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 JUNE 30, 2006ORo
            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, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange
      Act:





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





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




Yes o No x


On
      August
      7, 2006 there were 34,397,873 shares outstanding of the registrant's common
      stock, no par value, and 420,198 outstanding shares of the registrant's
      convertible preferred stock.


2




**PART
      I. FINANCIAL INFORMATION**





**ITEM
      1. CONSOLIDATED FINANCIAL STATEMENTS**





MULTIBAND
      CORPORATION AND SUBSIDIARIES


CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS


Three
                Months Ended
            
            Six
                Months EndedJune
                30, 2006
              (unaudited)
            
            June
                30, 2005
              (unaudited)
            
            June
                30,
              2006
              (unaudited)
            
            June
                30,
              2005
              (unaudited)REVENUES
            
            $
            4,501,737
            
            $
            4,183,606
            
            $
            8,905,781
            
            $
            7,890,482COSTS
                AND EXPENSESCost
                of products and services (exclusive of depreciation and amortization
                shown
                separately below)
            
            
            1,937,898
            
            
            1,703,517
            
            
            3,994,425
            
            
            3,583,025Selling,
                general and administrative
            
            
            2,909,038
            
            
            2,377,575
            
            
            5,881,261
            
            
            4,524,487Depreciation
                and amortization
            
            
            1,308,614
            
            
            1,218,867
            
            
            2,611,070
            
            
            2,367,734Total
                Costs and Expenses
            
            
            6,155,550
            
            
            5,299,959
            
            
            12,486,756
            
            
            10,475,246LOSS
                FROM OPERATIONS
            
            
            (1,653,813
            )
            
            (1,116,353
            )
            
            (3,580,975
            )
            
            (2,584,764
            )OTHER
                EXPENSEInterest
                expense
            
            
            (325,523
            )
            
            (373,013
            )
            
            (630,204
            )
            
            (1,058,714
            )Other
                income
            
            
            35,949
            
            
            70,120
            
            
            77,386
            
            
            82,292Total
                Other Expense
            
            
            (289,574
            )
            
            (302,893
            )
            
            (552,818
            )
            
            (976,422
            )LOSS
                FROM CONTINUING OPERATIONS
            
            
            (1,943,387
            )
            
            (1,419,246
            )
            
            (4,133,793
            )
            
            (3,561,186
            )INCOME
                (LOSS) FROM DISCONTINUED OPERATIONS
            
            
            -
            
            
            122,892
            
            
            2,200
            
            
            (318,376
            )NET
                LOSS
            
            
            (1,943,387
            )
            
            (1,296,354
            )
            
            (4,131,593
            )
            
            (3,879,562
            )Preferred
                Stock Dividends
            
            
            2,522,342
            
            
            669,634
            
            
            2,785,448
            
            
            1,600,718LOSS
                ATTRIBUTABLE TO COMMON STOCKHOLDERS
            
            $
            (4,465,729
            )
            $
            (1,965,988
            )
            $
            (6,917,041
            )
            $
            (5,480,280
            )BASIC
                AND DILUTED - LOSS PER COMMON SHARELoss
                from continuing operations
            
            
            (.06
            )
            
            (.05
            )
            
            (.13
            )
            
            (.13
            )Income
                (loss) from discontinued operations
            
            
            .00
            
            
            .00
            
            
            .00
            
            
            (.01
            )Net
                Loss
            
            
            (.06
            )
            
            (.05
            )
            
            (.13
            )
            
            (.14
            )LOSS
                ATTRIBUTABLE TO COMMON STOCKHOLDERS
            
            
            (.13
            )
            
            (.07
            )
            
            (.21
            )
            
            (.20
            )WEIGHTED
                AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED
            
            
            33,515,351
            
            
            28,634,502
            
            
            32,839,367
            
            
            27,929,454




See
      notes
      to condensed consolidated financial statements


3




**MULTIBAND
      CORPORATION AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS**




***ASSETS***


June
                    30, 2006
                  (unaudited)
                
                December
                    31, 2005
                  (audited)**CURRENT
                    ASSETS**Cash
                    and cash equivalents
                
                $
                1,443,584
                
                $
                3,100,427Accounts
                    receivable, net
                
                
                2,047,929
                
                
                2,367,864Inventories
                
                
                222,279
                
                
                241,015Prepaid
                    expenses and other
                
                
                175,092
                
                
                216,885Current
                    portion of notes receivable
                
                
                6,000
                
                
                11,316Total
                    Current Assets
                
                
                3,894,884
                
                
                5,937,507**PROPERTY
                    AND EQUIPMENT, NET**
                
                
                5,159,762
                
                
                5,247,240**OTHER
                    ASSETS**Goodwill
                
                
                954,871
                
                
                954,871Intangible
                    assets, net
                
                
                12,247,710
                
                
                13,923,542Notes
                    receivable - long-term, net
                
                
                65,324
                
                
                61,341Other
                    assets
                
                
                110,916
                
                
                146,904Total
                    Other Assets
                
                
                13,378,821
                
                
                15,086,658**TOTAL
                    ASSETS**
                
                $
                22,433,467
                
                $
                26,271,405
 ***LIABILITIES
        AND STOCKHOLDERS' EQUITY***


**CURRENT
                LIABILITIES**Checks
                issued in excess of cash in bank
            
            $
            281,854
            
            $
            93,005Current
                portion of long-term debt
            
            
            463,530
            
            
            616,260Current
                portion of note payable - stockholder
            
            
            30,000
            
            
            32,837Current
                portion of capital lease obligations
            
            
            224,755
            
            
            179,932Accounts
                payable
            
            
            1,973,881
            
            
            1,761,249Accrued
                liabilities
            
            
            2,399,437
            
            
            2,741,054Customer
                deposits
            
            
            62,011
            
            
            64,161Current
                liabilities of discontinued operations
            
            
            375,000
            
            
            500,000Deferred
                service obligations and revenue
            
            
            635,346
            
            
            587,093Mandatory
                redeemable preferred stock, 28,000
              and
                33,334 Class F preferred shares
            
            
            280,000
            
            
            333,334Total
                Current Liabilities
            
            
            6,725,814
            
            
            6,908,925**LONG-TERM
                LIABILITIES**Long-term
                debt, net
            
            
            3,556,047
            
            
            3,816,536Capital
                lease obligations, net of current portion
            
            
            591,204
            
            
            452,649Long-term
                liabilities of discontinued operations
            
            
            —
            
            
            125,000Total
                Liabilities
            
            
            10,873,065
            
            
            11,303,110**COMMITMENTS
                AND CONTINGENCIES****STOCKHOLDERS'
                EQUITY**Cumulative
                convertible preferred stock, no par value:8%
                Class A (27,151 and 27,931 shares issued and outstanding, $285,086
                and
                $293,276 liquidation preference)
            
            
            411,952
            
            
            419,75210%
                Class B (8,070 and 8,390 shares issued and outstanding, $84,735 and
                $88,095 liquidation preference)
            
            
            55,700
            
            
            58,90010%
                Class C (124,730 and 125,050 shares issued and outstanding, $1,247,300
                and
                $1,250,500 liquidation preference)
            
            
            1,604,405
            
            
            1,607,60510%
                Class F (150,000 shares issued and outstanding, $1,500,000 liquidation
                preference)
            
            
            1,500,000
            
            
            1,500,0008%
                Class G (45,245 shares issued and outstanding, $452,450 liquidation
                preference)
            
            
            179,897
            
            
            179,8976%
                Class H (2.0 shares issued and outstanding, $200,000 liquidation
                preference)
            
            
            —
            
            
            —Variable
                rate % Class I (65,000 and 90,000 shares issued and outstanding,
                $6,500,000 and $9,000,000 liquidation preference)
            
            
            —
            
            
            —Common
                stock, no par value (34,306,865 and 32,134,558 shares issued and
                outstanding)
            
            
            25,782,328
            
            
            22,801,405Stock
                subscriptions receivable
            
            
            (270,288
            )
            
