
            )**GAIN
                FROM DISCONTINUED OPERATIONS**
            
            
            -
            
            
            2,200**NET
                LOSS**
            
            
            (1,362,395
            )
            
            (2,188,206
            )Preferred
                stock dividends
            
            
            239,927
            
            
            263,106**LOSS
                ATTRIBUTABLE TO COMMON STOCKHOLDERS**
            
            $
            (1,602,322
            )
            $
            (2,451,312
            )**BASIC
                AND DILUTED LOSS PER COMMON SHARE:****LOSS
                FROM CONTINUING OPERATIONS**
            
            $
            (.05
            )
            $
            (.08
            )**LOSS
                FROM DISCONTINUED OPERATIONS**
            
            $
            -
            
            $
            -**LOSS
                ATTRIBUTABLE TO COMMON STOCKHOLDERS**
            
            $
            (.05
            )
            $
            (.08
            )**WEIGHTED
                AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED**
            
            
            35,398,903
            
            
            32,155,873





See
      notes
      to condensed consolidated financial statements





2


**MULTIBAND
      CORPORATION AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS**


March
                  31,
                2007
              
              December
                  31,
                2006(unaudited)
              
              (audited)***ASSETS*****CURRENT
                  ASSETS**Cash
                  and cash equivalents
              
              
              851,804
              
              $
              1,020,975Accounts
                  receivable, net
              
              
              1,667,378
              
              
              2,018,393Inventories
              
              
              175,771
              
              
              343,815Prepaid
                  expenses and other
              
              
              542,787
              
              
              181,767Current
                  portion of notes receivable
              
              
              6,116
              
              
              6,116Total
                  Current Assets
              
              
              3,243,856
              
              
              3,571,066**PROPERTY
                  AND EQUIPMENT, NET**
              
              
              3,006,040
              
              
              3,359,842**OTHER
                  ASSETS**Goodwill
              
              
              509,086
              
              
              509,086Intangible
                  assets, net
              
              
              8,188,820
              
              
              9,124,980Assets
                  held for sale
              
              
              -
              
              
              1,244,236Notes
                  receivable - long-term, net
              
              
              63,740
              
              
              63,740Other
                  assets
              
              
              134,744
              
              
              113,106Total
                  Other Assets
              
              
              8,896,390
              
              
              11,055,148**TOTAL
                  ASSETS**
              
              $
              15,146,286
              
              $
              17,986,056***LIABILITIES
                  AND STOCKHOLDERS' EQUITY*****CURRENT
                  LIABILITIES**Checks
                  issued in excess of cash in bank
              
              $
              -
              
              $
              319,244Mandatory
                  redeemable preferred stock, 25,876 and 28,000 Class F preferred
                  shares
              
              
              258,756
              
              
              280,000Current
                  portion of long-term debt
              
              
              708,823
              
              
              1,255,994Current
                  portion of capital lease obligations
              
              
              442,475
              
              
              444,921Note
                  payable - stockholder
              
              
              -
              
              
              24,739Accounts
                  payable
              
              
              2,907,859
              
              
              2,557,409Accrued
                  liabilities
              
              
              2,606,763
              
              
              2,977,356Customer
                  deposits
              
              
              60,957
              
              
              61,332Current
                  liabilities of discontinued operations
              
              
              -
              
              
              125,000Deferred
                  service obligations and revenue
              
              
              458,754
              
              
              819,316Total
                  Current Liabilities
              
              
              7,444,387
              
              
              8,865,311**LONG-TERM
                  LIABILITIES**Long-term
                  debt, net
              
              
              2,599,580
              
              
              2,969,764Capital
                  lease obligations, net of current portion
              
              
              437,863
              
              
              491,672Total
                  Liabilities
              
              
              10,481,830
              
              
              12,326,747**COMMITMENTS
                  AND CONTINGENCIES****STOCKHOLDERS'
                  EQUITY**Cumulative
                  convertible preferred stock, no par value:8%
                  Class A (26,658 shares issued and outstanding, $279,909 liquidation
                  preference)
              
              
              400,657
              
              
              400,65710%
                  Class B (5,920 and 7,470 shares issued and outstanding, $62,160
                  and
                  $78,435 liquidation preference)
              
              
              46,700
              
              
              49,70010%
                  Class C (123,630 and 124,130 shares issued and outstanding, $1,236,300
                  and
                  $1,241,300 liquidation preference)
              
              
              1,587,312
              
              
              1,593,47610%
                  Class F (150,000 shares issues and outstanding, $1,500,000 liquidation
                  preference)
              
              
              1,500,000
              
              
              1,500,0008%
                  Class G (38,195 shares issued and outstanding, $381,950 liquidation
                  preference)
              
              
              161,431
              
              
              161,4316%
                  Class H (2.0 shares issued and outstanding, $200,000 liquidation
                  preference)
              
              
              -
              
              
              -Variable
                  rate % Class I (57,500 shares issued and outstanding, $5,750,000
                  liquidation preference)
              
              
              -
              
              
              -Common
                  stock, no par value (35,450,539 and 35,168,161 shares issued and
                  outstanding)
              
              
              27,240,347
              
              
              26,873,255Stock
                  subscriptions receivable
              
              
              (215,034
              )
              
