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 1934FOR
                THE PERIOD ENDING MARCH 31, 2008ORo
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
                ACT
                OF 1934FOR
                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, a non-accelerated filer or a smaller reporting company.
      See
      the definitions of “large accelerated filer,” “accelerated filer“ and “smaller
      reporting company” in Rule 12b-2 of the Exchange Act. (Check one):




Large accelerated filer o
            
            Accelerated filer o


Non-accelerated filer x(do
              not check if a smaller reporting
              company)
            
            Smaller reporting company o




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 9,
      2008 there were 9,489,826 shares outstanding of the registrant's common stock,
      no par value, and 312,145 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, 2008
              (unaudited)
            
            March
                31, 2007
              (unaudited)**REVENUES**
            
            $
            5,714,229
            
            $
            4,384,955**COSTS
                AND EXPENSES**Cost
                of products and services (exclusive of depreciation and amortization
                shown
                separately below)
            
            
            3,820,198
            
            
            2,178,046Selling,
                general and administrative
            
            
            1,855,283
            
            
            2,389,256Depreciation
                and amortization
            
            
            737,707
            
            
            1,049,698Impairment
                of assets
            
            
            58,046
            
            
            -Total
                costs and expenses
            
            
            6,471,234
            
            
            5,617,000**LOSS
                FROM OPERATIONS**
            
            
            (757,005
            )
            
            (1,232,045
            )**OTHER
                EXPENSE**Interest
                expense
            
            
            (100,659
            )
            
            (153,407
            )Other
                income
            
            
            40,183
            
            
            23,057Total
                other expense
            
            
            (60,476
            )
            
            (130,350
            )**LOSS
                BEFORE INCOME TAXES AND MINORITY INTEREST IN
                SUBSIDIARY**
            
            
            (817,481
            )
            
            (1,362,395
            )**PROVISION
                FOR INCOME TAXES**
            
            
            28,500
            
            
            -**MINORITY
                INTEREST IN NET INCOME OF SUBSIDIARY**
            
            
            18,417
            
            
            -**NET
                LOSS**
            
            
            (864,398
            )
            
            (1,362,395
            )Preferred
                stock dividends
            
            
            3,881,020
            
            
            239,927**LOSS
                ATTRIBUTABLE TO COMMON STOCKHOLDERS**
            
            $
            (4,745,418
            )
            $
            (1,602,322
            )**BASIC
                AND DILUTED LOSS PER COMMON SHARE:****NET
                LOSS**
            
            $
            (.56
            )
            $
            (.23
            )**LOSS
                ATTRIBUTABLE TO COMMON STOCKHOLDERS**
            
            $
            (.56
            )
            $
            (.23
            )**WEIGHTED
                AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED**
            
            
            8,497,734
            
            
            7,087,561





See
      notes
      to condensed consolidated financial statements





Page
          2




**MULTIBAND
      CORPORATION AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS**





Three
                Months EndedMarch
                31, 2008
              (unaudited)
            
            March
                31, 2007
              (unaudited)**NET
                LOSS**
            
            $
            (864,398
            )
            $
            (1,362,395
            )





**OTHER
                COMPREHENSIVE INCOME, NET OF TAX:**Unrealized
                gains on securities:Unrealized
                holding gains arising during period
            
            
            208,969
            
            
            -**COMPREHENSIVE
                LOSS**
            
            $
            (655,429
            )
            $
            (1,362,395
            )





See
      notes
      to condensed consolidated financial statements





Page
          3




**MULTIBAND
      CORPORATION AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS**




***ASSETS***


March
                31, 2008
              (unaudited)
            
            December
                31, 2007
              (audited)**CURRENT
                ASSETS**Cash
                and cash equivalents
            
            $
            7,303,397
            
            $
            944,456Accounts
                receivable, net
            
            
            3,867,868
            
            
            1,560,123Securities
                available for sale
            
            
            208,969
            
            
            -Inventories
            
            
            1,318,586
            
            
            132,992Prepaid
                expenses and other
            
            
            229,159
            
            
            135,589Current
                portion of notes receivable
            
            
            62,954
            
            
            59,861Total
                Current Assets
            
            
            12,990,933
            
            
            2,833,021**PROPERTY
                AND EQUIPMENT, NET**
            
            
            1,683,423
            
            
            1,769,261**OTHER
                ASSETS**Goodwill
            
            
            116,757
            
            
            16,757Intangible
                assets, net
            
            
            6,598,691
            
            
            4,072,076Notes
                receivable - long-term, net
            
            
            41,921
            
            
            -Other
                assets
            
            
            604,064
            
            
            202,314Total
                Other Assets
            
            
            7,361,433
            
            
            4,291,147**TOTAL
                ASSETS**
            
            $
            22,035,789
            
            $
            8,893,429




***LIABILITIES
                AND STOCKHOLDERS'
                EQUITY***




**CURRENT
                LIABILITIES**Mandatory
                redeemable preferred stock, 20,526 and 22,026 Class F preferred
                shares
            
            $
            205,256
            
            $
            220,256Current
                portion of long-term debt
            
            
            1,555,542
            
            
            1,658,342Current
                portion of capital lease obligations
            
            
            221,325
            
            
            225,291Accounts
                payable
            
            
            6,658,711
            
            
            2,950,596Accrued
                liabilities
            
            
            3,523,272
            
            
            2,531,611Customer
                deposits
            
            
            60,582
            
            
            60,582Deferred
                service obligations and revenue
            
            
            611,989
            
            
            204,520Total
                Current Liabilities
            
            
            12,836,677
            
            
            7,851,198**LONG-TERM
                LIABILITIES**Long-term
                debt, net
            
            
            2,208,255
            
            
            118,924Capital
                lease obligations, net of current portion
            
            
            227,565
            
            
            249,469Total
                Liabilities
            
            
            15,272,497
            
            
            8,219,591**COMMITMENTS
                AND CONTINGENCIES****MINORITY
                INTEREST**
            
            
            2,692,880
            
            
            -**STOCKHOLDERS'
                EQUITY**Cumulative
                convertible preferred stock, no par value:8%
                Class A (24,728 shares issued and outstanding, $259,644 liquidation
                preference)
            
            
            371,708
            
            
            371,70810%
                Class B (3,470 and 3,770 shares issued and outstanding, $36,435 and
                $39,585 liquidation preference)
            
            
            34,700
            
            
            37,70010%
                Class C (118,650 and 120,250 shares issued and outstanding, $1,186,500
                and
                $1,202,500 liquidation preference)
            
            
            1,531,188
            
            
            1,548,35210%
                Class F (150,000 shares issues and outstanding, $1,500,000 liquidation
                preference)
            
            
            1,500,000
            
            
            1,500,0008%
                Class G (16,595 and 26,595 shares issued and outstanding, $165,950
                and
                $265,950 liquidation preference)
            
            
            68,407
            
            
            111,4686%
                Class H (2.0 shares issued and outstanding, $200,000 liquidation
                preference)
            
            
            -
            
            
            -Variable
                rate % Class I (0 and 39,500 shares issued and outstanding, $0 and
                $3,950,000 liquidation preference)
            
            
            -
            
            
            -Common
                stock, no par value (9,489,826 and 7,451,891 shares issued and
                outstanding)
            
            
            37,317,676
            
            
            29,574,673Stock
                subscriptions receivable
            
            
            (129,221
            )
            
            (170,888
            )Options
                and warrants
            
            
            46,083,542
            
            
            45,871,964Accumulated
                comprehensive income - unrealized gain in securities
            
            
            208,969
            
            
            -Accumulated
                deficit
            
            
            (82,916,557
            )
            
