UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   -----------

                               AMENDMENT NO. 2 TO
                                    FORM 10-K

(Mark One)

|X|   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
      EXCHANGE ACT OF 1934

                     FOR THE PERIOD ENDED DECEMBER 31, 2004
                                       OR

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

           FOR THE TRANSITION PERIOD FROM ____________ TO ____________

                         COMMISSION FILE NUMBER 0 - 1325

--------------------------------------------------------------------------------

                              MULTIBAND CORPORATION
             (Exact name of registrant as specified in its charter)


                                    MINNESOTA
         (State or other jurisdiction of incorporation or organization)


                                  41 - 1255001
                        (IRS Employer Identification No.)


              9449 Science Center Drive, New Hope, Minnesota 55428
                    (Address of principal executive offices)


                   Telephone (763) 504-3000 Fax (763) 504-3060
              The Company's Internet Address: www.multibandusa.com
     (Registrant's telephone number, facsimile number, and Internet address)

         Securities registered pursuant to Section 12 (b) of the Act:  None

         Securities registered pursuant to Section 12 (g) of the Act:

                           Common Stock (no par value)
<PAGE>

      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 |_|

      Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by references in Part III of this Form 10-K or any amendment to
this Form 10-K / /

      Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).

                                 Yes |_| No |X|

      As of June 30, 2004 (the most recently completed fiscal second quarter),
the aggregate market value of the voting stock held by non-affiliates of the
registrant, computed by reference to the average high and low prices on such
date as reported by the Nasdaq Smallcap was approximately $50,361,036.

      As of April 13, 2005, there were 28,479,578 outstanding shares of the
registrant's common stock, no par value stock.
<PAGE>

                       Documents Incorporated By Reference

      Portions of the registrant's definitive proxy statement to be filed within
120 days after the end of the fiscal year covered by this report are
incorporated by reference into Part III hereof.

                                Table of Contents

Part I             Item 1.  Business

                   Item 2.  Properties

                   Item 3.  Legal Proceedings

                   Item 4.  Submission of Matters to a Vote of Security Holders

Part II

                   Item 5.  Market for the Registrant's Common Equity Related
                            Shareholder Matters and Issuer Purchases of Equity
                            Securities

                   Item 6.  Selected Consolidated Financial Data

                   Item 7.  Management's Discussion and Analysis of Financial
                            Condition and Results of Operations

                  Item 7A.  Quantitative and Qualitative Disclosures About
                            Market Risk

                   Item 8.  Consolidated Financial Statements and
                            Supplementary Data

                   Item 9.  Changes in and Disagreements with Accountants on
                            Accounting and Financial Disclosure

                  Item 9A.  Controls and Procedures

                   Item 9B  None

Part III

                  Item 10.  Directors, Executive Officers, Promoters and Control
                            Persons of the Registrant

                  Item 11.  Executive Compensation

                  Item 12.  Security Ownership of Certain Beneficial Owners
                            and Management

                   Item 13  Certain Relationships and Related Transactions

                   Item 14  Principal Accountant Fees and Services

                   Item 15  Exhibits and Financial Statement Schedules.

                            Signatures
<PAGE>

Item 1
Business

      Multiband  Corporation  (Multiband),  (f/k/a Vicom,  Incorporated).,  is a
Minnesota  corporation  formed in September  1975.  Multiband  has one operating
division:  1)  Multiband  Consumer  Services  (MCS,  legally  known as Corporate
Technologies,  USA,  Inc.  dba  Multiband),  which  encompasses  the  subsidiary
corporations, Multiband USA, Inc., URON, Inc., Minnesota Digital Universe, Inc.,
and Rainbow Satellite Group, LLC.

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

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

      From its inception until December 31, 1998, Multiband operated as a
telephone interconnect company only. Effective December 31, 1998, Multiband
acquired the assets of the Midwest region of Enstar Networking Corporation
(ENC), a data cabling and networking company. In late 1999, in the context of a
forward triangular merger, Multiband to expand its range of computer products
and related services, purchased the stock of Ekman, Inc. d/b/a Corporate
Technologies, and merged Ekman, Inc. into the newly formed surviving
corporation, Corporate Technologies, USA, Inc. (MBS). MBS provided voice, data
and video systems and services to business and government. The MBS business
segment was sold effective March 31, 2005. All referenced to financial
information and descriptions of business in this Form 10-K have been revised to
reflect only our continuing operations and all references to our now
discontinued Multiband Business Services have been eliminated. MCS began in
February 2000. MCS, the Company's continuing operating division, provides voice,
data and video services to multiple dwelling units (MDUs), 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., which made the Company the
largest master service operator in MDU's for DirecTV satellite television in the
United States.