            (297,105
            )Options
                and warrants
            
            
            44,745,287
            
            
            44,259,540Unamortized
                compensation
            
            
            —
            
            
            (29,861
            )Accumulated
                deficit
            
            
            (62,448,879
            )
            
            (55,531,838
            )Total
                Stockholders' Equity
            
            
            11,560,402
            
            
            14,968,295**TOTAL
                LIABILITIES AND STOCKHOLDERS' EQUITY**
            
            $
            22,433,467
            
            $
            26,271,405


See
      notes
      to condensed consolidated financial statements


4





**MULTIBAND
      CORPORATION AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


**FOR
      SIX MONTHS ENDED JUNE 30, 2006 AND 2005**





**SIX
                MONTHS ENDED JUNE 30,****2006**
            
            **2005**(unaudited)
            
            (unaudited)OPERATING
                ACTIVITIESNet
                loss
            
            $
            (4,131,593
            )
            $
            (3,879,562
            )Adjustments
                to reconcile net loss to net cash flows from operating
                activitiesDepreciation
                and amortization
            
            
            2,709,244
            
            
            2,521,933Amortization
                of deferred compensation
            
            
            29,480
            
            
            50,930Amortization
                of original issue discount
            
            
            246,818
            
            
            667,350Gain
                on sale of business segment
            
            
            —
            
            
            (103,491
            )Warrants
                issued for services
            
            
            607
            
            
            —Common
                stock issued for services
            
            
            1,156
            
            
            20,580Loss
                on sale of property and equipment
            
            
            2,859
            
            
            —Change
                in allowance for doubtful accounts receivable
            
            
            (173,200
            )
            
            —Change
                in reserve for stock subscriptions and interest receivable
            
            
            21,434
            
            
            —Stock
                based compensation expense
            
            
            485,521
            
            
            —Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            493,135
            
            
            908,785Inventories
            
            
            18,736
            
            
            (371,461
            )Prepaid
                expenses and other
            
            
            40,929
            
            
            13,735Other
                assets
            
            
            35,988
            
            
            —Wholesale
                line of credit
            
            
            —
            
            
            (1,000,987
            )Accounts
                payable and accrued liabilities
            
            
            (143,701
            )
            
            (1,612,842
            )Deferred
                service obligations and revenue
            
            
            48,253
            
            
            65,092Liabilities
                of discontinued operations
            
            
            (250,000
            )
            
            (125,000
            )Customer
                deposits
            
            
            (2,150
            )
            
            2,439Net
                cash flows from operating activities
            
            
            (566,484
            )
            
            (2,842,499
            )INVESTING
                ACTIVITIESPurchases
                of property and equipment
            
            
            (580,049
            )
            
            (415,065
            )Purchases
                of intangible assets
            
            
            (10,750
            )
            
            (209,225
            )Purchase
                of Ultravision
            
            
            —
            
            
            (287,050
            )Proceeds
                from sale of business segment
            
            
            —
            
            
            1,682,184Collections
                on notes receivable
            
            
            1,859
            
            
            —Net
                cash flows from investing activities
            
            
            (588,940
            )
            
            770,844FINANCING
                ACTIVITIESChecks
                issued in excess of cash in bank
            
            
            188,849
            
            
            (37,773
            )Payments
                on short-term debt
            
            
            -
            
            
            (3,971,099
            )Payments
                on long-term debt
            
            
            (460,037
            )
            
            (2,248,204
            )Payments
                on capital lease obligations
            
            
            (75,742
            )
            
            (44,836
            )Payments
                on note payable to stockholder
            
            
            (2,837
            )
            
            (51,964
            )Payments
                on mandatory redeemable preferred stock
            
            
            (53,334
            )
            
            —Payments
                for debt issuance costs
            
            
            —
            
            
            (25,000
            )Proceeds
                from issuance of stock and warrants
            
            
            —
            
            
            11,090,843Proceeds
                from issuance of long-term debt
            
            
            —
            
            
            2,000,000Exercise
                of warrants
            
            
            —
            
            
            6,960Payments
                received on stock subscriptions receivable
            
            
            5,721
            
            
            66,399Redemption
                of preferred stock
            
            
            (14,200
            )
            
            (2,000
            )Preferred
                stock dividends
            
            
            (107,839
            )
            
            (31,224
            )Exercise
                of stock options
            
            
            18,000
            
            
            —Net
                cash flows from financing activities
            
            
            (501,419
            )
            
            6,752,102INCREASE
                (DECREASE) IN CASH AND CASH EQUIVALENTS
            
            
            (1,656,843
            )
            
            4,680,447CASH
                AND CASH EQUIVALENTSBeginning
                of period
            
            
            3,100,427
            
            
            726,553End
                of period
            
            $
            1,443,584
            
            $
            5,407,000SUPPLEMENTAL
                DISCLOSURE OF CASH FLOW INFORMATIONCash
                paid for interest, net of amortization of original issue
                discount
            
            $
            258,754
            
            $
            417,870SUPPLEMENTAL
                DISCLOSURES OF NON-CASH INVESTING AND FIN ANCING
                ACTIVITIESNote
                receivable recorded on sale of discontinued operations
            
            
            —
            
            
            339,051Conversion
                of preferred stock into common stock
            
            
            2,370,000
            
            
            850,001Current
                liabilities converted to stock
            
            
            28,653
            
            
            46,603Conversion
                of notes payable into common stock
            
            
            200,000
            
            
            648,001Conversion
                of accrued dividends into common stock
            
            
            363,114
            
            
            176,935Common
                stock issued in lieu of cash for other current assets
            
            
            —
            
            
            218,000Issuance
                of common stock for deferred financing costs
            
            
            —
            
            
            36,000Capital
                lease obligations related to property and equipment
            
            
            259,120
            
            
            —


See
      notes
      to condensed consolidated financial statements


5




MULTIBAND
      CORPORATION AND SUBSIDIARIES


NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS


JUNE
      30, 2006 AND 2005





**Note
      1 - Unaudited Consolidated Financial Statements**





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







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


*Nature
      of Business*





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





The
      accompanying consolidated financial statements have been prepared assuming
      the
      Company will continue as a going concern that contemplates the realization
      of
      assets and satisfaction of liabilities in the normal course of business. For
      the
      six months ended June 30, 2006 and 2005, the Company incurred net losses of
      $4,131,593 and $3,879,562, respectively. At June 30, 2006, the Company had
      an
      accumulated deficit of $62,448,879. The Company's ability to continue as a
      going
      concern is dependent on it ultimately achieving profitability and/or raising
      additional capital. Management intends to obtain additional debt or equity
      capital to meet all of its existing cash obligations and fund commitments on
      planned Multiband projects; however, there can be no assurance that the sources
      will be available or available on terms favorable to the Company. Management
      anticipates that the impact of the actions listed below will generate sufficient
      cash flows to pay current liabilities, long-term debt and capital lease
      obligations and fund the Company's future operations:





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


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


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


4.  Establish
      market for wireless internet services.


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





*Principles
      of Consolidation*





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





On
      January 1, 2004, the Company merged Multiband into CTU. On April 1, 2005, the
      continuing operations of CTU terminated (see Note 9.)





*Discontinued
      Operations*





During
      the first quarter of 2005, the Company sold certain assets and transferred
      certain liabilities related to its Multiband Business Services (a/k/a CTU).
      In
      accordance with appropriate accounting rules, the Company reclassified the
      previously reported financial results to exclude the results of the Multiband
      Business Services (CTU) and these results are presented on a historical basis
      as
      a separate line in the consolidated statements of operations and the
      consolidated balance sheets entitled “Discontinued Operations”. All of the
      financial information in the consolidated financial statements and notes to
      the
      consolidated financial statements has been revised to reflect only the results
      of continuing operations (see Note 9).