            (78,171,139
            )Total
                Stockholders' Equity
            
            
            4,070,412
            
            
            673,838**TOTAL
                LIABILITIES AND STOCKHOLDERS' EQUITY**
            
            $
            22,035,789
            
            $
            8,893,429




See
      notes
      to condensed consolidated financial statements





Page
          4




**MULTIBAND
      CORPORATION AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**




**THREE
                MONTHS ENDED MARCH 31,****2008**
            
            **2007**(unaudited)
            
            (unaudited)OPERATING
                ACTIVITIESNet
                loss
            
            $
            (864,398
            )
            $
            (1,362,395
            )Adjustments
                to reconcile net loss to net cash flows from operating
                activitiesDepreciation
                and amortization
            
            
            737,707
            
            
            1,053,691Minority
                interest in net income of consolidated subsidiary
            
            
            18,417
            
            
            -Impairment
                of intangibles
            
            
            58,046
            
            
            -Amortization
                of original issue discount
            
            
            -
            
            
            8,294Amortization
                of imputed interest discount
            
            
            9,656
            
            
            -Loss(gain)
                on sale of property and equipment and intangible assets
            
            
            -
            
            
            (284,516
            )Warrants
                issued for services
            
            
            -
            
            
            900Gain
                on debt extinguishment
            
            
            (29,965
            )
            
            -Stock
                based compensation expense
            
            
            211,578
            
            
            233,748Change
                in allowance for doubtful accounts on accounts receivable
            
            
            (15,000
            )
            
            -Change
                in reserve for stock subscriptions and interest receivable
            
            
            (20,053
            )
            
            15,000Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            293,771
            
            
            342,086Inventories
            
            
            696,949
            
            
            165,609Prepaid
                expenses and other
            
            
            (84,528
            )
            
            55,565Other
                assets
            
            
            (20,676
            )
            
            (21,638
            )Accounts
                payable and accrued liabilities
            
            
            (1,711,313
            )
            
            45,656Deferred
                service obligations and revenue
            
            
            407,469
            
            
            (352,440
            )Liabilities
                of discontinued operations
            
            
            -
            
            
            (125,000
            )Customer
                deposits
            
            
            -
            
            
            (375
            )Net
                cash flows used by operating activities
            
            
            (312,340
            )
            
            (225,815
            )INVESTING
                ACTIVITIESPurchases
                of property and equipment
            
            
            (42,047
            )
            
            (120,196
            )Cash
                acquired via purchase of MMT
            
            
            4,043,942
            
            
            -Cash
                collected on other receivables - related parties acquired via the
                purchase
                of MMT
            
            
            2,815,488
            
            
            -Purchase
                of US Installs
            
            
            (101,000
            )
            
            -Proceeds
                from sale of property and equipment and intangible assets
            
            
            -
            
            
            757,732Net
                cash flows from investing activities
            
            
            6,716,383
            
            
            637,536FINANCING
                ACTIVITIESChecks
                issued in excess of cash in bank
            
            
            -
            
            
            (319,244
            )Payments
                on long-term debt
            
            
            (10,144
            )
            
            (129,080
            )Payments
                on capital lease obligations
            
            
            (63,134
            )
            
            (56,255
            )Payments
                on note payable to stockholder
            
            
            -
            
            
            (24,739
            )Payments
                on mandatory redeemable preferred stock
            
            
            (15,000
            )
            
            (21,244
            )Payments
                received on stock subscriptions receivable
            
            
            387
            
            
            62Proceeds
                from issuance of long term debt
            
            
            100,000
            
            
            -Redemption
                of preferred stock
            
            
            (19,000
            )
            
            (20,500
            )Preferred
                stock dividends
            
            
            (38,211
            )
            
            (9,892
            )Net
                cash flows used by financing activities
            
            
            (45,102
            )
            
            (580,892
            )INCREASE(DECREASE)
                IN CASH AND CASH EQUIVALENTS
            
            
            6,358,941
            
            
            (169,171
            )CASH
                AND CASH EQUIVALENTSBeginning
                of period
            
            
            944,456
            
            
            1,020,975End
                of period
            
            $
            7,303,397
            
            $
            851,804SUPPLEMENTAL
                DISCLOSURE OF CASH FLOW INFORMATIONCash
                paid for interest, net of amortization of original issue
                discount
            
            $
            67,183
            
            $
            135,509SUPPLEMENTAL
                DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIESConversion
                of Class I preferred stock into common stock
            
            
            3,744,600
            
            
            -Conversion
                of Class G preferred stock into common stock
            
            
            100,000
            
            
            -Conversion
                of accrued dividends into common stock
            
            
            86,236
            
            
            367,092Intrinsic
                value of preferred dividends
            
            
            1,164
            
            
            11,336Purchase
                of property and equipment via increase of capital lease obligations
            
            
            12,500
            
            
            -Purchase
                of US Installs via increase in accrued expenses
            
            
            102,516
            
            
            -Acquisition
                of securities available for sale upon expiration of contingent
                rights
            
            
            208,969
            
            
            -Reduction
                of stock subscription receivable via cancellation of common
                stock
            
            
            61,333
            
            
            -Debt
                and accrued interest paid with issuance of common stock
            
            
            19,500
            
            
            -Purchase
                of 51% of MMT via issuance of notes payable and common stock, net
                of
                discount for imputed interest
            
            
            5,782,690
            
            
            -Sale
                of property, equipment and intangible to DirecTECH for other current
                asset
            
            
            -
            
            
            416,754Debt
                and interest assumed by DirecTECH as part of asset sale
            
            
            -
            
            
            267,143




See
      notes
      to condensed consolidated financial statements




Page
          5




**MULTIBAND
        CORPORATION AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008 AND 2007**


**Note
      1 - Unaudited Consolidated Financial Statements**





The
      information furnished in this report is unaudited and reflects all adjustments
      which are normal recurring adjustments and, which in the opinion of management,
      are necessary to fairly present the operating results for the interim periods.
      The operating results for the interim periods presented are not necessarily
      indicative of the operating results to be expected for the full fiscal year.
      The
      consolidated financial statements should be read in conjunction with the
      consolidated financial statements and footnotes thereto included in the
      Company’s Annual Report on Form 10-K for the year ended December 31, 2007,
      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 and provides video services to single family
      home
      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, 2008 and 2007, the Company incurred net losses
      of
      $864,398 and $1,362,395, respectively. At March 31, 2008, the Company had an
      accumulated deficit of $82,916,557. 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 future operations through
      2008:




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


2.
            Sale
                of video 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 it can sell these assets, under certain
                circumstances, at prices at or above their current carrying value.
                However, there is no guarantee 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.
            Delivery
                of video services to residents of single family homes. Effective
                March 1,
                2008 the Company purchased 51% of the outstanding stock of Michigan
                Microtech, Inc. (MMT), formerly a wholly owned subsidiary of DirecTECH
                Holding Company Inc. (DTHC) (see Note 4). MMT installs DirecTV video
                services in single family homes. Historically MMT has been profitable.
                The
                Company anticipates that by combining MMT operations with Multiband
                operations that it will achieve a beneficial impact to its consolidated
                cash flows and operating results. However, there is no guarantee
                that
                these combined results will ultimately be favorable to the
                Company.


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.




Page
          6


**MULTIBAND
        CORPORATION AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008 AND 2007**


*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). Effective March 1, 2008, the Company
      acquired 51% of the outstanding shares of Michigan Microtech, Inc. (MMT) (see
      Note 4). The minority interest on the consolidated balance sheet and statement
      of operations represents the 49% of activity for the period which the Company
      does not own. The consolidated financial statements include the accounts of
      MMT.
      All significant intercompany transactions and balances have been eliminated
      in
      consolidation.