              (229,927
              )Options
                  and warrants
              
              
              45,327,649
              
              
              45,093,001Accumulated
                  deficit
              
              
              (71,384,606
              )
              
              (69,782,284
              )Total
                  Stockholders' Equity
              
              
              4,664,456
              
              
              5,659,309**TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY**
              
              $
              15,146,286
              
              $
              17,986,056




See
      notes
      to condensed consolidated financial statements





3


**MULTIBAND
      CORPORATION AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


**FOR
      THREE MONTHS ENDED MARCH 31, 2007 AND 2006**





**THREE
                MONTHS ENDED MARCH 31,****2007**
            
            **2006**(unaudited)
            
            (unaudited)**OPERATING
                ACTIVITIES**Net
                loss
            
            
            ($1,362,395
            )
            $
            (2,188,206
            )Adjustments
                to reconcile net loss to net cash flows from operating
                activities:Depreciation
                and amortization
            
            
            1,053,691
            
            
            1,345,846Amortization
                of deferred compensation
            
            
            -
            
            
            29,480Amortization
                of original issue discount
            
            
            8,294
            
            
            114,908Gain
                on sale of sale of property and equipment
            
            
            (284,516
            )
            
            -Warrants
                issued for services
            
            
            900
            
            
            -Reserve
                for stock subscriptions and interest receivable
            
            
            -
            
            
            5,932Stock
                based compensation expense
            
            
            233,748
            
            
            316,763Change
                in allowance for doubtful accounts on accounts receivable
            
            
            -
            
            
            (191,450
            )Change
                in allowance for doubtful accounts on notes receivable
            
            
            15,000
            
            
            -Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            342,086
            
            
            456,923Inventories
            
            
            165,609
            
            
            18,317Prepaid
                expenses and other
            
            
            55,565
            
            
            5,360Other
                assets
            
            
            (21,638
            )
            
            (16,840
            )Accounts
                payable and accrued liabilities
            
            
            45,656
            
            
            (13,656
            )Deferred
                service obligations and revenue
            
            
            (352,440
            )
            
            50,382Liabilities
                of discontinued operations
            
            
            (125,000
            )
            
            (125,000
            )Customer
                deposits
            
            
            (375
            )
            
            (1,476
            )Net
                cash flows from operating activities
            
            
            (225,815
            )
            
            (192,717
            )**INVESTING
                ACTIVITIES**Purchases
                of property and equipment
            
            
            (120,196
            )
            
            (362,006
            )Purchase
                of intangible assets
            
            
            -
            
            
            (10,750
            )Proceeds
                from sale of property and equipment
            
            
            757,732
            
            
            -Collections
                on notes receivable
            
            
            -
            
            
            1,206Net
                cash flows from investing activities
            
            
            637,536
            
            
            (371,550
            )**FINANCING
                ACTIVITIES**Checks
                issued in excess of cash in bank
            
            
            (319,244
            )
            
            (93,005
            )Payments
                on long-term debt
            
            
            (129,080
            )
            
            (246,302
            )Payments
                on capital lease obligations
            
            
            (56,255
            )
            
            (36,713
            )Payments
                on note payable to stockholder
            
            
            (24,739
            )
            
            (2,837
            )Payments
                on mandatory redeemable preferred stock
            
            
            (21,244
            )
            
            (53,334
            )Payments
                received on stock subscriptions receivable
            
            
            62
            
            
            6,000Redemption
                of preferred stock
            
            
            (20,500
            )
            
            (4,600
            )Preferred
                stock dividends
            
            
            (9,892
            )
            
            (22,829
            )Exercise
                of stock options
            
            
            -
            
            
            18,000Net
                cash flows from financing activities
            
            
            (580,892
            )
            
            (435,620
            )DECREASE
                IN CASH AND CASH EQUIVALENTS
            
            
            (169,171
            )
            
            (999,887
            )CASH
                AND CASH EQUIVALENTSBeginning
                of period
            
            
            1,020,975
            
            
            3,100,427End
                of period
            
            $
            851,804
            
            $
            2,100,540SUPPLEMENTAL
                DISCLOSURE OF CASH FLOW INFORMATIONCash
                paid for interest, net of amortization of original issue
                discount
            
            $
            135,509
            
            $
            132,433SUPPLEMENTAL
                DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIESSale
                of property, equipment and intangible to Directech for other current
                asset
            
            
            416,754
            
            
            -Debt
                and interest assumed by Directech as part of sale
            
            
            267,143
            
            
            -Conversion
                of accrued dividends into common stock
            
            
            367,092
            
            
            16,667Intrinsic
                value of preferred dividends
            
            
            11,336
            
            
            -




See
      notes
      to condensed consolidated financial statements


4


**MULTIBAND
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**MARCH
      31, 2007 AND 2006**


**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/A for the year ended December 31, 2006,
      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, 2007 and 2006, the Company incurred net losses
      of
      $1,362,395 and $2,188,206, respectively. At March 31, 2007, the Company had
      an
      accumulated deficit of $71,384,606. 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 sell certain assets on a strategic
      basis for prices agreeable to the Company and/or 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
      and
      operating lease obligations and fund the Company's operations through 2007:





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




2.
            Sale
                of video subscriber assets on a strategic basis. The Company, based
                on
                recent transactions, believes there is an active market for its video
                subscriber assets. The Company believes that it can sell these assets,
                under certain circumstances, at prices at or above their current
                carrying
                value. However, there is no guarantee that these sales will ultimately
                be
                favorable to the Company.