Multiband Consumer Services

      Since 2000, Multiband has offered voice, data and video services to
residents of the multi dwelling unit (MDU) market. Our experience in this market
suggests that property owners and managers are currently looking for a solution
that will satisfy two problems. The first problem that they are dealing with is
how to satisfy the residents who desire to bring satellite television service to
the unit without being visually unattractive or a structural/maintenance
problem. The second is how to provide competitive access for local and long
distance telephone cable television and internet services. Our MCS offering
addresses these problems and provides the consumer several benefits, including:

      o     Lower Cost Per Service
<PAGE>

      o     Blended Satellite and Cable Television Package

      o     Multiple Feature Local Phone Services (features such as call
            waiting, call forwarding and three-way calling)

      o     Better than Industry Average Response Times

      o     One Number for Billing and Service Needs

      o     One Bill for Local, Long Distance Cable Television and Internet

      o     "Instant On" Service Availability

      As we develop and market this package, we keep a marketing focus on two
levels of customer for this product. The primary decision-makers are the
property owners/managers. Their concerns are focused on delivering their
residents reliability, quality of service, short response times, minimized
disruptions on the property, minimized alterations to the property and value
added services. Each of these concerns is addressed in our contracts with the
property owner, which includes annual reviews and 10 year terms as service
providers on the property. The secondary customer is the end-user. We provide
the property with on-going marketing support for their leasing agents to deliver
clear, concise and timely information on our services. This will include simple
sign up options that should maximize our penetration of the property.

      When taken as a whole, and based on Multiband 's interpretations of U.S.
Census Bureau statistics, cable television, telephone and internet services
currently generate over $170 billion of revenues annually in the U.S, with an
estimated 26 million households living in MDUs. These statistics indicate stable
growing markets with demand that is likely to deliver significant values to
businesses that can obtain a subscriber base of any meaningful size.

Multiband Consumer Industry Analysis

Strategy

      For the near future, the services described below will be offered
primarily in New York, California, Minnesota, Florida, Illinois, Missouri and
North Dakota. Our primary competition will come from the local incumbent
providers of telephone and cable television services.

Local Telephone Service

      We compete with the former Bell System companies such as Verizon
Communications (Verizon) and Qwest Communications International, Inc. (Qwest)
for local telephone services. Although those companies have become the standard
for local telephone service, we believe we have the ability to underprice their
service while maintaining high levels of customer satisfaction.
<PAGE>

Cable Television Service

      We compete with Comcast Corporation (Comcast), Time Warner and others for
pay-TV customers. Comcast and Time-Warner are national cable television service
providers. We have a significant consumer benefit in that we are establishing
private rather than public television systems, which allows us to deliver a
package that is not laden with local "public access" stations that clog the
basic service package. In essence, we will be able to deliver a customized
service offering to each property based upon pre-installation market research
that we perform. The pricing of our service is also untariffed which allows for
flexible and competitive "bundling" of services.

Long Distance Telephone Service

      Cingular-Wireless, LLC (Cingular), WorldCom Inc. dba MCI (MCI), and Sprint
Corporation (Sprint) are our principal competitors in providing long distance
telephone service. They offer new products almost weekly. Our primary concern in
this marketplace is to assure that we are competitive with the most recent
advertised offerings in the "long distance wars." We will meet this challenge by
staying within a penny of the most current offering, while still maintaining a
high gross margin on our product. We accomplish this through various carrier
agency associations. We expect to generate a high penetration in our long
distance services amongst our local service subscribers because private property
owners in the shared tenant environment (similar to a hotel environment) are not
required to offer multiple long distance carriers to their tenants.

Internet Access Service

      The clear frontrunners in this highly unregulated market are America
Online, Inc. and CompuServe Corp. They compete with local exchange carriers,
long distance carriers, Internet backbone companies and many local ISPs
(Internet Service Providers). Competition has driven this to a flat rate
unlimited access dial-up service market. The general concern among consumers is
the quality of the connection and the speed of the download. Our design provides
the highest connection speeds that are currently available. The approach that we
will market is "blocks of service." Essentially, we deliver the same high bit
rate service in small, medium and large packages, with an appropriate per unit
cost reduction for those customers that will commit to a higher monthly
expenditure.