6


*Revenues
      and Cost Recognition*





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





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





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





Customer’s
      contract for both the purchase and installation of voice and data networking
      technology products and certain video technologies products on one sales
      agreement, as installation of the product is essential to the functionality
      of
      the product. Revenue is recognized when the products are delivered and installed
      and the customer has accepted the terms and has the ability to fulfill the
      terms. This revenue has been included with discontinued operations. Service
      revenues related to technology products including consulting, training and
      support are recognized when the services are provided. Service revenues
      accounted for less than 10% of total revenues for the three and six months
      ended
      June 30, 2006 and 2005. The Company, if the customer elects, enters into
      equipment maintenance agreements for products sold once the original
      manufacturer's warranty has expired. Revenues from all equipment maintenance
      agreements are recognized on a straight-line basis over the terms of each
      contract. Costs for services are expensed as incurred. This revenue has been
      included with discontinued operations.





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





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





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.





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


7




MULTIBAND
        CORPORATION AND SUBSIDIARIES
 NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS
 JUNE
        30, 2006 AND 2005


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





*Cash
      and Cash Equivalents*





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




*Goodwill
      and Other Intangible Assets*





The
      Company periodically evaluates acquired businesses for potential impairment
      indicators. Our judgments regarding the existence of impairment indicators
      are
      based on legal factors, market conditions and operational performance of our
      acquired businesses. Future events could cause us to conclude that impairment
      indicators exist and that goodwill associated with our acquired businesses
      is
      impaired. Any resulting impairment loss could have a material adverse impact
      on
      our financial condition and results of operations. Goodwill related to
      continuing operations was $954,871 at both June 30, 2006 and December 31,
      2005.





Components
      of intangible assets are as follows:


June
                30, 2006
            
            December
                31, 2005Gross
                Carrying
            
            Accumulated
            
            Gross
                Carrying
            
            AccumulatedAmount
            
            Amortization
            
            Amount
            
            AmortizationIntangible
                assets subject to amortizationDomain
                name
            
            $
            83,750
            
            $
            80,958
            
            $
            83,750
            
            $
            72,583Right
                of entry contracts
            
            
            9,205,678
            
            
            3,144,443
            
            
            9,129,028
            
            
            2,300,664Subscriber
                lists
            
            
            10,151,809
            
            
            4,063,637
            
            
            10,151,809
            
            
            3,261,483Debt
                issuance costs
            
            
            499,837
            
            
            404,326
            
            
            499,837
            
            
            306,152Total
            
            $
            19,941,074
            
            $
            7,693,364
            
            $
            19,864,424
            
            $
            5,940,882Intangible
                assets not subject to amortizationGoodwill
            
            $
            954,871
            
            $
            —
            
            $
            954,871
            
            $
            —





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





Amortization
      of intangible assets was $879,914 and $849,730 for the three months ended June
      30, 2006 and 2005, respectively. For the six months ended June 30, 2006 and
      2005, amortization of intangible assets was $1,752,482 and $1,714,854,
      respectively. Amortization of debt issuance costs of $98,174 and $98,011 for
      the
      six months ended June 30, 2006 and 2005, respectively, is included in interest
      expense. Estimated amortization expense of intangible assets for the years
      ending December 31, 2006, 2007, 2008, 2009, 2010 and 2011 is $3,477,331,
      $3,206,794, $3,029,078, $2,903,508, $1,111,691 and $59,835, respectively. The
      weighted average remaining life of the intangibles is 6.8 years with right
      of
      entry average life of 8.5 years and subscriber lists average life of 2.3
      years.


8





*Stock-Based
      Compensation*




Effective
      January 1, 2006, the Company adopted SFAS No. 123R Accounting for
      Stock-Based Compensation (SFAS 123R), which requires companies to measure and
      recognize compensation expense for all stock-based payments at fair value.
      SFAS
      123R is being applied on the modified prospective transition method and
      therefore the Company has not restated results for prior periods. The financial
      statements for the six months ended June 30, 2006 recognize compensation cost
      for the portion of outstanding awards which have vested during the period.
      The
      Company recognizes stock-based compensation costs on a straight-line basis
      over
      the requisite service period of the award, which is generally the option vesting
      term. For the three and six months ended June 30, 2006, total stock-based
      compensation expense of $168,758 ($.01 per share) and $485,521 ($.01 per share)
      was included in selling, general and administrative expenses. The Company is
      estimating $350,000 of additional stock-based compensation expense for the
      remainder of 2006 related to SFAS 123R.





The
      following table illustrates the effect on net loss and net loss per share if
      the
      Company had applied the fair value recognition provisions of SFAS No. 123, *Accounting
      for Stock-Based Compensation* ,
      to its
      stock-based employee compensation for the three and six months ended June 30,
      2005.





Three
                months ended
              June
                30, 2005
            
            Six
                months ended
              June
                30, 2005Loss
                attributable to common stockholders
            
            $
            (1,965,988
            )
            $
            (5,480,280
            )Pro
                forma loss attributable to common stockholders
            
            
            (2,050,813
            )
            
            (5,865,199
            )Basic
                and diluted loss attributable to common stockholders:As
                reported
            
            
            (.07
            )
            
            (.20
            )Pro
                forma loss attributable to common shares
            
            
            (.07
            )
            
            (.21
            )Stock-based
                compensation:As
                reported
            
            
            0
            
            
            0Pro
                forma
            
            
            84,825
            
            
            384,919





In
      determining the compensation cost of the options granted during the six months
      ended June 30, 2006 and 2005, as specified by SFAS No. 123, the fair value
      of
      each option grant has been estimated on the date of grant using the
      Black-Scholes option pricing model and the weighted average assumptions used
      in
      these calculations are summarized as follows:





Three
                months ended
              June
                30, 2006
            
            Three
                months ended
              June
                30, 2005
            
            Six
                months ended
              June
                30, 2006
            
            Six
                months ended
              June
                30, 2005Risk-free
                interest rate
            
            
            4.88
            %
            
            3.75
            %
            
            4.69
            %
            
            3.57
            %Expected
                life of options granted
            
            
            10
                years
            
            
            10
                years
            
            
            10
                years
            
            
            10
                yearsExpected
                volatility range
            
            
            215
            %
            
            208
            %
            
            215
            %
            
            211
            %Expected
                dividend yield
            
            
            0
            %
            
            0
            %
            
            0
            %
            
            0
            %





The
      Company uses the Black-Scholes option-pricing model (Black-Scholes model) for
      the Company’s pro forma information required under SFAS 123 and stock based
      compensation expense recognized under SFAS 123R. 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.


9




MULTIBAND
        CORPORATION AND SUBSIDIARIES
 NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS
 JUNE
        30, 2006 AND 2005


*Net
      Loss per Common Share*





Basic
      net
      loss per common share is computed by dividing the loss attributable to common
      stockholders by the weighted average number of common shares outstanding for
      the
      reporting period. Diluted net loss per common share is computed by dividing
      loss
      attributable to common stockholders by the sum of the weighted average number
      of
      common shares outstanding plus all additional common stock that would have
      been
      outstanding if potentially dilutive common shares related to common share
      equivalents (stock options, stock warrants, convertible preferred shares, and
      issued but not outstanding restricted stock) had been issued. All options,
      warrants, convertible preferred shares, and restricted stock outstanding during
      the three and six months ended June 30, 2006 and 2005 were anti-dilutive due
      to
      the Company’s net losses.





*Segment
      Reporting*





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





*Recent
      Accounting Pronouncement*





The
      Financial Accounting Standards Board has published FASB Interpretation (FIN)
      No.
      48 (FIN No. 48), “Accounting for Uncertainty in Income Taxes”, to address the
      noncomparability in reporting tax assets and liabilities resulting from a lack
      of specific guidance in FASB Statement of Financial Accounting Standards (SFAS)
      No. 109 (SFAS 109), “Accounting for Income Taxes”, on the uncertainty in income
      taxes recognized in an enterprise’s financial statements. Specifically, FIN No.
      48 prescribes (a) a consistent recognition threshold and (b) a measurement
      attribute for the financial statement recognition and measurement of a tax
      position taken or expected to be taken in a tax return, and provides related
      guidance on derecognition, classification, interest and penalties, accounting
      interim periods, disclosure and transition. FIN No. 48 will apply to fiscal
      years beginning after December 15, 2006, with earlier adoption permitted. The
      Company does not expect the adoption of FIN No. 48 to have a material impact
      on
      the consolidated financial statements.