3.
            Solicit
                additional equity investment in the Company by either issuing preferred
                or
                common stock.




4.
            Continue
                to market Multiband services and acquire additional multi-dwelling
                unit
                customers.




5.
            Control
                capital expenditures by contracting Multiband services and equipment
                through a landlord-owned equipment
                program.




6.
            Establish
                market for wireless internet
                services.




7.
            Expansion
                of call center support via sales of call center services to both
                existing
                and future system operators and to buyers of the Company’s video
                subscribers.





*Principles
      of Consolidation*





The
      consolidated financial statements include the accounts of Multiband Corporation
      (MB) and its wholly owned subsidiaries, Minnesota Digital Universe, Inc. (MDU),
      Rainbow Satellite Group, LLC (Rainbow), Multiband Subscriber Services, Inc.
      (MBSS), and Multiband USA, Inc. (MBUSA). All significant intercompany
      transactions and balances have been eliminated in consolidation.




5


**MULTIBAND
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**MARCH
      31, 2007 AND 2006**


*Revenue
      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 reasonably assured; and (iv)
      product delivery has occurred or services have been rendered. The Company
      recognizes revenue as products are shipped based on FOB shipping point terms
      when title passes to customers.





The
      Company earns revenues from five sources: 1) Voice, video and data communication
      products which are sold and installed, 2) Multiband user charges to multiple
      dwelling units, 3) MB USA user charges to timeshares, 4) MDU earns revenue
      primarily through the activation of and residual fees on video programming
      services, and 5) Revenue generated by the support center for billing and call
      center services provided to third party customers.





Customers
      contract for both the purchase and installation of voice and data networking
      technology products and certain video technologies products. 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.





Revenue
      generated from activation of 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 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.





We
      offer
      some products and services that are provided by third party vendors. We review
      the relationship between us, the vendor and the end customer on an individual
      basis to assess whether revenue should be reported on a gross or net basis.
      As
      an example, our resold satellite digital television is reported on a net
      basis.





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.





Revenue
      generated by the support center to service third party subscribers by providing
      billing and call center support services is recognized in the period the related
      services are provided.





Multiband,
      Rainbow, MDU and MBUSA 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.


6


**MULTIBAND
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**MARCH
      31, 2007 AND 2006**


*Goodwill
      and Other Intangible Assets*





We
      periodically evaluate goodwill and other intangible and long-lived assets for
      potential impairment indicators. Our judgments regarding the existence of
      impairment indicators are based on legal factors, market conditions and
      operational performance of our business segments. Future events could cause
      us
      to conclude that impairment indicators exist and that goodwill and other
      intangible and long-lived assets are impaired. Any resulting impairment loss
      could have a material adverse impact on our financial condition and results
      of
      operations. Goodwill was $509,086 at both March 31, 2007 and December 31, 2006
      and is recorded as part of our Multiband Corp segment.





Components
      of intangible assets are as follows:


March
                31, 2007
            
            December
                31, 2006Gross
                Carrying
            
            Accumulated
            
            Gross
                Carrying
            
            AccumulatedAmount
            
            Amortization
            
            Amount
            
            AmortizationIntangible
                assets subject to amortizationDomain
                name
            
            $
            83,750
            
            $
            83,750
            
            $
            83,750
            
            $
            83,750Right
                of entry contracts
            
            
            5,929,094
            
            
            2,635,856
            
            
            8,955,558
            
            
            3,591,598Subscriber
                lists
            
            
            9,697,879
            
            
            4,812,944
            
            
            9,697,879
            
            
            4,411,865Debt
                issuance costs
            
            
            499,837
            
            
            489,190
            
            
            499,837
            
            
            485,198Total
            
            
            16,210,560
            
            
            8,021,740
            
            
            19,237,024
            
            
            8,572,411Impairment
                of intangibles
            
            
            -
            
            
            -
            
            
            -
            
            
            1,539,633Total
                including impairment
            
            $
            16,210,560
            
            $
            8,021,740
            
            $
            19,237,024
            
            $
            10,112,044




Amortization
      of intangible assets was $673,069 and $872,568 for the three months ended March
      31, 2007 and 2006, respectively. Amortization of debt issuance costs of $3,993
      and $43,390 for the three months ended March 31, 2007 and 2006, respectively,
      is
      included in interest expense. Estimated amortization expense of intangible
      assets for the years ending December 31, 2007, 2008, 2009, 2010, 2011 and
      thereafter is $2,597,385, $2,546,234, $2,501,785, $948,707, $61,751, $210,020,
      respectively. The weighted average remaining life of the intangibles is 3.4,
      years with right of entry average life of 3.9 years and customer subscriber
      lists of 3.1 years as of March 31, 2007. The reduction in intangible value
      during 2006 is due to a sale of subscribers to Consolidated Smart Broadband
      Systems “CSBS” (see Note 3). The Company recorded impairment charge to
      intangible assets of $1,539,633. Assets held for sale at December 31, 2006
      do
      not include intangible assets or goodwill.