Market Description

      We are currently marketing Multiband services to MDU properties primarily
throughout Minnesota, North Dakota, Missouri, Florida, New York, California and
Illinois. We will target properties that range from 50 to 150 units on a
contiguous MDU property for television and Internet access only. We will survey
properties that exceed 150 units for the feasibility of local and long distance
telephone services.

      We are initially concentrating on middle to high-end rental complexes. We
are also pursuing resort area condominiums. A recent U.S. Census Bureau table
indicates that there are more than 65,000 properties in the United States that
fit this profile. Assuming an average of 100 units per complex, our focus is on
a potential subscriber base of 6,500,000.

      A recent Property Owners and Manager Survey, published by the U.S. Census
Bureau , shows that the rental properties are focusing on improving services and
amenities that are available to their tenants. These improvements are being
undertaken to reduce tenant turnover, relieve pricing pressures on rents and
attract tenants from competing properties. We believe that most of these owners
or managers are not interested in being "in the technology business" and will
use the services that we are offering. Various iterations of this package will
allow the owners to share in the residual income stream from the subscriber
base.
<PAGE>

Minnesota Digital Universe, Inc. (MDU, Inc.)

The Company, through its MDU, Inc. subsidiary, also serves as a master service
operator for DirecTV, a provider of satellite television service. DirecTV is the
largest provider of satellite television services in the United States with
approximately 13 million subscribers. DirecTV competes with the leading cable
companies and with Echostar, America's second largest provider of satellite
television. The Company, through its direct operations, markets DirecTV
services. The MDU, Inc. subsidiary allows the Company to offer satellite
television services to residents of Multi-dwelling-units through a network of
affiliated operators.

Number of Units/Customers

      At April 1, 2005, MCS had 36,816 subscriptions for its services, (1,386
voice subscriptions, 31,177 video subscriptions and 4,253 internet
subscriptions).

Employees

      As of March 31, 2005, Multiband employed three full-time management
employees, four accounting personnel, and six information technology employees.
As of that same date, MCS had 33 full-time employees, consisting of eight in
sales and marketing, seven in technical positions, sixteen in customer service
and related support, and two in management.

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.
<PAGE>

      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 $9,783,962 for the fiscal year ended
December 31, 2004, $4,365,004 for the fiscal year ended December 31, 2003, and
$4,438,059 for the fiscal year ended December 31, 2002. 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. In 2004, the Company recorded an impairment
charge of $527,879 related to Multiband Business Services. In 2004, the Company
wrote off $2,221,000 worth of goodwill related to discontinued operations. As of
December 31, 2004, the Company had remaining recorded goodwill of $812,366
related to the purchase of Rainbow Satellite Group, LLC.

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.
<PAGE>

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 which expires in May 2006. 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.
<PAGE>

Variability of Quarterly Operating Results; Seasonality

      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. Further,
Multiband has historically experienced a seasonal fluctuation in its operating
results, with a larger proportion of its revenues and operating income occurring
during the third quarter of the fiscal year.

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.
<PAGE>

Competition

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

FORWARD-LOOKING STATEMENTS

      This document contains forward-looking statements within the meaning of
federal securities law. Terminology such as "may," "will," "expect,"
"anticipate," "believe," "estimate," "continue," "predict," or other similar
words, identify forward-looking statements. These statements discuss future
expectations, contain projections of results of operations or of financial
condition or state other forward-looking information. Forward-looking statements
appear in a number of places in this prospectus and include statements regarding
our intent, belief or current expectation about, among other things, trends
affecting the industries in which we operate, as well as the industries we
service, and our business and growth strategies. Although we believe that the
expectations reflected in these forward-looking statements are based on
reasonable assumptions, forward-looking statements are not guarantees of future
performance and involve risks and uncertainties. Actual results may differ
materially from those predicted in the forward-looking statements as a result of
various factors, including those set forth in "Risk Factors."