*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
      communications products which are sold and installed, 2) Multiband user charges
      to multiple dwelling units, 3) MBUSA user charges to timeshares, 4) MDU earns
      revenue primarily through the activation of and residual fees on video
      programming services provided to residents of multiple dwelling units; and
      5)
      MMT earns revenue primarily through the installation and service of DirecTV
      (DTV) video programming for residents of single family houses.





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 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 Multiband's Master System Operator 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.





MMT
      has a
      home services provider (HSP) agreement with DirecTV which allows MMT to install
      and activate DTV video programming services for residents of single family
      homes. As a DirecTV HSP, MMT earns revenue for installing and servicing DTV
      video customers pursuant to predetermined rates set by DirecTV which may vary
      from time to time. Revenue
      is recognized upon completion of the delivery and installation of
      equipment.





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.




Page
          7


**MULTIBAND
        CORPORATION AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008 AND 2007**


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.





In
      June
      2006, the Financial Accounting Standards Board (FASB) ratified the consensus
      of
      Emerging Issues Task Force Issue No. 06-3, “How Taxes Collected from Customers
      and Remitted to Governmental Authorities Should Be Presented in the Income
      Statement (That Is, Gross versus Net Presentation)” (EITF 06-3). EITF 06-3
      concluded that the presentation of taxes imposed on revenue-producing
      transactions (sales, use, value added and excise taxes) on either a gross
      (included in revenues and costs) or a net (excluded from revenues) basis is
      an
      accounting policy that should be disclosed. The Company’s policy is to present
      taxes imposed on revenue-producing transactions on a net basis.





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. MMT installation and services revenues are recognized in the
      period the related services are provided in accordance with SAB
      104.





*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 $116,757 and $16,757 at March 31, 2008 and December
      31,
      2007, respectively, and is recorded as part of our Multiband Corp. and MCS
      segments. The increase in goodwill during 2008 is due to the purchase US Install
      (see Note 4).





Pursuant
      to the planned future abandonment of a right of entry intangible asset, the
      Company recorded an impairment charge of $58,046 for the three months ended
      March 31, 2008. This charge was determined based upon the net book value of
      assets to be abandoned.




Page
          8




**MULTIBAND
        CORPORATION AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008 AND 2007**


Components
      of intangible assets are as follows:




March
                31, 2008
            
            December
                31, 2007Gross
                Carrying
            
            Accumulated
            
            Gross
                Carrying
            
            AccumulatedAmount
            
            Amortization
            
            Amount
            
            AmortizationIntangible
                assets subject to amortizationRight
                of entry contracts
            
            $
            930,739
            
            $
            588,675
            
            $
            993,393
            
            $
            618,027Contracts
                with DirecTV
            
            
            12,696,944
            
            
            6,476,244
            
            
            9,697,879
            
            
            6,001,169Customer
                contracts
            
            
            102,516
            
            
            8,543
            
            
            -
            
            
            -Total
            
            
            13,730,199
            
            
            7,073,462
            
            
            10,691,272
            
            
            6,619,196Impairment
                of intangibles
            
            
            -
            
            
            58,046
            
            
            -
            
            
            -Total
                including impairment
            
            $
            13,730,199
            
            $
            7,131,508
            
            $
            10,691,272
            
            $
            6,619,196





Amortization
      of intangible assets was $516,920 and $673,069 for the three months ended March
      31, 2008 and 2007, respectively. Amortization of debt issuance costs of $0
      and
      $3,993 for the three months ended March 31, 2008 and 2007, respectively, is
      included in interest expense. Estimated amortization expense of intangible
      assets for the years ending December 31, 2008, 2009, 2010, 2011, 2012 and
      thereafter is $2,045,243, $2,588,376, $1,513,475, $351,830, $36,139, $63,628,
      respectively. The weighted average remaining life of the intangibles is 2.67
      years with right of entry average life of 5.77 years, contracts with DirecTV
      of
      2.55 years and customer contracts of .92 years as of March 31,
      2008.





*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, 2008 and 2007, total share-based
      compensation expense of $211,578 ($.02 per share) and $233,748 ($.03 per share)
      was included in selling, general and administrative expenses, respectively.
      Estimated share based compensation expense for the years ending December 31,
      2008, 2009, 2010, 2011 and 2012 is $712,376, $94,431, $13,897, $112 and $0,
      respectively. This is an estimate based on options currently outstanding and
      therefore this projected expense could be more in the future.





In
      determining the compensation cost of the options granted during the three months
      ended March 31, 2008 and 2007, 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, 2008
            
            Three
                months
              ended
              March
                30, 2007Risk-free
                interest rate
            
            
            2.50
            %
            
            4.50
            %Expected
                life of options granted
            
            
            10
                Years
            
            
            10
                YearsExpected
                volatility range
            
            
            261
            %
            
            231
            %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.




Page
          9




**MULTIBAND
        CORPORATION AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008 AND 2007**


*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 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, 2008 and 2007 were excluded from the
      calculation of diluted loss per share as their effects 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 three
      operating segments, MCS, where the Company bills voice, data and video
      subscribers as a principal; 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 and HSP (Home Service Provider), where the
      Company receives net cash payments for the installation and service of DirecTV
      (DTV) video programming for residents of single family houses. These video
      subscribers are billed by DirecTV.





*Recent
      Accounting Pronouncements*





In
      May
      2008, the Financial Accounting Standards Board (FASB) issued Statements of
      Financial Standards No. 162 (SFAS 162), “The Hierarchy of Generally Accepted
      Accounting Principles.” SFAS 162 is intended to improve financial reporting by
      identifying a consistent framework, or hierarchy, for selecting accounting
      principles to be used in preparing financial statements that are presented
      in
      conformity with U.S. generally accepted accounting principles (GAAP) for
      nongovernmental entities.





Prior
      to
      the issuance of SFAS 162, GAAP hierarchy was defined in the American Institute
      of Certified Public Accountants (AICPA) Statement on Auditing Standards No.
      69
      (SAS 69), “The Meaning of Present Fairly in Conformity With Generally Accepted
      Accounting Principles.” SAS 69 has been criticized because it is directed to the
      auditor rather than the entity. SFAS 162 addresses these issues by establishing
      that the GAAP hierarchy should be directed to entities because it is the entity
      (not its auditor) that is responsible for selecting accounting principles for
      financial statements that are presented in conformity with GAAP.





SFAS
      162
      is effective 60 days following the SEC’s approval of the Public Company
      Accounting Oversight Board Auditing amendments to AU Section 411, “The Meaning
      of Present Fairly in Conformity with Generally Accepted Accounting Principles.”
The Company does not expect SFAS 162 to have a material effect on its
      consolidated financial statements.




Page
          10


**MULTIBAND
        CORPORATION AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008 AND 2007**





**NOTE
      3** **-
      Sales Transactions**








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
      an
      additional $100,000, paid on March 30, 2007 consisting of cash proceeds of
      $757,731 and direct payments to lenders of $556,269 (including $22,338 of
      imputed interest).





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.





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 consisted of the assumption of a note
      payable for the gross value of $329,036 and $416,754 cash paid at closing on
      April 20, 2007. 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 during the three months ended March 31, 2007. The proceeds of $683,897,
      including assumed liabilities of $267,143, less the net book value of the MCS
      segment assets sold amounted to a gain on sale of $324,626.