*Reclassifications*





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







**NOTE
      3 - Business Acquisitions**








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


10




MULTIBAND
        CORPORATION AND SUBSIDIARIES
 NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS
 JUNE
        30, 2006 AND 2005


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




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





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





The
      unaudited pro forma results of operations for the six months ended June 30,
      2006
      and 2005 as a result of the SBC, Ultravision, and Dinamo acquisitions of video
      subscribers and video equipment is not material to the historical financial
      statements.







**NOTE
      4** **- Lease Financing**





In
      June
      2006, the Company entered into a lease financing arrangement with B&L
      Financial, Inc. The Company signed a five year lease for equipment with a cost
      of $259,120, payable in 60 monthly payments of $5,501 including interest at
      10.4%. The lease is collateralized by the income stream from the installation
      of
      communications equipment at specific property locations.


11




MULTIBAND
        CORPORATION AND SUBSIDIARIES
 NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS
 JUNE
        30, 2006 AND 2005


**NOTE
      5** **- Stockholder Equity**





Stock
      warrants activity is as follows for the six months ended June 30,
      2006:





.
            
            Number
                of Warrants
            
            Weighted
                –Average Exercise PriceOutstanding,
                December 31, 2005
            
            
            18,715,979
            
            $
            1.68Granted
            
            
            670
            
            
            2.20Exercised
            
            
            —
            
            
            —Cancelled
            
            
            (472,338
            )
            
            (3.51
            )Outstanding,
                June 30, 2006
            
            
            18,244,311
            
            $
            1.63





The
      Company granted 670 warrants in lieu of cash for services during the three
      months ended June 30, 2006 valued at $607 using the Black Scholes pricing
      model.







**NOTE
      6** **- Accrued Liabilities**   Accrued
        liabilities consisted of the following:





**June
                30, 2006**
            
            **December
                31, 2005**Payroll
                and related taxes
            
            $
            454,183
            
            $
            391,707Accrued
                preferred stock dividends
            
            
            451,030
            
            
            506,535Accrued
                liability-vendor charge backs
            
            
            1,103,414
            
            
            1,347,673Other
            
            
            390,810
            
            
            495,139**Total**
            
            $
            2,399,437
            
            $
            2,741,054







**NOTE** **7
      - Business Segments**


The
        Company has the following business segments. Multiband Corp. includes corporate
        expenses (e.g. corporate administrative costs), interest income, interest
        expense, depreciation and amortization. The MCS segment provides voice, data
        and
        video services to residential multi-dwelling units as the principal to
        subscribers. This segment encompasses the subsidiary corporations, Multiband
        Subscriber Services, Inc., Multiband USA, Inc., URON, Inc., and Rainbow
        Satellite Group, LLC. The MDU segment represents results as the master service
        operator for DirecTV which includes the subsidiary corporation, Minnesota
        Digital Universe, Inc. and certain DirecTV revenue generated by the owned
        properties in the subsidiary Multiband Subscriber Services, Inc. The
        discontinued operations segment includes the Multiband Business Services
        segment
        which was sold effective after the close of business March 31, 2005 (see
        Note
        9).




12




MULTIBAND
        CORPORATION AND SUBSIDIARIES
 NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS
 JUNE
        30, 2006 AND 2005


Segment
        disclosures are as follows:


MultibandCorp.
              
              MDU
              
              MCS
              
              DiscontinuedOperations
              
              TotalThree
                  months ended June 30, 2006:Revenues
              
              $
              —
              
              $
              2,643,217
              
              $
              1,858,520
              
              $
              —
              
              $
              4,501,737Income
                  (loss) from operations
              
              
              (1,060,690
              )
              
              1,148,971
              
              
              (1,742,094
              )
              
              —
              
              
              (1,653,813
              )Identifiable
                  assets
              
              
              3,734,559
              
              
              7,259,784
              
              
              11,439,124
              
              
              —
              
              
              22,433,467Depreciation
                  and amortization
              
              
              59,208
              
              
              401,079
              
              
              848,327
              
              
              —
              
              
              1,308,614Capital
                  expenditures
              
              
              1,110
              
              
              —
              
              
              216,933
              
              
              —
              
              
              218,043
  MultibandCorp.
              
              
              MDU
              
              
              MCS
              
              
              DiscontinuedOperations
              
              
              TotalThree
                months ended June 30, 2005:Revenues
              
              $
              —
              
              $
              2,102,459
              
              $
              2,081,147
              
              $
              —
              
              $
              4,183,606Income
                  (loss) from operations
              
              
              (772,620
              )
              
              1,037,354
              
              
              (1,381,087
              )
              
              —
              
              
              (1,116,353
              )Identifiable
                  assets
              
              
              8,072,968
              
              
              8,807,922
              
              
              12,072,166
              
              
              —
              
              
              28,953,056Depreciation
                  and amortization
              
              
              63,927
              
              
              401,079
              
              
              753,861
              
              
              —
              
              
              1,218,867Capital
                  expenditures
              
              
              5,429
              
              
              —
              
              
              268,486
              
              
              —
              
              
              273,915
  Six
                  months ended June 30, 2006:
              
              MultibandCorp.
              
              MDU
              
              MCS
              
              DiscontinuedOperations
              
              TotalRevenues
              
              $
              —
              
              $
              5,155,389
              
              $
              3,750,392
              
              $
              —
              
              $
              8,905,781Income
                  (loss) from operations
              
              
              (2,204,871
              )
              
              2,053,914
              
              
              (3,430,018
              )
              
              —
              
              
              (3,580,975
              )Identifiable
                  assets
              
              
              3,734,559
              
              
              7,259,784
              
              
              11,439,124
              
              
              —
              
              
              22,433,467Depreciation
                  and amortization
              
              
              119,005
              
              
              802,155
              
              
              1,689,910
              
              
              —
              
              
              2,611,070Capital
                  expenditures
              
              
              24,919
              
              
              —
              
              
              555,130
              
              
              —
              
              
              580,049
  Six
                  months ended June 30, 2005:
              
              MultibandCorp.
              
              MDU
              
              MCS
              
              DiscontinuedOperations
              
              TotalRevenues
              
              $
              —
              
              $
              4,013,963
              
              $
              3,876,519
              
              $
              —
              
              $
              7,890,482Income
                  (loss) from operations
              
              
              (1,332,921
              )
              
              1,374,371
              
              
              (2,626,214
              )
              
              —
              
              
              (2,584,764
              )Identifiable
                  assets
              
              
              8,072,968
              
              
              8,807,922
              
              
              12,072,166
              
              
              —
              
              
              28,953,056Depreciation
                  and amortization
              
              
              71,771
              
              
              802,158
              
              
              1,493,805
              
              
              —
              
              
              2,367,734Capital
                  expenditures
              
              
              5,429
              
              
              —
              
              
              371,278
              
              
              38,358
              
              
              415,065





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


13





**NOTE** **8
      - Commitments and Contingencies**








*Legal
      Proceedings*





The
      Company is involved in legal actions in the ordinary course of its business.
      As
      of June 30, 2006, management believes that there are no pending legal
      proceedings against or involving the Company for which the outcome is likely
      to
      have a material adverse effect upon the Company’s consolidated financial
      position, results of operations, or cash flows.





*Significant
      Relationship*





The
      Company is a master agent for DirecTV pursuant to a system operator agreement
      with DirecTV dated August, 2005. The initial term of the agreement is for three
      years and provides for two additional two-year renewals if the Company has
      a
      minimum number of paying video subscribers in its system operator network.
      Termination of the Company's DirecTV agreement would have a material adverse
      impact on the Company's on-going operations. Revenues generated from DirecTV
      were 58.7% and 57.9% of total revenues for the three and six months ended June
      30, 2006, respectively. Revenues generated from DirecTV for the three and six
      months ended June 30, 2005 were 50.3% and 50.9% of total revenue, respectively.