*Share-Based
      Compensation*





The
      Company recognizes share-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, 2007 and 2006, total share-based
      compensation expense of $233,748 ($.01 per share) and $316,763 ($.01 per share)
      was included in selling, general and administrative expenses, respectively.
      Estimated share based compensation expense for the years ending December 31,
      2007, 2008, 2009 , 2010, 2011 is $744,653, $661,161, $86,504, $1,973, $0,
      respectively. This is an estimate is based on options currently outstanding
      and
      therefore this projected expense could be more in the future.


7


**MULTIBAND
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**MARCH
      31, 2007 AND 2006**


In
      determining the compensation cost of the options granted during the three months
      ended March 31, 2007 and 2006, as specified by SFAS No. 123R, 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 ended
              March
                31, 2007
            
            Three
                months ended
              March
                31, 2006Risk-free
                interest rate
            
            4.50%
            
            4.50%Expected
                life of options granted
            
            10
                Years
            
            10
                YearsExpected
                volatility range
            
            231%
            
            214%Expected
                dividend yield
            
            0%
            
            0%





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, 2007 and 2006 were anti-dilutive due to the
      Company’s net losses for the periods.





*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, MCS, where the Company bills voice, data and video
      subscribers as a principal; and MDU where the Company as a master service
      operator for DirecTV receives net cash payments for managing video subscribers
      through its network of system operators. These video subscribers are billed
      by
      DirecTV.





*Recent
      Accounting Pronouncements*





In
      February 2007, the Financial Accounting Standards Board (“FASB”) issued
      Statement of Financial Accounting Standards (“SFAS”) No. 159, “The Fair Value
      Option for Financial Assets and Financial Liabilities - Including an amendment
      of FASB Statement No. 115” (“SFAS No. 159”). SFAS No. 159 permits entities to
      elect to measure many financial instruments and certain other items at fair
      value. Upon adoption of SFAS No. 159, an entity may elect the fair value option
      for eligible items that exist at the adoption date. Subsequent to the initial
      adoption, the election of the fair value option may only be made at initial
      recognition of the asset or liability or upon a re-measurement event that gives
      rise to new-basis accounting. The decision about whether to elect the fair
      value
      option is applied on an instrument-by-instrument basis, is irrevocable and
      is
      applied only to an entire instrument and not only to specified risks, cash
      flows
      or portions of that instrument. SFAS No. 159 does not affect any existing
      accounting literature that requires certain assets and liabilities to be carried
      at fair value nor does it eliminate disclosure requirements included in other
      accounting standards. SFAS No. 159 is effective for fiscal years beginning
      after
      November 15, 2007. The Company is currently evaluating the impact of adopting
      SFAS No. 159 on its financial position and results of operations.


8


**MULTIBAND
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**MARCH
      31, 2007 AND 2006**




**NOTE
      3 - Sales Transactions**





The
      Company had $1,244,236 of assets held for sale on December 31, 2006 related
      to
      video assets located in California. Effective March 1, 2007, the Company,
      pursuant to an asset purchase agreement entered into October 19, 2006 (the
      “agreement”), completed the sale of substantially all of its video assets
      located in California to Consolidated Smart Broadband Systems, LLC (CSBS).
      The
      purchase price paid by CSBS was $1,214,000 at closing plus a guarantee of an
      additional $100,000, paid on March 31, 2007. The ultimate purchase price to
      be
      paid by the CSBS for the assets will be determined, in part, by an earnout
      formula detailed in the agreement tied to free subscriber cash flow and length
      of right of entry contracts. The ultimate price paid for the assets will not
      be
      known until February 2008 due to the aforementioned contingencies.





In
      accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of
      Long-Lived Assets”, the Company classified the assets as held for sale, and
      recorded an impairment charge for the year ended December 31, 2006, that was
      determined based upon the excess net book value of assets sold over the known
      proceeds from the sale. Any consideration received for the assets during future
      accounting periods based upon the earnout formula will be recognized as a gain
      on sale of assets in that period. The results of the sale of the California
      assets resulted in a loss of $40,110, which is included in the selling, general
      and administrative expenses of the accompanying consolidated statements of
      operations for the three months ended March 31, 2007.




**Sale
              price**Cash
                proceeds on March 1, 2007
            
            $
            1,214,000Cash
                proceeds guaranteed at second closing March 30, 2007
            
            
            100,000Total
                initial sale price
            
            
            1,314,000Debt
                paid which was secured by assets sold
            
            
            556,268Net
                proceeds
            
            
            757,732




**Assets
              sold**Property
                and equipment (MCS segment)
            
            
            1,244,673Goodwill
            
            
            -Rights
                of entry contracts
            
            
            -Net
                assets sold
            
            
            1,244,673


**Less
                costs and expenses**Broker’s
                fee
            
            
            39,420Accounting
                costs
            
            
            10,000Other
                costs
            
            
            18,180DTV
                transfer fees
            
            
            19,500Imputed
                interest costs
            
            
            22,337Total
                costs
            
            
            109,437




Loss
                on sale of assets
            
            $
            40,110




9


**MULTIBAND
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**MARCH
      31, 2007 AND 2006**




Effective
      March 31, 2007, the Company completed the sale of substantially all of its
      video
      assets located in Ohio to Directech MDU (“Dtech”). The purchase price paid by
      Dtech was $745,790. The purchase price consists of the assumption of a note
      payable for the gross value of $329,036 and $416,754 cash paid at closing April
      20, 2007 ($416,754 is recorded as “other receivable” and included in prepaid
      expenses and other on the March 31, 2007 balance sheet ). The sale of the Ohio
      assets resulted in a gain on sale in the amount of $324,626, which is included
      in the selling, general and administrative expenses of the accompanying
      consolidated statements of operations for the three months ended March 31,
      2007.