On
      October 16, 2007, the Company completed the sale to MDU Communications (MDUC)
      of
      approximately 9,800 subscriptions and the related assets located in 181
      multi-family properties located throughout Florida, Illinois, New York,
      Colorado, New Jersey, and Texas. Total proceeds for MCS assets sold amounted
      to
      approximately $3,325,000, consisting of cash proceeds of $1,476,753, selling
      expenses paid by MDUC of $135,000 and the remainder on debt and liabilities
      paid
      directly by MDUC. The sale resulted in a loss of $461,687 which is included
      in
      the selling, general and administrative expenses of the consolidated statements
      of operations for the year ended December 31, 2007. The aforementioned loss
      primarily resulted from fewer multi-family properties being sold to MDUC than
      was originally intended in the party’s asset purchase agreement. Certain
      properties could not be sold due to the Company’s inability to obtain some
      property owners consent to assignment. The difference in the mix of properties
      ultimately transferred to MDUC increased the loss on sale compared to what
      the
      Company originally estimated upon execution of the asset purchase agreement
      in
      July 2007.





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.




Page
          11




**MULTIBAND
        CORPORATION AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008 AND 2007**





**NOTE
      4 - Business Acquisitions**





Effective
      March 1, 2008, the Company purchased, pursuant to a Supplemental Agreement
      and
      Plan of Share Exchange, 51% of the outstanding shares of Michigan Microtech,
      Inc. (MMT), previously a wholly owned subsidiary of DirecTECH Holding Company,
      Inc. (DTHC) which equaled 1,020,000 MMT common shares. The consideration paid
      for the shares was 1,490,000 shares of restricted Multiband common stock valued
      at $3,854,000 and a promissory note for $2,246,000. The note is secured by
      the
      aforementioned MMT common shares, which carries a stated interest rate of 5%
      per
      annum and is due February 2013. The Multiband shares, via negotiation and mutual
      agreement between buyer and seller, were valued at $2.59 per share. The seller
      received certain piggyback registration rights with regards to the Multiband
      shares. The note payable was recorded net of a discount for imputed interest
      of
      3% which amortizes monthly as part of interest expense. The total discount
      for
      imputed interest amounted to $317,310. The Company purchased MMT to enter the
      market of installing video services in single family homes. The Company, on
      a
      preliminary and unaudited basis, allocated the purchase price to the fair values
      of MMT assets and liabilities. As part of the acquisition, the Company
      recognized an intangible asset of $2,999,065 related to MMT’s HSP agreement with
      DirecTV. The Company will amortize this intangible over the remaining 38 month
      term of MMT’s home services provided contract with DirecTV. The term of the
      contract will automatically renew as of April 30, 2011 for additional one year
      periods unless either MMT or DirecTV gives written notice of termination at
      least 90 days in advance of expiration of the then current term. Also, all
      signing parties to the October 31, 2007 Plan of Merger Agreement involving
      Multiband Corporation and DirecTECH Holding Company, Inc. have agreed to extend
      the time to reach a definitive agreement in the matter from March 31, 2008
      to
      December 31, 2008. Due to a number of conditions precedent to completion of
      the
      merger including, but not limited to, shareholder approval from both parties,
      Multiband cannot deem it likely as of this date that the merger as originally
      structured in the 4 th quarter
      of 2007 will be completed.





Effective
      March 1, 2008, the Company purchased 100% of the assets of US Install LLC.
      in
      exchange for $95,000 in cash plus 37,879 shares of restricted Multiband common
      stock valued at $102,516 which is included in accrued liabilities on the
      consolidated balance sheet and to be issued in August, 2008. The Company also
      incurred acquisition expense of $1,000 related to this purchase. In addition,
      the parties executed employment agreements with US Install’s two principals. The
      parties also executed noncompetition and nonsolicitation agreements with each
      principal in exchange for cash consideration of $2,500 per agreement. The
      Company allocated the purchase price as follows:




Intangible
                assets
            
            $
            102,516Goodwill
            
            
            100,000Total
                assets acquired
            
            
            202,516




Proceeds
      for the acquisition were obtained via an unsecured promissory note in the amount
      of $100,000 between Multiband and Bas Mattingly Master, LLC, a trust controlled
      by J. Bas Mattingly, chairman of DTHC, with DTHC as a 49% owner of MMT. The
      note
      carries an interest rate of 7% per annum and is due August 20, 2009. The Company
      purchased US Install LLC to diversify its revenue sources.


Page
          12




**MULTIBAND
        CORPORATION AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008 AND 2007**


The
      unaudited pro forma information does not purport to represent what the Company’s
      results of operations would actually have been if such transactions in fact
      had
      occurred at such date or to project the Company’s results of future
      operations.




**2008**
            
            **2008**
            
            **2007**
            
            **2007****Consolidated**
              **as
                reported**
            
            **Pro
                Forma**
              **Disclosed**
            
            **Consolidated**
              **as
                reported**
            
            **Pro
                Forma**
              **Disclosed**Three
                months ended March 31, 2008 and 2007Revenues
            
            $
            5,714,229
            
            $
            10,114,109
            
            $
            4,384,955
            
            $
            9,824,084Loss
                from operations
            
            
            (757,005
            )
            
            (524,450
            )
            
            (1,232,045
            )
            
            (1,930,905
            )Net
                loss
            
            
            (864,398
            )
            
            (721,075
            )
            
            (1,362,395
            )
            
            (1,861,413
            )Preferred
                dividends
            
            
            3,881,020
            
            
            3,881,020
            
            
            239,927
            
            
            239,927Loss
                attributable to common shareholders
            
            
            (4,745,418
            )
            
            (4,602,095
            )
            
            (1,602,322
            )
            
            (2,101,340
            )Basic
                and diluted loss per share:Loss
                attributable to common shareholders
            
            $
            (.56
            )
            $
            (.54
            )
            $
            (.23
            )
            $
            (.24
            )Weighted
                average shares outstanding - basic and diluted
            
            
            8,497,734
            
            
            8,497,734
            
            
            7,087,561
            
            
            8,577,561




Page
          13




**MULTIBAND
        CORPORATION AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008 AND 2007**







**NOTE
      5 - Inventor** **ies**




Inventories
                consisted of the following:
            
            **March
                31,**
              **2008**
            
            **December
                31, 2007**DirecTV
                - serialized
            
            $
            507,078
            
            $
            -DirecTV
                - nonserialized
            
            
            352,135
            
            
            -Other
            
            
            459,373
            
            
            132,992**Total**
            
            $
            1,318,586
            
            $
            132,992





The
      Company’s inventories are segregated into three major categories. Serialized
      DirecTV inventories consists primarily of satellite receivers and similar
      devices. Non-serialized DirecTV inventories consists primarily of satellite
      dishes, poles and similar devices which are supplied by DirecTV. Other inventory
      consists primarily of cable, switches and various small parts used in the
      installation of DirecTV satellite dishes.







**NOTE
      6 - Securities Available for Sale**








As
      of
      December 31, 2007, Multiband had the voting rights for and was holding in trust
      58,161 common shares of URON for various contingent rights holders whose rights
      were tied to potential future warrant exercises or preferred stock conversions.
      As of February 4, 2008, certain aforementioned contingent rights were not
      exercised by the various holders, therefore Multiband now owns 37,994 shares
      of
      URON. As a result, Multiband recorded the fair value of URON shares based on
      quoted market prices as an unrealized gain.





**Unrealized
                Gains on Securities**Balance,
                December 31, 2007
            
            $
            -Current-period
                change
            
            
            208,969Balance,
                March 31, 2008
            
            $
            208,969









**NOTE** **7
      - Stock Transactions**




Stock
      warrants activity is as follows for the three months ended March 31,
      2008:




**Number
                  of****Warrants**
              
              
              **Weighted
                  - Average****Exercise Price**Outstanding,
                  December 31, 2007
              
              
              3,088,873
              
              $
              7.64Granted
              
              
              -
              
              
              -Exercised
              
              
              -
              
              
              -Cancelled
              
              
              (1,522,672
              )
              
              (8.03
              )Outstanding,
                  March 31, 2008
              
              
              1,566,201
              
              $
              7.27


During
      the quarter ended March 31, 2008, all remaining shares of Class I Preferred
      Stock (39,500 shares) were converted into 526,667 shares of Multiband common
      stock. This conversion event created a non-cash dividend expense of $3,744,600
      which is reflected in the Company’s consolidated statement of
      operations.