Item 2:

Properties

      Multiband and its subsidiaries lease principal offices located at 2000
44th Street SW, Fargo, ND 58103 and 9449 Science Center Drive, New Hope,
Minnesota 55428. We have no foreign operations. The main Fargo office lease
expires in 2017 and covers approximately 22,500 square feet. The Fargo base rent
ranges from $23,565 to $30,377 per month. The New Hope office lease expires in
2013 and covers approximately 47,000 square feet. The New Hope base rent ranges
from $18,389 to $25,166 per month. Both the New Hope and Fargo leases have
provisions that call for the tenants to pay net operating expenses, including
property taxes, related to the facilities. Both offices have office, warehouse
and training facilities.

      Multiband considers its current facilities adequate for its current needs
and believes that suitable additional space would be available as needed.

Item 3:

Legal Proceedings

      The Company is involved in legal actions in the ordinary course of
business, including an action brought by Private Investor's Equity Group (PIEG)
brought in the third quarter of 2004, which seeks damages in excess of $75,000
over an alleged financing fee owed. The Company believes the claims are without
merit and is vigorously defending against the action. However, as of December
31, 2004, with the possible exception of the aforementioned PIEG proceeding,
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.
<PAGE>

Item 4:

Submission of Matters to a Vote of Security Holders

      The Company did not submit matters to a vote of security holders during
the last quarter of the fiscal year covered by this report.

PART II

Item 5:

Market for the  Registrant's  Common  Equity,  Related  Shareholder  Matters and
Issuer Purchases of Equity Securities

      Through May 17, 2000, Multiband's common stock was traded and quoted on
the OTC Bulletin Board(R) ("OTCBB") under the symbol "VICM." From May 18, 2000
until August 21, 2000, the common stock was quoted under the VICM symbol on the
Pink Sheets(R) operated by Pink Sheets LLC. From August 21, 2000, to December
12, 2000, Multiband's common stock was traded and quoted on the OTCBB under the
VICM symbol. Since then, the stock has been traded and quoted on the Nasdaq
Smallcap market system. In July 2004, the symbol was changed to MBND to coincide
with the Company's name change to Multiband Corporation. The table below sets
forth the high and low bid prices for the common stock during each quarter in
the two years ended December 31, 2003 and December 31, 2004 as provided by
Nasdaq.

                Quarter Ended                         High Bid          Low Bid
                -------------                         --------          -------

March 31, 2003 .......................                $   1.37         $    .77

June 30, 2003 ........................                    2.49             1.03

September 30, 2003 ...................                    2.20             1.52

December 31, 2003 ....................                    1.85             1.23

March 31, 2004 .......................                    1.68             1.04

June 30, 2004 ........................                    2.70             1.30

September 30, 2004 ...................                    1.45              .96

December 31, 2004 ....................                    1.78             1.01

      As of March 31, 2005, Multiband had 637 shareholders of record of its
common stock and 28,434,584 shares of common stock outstanding. As of that date,
eight shareholders held a total of 27,931 of Class A Preferred, two shareholders
held 8,700 shares of Class B Preferred, five shareholders held a total of
125,400 shares of Class C Preferred, one shareholder held a total of 150,000
shares of Class F Preferred, 14 shareholders held a total of 45,245 shares of
Class G Preferred, 8 shareholders held a total of 4.8 shares of Class H
Preferred, and four shareholders held a total of 100,000 shares of Class I
Preferred.
<PAGE>

Recent Sales of Unregistered Securities

      In 2004, the Company, via accredited investor purchasers of common stock,
exercise of warrants, or other conversion into common stock, issued 2.3 million
common shares at various prices, netting proceeds of approximately $3.2 million.

      The Company in 2004 issued $212,110 worth of its common stock to Pyramid
Trading LP in connection with conversion of a note payable and accrued interest.
The common stock was issued at various prices pursuant to a formula tied to the
trading price of the Company's common stock.

      The Company in 2004 issued $230,909 worth of its common stock to Laurus
Master Fund Ltd in connection with conversion of a note payable. The common
stock was issued at a conversion rate of $1.40.

      At various other times in 2004, the Company issued $194,575 worth of
common stock in connection with conversion of interest and notes payable. The
common stock was issued at various prices pursuant to a formula tied to the
trading price of the Company's common stock.

      In 2004 the Company repurchased 27,500 shares of common stock for $62,975
from a former officer of the Company.

      The Company, during 2004, issued $452,450 worth of Class G Preferred Stock
and $1,083,341 worth of Class H Preferred Stock to various accredited investors.