**Sale
              price**Cash
                proceeds on April 20, 2007
            
            $
            416,754Liabilities
                assumed
            
            
            267,143Total
                initial sale price
            
            
            683,897




**Assets
              sold - MCS segment**Accounts
                receivable and inventory, net
            
            
            3,242Property
                and equipment
            
            
            96,931Rights
                of entry contracts
            
            
            259,098Net
                assets sold
            
            
            359,271





Gain
                on sale of assets
            
            $
            324,626





These
      sales were not reported as a discontinued operation because the assets sold
      did
      not constitute a segment or component of the Company’s business, and the Company
      retained assets and on-going service rights associated with the video
      subscribers.





**NOTE
      4 - Stock Warrants**





Stock
      warrants activity is as follows for the three months ended March 31,
      2007:


**Number
                  of****Warrants**
              
              **Weighted
                  - Average****Exercise Price**Outstanding,
                  December 31, 2006
              
              
              17,441,644
              
              $
              1.61Granted
              
              
              2,010
              
              
              2.20Exercised
              
              
              -
              
              
              -Cancelled
              
              
              (647,000
              )
              
              (1.98
              )Outstanding,
                  March 31, 2007
              
              
              16,796,654
              
              $
              1.59





**NOTE
      5 - Accrued Liabilities**





Accrued
      liabilities consisted of the following:





**March
                31, 2007**
            
            **December
                31, 2006**Payroll
                and related taxes
            
            $
            415,126
            
            $
            535,919Accrued
                preferred stock dividends
            
            
            661,856
            
            
            810,249Accrued
                liability - vendor chargebacks
            
            
            1,103,414
            
            
            1,103,414Other
            
            
            426,367
            
            
            527,774**Total**
            
            $
            2,606,763
            
            $
            2,977,356





10


**MULTIBAND
      CORPORATION AND SUBSIDIARIES**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


**MARCH
      31, 2007 AND 2006**




**NOTE
      6 - Business Segments**





The
      Company has three reporting 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.





Segment
      disclosures are as follows:


MultibandCorp.
              
              MDU
              
              MCS
              
              TotalThree
                  months ended March 31, 2007:Revenues
              
              $
              -
              
              $
              2,532,875
              
              $
              1,852,080
              
              $
              4,384,955Income
                  (loss) from operations
              
              
              (1,108,925
              )
              
              866,434
              
              
              (989,554
              )
              
              (1,232,045
              )Identifiable
                  assets
              
              
              2,214,571
              
              
              6,023,746
              
              
              6,907,969
              
              
              15,146,286Depreciation
                  and amortization
              
              
              49,863
              
              
              406,271
              
              
              593,564
              
              
              1,049,698Capital
                  expenditures
              
              
              -
              
              
              -
              
              
              120,196
              
              
              120,196
  MultibandCorp.
              
              MDU
              
              MCS
              
              TotalThree
                  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
              )Identifiable
                  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




Segment
      disclosures are provided by entity to the extent practicable under the Company's
      accounting system.





**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, 2007, 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. In April 2007, the Company
      settled its litigation with DirecTechnologies, LLC (DT) by agreeing to pay
      DT
      approximately $13,000, net of previously accrued for commissions of $35,000,
      over a six month period.





*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 57.8% and 57.0% of total revenue for the three months ended March
      31, 2007 and 2006, respectively.





11


MULTIBAND
        CORPORATION AND SUBSIDIARIES
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2007 AND 2006**


*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. This
      guaranty has no effect on the Company’s consolidated financial statements for
      the periods ended March 31, 2007 and 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 - Income Taxes**





Effective
      January 1, 2007, the Company adopted FASB Interpretation (FIN) No. 48 (FIN
      No.
      48), “Accounting for Uncertainty in Income Taxes”, to address the
      noncomparability in reporting tax assets and liabilities resulting from a lack
      of specific guidance in FASB SFAS No. 109 (SFAS 109), “Accounting for Income
      Taxes”, on the uncertainty in income taxes recognized in an enterprise’s
      financial statements. Specifically, FIN No. 48 prescribes (a) a consistent
      recognition threshold and (b) a measurement attribute for the financial
      statement recognition and measurement of a tax position taken or expected to
      be
      taken in a tax return, and provides related guidance on derecognition,
      classification, interest and penalties, accounting interim periods, disclosure
      and transition. The Company has determined that there was no impact on the
      financial position or results of operations following adoption of FIN No. 48
      for
      the three months ended March 31, 2007.





**NOTE
      9 - Subsequent Events**





On
      April
      11, 2007, the Company signed a nonbinding letter of intent with MDU
      Communications International, Inc. (MDU) regarding the sale of certain
      subscribers and associated assets from the Company to MDU and the simultaneous
      provisioning by MDU from the Company of certain on-going Company supplied
      subscriber management services.