*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
      9).
      This guaranty has no effect on the Company’s consolidated financial statements
      for the periods ended June 30, 2006. 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.







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




After
      the
      close of business on March 31, 2005, the Company completed the sale of certain
      assets and liabilities relating to its Multiband Business Services (MBS, a/k/a
      Corporate Technologies USA) division. The buyer was North Central Equity LLC
      (“Buyer”).





The
      original purchase price paid by the Buyer was $2,550,000 which consisted of
      $1,682,184 in cash at closing, $349,817 in assumed vacation pay and warranty
      liabilities, and the balance of $517,999 in the original note receivable at
      7%
      interest due on December 31, 2005. The amount of the note receivable was subject
      to adjustment based on certain representations and warranties and estimated
      presale customer service obligations the Buyer assumed liability for in the
      purchase agreement. Due to the aforementioned representations and warranties
      and
      estimated liabilities, the Company, at the notes inception established a reserve
      of $178,948 against the collectibility of the note receivable. In November
      2005,
      the note was paid by the buyer in the amount of $400,000 which included the
      net
      adjustment for the actual amount of presale customer service obligations. The
      Company’s gain on sale was increased $149,865 accordingly as of September 30,
      2005 to reflect this prepayment and the resolution of estimated assumed
      liabilities.





In
      connection with the purchase agreement, the Company entered into an interim
      services agreement whereby the Buyer is able to sublease space at no charge
      at
      the Company’s Minneapolis and Fargo locations and obtain access to certain
      aspects of the Company’s information technology resources for one year. Services
      provided will be charged by either party at fair value and is estimated by
      management to be insignificant. In addition the services agreement is explicit
      that the Company has no control over the buyer’s operations. The buyer also
      receives additional free rent for a second year due to the results of a post
      closing inventory appraisal (see Note 8).


14




MULTIBAND
        CORPORATION AND SUBSIDIARIES
 NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS
 JUNE
        30, 2006 AND 2005






The
      gain
      on sale of MBS business services segment is as follows as adjusted at December
      31, 2005:




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


The
        following are condensed statements of operations of the discontinued operations
        for the three and six months ended June 30:




Three
                months ended June 30,
            
            Six
                months ended June 30,**Statement
              of Operations**
            
            
            
            2006
            
            2005
            
            2006
            
            2005Revenues
            
            
            
            
            $
            —
            
            $
            14,052
            
            $
            —
            
            $
                3,698,927Cost
                of sales
            
            
            
            
            
            —
            
            
            (11,117
            )
            
            —
            
            2,701,664Selling,
                general and administrative
            
            
            
            
            
            —
            
            
            (106,903
            )
            
            (2,200
            )
            1,307,502Depreciation
                and amortization
            
            
            
            
            
            —
            
            
            —
            
            
            —
            
            56,188Income
                (loss) from operations
            
            
            
            
            
            
            
            
            132,072
            
            
            2,200
            
            (366,427)Other
                income (expense)
            
            
            
            
            
            —
            
            
            (9,180
            )
            
            —
            
            (55,440)Net
                income (loss)
            
            
            
            
            
            —
            
            
            122,892
            
            
            2,200
            
            (421,867)Gain
                on sale
            
            
            
            
            
            —
            
            
            —
            
            
            —
            
            103,491Income
                (loss) from discontinued operations
            
            
            
            
            $
            —
            
            $
            122,892
            
            $
            2,200
            
            $
                (318,376)


15


The
      Company has recorded $1 million in deferred rent liability in relation to the
      sale of the MBS business segment. This liability is amortized over the 24 month
      term of the sublease. Amortization has been netted with rent expense and the
      resulting income of $16,100 and $32,200 is included in other income (expense)
      for the three and six months ended June 30, 2006, respectively.





**NOTE** **10
      - Stock Dividend**





As
      of May
      1, 2006, certain Multiband shareholders of record and certain contingent rights
      holders became eligible for a distribution of URON common stock based on the
      holder’s ownership of Multiband shares or rights as of that date. The holders
      will receive .05 shares of URON common stock for each share or right to a share
      of Multiband common stock held on the record date. As of June 30, 2006, the
      stock distribution had not yet occurred. In July 2006, URON’s Form 10-SB was
      declared effective by the SEC. On August 10, 2006, the stock distribution
      occurred. Multiband is committed to funding URON operations, as necessary,
      through December 2007.







**NOTE** **11
      - Subsequent Events**




Effective
      July 1, 2006, Multiband Corporation (the Company) acquired the video assets
      and
      rights of entry of Extreme Video Enterprise, LLC of Cincinnati, Ohio for a
      total
      purchase price of $578,125. The assets included 5,567 homes under rights of
      entry and 928 subscribers. 162,500 shares of restricted common stock valued
      at
      $1.00 per share (fair value at the date of the agreement) were issued to the
      Seller as part of the consideration for the purchase. The balance of the
      purchase of $415,625 is to be paid in 48 equal payments and is collateralized
      by
      the assets purchased. This note does not bear interest. The agreement allows
      for
      a reduction of the purchase price if the annual cash flow generated is less
      than
      $94,000 in the first 3 years and less than $7,844 per month in the final year
      of
      the repayment of the note payable. Any shortfall will be deducted from the
      payment dollar for dollar. The purchase price was allocated to the acquired
      assets based on the estimated fair values as of the acquisition
      date.




**FORWARD-LOOKING
      STATEMENTS**





From
      time
      to time, the Company may publish forward-looking statements relating to such
      matters as anticipated financial performance, business prospects, product
      pricing, management for growth, integration of acquisitions, technological
      developments, new products, and similar matters. The Private Securities
      Litigation Reform Act of 1995 provides a safe harbor for forward-looking
      statements including those made in this statement. In order to comply with
      the
      terms of the Private Securities Litigation Reform Act, the Company notes that
      a
      variety of factors could cause the Company's actual results and experience
      to
      differ materially from the anticipated results or Company's forward-looking
      statements.





The
      risks
      and uncertainties that may affect the operations, performance, developments
      and
      results of the Company's business include the following: national and regional
      economic conditions; pending and future legislation affecting IT and
      telecommunications industries; market acceptance of the Company's products
      and
      services; the Company's products and services; the Company's continued ability
      to provide integrated communication solutions for customers in a dynamic
      industry; and other competitive factors.





Because
      these and other factors could affect the Company's operating results, past
      financial performance should not necessarily be considered as a reliable
      indicator of future performance and anticipated future period results.


16




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




**OUR
      COMPANY**





Multiband
      Corporation (Multiband), is a Minnesota corporation formed in
      September 1975. Multiband has two operating segments: 1) Multiband Consumer
      Services (MCS, legally known as Multiband Subscriber Services, Inc.), which
      encompasses the subsidiary corporations, Multiband USA, Inc., URON, Inc., and
      Rainbow Satellite Group, LLC; and 2) Minnesota Digital Universe, Inc.
      (MDU)





Multiband
      completed an initial public offering in June 1984. In November 1992,
      Multiband became a non-reporting company under the Securities Exchange Act
      of
      1934. In July 2000, Multiband regained its reporting company status. In
      December, 2000, Multiband stock began trading on the NASDAQ stock exchange
      under
      the symbol VICM. In July 2004, the symbol was changed to MBND concurrent with
      the Company’s name change from Vicom, Incorporated to Multiband
      Corporation.





As
      of May
      1, 2006, certain Multiband shareholders of record and certain contingent rights
      holders became eligible for a distribution of URON common stock based on the
      holder’s ownership of Multiband shares or rights as of that date. The holders
      will receive .05 shares of URON common stock for each share or right to a share
      of Multiband common stock held on the record date. As of June 30, 2006, the
      stock distribution had not yet occurred.





Multiband’s
      website is located at : www.multibandusa.com .