Page
          14


**MULTIBAND
        CORPORATION AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008 AND 2007**


**NOTE** **8
      - Accrued Liabilities**




Accrued
      liabilities consisted of the following:





**March
                31,**
              **2008**
            
            **December
                31, 2007**Payroll
                and related taxes
            
            $
            1,297,293
            
            $
            512,960Accrued
                preferred stock dividends
            
            
            598,593
            
            
            642,395Accrued
                liability - vendor chargebacks
            
            
            630,800
            
            
            630,800Accrued
                income taxes
            
            
            72,889
            
            
            -Other
            
            
            923,697
            
            
            745,456**Total**
            
            $
            3,523,272
            
            $
            2,531,611







**NOTE** **9
      - Business Segm** **ents**




The
      Company has four 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.
      The HSP segment provides the installation and service of DirecTV (DTV) video
      programming for residents of single family houses.





Segment
      disclosures are as follows:




MultibandCorp.
            
            MDU
            
            MCS
            
            HSP
            
            TotalThree
                months ended March 31, 2008:Revenues
            
            $
            -
            
            $
            2,885,711
            
            $
            848,562
            
            $
            1,979,956
            
            $
            5,714,229Income
                (loss) from operations
            
            
            (828,224
            )
            
            554,825
            
            
            (544,172
            )
            
            60,566
            
            
            (757,005
            )Identifiable
                assets
            
            
            4,518,567
            
            
            4,672,884
            
            
            2,572,873
            
            
            10,271,465
            
            
            22,035,789Depreciation
                and amortization
            
            
            136,855
            
            
            396,365
            
            
            201,700
            
            
            2,787
            
            
            737,707Capital
                expenditures
            
            
            20,678
            
            
            -
            
            
            21,369
            
            
            -
            
            
            42,047




MultibandCorp.
            
            MDU
            
            MCS
            
            HSP
            
            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





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




Page
          15


**MULTIBAND
        CORPORATION AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008 AND 2007**


**NOTE** **10
      - Commitments and Contingencies**





*Legal
      proceedings*





The
      Company is involved in legal actions in the ordinary course of its business.
      As
      of March 31, 2008, 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
      early
      May 2008, MB Financial Bank, N.A (MB Bank) filed a lawsuit in the U.S. District
      Court for the Northern District of Illinois, Eastern Division, against DirecTECH
      Holding Co, Inc. (DTHC), certain of its non-ESOT shareholders and its
      subsidiaries (collectively, the “Defendants”), alleging breach of contract and
      fraudulent conveyances. The Company, not named in the suit, owns 51% of the
      common stock of one of the aforementioned subsidiaries, MMT. At the time of
      Multiband’s purchase of the MMT stock in February 2008, Multiband received a
      release of the MB Bank’s lien against the MMT stock. (see Note 10).





The
      MB
      Bank appears to have filed the suit because the statute of limitations on one
      of
      its technical claims was about to expire and it may have believed that it could
      not obtain an appropriate tolling agreement (an agreement that extends the
      statute of limitations) to extend the statute prior to the end of the statute
      of
      limitations.





Subsequent
      to the initial filing of the lawsuit, the District Court dismissed the claim
      sua
      sponte (on its own action) in favor of the defendants for want of the proper
      establishment in the complaint of subject matter jurisdiction.





*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.
      The
      Company, via MMT, also has a separate home service provider agreement with
      DirecTV ending April 30, 2011.  The term
      of the MMT contract with DirecTV will automatically renew as of May 1, 2011
      for
      additional one year periods unless either MMT or DirecTV gives written notice
      of
      termination at least 90 days in advance of expiration of the then current term.
      Termination of the Company's DirecTV agreements would have a material adverse
      impact on the Company's on-going operations. Revenues generated from DirecTV
      were 85.2% and 57.8% of total revenue for the three months ended March 31,
      2008
      and 2007, respectively.





*Gain
      on extinguishment of debt*





In
      January 2008, the Company negotiated payment of the remaining balance of the
      note payable to Vern Swedin by issuing 7,500 shares of common stock at $2.60
      per
      share in settlement of this debt resulting in a gain on extinguishment of debt
      of $29,965. This modification was accounted for as a gain on extinguishment
      of
      debt in accordance with EITF 96-19, “Debtor’s Accounting for a Modification or
      Exchange of Debt Instruments”. This amount is included in other income on the
      consolidated statement of operations for the three months ended March 31,
      2008.





*Current
      portion of long-term debt*





As
      of
      March 31, 2008, the Company failed to meet one of the compliance covenants
      of
      its lender, Convergent Capital, with respect to having minimum net worth of
      five
      million dollars at March 31, 2008. Convergent Capital provided the Company
      with
      a waiver for the covenant for the three months ended March 31, 2008. The
      Company’s management believes it is probable that the violation will not be
      cured at measurement dates that are within the next twelve months. In accordance
      with EITF 86-30 “Classification of obligations when a violation is waived by the
      creditor”, the Company has classified the debt as current as of March 31, 2008
      and December 31, 2007.




Page
          16


**MULTIBAND
        CORPORATION AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008 AND 2007**


*DirecTECH
      Holding Company Bank Loan*





In
      May
      2007 (as subsequently amended in June 2007 and December 2007), DirecTECH Holding
      Company (DTHC) and its subsidiaries, including Michigan Microtech, Inc. (MMT)
      which was then 100% owned by DTHC, entered into a loan and security agreement
      with MB Financial Bank, N.A. (MB Bank). Multiband Corporation effective March
      1,
      2008, owns 51% of the common stock of one of the aforementioned subsidiary
      MMT.
      At the time of Multiband’s purchase of the MMT stock in February 2008, Multiband
      received a release of the MB Bank’s lien against the MMT stock. However, MMT
      remains an obligor on the overall MB Bank loan. The loan, as amended, has two
      term loans and a five million dollar line of credit component. As of March
      31,
      2008, DTHC has borrowed $11,840,000 under the term loans and $3,500,000 under
      the line of credit. Term loan payments are made to MB Bank on a quarterly basis.
      These quarterly payments total $710,000 plus interest (a principal payment
      of
      $550,000 plus current interest at 5.99% and a principal payment of $160,000
      plus
      current interest of 5.45%). The line of credit has a current interest rate
      of
      5.74%. The term loans mature in May and December 2012, respectively. The line
      of
      credit matures in May 2008 and has not been renewed as of the date of this
      filing. To date, MMT has not utilized any of the loan proceeds. Based on the
      Company’s interpretation of Securities Exchange Commission’s Staff Accounting
      Bulletin No. 5J (SAB 5J), none of the DTHC bank loan debt is reflected in MMT’s
      financial statements which have been consolidated with Multiband Corporation’s
      consolidated financial statements for the one month ended March 31,
      2008.





*Auto
      leases*




The
      Company leases substantially all of its fleet vehicles under operating leases
      from one lessor. Each lease commences upon the in-service date of the vehicle
      and requires scheduled lease payments to be paid monthly for one year. After
      one
      year, the Company has the option to renew the open ended lease for one year
      renewal periods or surrender the leased vehicle to the lessor to be sold. If
      the
      net proceeds of such sale exceed the vehicle’s then depreciated value, the
      lessee receives the benefit of such excess. If there is a deficiency upon such
      sale, then lessee is required to pay the deficiency as additional rent to
      lessor. The Company has entered this agreement jointly and severally with
      various subsidiaries of DTHC. For the one month ended March 31, 2008, the
      Company’s operating lease expense under the lease totaled approximately
      $88,000.