12




**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. Words such as “anticipates”,
“may”, “will”, “should”, “believes”, “estimates”, “expects”, “intends”, “plans”,
“predicts”, “will likely result”, “will continue”, or similar expressions
      identify forward-looking statements. 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 (the Company), is a Minnesota corporation formed in
      September 1975. The Company has two operating segments: 1) Multiband
      Consumer Services (MCS, legally known as Multiband Subscriber Services, Inc.),
      which encompasses the subsidiary corporations, Multiband USA, Inc., and Rainbow
      Satellite Group, LLC; and 2) Minnesota Digital Universe, Inc.
      (MDU).





The
      Company completed an initial public offering in June 1984. In
      November 1992, the Company became a non-reporting company under the
      Securities Exchange Act of 1934. In July 2000, the Company regained its
      reporting company status. In December 2000, The Company 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.





The
      Company’s website is located at : www.multibandusa.com .





From
      its
      inception until December 31, 1998, the Company operated as a telephone
      interconnect company only. Effective December 31, 1998, the Company
      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, the Company, 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 quarterly statement on Form
      10-Q have been revised to reflect only our continuing operations and all
      references to our now discontinued Multiband Business Services have been
      eliminated. The Company’s 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, 2007, the Company had approximately 103,600 owned and managed subscriptions.


13





**SELECTED
      CONSOLIDATED FINANCIAL DATA**





DOLLAR
                AMOUNTS AS A PERCENTAGE OF REVENUESTHREE
                MONTHS ENDEDMarch
                31, 2007
              (unaudited)
            
            March
                31, 2006 (unaudited)REVENUES
            
            
            100
            %
            
            100
            %COST
                OF PRODUCTS & SERVICES (Exclusive of depreciation and amortization
                shown below)
            
            
            49.7
            %
            
            46.7
            %SELLING,
                GENERAL & ADMINISTRATIVE
            
            
            54.5
            %
            
            67.5
            %DEPRECIATION
                & AMORTIZATION
            
            
            23.9
            %
            
            29.5
            %LOSS
                FROM OPERATIONS
            
            
            -28.1
            %
            
            -43.7
            %INTEREST
                EXPENSE & OTHER, NET
            
            
            -3.0
            %
            
            -6.0
            %LOSS
                FROM CONTINUING OPERATIONS
            
            
            -31.1
            %
            
            -49.7
            %INCOME
                (LOSS) FROM DISCONTINUED OPERATIONS
            
            
            -
            
            
            -NET
                LOSS
            
            
            -31.1
            %
            
            -49.7
            %





**RESULTS
      OF OPERATIONS**





*Revenues*





Total
      revenues decreased 0.4% to $4,384,955 for the quarter ended March 31, 2007
      as
      compared to $4,404,044 for the quarter ended March 31, 2006. This decrease
      is
      primarily due to sales of subscribers between the comparable periods. The
      Company expects revenues to continue to decrease in 2007 over 2006 due to sales
      of subscribers in the MCS portfolio. The Company experienced a slight decrease
      in revenues between the quarter ended March 31, 2007 and the quarter ended
      March
      31, 2006. The Company throughout 2007 intends to continue to strategically
      sell
      unprofitable owned assets as prudent and redeploy the proceeds from those assets
      into facilitating growth of its managed subscriber services including its
      support center and its master system operator program. The Company believes
      it
      can increase revenues by selling its support center services to its network
      of
      system operators and by providing ancillary programs for voice and data services
      to that same network.





Revenues
      in the first quarter of fiscal year 2007, for the MCS segment, decreased 2.1%
      to
      $1,852,080 as compared to $1,891,872 in the first quarter of fiscal 2006. This
      decrease is primarily due to sales of subscribers during the comparable
      periods.





Revenues
      in the first quarter of 2007 for the MDU segment increased to $2,532,875 as
      compared to $2,512,172 in the first quarter of fiscal 2006. This increase is
      primarily due to an increase in the number of revenue generating subscribers
      and
      a related increase in agent fees during the comparable period.


14


*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 5.9% to $2,178,046 for the quarter ended March 31,
      2007 as compared to $2,056,527 for the similar quarter last year. Costs of
      products and services for the MCS segment for the quarter were $1,032,389
      compared to $1,011,436 in the same quarter last year, a 2.1% increase. Costs
      of
      products and services for the MDU segment for the quarter were $1,145,657
      compared to $1,045,091 in the same quarter last year, a 9.6% increase. The
      increase in costs of products and services in the MCS segment is directly
      related to an increase in equipment sales to landlords and an increase in analog
      programming charges between the comparable periods. The increase of costs of
      products and services in the MDU segment is directly related to an increase
      in
      bulk subsidy costs in the three months ended March 31, 2007 versus March 31,
      2006. The Company expects costs of products and services as a percentage of
      revenue to remain comparable in future periods due to the predictability of
      costs and the ability to pass costs through to customers. Overall costs of
      products and services as a percentage of revenue did increase slightly between
      March 31, 2007 and March 31, 2006 due to certain vendor price increases.
      However, the Company’s ability to raise prices to its customers accordingly
      should allow the Company to increase margins in future periods.