From
      its
      inception until December 31, 1998, Multiband operated as a telephone
      interconnect company only. Effective December 31, 1998, Multiband acquired
      the assets of the Midwest region of Enstar Networking Corporation (ENC), a
      data
      cabling and networking company. In late 1999, in the context of a forward
      triangular merger, Multiband to expand its range of computer products and
      related services, purchased the stock of Ekman, Inc. d/b/a Corporate
      Technologies, and merged Ekman, Inc. into the newly formed surviving
      corporation, Corporate Technologies, USA, Inc. (MBS). MBS provided voice,
      data and video systems and services to business and government. The MBS business
      segment was sold effective April 1, 2005. All references to financial
      information and descriptions of business in this registration have been revised
      to reflect only our continuing operations and all references to our now
      discontinued Multiband Business Services have been eliminated. MCS segment
      began
      in February 2000. MCS, the Company’s continuing operating division, provides
      voice, data and video services to multiple dwelling units (MDU), including
      apartment buildings, condominiums and time share resorts. During 2004, the
      Company purchased video subscribers in a number of separate transactions, the
      largest one being Rainbow Satellite Group, LLC. During 2004, the Company also
      purchased the stock of Minnesota Digital Universe, Inc., (MDU segment) which
      made the Company the largest master service operator in MDU’s for DirecTV
      satellite television in the United States.





At
      June
      30, 2006, MCS had 117,600 (owned and managed) subscriptions for its services
      (112,000 video subscriptions, 1,400 voice subscriptions, and 4,200 internet
      subscriptions).


17





**SELECTED
      CONSOLIDATED FINANCIAL DATA**





DOLLAR
                AMOUNTS AS A PERCENTAGE OF REVENUES
            
            DOLLAR
                AMOUNTS AS A PERCENTAGE OF REVENUESTHREE
                MONTHS ENDED
            
            SIX
                MONTHS ENDEDJune
                30, 2006
              (unaudited)
            
            June
                30, 2005 (unaudited)
            
            June
                30, 2006
              (unaudited)
            
            June
                30, 2005 (unaudited)REVENUES
            
            
            100
            %
            
            100
            %
            
            100
            %
            
            100
            %COST
                OF PRODUCTS & SERVICES (Exclusive of depreciation and amortization
                shown below)
            
            
            43.0
            %
            
            40.7
            %
            
            44.9
            %
            
            45.4
            %SELLING,
                GENERAL & ADMINISTRATIVE
            
            
            64.6
            %
            
            56.8
            %
            
            66.0
            %
            
            57.3
            %DEPRECIATION
                & AMORTIZATION
            
            
            29.1
            %
            
            29.1
            %
            
            29.3
            %
            
            30.0
            %LOSS
                FROM OPERATIONS
            
            
            -36.7
            %
            
            -26.6
            %
            
            -40.2
            %
            
            -32.7
            %INTEREST
                EXPENSE & OTHER, NET
            
            
            -6.5
            %
            
            -7.2
            %
            
            -6.2
            %
            
            -12.4
            %LOSS
                FROM CONTINUING OPERATIONS
            
            
            -43.2
            %
            
            -33.8
            %
            
            -46.4
            %
            
            -45.1
            %INCOME
                (LOSS) FROM DISCONTINUED OPERATIONS
            
            
            0.0
            %
            
            2.9
            %
            
            0.0
            %
            
            -4.0
            %NET
                LOSS
            
            
            -43.2
            %
            
            -30.9
            %
            
            -46.4
            %
            
            -49.1
            %





**RESULTS
      OF OPERATIONS**





*Revenues*





Total
      revenues increased 7.6% to $4,501,737 for the quarter ended June 30, 2006 as
      compared to $4,183,606 for the quarter ended June 30, 2005. This increase is
      primarily due to an increase in agent fees and revenue generating subscriptions
      during the comparable periods. The Company expects revenues to continue to
      increase in 2006 over 2005 as the Company adds additional services and thus
      additional revenue generating subscriptions to new and existing
      properties.





Revenues
      in the second quarter of 2006, for the MCS segment, decreased 10.7% to
      $1,858,520 as compared to $2,081,147 in the second quarter of fiscal 2005.
      This
      decrease is entirely due to a decrease in revenue from equipment sales to
      property owners between comparable periods. Sales of recurring revenue services,
      exclusive of equipment sales, increased 5.9% between comparable
      periods.





Revenues
      in the second quarter of 2006 for the MDU segment increased 25.7% to $2,643,217
      as compared to $2,102,459 in the second quarter of fiscal 2005. This increase
      is
      primarily due to the number of managed subscribers and a related increase in
      agent fees during the comparable period.





Revenues
      for the six month period ended June 30, 2006 increased 12.9% to $8,905,781
      from
      $7,890,482 for the same period in 2005. Again, this revenue increase is
      primarily due to an increase in agent fees and revenue generating subscriptions
      during the comparable periods.


18




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





The
      Company's cost of products and services, exclusive of depreciation and
      amortization, increased by 13.8% to $1,937,898 for the quarter ended June 30,
      2006 compared to $1,703,517 for the same quarter last year. Costs of products
      and services for the MCS segment for the quarter were $1,006,720 compared to
      $1,209,389 in the same quarter last year, a 16.8% decrease. The decrease in
      costs for the MCS segment is directly related to the decrease in equipment
      sales. Costs in the MCS segment decreased more significantly than revenues,
      reflecting the Company’s higher margins in the sales of services versus
      equipment sales. Costs of products and services for the MDU segment for the
      quarter were $931,178 compared to $494,128 in the same quarter last year, an
      88.4% increase. The increase in costs for the MDU segment reflect increased
      sales and a reduction in accrued liabilities for vendor chargebacks of $244,258
      during the quarter ended June 30, 2006, versus a reduction of $554,299 in the
      same quarter last year. The Company anticipates that, on a percentage basis,
      revenues throughout the balance of 2006 will increase slightly ahead of costs
      due to the expectation that customer penetrations in certain properties will
      grow as additional services are added to those properties. The Company’s past
      operating performance indicates that revenues and gross margins on a property
      level improve when the Company offers two or three services (e.g. voice, data
      and video) at a property versus a single service (video only).





For
      the
      six months ended June 30, 2006, costs of products and services, exclusive of
      depreciation and amortization were $3,994,425 compared to $3,583,025 in the
      prior year. This overall increase in costs of products and services over the
      prior year resulted primarily from an increase in overall revenues and the
      aforementioned difference in reduction in accrued liabilities between the
      comparable periods.





*Selling,
      General and Administrative Expenses*





Selling,
      general and administrative expenses increased 22.4% to $2,909,038 in the quarter
      ended June 30, 2006, compared to $2,377,575 in the prior year quarter. Selling,
      general and administrative expenses were, as a percentage of revenues, 64.6%
      for
      the quarter ended June 30, 2006 and 56.8% for the similar period a year ago.
      This percentage increase is primarily a result of increased payroll expenses
      related to an increase in revenue and due to stock option expense of $168,758
      required to be recognized in the current quarter verses $0 stock option in
      expense in the comparable period last year. The Company anticipates that
      selling, general and administrative expenses, exclusive of stock option
      expenses, will increase slightly in future periods as the Company continues
      to
      deploy additional services at its MDU properties.





For
      the
      six months ended June 30, 2006, these expenses increased 30.0% to $5,881,261
      compared to $4,524,487 for the six months ended June 30, 2005. As a percentage
      of revenue, selling, general and administrative expenses were 66.0% for the
      six
      months ended June 30, 2006, compared to 57.3% for the same period in 2005.
      Again, this percentage increase is primarily due to the aforementioned stock
      option expenses of $485,521 for the six months ended June 30, 2006 and payroll
      expense increase.





*Interest
      Expense*





Interest
      expense was $325,523 for the quarter ended June 30, 2006, versus $373,013 for
      the same quarter last year primarily reflecting a decrease in the Company’s debt
      and original issue discount expense. Amortization of original issue discount
      was
      $131,910 and $164,882 for the three months ended June 30, 2006 and 2005,
      respectively.