*Guaranty*





On
      March
      1, 2006, Corporate Technologies, LLC (CTLLC), a subsidiary of North Central
      Equity, LLC, the purchaser of the MBS business segment, signed a lease with
      Lexstar Tower I Limited Partnership whereby CTLLC assumed the lease obligation
      for substantially all of the first floor space the Company is renting in Fargo,
      North Dakota for the period beginning March 1, 2006 to February 28, 2011.
      Pursuant to the aforementioned lease, the Company entered into a guaranty
      whereby the Company, in the event of a default or early termination of the
      lease
      by CTLLC, is obligated to perform CTLLC’s lease obligation during months 43-60
      of the lease. The Company remains obligated to provide free rent to CTLLC
      through March 31, 2007 as defined in the purchase agreement of MBS (see Note
      15
      to the Company’s Form 10-K filing for the year ended December 31, 2007). This
      guaranty has no effect on the Company’s consolidated financial statements for
      the quarters ended March 31, 2008 and 2007. However, should Multiband eventually
      have to perform on the guaranty in the future, it could be liable for up to
      $348,881 in rent payments plus any associated charges such as property taxes
      and
      common area maintenance. The Company has evaluated the accounting guidance
      of
      FIN 45 “Guarantor’s Accounting and Disclosure Requirements for Guarantees” and
      has determined that it does not apply to this guaranty.




Page
          17


**MULTIBAND
        CORPORATION AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **MARCH
        31, 2008 AND 2007**


**NOTE** **11
      - Income Taxes**





At
      March
      31, 2008, the Company’s federal and state net operating loss carryforwards were
      estimated to be approximately $46,962,000 and $38,773,100,
      respectively.





Due
      to
      Multiband’s purchase of 51% of MMT’s stock, effective March 1, 2008, MMT will no
      longer file consolidated tax returns with its former parent DTHC but will file
      as a single entity as it no longer meets the 80% ownership required for tax
      consolidation. Therefore, MMT will not be able to utilize the tax loss
      carryforwards of Multiband Corporation. As of and for the one month ended March
      31, 2008, MMT has recorded income taxes payable and expense of
      $28,500.





The
      Company has adopted FASB Interpretation 48 (FIN 48), “Accounting for Uncertainty
      in Income Taxes” to address the non-comparability in reporting tax assets and
      liabilities resulting from a lack of specific guidance in FASB Statement of
      Financial Accounting Standards No. 109 (SFAS 109), “Accounting for Income Taxes”
on the uncertainty in income taxes recognized in an enterprise’s financial
      statements. Specifically, FIN 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.
      To the extent interest and penalties would be assessed by taxing authorities
      on
      any underpayment of income taxes, such amounts would be accrued and classified
      as a component of income tax expenses on the consolidated statement of
      operations. There was no impact on the consolidated financial statements for
      the
      three months ended March 31, 2008 related to FIN 48. The Company’s federal and
      state tax returns are potentially open to examinations for fiscal years
      2004-2006.








**NOTE** **12
      - Related Party Transactions**





Proceeds
      for the acquisition of US Install Inc. by the Company completed in February,
      2008 were obtained via an unsecured promissory note in the amount of $100,000
      between Multiband and Bas Mattingly Master, LLC, a trust controlled by J. Bas
      Mattingly, chairman of DTHC, which is a 49% owner of MMT. The note carries
      an
      interest rate of 7% per annum and is due August 20, 2009.





MMT
      leases office space from two individuals that have ownership via related trusts
      in DTHC. DTHC owns 49% of MMT as a minority interest shareholder (see Note
      4).
      Lease payments amount to $3,300 per month plus expenses, expiring in April
      2009.





Page
          18




**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 three 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) Multi-Dwelling Unit (legally know as Minnesota
      Digital Universe, Inc. (MDU)); and 3) Home Service Provider (HSP, legally known
      as Michigan Microtech, Inc (MMT)).





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. 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. Effective March 1, 2008, the Company purchased
      51% of the outstanding stock of MMT. MMT installs DTV video services in single
      family homes. At April
      25, 2008, the Company had approximately 93,766 owned and managed subscriptions
      with an additional 19,210 subscribers supported by the call center.


Page
          19




**SELECTED
      CONSOLIDATED FINANCIAL DATA**




DOLLAR
                AMOUNTS AS A PERCENTAGE OF REVENUESTHREE
                MONTHS ENDEDMarch
                31, 2008
              (unaudited)
            
            March
                31, 2007
              (unaudited)REVENUES
            
            
            100
            %
            
            100
            %COST
                OF PRODUCTS & SERVICES (Exclusive of depreciation and amortization
                shown below)
            
            
            66.9
            %
            
            49.7
            %SELLING,
                GENERAL & ADMINISTRATIVE
            
            
            32.5
            %
            
            54.5
            %DEPRECIATION
                & AMORTIZATION
            
            
            12.9
            %
            
            23.9
            %IMPAIRMENT
                OF ASSETS
            
            
            1.0
            %
            
            -LOSS
                FROM OPERATIONS
            
            
            -13.3
            %
            
            -28.1
            %INTEREST
                EXPENSE & OTHER, NET
            
            
            -1.0
            %
            
            -3.0
            %LOSS
                BEFORE INCOME TAXES AND MINORITY INTEREST IN SUBSIDIARY
            
            
            -14.3
            %
            
            -31.1
            %PROVISION
                FOR INCOME TAXES
            
            
            .5
            %
            
            -MINORITY
                INTEREST IN NET INCOME OF SUBSIDIARY
            
            
            .3
            %
            
            -NET
                LOSS
            
            
            -15.1
            %
            
            -31.1
            %





**RESULTS
      OF OPERATIONS**





*Revenues*





Total
      revenues increased 30.3% to $5,714,229 for the quarter ended March 31, 2008
      as
      compared to $4,384,955 for the quarter ended March 31, 2007. This overall
      increase in revenues is primarily due to the purchase of MMT in March, 2008
      with
      revenues of $1,980,000 offset by sales of approximately 23,000 owned
      subscriptions which occurred throughout 2007 in efforts to strategically sell
      unprofitable owned assets as prudent and redeploy the proceeds from those assets
      into facilitating growth in the Company’s managed subscriber services including
      our support center and our master system operator program.





Revenues
      in the first quarter of 2008, for the MCS segment, decreased 54.2% to $848,562
      as compared to $1,852,080 in the first quarter of 2007 due to the aforementioned
      sales of owned subscriptions offset by an increase in call center revenue.
      In
      2008, the Company expects MCS revenues to stabilize due to the addition of
      US
      Installs revenues, increased activity in the call center and improved
      marketability with installation of high definition (HD) upgrades in its owned
      subscriber base.





Revenues
      for the three month period ended March 31, 2008, for the MDU segment, increased
      13.9% to $2,885,711 from $2,532,875 for the same period in 2007. This overall
      increase of approximately $350,000 in the MDU segment is primarily due to the
      DTV subsidies for property equipment upgrades and increased activity from a
      large system operator. The Company believes it can ultimately 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.
      Due to demand for high definition television services and the aforementioned
      DTV
      subsidies for high definition upgrades MDU revenues are expected to remain
      above
      2007 levels for the balance of 2008.




Page
          20




Revenues
      for the one month period ended March 31, 2008 for the HSP segment, were
      $1,979,956 in comparison to $0 for the same period in 2007. This increase is
      due
      to the purchase of MMT (see Note 4).