*Selling,
      General and Administrative Expenses*





Selling,
      general and administrative expenses decreased 19.6% to $2,389,256 in the quarter
      ended March 31, 2007, compared to $2,972,223 in the prior year’s quarter.
      Selling, general and administrative expenses were, as a percentage of revenues,
      54.5% for the quarter ended March 31, 2007 and 67.5% for the similar period
      a
      year ago. This decrease is primarily a result of decreases in payroll expense,
      advertising expense, subcontracting expense, stock option expense and a gain
      on
      sale of assets between the comparable periods. The Company anticipates that
      selling, general and administrative expenses, exclusive of stock option
      expenses, will continue to decrease in 2007 due to reduced payroll expenses
      from
      the sale of subscribers in the MCS portfolio.





*Depreciation
      and Amortization*





Depreciation
      and amortization expense decreased 19.4% to $1,049,698 for the quarter ended
      March 31, 2007 compared to $1,302,456 in the prior year’s quarter. This decrease
      in depreciation and amortization is due to the sale of tangible and intangible
      assets in California and Ohio(Note 3).





*Loss
      from Operations*





The
      Company, in the first quarter of 2007, incurred a loss from operations for
      its
      combined operating business segments of $1,232,045 versus a loss of $1,972,162
      during the prior year’s period. The MDU segment showed a profit from operations
      of $866,434 during the first quarter of 2007 versus profits of $904,943 for
      the
      three months ended March 31, 2006. For the first quarter of 2007, the MCS
      segment showed a loss from operations of $989,554 versus a loss of $1,687,924
      for the prior year period. The Multiband Corporation segment, which has no
      revenues, showed a loss from operations of $1,108,925 for the three months
      ended
      March 31, 2007 versus a loss of $1,144,181 for the same period last year. The
      Multiband Corporation loss is expected to continue in future periods as
      corporate overhead is expected to remain consistent with current levels. The
      Company expects the MDU segment profitability in future periods to remain steady
      or improve as that segment continues to experience growth. In addition to the
      sale of subscribers, the Company hopes that it can mitigate its loss in the
      MCS
      segment by reducing related payroll expenses. At the same time, the Company
      will
      look to add subscribers in its MDU division since the on-going selling, general
      and administrative expenses to service those subscribers can be more variable
      than fixed.





*Interest
      Expense*





Interest
      expense was $153,407 for the quarter ended March 31, 2007, versus $304,681
      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 $8,294 and $114,908 for the three months ended March 31, 2007
      and
      2006.





*Net
      Loss*





In
      the
      first quarter of fiscal 2007, the Company incurred a net loss of $1,362,395
      compared to a net loss of
      $2,188,206 for the first fiscal quarter of 2006.


15


*Liquidity
      and Capital Resources*





During
      the three months ended March 31, 2007 and 2006, the Company recorded a net
      loss
      of $1,362,395 and $2,188,206, respectively. Net cash used by operations during
      the three months ended March 31, 2007 was $225,815 as compared to cash used
      by
      operations during the three months ended March 31, 2006 of $192,717. Principal
      payments on current long-term debt over the next 12 months are expected to
      total
      $708,823.





Cash
      and
      cash equivalents totaled $851,804 at March 31, 2007 versus $1,020,975 at
      December 31, 2006. Working capital deficit for the three months ended March
      31,
      2007 decreased to $4,200,531 as compared to $5,294,245, at December 31, 2006,
      primarily due to net proceeds of $757,732 received from the sale of video assets
      to CSBS (see Note 3), during the quarter. Total debt was reduced in the three
      months ended March 31, 2007 as the Company continued to retire financing debt
      and certain notes were paid off in conjunction with asset sales. The Company
      had
      a material decrease in accounts receivables for the period ended March 31,
      2007
      verses the period ended December 31, 2006 due to sales of assets. Accounts
      payable and accrued liabilities combined remained relatively constant in total
      from December 31, 2006 to March 31, 2007. Net cash flows from investing
      activities totaled $637,536 compared to ($371,550) for the comparable period
      reflecting the sale of video assets to CSBS, previously mentioned
      herein.





The
      Company experienced a slight decrease in revenues between the quarter ended
      March 31, 2007 and the quarter ended March 31, 2006. The Company throughout
      2007
      intends to continue to strategically sell unprofitable owned assets as prudent
      and redeploy the proceeds from those assets into facilitating growth of its
      managed subscriber services including its support center and its master system
      operator program. The Company believes it can increase revenues by selling
      its
      support center services to its network of system operators and by providing
      ancillary programs for voice and data services to that same
      network.





Management
      intends to sell certain assets on a strategic basis for prices agreeable to
      the
      Company and/or 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 and operating lease obligations
      and fund the Company's operations through 2007:





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




2.
              Sale
                  of video subscriber assets on a strategic basis. The Company, based
                  on
                  recent transactions, believes there is an active market for its
                  video
                  subscriber assets. The Company believes that it can sell these
                  assets,
                  under certain circumstances, at prices at or above their current
                  carrying
                  value. However, there is no guarantee that these sales will ultimately
                  be
                  favorable to the Company.


3.
            Solicit
                additional equity investment in the Company by either issuing preferred
                or
                common stock.