Interest
      expense was $630,204 for the six months ended June 30, 2006, and $1,058,714
      for
      the same period last year. Amortization of original issue discount was $246,818
      for the six months ended June 30, 2006 and $664,350 for the same period last
      year.


19




*Loss
      from Operations*





The
      Company, in the second quarter of 2006, incurred a loss from operations for
      its
      combined operating business segments of $1,943,387 compared to a loss of
      $1,419,246 during the second quarter in 2005. Loss from operations from said
      segments was $4,133,793 during the first six months of 2006, compared to
      $3,561,186 during the second quarter in 2005. The MDU segment showed a profit
      from operations of $1,148,971 and $2,053,914 for the three and six months ended
      June 30, 2006 compared to profits of $1,037,354 and $1,374,371 for the three
      and
      six months ended June 30, 2005. For the second quarter of 2006, the MCS segment
      showed a loss from operations of $1,742,094, compared to a loss of $1,381,087
      for the same quarter last year. For the six months ended June 30, 2006, the
      MCS
      segment showed a loss from operations of $3,430,018 compared to a loss of
      $2,626,214 for the same period in 2005. The Multiband Corporation segment,
      which
      has no revenues, showed a loss from operations of $1,060,690 for the three
      months ended June 30, 2006 and $2,204,871 for the six months ended June 30,
      2006
      compared to losses of $772,620 and $1,332,921 for the same periods last year.
      The Multiband Corporation loss is expected to be constant in future periods
      as
      corporate overhead is expected to remain constant. The Company expects the
      MDU
      segment profitability in future periods to remain steady or improve as that
      segment continues to experience growth. The Company hopes that it can mitigate
      its loss in the MCS segment by adding additional services and thus gross margin
      to the properties in the MCS portfolio.





*Net
      Loss*





In
      the
      second quarter of fiscal 2006, the Company incurred a net loss of $1,943,387
      compared to a net loss of
      $1,296,354 for the second fiscal quarter of 2005. For the six months ended
      June
      30, 2006, the Company recorded a net loss of $4,131,593 compared to $3,879,562
      for the six months ended June 30, 2005.





*Liquidity
      and Capital Resources*





During
      the six months ended June 30, 2006 and 2005, the Company recorded a net loss
      of
      $4,131,593 and $3,879,562, respectively. Net cash used by operations during
      the
      six months ended June 30, 2006 was $566,484 compared to cash used by operations
      during the six months ended June 30, 2005 of $2,842,499. Operating cash flows
      improved during the comparable periods. This
      improvement in cash flows between the comparable periods is primarily due to
      an
      overall decrease in the balance of accounts payable and accrued liabilities
      and
      retirement of a wholesale line of credit related to the Company’s sale of the
      MBS segment in 2005 .
      Management believes that over the next 12 months there will be a decrease in
      accrued liabilities and no significant change in accounts payable. Principal
      payments on current long-term debt over the next 12 months are expected to
      be
      $463,530.





Cash
      and
      cash equivalents totaled $1,443,584 at June 30, 2006 versus $3,100,427 at
      December 31, 2005. The working capital deficit for the six months ended June
      30,
      2006 increased to $2,830,930 as compared to $971,418, at December 31, 2005,
      primarily due to funds invested in project build-outs and the operating loss
      for
      the six months ended June 30, 2006. The Company intends to fund future
      build-outs near term through its leasing facility to reduce the impact on
      working capital. Total debt was reduced in the six months ended June 30, 2006
      as
      the Company continued to retire financing debt and debt related to acquisitions.
      Net cash flows from investing activities totaled ($588,940) compared to $770,844
      for the comparable period last year, reflecting the sale of the MBS
      segment.





The
      Company continues to experience growth, primarily due to increased subscriber
      related recurring revenues acquired from the various transactions previously
      mentioned herein.





Management
      of Multiband believes that cash on hand, combined with capital resources and
      anticipated leasing availability, as of June 30, 2006, is adequate to meet
      the
      anticipated liquidity and capital resource requirements of its business for
      the
      next 12 months.





*Capital
      Expenditures*





The
      Company used $580,049 for capital expenditures during the six months ended
      June
      30, 2006, as compared to $415,065 in the same period last year. Capital
      expenditures consisted of project build-outs and equipment acquired for internal
      use. We estimate capitalized expenditures for the remainder of 2006 will be
      approximately $400,000.


20




**CRITICAL
      ACCOUNTING POLICIES AND ESTIMATES**





Impairment
      of Long-Lived Assets


The
      Company’s long-lived assets include property, equipment and leasehold
      improvement. At June 30, 2006, the Company had net property and equipment of
      $5,159,762, which represents approximately 23% of the Company’s total assets.
      The estimated fair value of these assets is dependent on the Company’s future
      performance. In assessing for potential impairment for these assets, the Company
      considers future performance. If these forecasts are not met, the Company may
      have to record an impairment charge not previously recognized, which may be
      material. During the six months ended June 30, 2006 and 2005, the Company did
      not record any impairment losses related to long-lived assets.





Impairment
      of Goodwill


We
      periodically evaluate acquired businesses for potential impairment indicators.
      Our judgments regarding the existence of impairment indicators are based on
      legal factors, market conditions and operational performance of our acquired
      businesses. Future events could cause us to conclude that impairment indicators
      exist and that goodwill associated with our acquired businesses is impaired.
      Any
      resulting impairment loss could have a material adverse impact on our financial
      condition and results of operations. During the six months ended June 30, 2006
      and 2005, the Company did not record any impairment losses related to goodwill.





Amortization
      of Intangible Assets


The
      Company amortizes a domain name over its estimated useful life of five years
      using the straight-line method. The Company amortizes right of entry contracts
      and subscriber lists over their estimated useful lives ranging from 24 to 180
      months. The estimated fair value of these assets is dependent on the Company’s
      future performance. In assessing for potential impairment for these assets,
      the
      Company considers future performance. If these forecasts are not met, the
      Company may have to record an impairment charge not previously recognized,
      which
      may be material. During the six months ended June 30, 2006 and 2005, the Company
      did not record any impairment losses related to intangible assets.





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





Multiband
      is not subject to any material interest rate risk as any current lending
      agreements are at a fixed rate of interest except for the notes payable to
      Laurus Master Fund, Ltd., which is three percent over the prime interest rate
      and the Convergent Capital note of $2,500,000, which varies from 11% to 14%,
      dependent on the Company’s common stock price. Multiband also has variable rate
      % of Class I convertible preferred stock which pays dividends on a basis of
      prime rate.





**ITEM
      4. CONTROLS AND PROCEDURES**





As
      of the
      end of the period covered by this quarterly report, the Company carried out
      an
      evaluation, under the supervision and with the participation of the Company’s
      management, of the effectiveness of the design and operation of the Company’s
      disclosure controls and procedures pursuant to Rule 13a-14(c) of the Securities
      Exchange Act of 1934. Based upon that evaluation, the Company’s Chief Executive
      Officer and Chief Financial Officer concluded that the Company’s disclosure
      controls and procedures are effective in alerting them in a timely basis to
      material information relating to the Company required to be disclosed in the
      Company’s periodic SEC reports. There have been no significant changes in the
      Company’s internal controls or in other factors which could significantly affect
      internal controls subsequent to the date the Company carried out its evaluation.
      There was no change in the Company’s internal control over financial reporting
      during the Company’s most recently completed fiscal quarter that has materially
      affected, or is reasonably likely to materially affect, the Company’s internal
      control over financial reporting.





**PART
      II. OTHER INFORMATION**





**ITEM
      1. LEGAL PROCEEDINGS**





As
      of
      June 30, 2006, Multiband was not engaged in any pending legal proceedings where,
      in the opinion of the Company, the outcome is likely to have a material adverse
      effect upon the business, operating results and financial condition of the
      Company.


21




**ITEM
      1A. RISK FACTORS**





Our
      operations and our securities are subject to a number of risks, including but
      not limited to those described below. If any of the following risks actually
      occur, the business, financial condition or operating results of Multiband
      and
      the trading price or value of our common stock could be materially adversely
      affected.