      In connection with these sales, we relied on the exemption from
registration provided by Sections 4(2) and 4(6) of the Securities Act of 1933,
as well as Rule 506 of Regulation D based on (i) our belief that the issuances
did not involve a public offering, (ii) the transactions involved fewer than 35
purchasers, and (iii) because we had a reasonable basis to believe that each of
the shareholders were either accredited or otherwise had sufficient knowledge
and sophistication, either alone or with a purchaser representative, to
appreciate and evaluate the risks and merits associated with their investment
decision.

Common Stock

      Holders of common stock are entitled to one vote per share in all matters
to be voted upon by shareholders. There is no cumulative voting for the election
of directors, which means that the holders of shares entitled to exercise more
than 50% of the voting rights in the election of directors are able to elect all
of the directors. Multiband's Articles of Incorporation provide that holders of
the Company's common stock do not have preemptive rights to subscribe for and to
purchase additional shares of common stock or other obligations convertible into
shares of common stock which may be issued by the Company.

      Holders of common stock are entitled to receive such dividends as are
declared by Multiband's Board of Directors out of funds legally available for
the payment of dividends. Multiband presently intends not to pay any dividends
on the common stock for the foreseeable future. Any future determination as to
the declaration and payment of dividends will be made at the discretion of the
Board of Directors. In the event of any liquidation, dissolution or winding up
of Multiband, and subject to the preferential rights of the holders of the Class
A Preferred, Class B Preferred, Class C Preferred, Class D Preferred and Class E
Preferred, the holders of common stock will be entitled to receive a pro rata
share of the net assets of Multiband remaining after payment or provision for
payment of the debts and other liabilities of Multiband.
<PAGE>

      All of the outstanding shares of common stock are fully paid and
non-assessable. Holders of common stock of Multiband are not liable for further
calls or assessments.

      The Company's Board of Directors has not declared any dividends on our
common stock since our inception, and does not intend to pay out any cash
dividends on our common stock in the foreseeable future. We presently intend to
retain all earnings, if any, to provide for our growth. The payment of cash
dividends in the future, if any, will be at the discretion of the Board of
Directors and will depend upon such factors as earnings levels, capital
requirements, our financial condition and other factors deemed relevant by our
Board of Directors.

Preferred Stock

In December 1998, Multiband issued 2,550 shares of Class A Preferred for $23,638
and 37,550 shares of Class B Preferred for $359,893. The Class B Preferred was
offered to certain note holders at a conversion rate of $10.00 per share of
Class B Preferred. Each share of Class A Preferred and Class B Preferred is
non-voting (except as otherwise required by law) and convertible into five
shares of common stock, subject to adjustment in certain circumstances. Each
holder of a share of Class A Preferred or Class B Preferred has a five-year
warrant to purchase one share of common stock at $3.00 per share, subject to
adjustment. During 2001, Multiband issued 67,655 shares of Class A Preferred for
$676,556.

      In June 2000, Multiband issued 80,500 shares of Class C Preferred for
$805,000. The Class C Preferred was offered to certain note holders at a
conversion rate of $10.00 a share. In September 2000, Multiband issued an
additional 72,810 shares of Class C Preferred for $728,100. Each share of Class
C Preferred is non-voting (except as otherwise required by law) and convertible
into two shares of Multiband common stock, subject to adjustment in certain
circumstances.

      In November 2000, Multiband issued 72,500 shares of Class D Preferred for
$490,332. The Class D Preferred was sold to eight accredited investors at $10.00
per share. Each share of Class D Preferred is non-voting (except as otherwise
required by law) and convertible into two and one-half shares of Multiband
Common Stock, subject to adjustment in certain circumstances.

      In the second quarter of 2002, Preferred Class D stocks were redeemed;
$100,000 converted to Common Stock, and $300,000 converted to a Note Payable.

      In the fourth quarter of 2002, Multiband issued 70,000 shares of Class E
Preferred for $700,000, with $600,000 related to conversion of a note payable
from a director of the Company into Preferred Stock.

      In the first quarter of 2003, $72,000 worth of Class C Preferred Stock was
issued to an officer of the Company in a conversion of accounts payable. Also in
the first quarter of 2003, $76,500 worth of Class E Preferred Stock was issued
to a member of the Board for his purchase of Multiband assets.
<PAGE>

      In the third quarter of 2003 $25,000 worth of Class B Preferred Stock was
purchased by an accredited investor.