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





The
      Company's cost of products and services, increased by 75.4% to $3,820,198 for
      the quarter ended March 31, 2008 as compared to $2,178,046 for the similar
      quarter last year. Overall costs of products and services as a percentage of
      revenue did increased due to the purchase of MMT with costs of $1,437,581 and
      specific vendor price increases without a corresponding increase in price to
      customers, certain commission payments, and allocation of certain support center
      costs to cost of products and services offset by a decrease in costs related
      to
      a decrease in programming and circuit charges due to a decreased subscriber
      number.





Costs
      of
      products and services for the MCS segment for the quarter were $604,309 compared
      to $1,032,389 in the same quarter last year, a 41.5% decrease. In 2008, the
      decrease in costs of products and services in the MCS segment is directly
      related to a decrease in programming and circuit charges between the comparable
      periods due to a decreased subscriber number.





Costs
      of
      products and services for the MDU segment for the quarter were $1,778,308
      compared to $1,145,657 in the same quarter last year, a 55.2% increase. The
      increase in costs of products and services in the MDU segment is primarily
      related to an increase in revenue generated by the system operators. The Company
      expects costs of products and services as a percentage of revenue to increase
      slightly in future periods due to the change in revenue mix.





Costs
      of
      products and services for the HSP segment for the quarter were $1,437,581
      compared to $0 in the same quarter last year. This increase is due to the
      purchase of MMT (see Note 4). Gross margin on the HSP business is 27.4% which
      the Company expects to continue through the end of 2008.





*Selling,
      General and Administrative Expenses*





Selling,
      general and administrative expenses decreased 22.3% to $1,855,283 in the quarter
      ended March 31, 2008, compared to $2,389,256 in the prior year’s quarter.
      Selling, general and administrative expenses were, as a percentage of revenues,
      32.5% for the quarter ended March 31, 2008 and 54.5% for the similar period
      a
      year ago. This decrease is primarily due to decreases in payroll and employee
      expenses, property maintenance expenses, and outside service expenses between
      the comparable periods. The Company anticipates that selling, general and
      administrative expenses, will in subsequent quarters increase over 50% from
      first quarter 2008 levels due to the acquisition of MMT.





*Depreciation
      and Amortization*





Depreciation
      and amortization expense decreased 29.7% to $737,707 for the quarter ended
      March
      31, 2008 compared to $1,049,698 in the prior year’s quarter. This decrease in
      depreciation and amortization is due to the sale of tangible and intangible
      assets in various states (Note 3). Depreciation and amortization expense is
      expected to increase throughout the balance of 2008 due to ongoing amortization
      of the DTV dealer contract purchased with the MMT acquisition.




Page
          21




*Loss
      from Operations*





The
      Company, in the first quarter of 2008, incurred a loss from operations for
      its
      combined operating business segments of $757,005 versus a loss of $1,232,045
      during the prior year’s period. The MDU segment showed a profit from operations
      of $554,825 during the first quarter of 2008 compared to profits of $866,434
      for
      the three months ended March 31, 2007. For the first quarter of 2008, the MCS
      segment showed a loss from operations of $544,172 compared to a loss of $989,554
      for the same quarter last year. The Multiband Corporation segment, which has
      no
      revenues, showed a loss from operations of $828,224 for the three months ended
      March 31, 2008 compared to losses of $1,108,925 for the same period last year.
      For the first quarter of 2008, the HSP segment showed a profit from operations
      of $60,566. This segment did not exist in 2007 so there is no comparable (Note
      4). 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 stabilize
      as
      the year to date reduction in profits for this segment has been significantly
      impacted by agent fees paid for owned subscriber sales. These sales have now
      been completed. In addition to the sale of subscribers, the Company hopes that
      it can continue to 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 $100,659 for the quarter ended March 31, 2008, versus $153,407
      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 $0 and $8,294 for the three months ended March 31, 2008 and
      2007.





*Minority
      Interest*





Effective
      March 1, 2008, the Company purchased 51% of the stock of MMT. The minority
      interest of $18,417 on the statement of operations represents 49% of the
      activity in MMT not owned by the Company. MMT currently makes up 100% of the
      HSP
      segment.





*Income
      taxes*





Due
      to
      Multiband’s purchase of 51% of MMT’s stock, effective March 1, 2008, MMT will no
      longer file consolidated tax returns with its former parent DTHC but will file
      as a single entity as it no longer meets the 80% ownership required for tax
      consolidation. Therefore, MMT will not be able to utilize the tax loss
      carryforwards of Multiband Corporation.  As of and for the one month ended
      March 31, 2008, MMT has recorded income taxes payable and expense of $28,500.
      MMT currently makes up 100% of the HSP segment.





*Net
      Loss*





In
      the
      first quarter of fiscal 2008, the Company incurred a net loss of $864,398
      compared to a net loss of $1,362,395 for the first fiscal quarter of
      2007.





**Liquidity
      and Capital Resources**





During
      the three months ended March 31, 2008 and 2007, the Company recorded a net
      loss
      of $817,481 and $1,362,395 respectively. Net cash used by operations during
      the
      three months ended March 31, 2008 was $312,340 as compared to the three months
      ended March 31, 2007 of $225,815. Principal payments on current long-term debt
      over the next 12 months are expected to total $1,555,542. As of March 31, 2008,
      the Company failed to meet one the compliance covenants of its lender,
      Convergent Capital, with respect to having minimum net worth of five million
      dollars as of the quarter ended March 31, 2008. Convergent Capital provided
      the
      Company with a waiver for the said covenant as of the quarter ended March 31,
      2008. The Company’s management believes it is probable that the violation will
      not be cured at measurement dates that are within the next twelve months. In
      accordance with EITF 86-30 “Classification of obligations when a violation is
      waived by the creditor”, the Company has classified the debt as current as of
      March 31, 2008.





Cash
      and
      cash equivalents totaled $7,303,397 at March 31, 2008 versus $944,456 at
      December 31, 2007. Working capital at March 31, 2008 was $154,256 as compared
      to
      a working capital deficit of $5,018,177 at December 31, 2007, primarily due
      to
      the acquisition of MMT. Total debt and capital lease obligations increased
      by
      $1,960,661 in the three months ended March 31, 2008 due to the addition of
      notes
      payable in order to purchase MMT and US Installs. The Company had a material
      increase in accounts receivable, accounts payable and accrued liabilities for
      the period ended March 31, 2008 verses the period ended December 31, 2007 due
      to
      the acquisition of MMT. Net cash from investing activities totaled $6,716,383
      for the period ended March 31, 2008, compared to $637,536 for the period ended
      December 31, 2007, due to the acquisition of MMT. MMT is an obligor in loans
      entered into by DTHC and subsidiaries in May 2007 (as subsequently amended
      in
      June 2007 and December 2007) with MB Financial, N.A. (MB Bank) (see Note 10).
      In
      the event that DTHC and its various subsidiaries other than MMT could not retire
      the loan then MMT’s cash or other assets may have to be utilized to retire the
      loan which would adversely affect MMT’s working capital.




Page
          22




The
      Company experienced a material increase in revenues between the quarter ended
      March 31, 2008 and the quarter ended March 31, 2007. The revenue increase,
      as
      stated previously, is a result of the additional revenue obtained from the
      purchase of MMT offset by the reduction of revenue resulting from the sale
      of
      unprofitable assets. In 2008, the Company intends to focus on facilitating
      growth of its HSP business segment and 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.





The
      Company used $42,047 for capital expenditures during the three months ended
      March 31, 2008, as compared to $120,196 in the similar period last year. Capital
      expenditures consisted of project build-outs and equipment acquired for internal
      use. This decrease was related to a reduction of company funded video and
      internet service build outs to MDU properties made during 2008. Capital
      expenditures in 2008 are expected to be below the 2007 levels.