4.
            Continue
                to market Multiband services and acquire additional multi-dwelling
                unit
                customers.




5.
            Control
                capital expenditures by contracting Multiband services and equipment
                through a landlord-owned equipment
                program.




6.
            Establish
                market for wireless internet
                services.


7.
              Expansion
                  of call center support via sales of call center services to both
                  existing
                  and future system operators and to buyers of the Company’s video
                  subscribers.


Management
      of the Company believes that cash on hand, as of March 31, 2007, combined with
      capital resources and the ability to monetize intangible subscriber assets,
      is
      adequate to meet the anticipated liquidity and capital resource requirements
      of
      its business for the next 12 months.





*Capital
      Expenditures*





The
      Company used $120,196 for capital expenditures during the three months ended
      March 31, 2007, as compared to $362,006 in the similar period last year. Capital
      expenditures consisted of project build-outs and equipment acquired for internal
      use. Capital expenditures in 2007 are expected to decrease significantly as
      the
      Company is intending to build out fewer services in 2007 than in
      2006.


16


**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, 2007, the Company had net property and equipment
      of
      $3,006,040, which represents approximately 19.8% 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, which may be material. During the three
      months ended March 31, 2007 and 2006, the Company did not record any impairment
      losses related to long-lived assets.





Impairment
      of Goodwill




At
      year
      end, we test goodwill for impairment. If indicators of impairment are determined
      to exist, we test goodwill for impairment quarterly. Our judgments regarding
      the
      existence of impairment indicators are based on legal factors, market conditions
      and operational performance of our operating segments. Future events could
      cause
      us to conclude that impairment indicators exist and that goodwill associated
      with our operating segments which amounts to $509,086 as of March 31, 2007,
      may
      be 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, 2007 and 2006, the Company did not record any impairment losses
      related to goodwill.





Impairment
      of Intangible Assets





The
      intangible assets consist of rights of entry contracts, customer cable lists,
      debt issuance costs, domain name and access contracts. These intangibles are
      being amortized over their estimated useful lives ranging from 18 to 180 months.
      If significant changes would occur to the estimated future cash flows associated
      with these intangibles, the Company would determine if there is impairment
      and
      reduce the value of intangibles based on the discounted present value of such
      cash flows. At March 31, 2007, the Company had net intangibles of $8,188,820
      which represented approximately 54.1% of the Company’s total assets. During the
      three months ended March 31, 2007 and 2006, the Company did not record any
      impairment losses related to intangible assets.





Inventories





We
      value
      our inventory at the lower of the actual cost or the current estimated market
      value of the inventory. We regularly review inventory quantities on hand and
      record a provision for excess and obsolete inventory. Rapid technological
      change, frequent new product development, and rapid product obsolescence that
      could result in an increase in the amount of obsolete inventory quantities
      on
      hand characterize our industry.





Share-Based
      Payments





Effective
      January 1, 2006, the Company adopted Statement of Financial Accounting
      Standard No. 123 (revised 2004), *Share-Based
      Payment* (SFAS
      123(R)), which requires the measurement and recognition of compensation expense
      for all share-based payment awards made to employees and directors including
      employee stock options based on fair values. The Company’s determination of fair
      value of share-based payment awards is based on the date of grant using an
      option-pricing model which incorporates a number of highly complex and
      subjective variables. These variables include, but are not limited to, the
      Company’s expected stock price volatility and estimates regarding projected
      employee stock option exercise behaviors and forfeitures. The Company recognizes
      the expense related to the fair value of the award straight-line over the
      vesting period.




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





The
      Company 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
      percentage of Class I convertible preferred stock which pays dividends based
      on
      a basis of prime plus one percent (9.25% at March 31, 2007).




17


**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.





**PART
      II. OTHER INFORMATION**





**ITEM
      1. LEGAL PROCEEDINGS**





As
      of
      March 31, 2007, the Company was not engaged in any pending legal proceedings
      where, in the opinion of management, the outcome is likely to have a material
      adverse effect upon the business, operating results and financial condition
      of
      the Company. In April 2007, the Company settled its litigation with
      DirecTechnologies, LLC (DT) by agreeing to pay DT approximately $13,000, net
      of
      previously accrued for commissions of $35,000, over a six month
      period.





**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.





**Net
      Losses**





The
      Company had net losses of $1,362,395 for the three months ended March 31, 2007,
      $10,183,723 for the year ended December 31, 2006, and $7,475,000 for the year
      ended December 31, 2005. The Company 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:




·
              our
                  capital expenditure
                  objectives;




·
            our
                debt service obligations; or




·
            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 an annual test of "impairment" for fiscal years beginning after
      December 15, 2001. In 2006, the Company recorded an impairment charge to
      goodwill of $417,465 related to the sale of video assets to CSBS (see Note
      3).
      As of March 31, 2007, the Company had remaining recorded goodwill of $509,086
      primarily related to the purchase of Rainbow Satellite Group, LLC. At March
      31,
      2007 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, expires in August 2008, 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. 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, 2007
            By:
            /s/
              James L. Mandel*Chief
                Executive Officer*




Date:
                May 15, 2007
            By:
            /s/
              Steven M. Bell*Chief
                  Financial Officer*
                *(Principal
                  Financial and Accounting
                  Officer)*  21