      In addition, during 2003 $133,100 worth of Class C Preferred Stock was
redeemed.

      During the second quarter of 2004, $776,500 worth of Class E Preferred
Stock was converted into Common Stock at a price of $1.25 per share. During the
third quarter of 2004, two million dollars worth of Class F Preferred Stock was
issued. During the fourth quarter of 2004, $452,450 worth of Class G Preferred
Stock was issued and $1,083,341 worth of Class H Preferred Stock was issued.

      In the first quarter of 2005, the company issued $10,000,000 worth of
Class I Preferred Stock.

      The holders of the Class A Preferred, Class B Preferred, Class C
Preferred, Class D Preferred, Class E Preferred, Class F Preferred, Class G
Preferred and Class H Preferred (collectively, "Preferred Stock") are entitled
to receive, as and when declared by the Board, out of the assets of the Company
legally available for payment thereof, cumulative cash dividends calculated
based on the per share stated value of the Preferred Stock. The per annum
dividend rate is eight percent (8%) for the Class A Preferred and ten percent
(10%) for the Class B Preferred, Class C Preferred and Class F Preferred,
fourteen percent (14%) for the Class D Preferred, fifteen percent (15%) for the
Class E Preferred, to be paid in kind, eight percent (8%) for the Class G
Preferred and six percent (6%) for the Class H Preferred. Dividends on the Class
A Preferred, Class C Preferred, Class D Preferred, Class F Preferred and Class G
Preferred are payable quarterly on March 31, June 30, September 30, and December
31 of each year. Dividends on the Class B Preferred are payable monthly on the
first day of each calendar month. Dividends on the Class H Preferred are payable
semiannually on June 30 and December 31 of each year. Dividends on the Preferred
Stock accrue cumulatively on a daily basis until the Preferred Stock is redeemed
or converted.

      In the event of any liquidation, dissolution or winding up of Multiband,
the holders of the Class A Preferred and Class B Preferred will be entitled to
receive a liquidation preference of $10.50 per share, and the holders of the
Class C Preferred, Class D Preferred, Class E Preferred, Class F Preferred and
Class G Preferred will be entitled to receive a liquidation preference of $10.00
per share, each subject to adjustment. Holders of the Class H Preferred will be
entitled to receive a liquidation preference of $100,000 per share. Any
liquidation preference shall be payable out of any net assets of Multiband
remaining after payment or provision for payment of the debts and other
liabilities of Multiband.

      Multiband may redeem the Preferred Stock, in whole or in part, at a
redemption price of $10.50 per share for the Class A Preferred and the Class B
Preferred and $10.00 per share for the Class C Preferred, Class D Preferred,
Class E Preferred, Class F Preferred and Class G Preferred (subject to
adjustment, plus any earned and unpaid dividends) on not less than thirty days'
notice to the holders of the Preferred Stock, provided that the closing bid
price of the common stock exceeds $4.00 per share (subject to adjustment) for
any ten consecutive trading days prior to such notice. Upon Multiband's call for
redemption, the holders of the Preferred Stock called for redemption will have
the option to convert each share of Preferred Stock into shares of common stock
until the close of business on the date fixed for redemption, unless extended by
Multiband in its sole discretion. Preferred Stock not so converted will be
redeemed. No holder of Preferred Stock can require Multiband to redeem his or
her shares.
<PAGE>

Item 6:

Selected Consolidated Financial Data

      The following selected financial data should be read in conjunction with
our consolidated financial statements including the accompanying notes and with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations". The data for each of the fiscal years in the three year period
ended December 31, 2004, have been derived from our consolidated financial
statements and accompanying notes contained in this prospectus. The Statement of
Operations Data for the year ended December 31, 2001 and 2000 and the Balance
Sheet data at December 31, 2002, 2001 and 2000 have been derived from our
audited consolidated financial statements which are not contained in this
filing.