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 2008:





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


2.  Sale
      of
      video 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 it can sell these assets, under certain circumstances, at prices at
      or
      above their current carrying value. However, there is no guarantee 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.  Delivery
      of video services to residents of single family homes. Effective March 1, 2008
      the Company purchased 51% of the outstanding stock of Michigan Microtech, Inc.
      (MMT), formerly a wholly owned subsidiary of DTHC. MMT installs DirecTV video
      services in single family homes. Historically MMT has been profitable. The
      Company anticipates that by combining MMT operations with Multiband operations
      that it will achieve a beneficial impact to its consolidated cash flows and
      operating results. However, there is no guarantee that these combined results
      will ultimately be favorable to the Company.


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 Multiband believes that the cash on hand, combined with capital resources
      and
      the potential ability to monetize intangible subscriber assets, as was done
      in
      the sale of assets to MDUC, is adequate to meet the anticipated liquidity and
      capital resource requirements for the next 12 months.





**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, 2008, the Company had net property and equipment
      of
      $1,683,423, which represents approximately 7.6% 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, 2008 and 2007, the Company did not record any impairment
      losses related to long-lived assets.




Page
          23




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 $116,757 as of March 31, 2008,
      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, 2008 and 2007, the Company did not record any impairment losses
      related to goodwill.





Impairment
      of Intangible Assets





The
      intangible assets consist of rights of entry contracts, contracts with DirecTV,
      customer cable lists, debt issuance costs, domain name, access contracts and
      customer contracts. These intangibles are being amortized over their estimated
      useful lives ranging from 12 to 120 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, 2008, the Company had net intangibles of $6,598,691 which represented
      approximately 29.9% of the Company’s total assets. During the three months ended
      March 31, 2008 and 2007, the Company recorded an impairment charge to intangible
      assets of $58,046 and $0 (see Note 2).





Inventories





We
      value
      our inventories at the lower of the actual cost or the current estimated market
      value of the inventories. We regularly review inventories quantities on hand
      and
      record a provision for excess and obsolete inventories. 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





The
      Company accounts for its stock options in compliance with the 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.





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) collectability 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
      communications products which are sold and installed, 2) Multiband user charges
      to multiple dwelling units, 3) MBUSA user charges to timeshares, 4) MDU earns
      revenue primarily through the activation of and residual fees on video
      programming services provided to residents of multiple dwelling units; and
      5)
      MMT earns revenue primarily through the installation and service of DirecTV
      (DTV) video programming services for residents of single family houses.





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 and has the ability to fulfill the terms.




Page
          24




Revenue
      generated from activation of video programming services is earned in the month
      of activation. According to Multiband's Master System Operator 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.





MMT
      has a
      home services provider (HSP) agreement with DirecTV which allows MMT to install
      and service DTV video programming for residents of single family homes. As
      a
      DirecTV HSP, MMT earns revenue for installing and servicing DTV video customers
      pursuant to predetermined rates set by DirecTV which may vary from time to
      time.





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.





In
      June
      2006, the Financial Accounting Standards Board (FASB) ratified the consensus
      of
      Emerging Issues Task Force Issue No. 06-3, “How Taxes Collected from Customers
      and Remitted to Governmental Authorities Should Be Presented in the Income
      Statement (That Is, Gross versus Net Presentation)” (EITF 06-3). EITF 06-3
      concluded that the presentation of taxes imposed on revenue-producing
      transactions (sales, use, value added and excise taxes) on either a gross
      (included in revenues and costs) or a net (excluded from revenues) basis is
      an
      accounting policy that should be disclosed. The Company’s policy is to present
      taxes imposed on revenue-producing transactions on a net basis.





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. MMT installation and services revenues are recognized in the
      period the related services are provided in accordance with SAB
      104.




**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 Convergent Capital
      note of $1,500,000, which varies from 11% to 14%, dependent on the Company’s
      common stock price. Each 1% change in interest impacts the statement of
      operations $15,000 annually.





**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. An exception to the aforementioned conclusions
      is hereby made specifically with regards to the Company’s home service provider
      business segment. As of March 31, 2008, the Company has not tested the
      effectiveness of any controls or procedures with regards to MMT due to the
      recent acquisition of 51% of MMT. The Company does intend to perform such
      testing prior to December 31, 2008.




Page
          25




**PART
      II. OTHER INFORMATION**





**ITEM
      1. LEGAL PROCEEDINGS**





The
      Company is involved in legal actions in the ordinary course of its business.
      As
      of March 31, 2008, 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
      early
      May, 2008, MB Financial Bank, N.A (MB Bank) filed a lawsuit in the U.S. District
      Court for the Northern District of Illinois, Eastern Division, against DirecTECH
      Holding Co, Inc. (“DTHC”), certain of its non-ESOT shareholders and its
      subsidiaries (collectively, the “Defendants”), alleging breach of contract and
      fraudulent conveyances. Multiband Corporation (“Multiband”), not named in the
      suit, owns 51% of the common stock of one of the aforementioned subsidiaries,
      Michigan Microtech, Inc. (“MMT”). At the time of Multiband’s purchase of the MMT
      stock in February 2008, Multiband received a release of the MB Bank’s lien
      against the MMT stock. (see Note 10).





The
      MB
      Bank appears to have filed the suit because the statute of limitations on one
      of
      its technical claims was about to expire and it may have believed that it could
      not obtain an appropriate tolling agreement (an agreement that extends the
      statute of limitations) to extend the statute prior to the end of the statute
      of
      limitations.





Subsequent
      to the initial filing of the lawsuit, the District Court dismissed the claim
      sua
      sponte (on its own action) in favor of the defendants for want of the proper
      establishment of subject matter jurisdiction.





**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.




Page
          26




**Net
      Losses**





The
      Company had net losses of $864,398 for the three months ended March 31, 2008,
      $6,088,353 for the year ended December 31, 2007, and $10,183,723 for the year
      ended December 31, 2006. 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:


o our
      capital expenditure objectives;


o our
      debt
      service obligations; or


o our
      working capital needs.





**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. As of March 31, 2008, the Company had goodwill of $116,757
      primarily related to the purchase of US Installs. At March 31, 2008 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.




Page
          27




**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.





**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.




Page
          28




**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.





**Uncertain
      Effects Of The Merger**





During
      the fourth quarter of 2007, the Company announced its intent to merge with
      DirecTECH Holding Company, Inc. (DTHC) pursuant to a signed merger agreement.
      The announcement of the merger may produce an uncertain effect on Multiband’s
      and DTHC’s business relationships, operating results and business generally,
      including their ability to retain key employees, suppliers and customers. Even
      if the Merger is consummated, the DTHC business as merged into the Multiband
      business may not achieve the operating results and growth anticipated by
      management in structuring the transaction. As of this date, the merger has
      not
      been completed. Due to a number of conditions precedent to completion of the
      merger including, but not limited to, shareholder approval from both parties,
      Multiband cannot deem it likely as of this date that the merger as originally
      structured in the 4 th quarter
      of 2007 will be completed.




Page
          29




**ITEM
      6. EXHIBITS**





(a)
                Exhibits





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





31.2
            Certification
                of Chief Financial Officer pursuant to Rules 13a-15e and 15d-15e
                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, 2008
            By:
            /s/
                James L. Mandel
              *James
                L. Mandel*
              *Chief
                Executive Officer*Date:
                May 15, 2008
            By:
            /s/
                Steven M. Bell
              
              *Steven
                M. Bell*
              *Chief
                Financial Officer*
              *(Principal
                Financial and Accounting
                Officer)*




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          30