**General**





Multiband,
      since 1998, has taken several significant steps to reinvent and reposition
      itself to take advantage of opportunities presented by a shifting economy and
      industry environment.





Recognizing
      that voice, data and video technologies in the late twentieth century were
      beginning to systematically integrate as industry manufacturers were evolving
      technological standards from "closed" proprietary networking architectures
      to a
      more "open" flexible and integrated approach, Multiband, between 1998 and 2001,
      purchased three competitors which, in the aggregate, possessed expertise in
      data
      networking, voice and data cabling and video distribution technologies.





In
      early
      2000, Multiband created its MCS division, employing the aforementioned
      expertise, to provide communications and entertainment services (local dial
      tone, long distance, high-speed internet and expanded satellite television
      services) to residents in MDUs on one billing platform, which the Company
      developed internally.





The
      specific risk factors, as detailed below, should be analyzed in the context
      of
      the Company's anticipated MCS related growth.





**Net
      Losses**





The
      Company had net losses of $4,131,593 for the six months ended June 30, 2006,
      $7,475,000 for the year ended December 31, 2005, $9,783,962 for the year ended
      December 31, 2004. Multiband may never be profitable.




The
      prolonged effects of generating losses without additional funding may restrict
      our ability to pursue our business strategy. Unless our business plan is
      successful, an investment in our common stock may result in a complete loss
      of
      an investor's capital.





If
      we
      cannot achieve profitability from operating activities, we may not be able
      to
      meet:


o  our
      capital expenditure objectives;


o  our
      debt
      service obligations; or


o  our
      working capital needs.





**Goodwill**





In
      June
      2001, the Financial Accounting Standards Board (FASB) adopted Statement of
      Financial Accounting Standards (SFAS) 142, "Goodwill and Other Intangible
      Assets" which changed the amortization rules on recorded goodwill from a monthly
      amortization to a periodic "impairment" analysis for fiscal years beginning
      after December 15, 2001. As of December 31, 2005, the Company had goodwill
      of
      $954,871 primarily related to the purchase of Rainbow Satellite Group, LLC.
      and
      the purchase of certain assets of Dinamo Entertainment, Inc. At June 30, 2006,
      the Company did not note any indications of impairment related to
      goodwill.


22




**Deregulation**





Several
      regulatory and judicial proceedings have recently concluded, are underway or
      may
      soon be commenced that address issues affecting operations and those of our
      competitors, which may cause significant changes to our industry. We cannot
      predict the outcome of these developments, nor can we assure you that these
      changes will not have a material adverse effect on us. Historically, we have
      been a reseller of products and services, not a manufacturer or carrier
      requiring regulation of its activities. Pursuant to Minnesota statutes, our
      Multiband activity is specifically exempt from the need to tariff our services
      in MDU's. However, the Telecommunications Act of 1996 provides for significant
      deregulation of the telecommunications industry, including the local
      telecommunications and long-distance industries. This federal statute and the
      related regulations remain subject to judicial review and additional
      rule-makings of the Federal Communications Commission, making it difficult
      to
      predict what effect the legislation will have on us, our operations, and our
      competitors.





**Dependence
      on Strategic Alliances**





Several
      suppliers or potential suppliers of Multiband, such as McLeod, WorldCom, WS
      Net,
      XO Communications and others have filed for bankruptcy in recent years. While
      the financial distress of its suppliers or potential suppliers could have a
      material adverse effect on Multiband's business, Multiband believes that enough
      alternate suppliers exist to allow the Company to execute its business plans.
      The Company is also highly dependent on its Master System Operator agreement
      with DirecTV. The initial term of the agreement, which expires in August 2008,
      is for three years and provides for two additional two-year renewals if the
      Company has a minimum number of paying video subscribers in its system operator
      network. Although an alternate provider of satellite television services,
      Echostar, exists, the termination of its agreements with DirecTV could have
      a
      material adverse effect on Multiband's business.





**Changes
      in Technology**





A
      portion
      of our projected future revenue is dependent on public acceptance of broadband
      and expanded satellite television services. Acceptance of these services is
      partially dependent on the infrastructure of the internet and satellite
      television which is beyond Multiband's control. In addition, newer technologies,
      such as video-on-demand, are being developed which could have a material adverse
      effect on the Company's competitiveness in the marketplace if Multiband is
      unable to adopt or deploy such technologies.





**Attraction
      and Retention of Employees**





Multiband's
      success depends on the continued employment of certain key personnel, including
      executive officers. If Multiband were unable to continue to attract and retain
      a
      sufficient number of qualified key personnel, its business, operating results
      and financial condition could be materially and adversely affected. In addition,
      Multiband's success depends on its ability to attract, develop, motivate and
      retain highly skilled and educated professionals with a wide variety of
      management, marketing, selling and technical capabilities. Competition for
      such
      personnel is intense and is expected to increase in the future.





**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.


23




**Variability
      of Quarterly Operating Results**





Variations
      in Multiband's revenues and operating results occur from quarter to quarter
      as a
      result of a number of factors, including customer engagements commenced and
      completed during a quarter, the number of business days in a quarter, employee
      hiring and utilization rates, the ability of customers to terminate engagements
      without penalty, the size and scope of assignments and general economic
      conditions. Because a significant portion of Multiband's expenses are relatively
      fixed, a variation in the number of customer projects or the timing of the
      initiation or completion of projects could cause significant fluctuations in
      operating results from quarter to quarter.





**Certain
      Anti-Takeover Effects**





Multiband
      is subject to Minnesota statutes regulating business combinations and
      restricting voting rights of certain persons acquiring shares of Multiband.
      These anti-takeover statutes may render more difficult or tend to discourage
      a
      merger, tender offer or proxy contest, the assumption of control by a holder
      of
      a large block of Multiband's securities, or the removal of incumbent management.





**Volatility
      of Multiband's Common Stock**





The
      trading price of our common stock has been and is likely to be volatile. The
      stock market has experienced extreme volatility, and this volatility has often
      been unrelated to the operating performance of particular companies. We cannot
      be sure that an active public market for our common stock will continue after
      this offering. Investors may not be able to sell the common stock at or above
      the price they paid for their common stock, or at all. Prices for the common
      stock will be determined in the marketplace and may be influenced by many
      factors, including variations in our financial results, changes in earnings
      estimates by industry research analysts, investors' perceptions of us and
      general economic, industry and market conditions.





**Future
      Sales of Our Common Stock May Lower Our Stock Price**





If
      our
      existing shareholders sell a large number of shares of our common stock, the
      market price of the common stock could decline significantly. The perception
      in
      the public market that our existing shareholders might sell shares of common
      stock could depress our market price.





**Competition**





We
      face
      competition from others who are competing for a share of the MDU market,
      including other satellite companies, cable companies and telephone companies.
      Some of these companies have significantly greater assets and resources than
      we
      do.





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





(a)
            An
                annual meeting of Multiband Corporation shareholders was held on
                June 20,
                2006. There were present or present by proxy at the meeting 11,392,490
                votes, the majority necessary to hold a
                quorum.


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


1.
      Election of Directors:




For
                
                Against
                
                AbstainBennett,
                    Mandel, Bell, Miller, Dodge, Harris
                
                $
                11,367,490
                
                $
                25,000
                
                $
                0


2.
        Ratify
        the election of Virchow, Krause & Company, LLP as independent auditors of
        the Company for Fiscal Year 2005.
  For
                
                Against
                
                Abstain$11,392,490
                
                $
                0
                
                $
                0


24




ITEM 6. EXHIBITS


(a)
            Exhibits


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






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





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





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





**SIGNATURES**





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


MULTIBAND
              CORPORATIONRegistrantDate:
              August 14, 2006
            By:
            /s/ James
              L.
              Mandel*Chief
              Executive Officer* Date:
              August 14, 2006
            By:
            /s/ Steven
              M.
              Bell*Chief
              Financial Officer*


25