<TABLE>
<CAPTION>
Statement of Operations Data           2004               2003               2002               2001               2000
-----------------------------     ------------       ------------       ------------       ------------       ------------
<S>                               <C>                <C>                <C>                <C>                <C>
Revenues ....................     $ 11,067,834       $  1,441,118       $    577,221       $    265,996       $     73,319
Cost of products and
  services (exclusive of
  depreciation and amortization
  listed separately below)...     $  5,943,395       $    884,536       $    418,093       $    226,432       $    105,617
Selling, general and
  administrative expenses ...     $  5,960,050       $  2,647,870       $  1,971,584       $  2,555,144       $  2,870,657
% of revenues ...............             53.9%             183.0%             641.6%             960.6%           3915.30%
Depreciation and amortization     $  3,432,779       $  1,065,650       $  1,193,306          1,165,610            830,181
Loss from Operations ........     $ (4,268,390)      $ (3,156,938)      $ (3,005,762)      $ (3,681,190)      $ (3,733,136)
Other expense net ...........     $ (1,058,252)      $   (548,476)      $ (1,439,069)      $ (1,070,802)      $   (280,962)
Minority interest in
   subsidiary ...............     $          0       $     33,366       $          0       $          0       $          0

Loss before income taxes ....     $ (5,326,642)      $ (3,672,048)      $ (4,444,831)      $ (4,751,992)      $ (4,014,098)
Income tax provision ........     $          0       $          0       $          0       $          0       $      8,849
Net Loss from Continuing
   Operations ...............     $ (5,326,642)      $ (3,672,048)      $ (4,444,831)      $ (4,751,992)      $ (4,022,947)
Discontinued operations .....     $ (4,457,320)      $   (692,956)             6,772       $   (573,560)          (212,884)
Net Loss ....................     $ (9,783,962)      $ (4,365,004)      $ (4,438,059)      $ (5,325,552)      $ (4,235,831)
Loss attributable to common
   stockholders .............     $(10,374,417)      $ (4,613,693)      $ (4,591,637)      $ (5,758,221)      $ (5,082,011)
Loss per common share-basic
   and diluted ..............     $       (.42)      $       (.27)      $       (.38)      $       (.66)      $      (0.72)
Weighted average shares
   outstanding ..............       23,307,594         16,112,231         11,735,095          8,762,814          7,009,751
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
Balance Sheet Data                     2004               2003               2002               2001               2000
-----------------------------     ------------       ------------       ------------       ------------       ------------
<S>                               <C>                <C>                <C>                <C>                <C>
Working capital
   (deficiency) .............     $ (8,931,414)      $  1,118,792       $   (252,870)      $    426,549       $  2,870,114
Total assets ................     $ 26,633,712       $ 13,902,885       $ 10,347,316       $ 12,209,681       $ 15,614,573
Long-term debt ..............     $  3,498,657       $  2,262,891       $  3,273,350       $  3,311,870       $  3,362,083
Stockholders' equity ........     $  8,549,431       $  5,807,711       $  2,642,285       $  4,184,001       $  5,876,352
</TABLE>

Item 7:

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION

      The following discussion of the financial condition and results of
operations of Multiband should be read in conjunction with the Condensed
Consolidated Financial Statements and the Notes thereto included elsewhere in
this report.

Years Ended December 31, 2004 and December 31, 2003.

This discussion does not include the results of discontinued operations.

Results of Operations

The following table sets forth certain items.

                                                           2004          2003
                                                         -------       -------
Revenues

Multiband                                                      0%            0%
MCS                                                          100%          100%
                                                         -------       -------
                               Total Revenues                100%          100%
                                                         =======       =======

Cost of Products and Services (exclusive of
  depreciation and amortization)
Multiband                                                      0%            0%
MCS                                                        53.70%        61.38%
                                                         -------       -------
Total Cost of Products and Services (exclusive of
  depreciation and amortization)                           53.70%        61.38%
                                                         =======       =======
Selling, General and Administrative expenses               53.85%       183.73%
Operating loss from continuing operations                 (48.12%)     (254.81%)
Loss from discontinued operations                         (40.27%)      (48.08%)
Net Loss                                                  (88.40%)     (302.89%)

Revenues:

      Total revenues from continuing operations increased 668.0% from $1,441,118
in 2003 to $11,067,834 in 2004. This significant increase in revenues is
primarily due to the Company's acquisition of subscriber related assets in 2004
which produced a material increase in consumer recurring revenues. These
acquisitions led primarily to the Company in 2004 growing from approximately
6,800 subscribers to approximately 30,000 subscribers. The Company's revenues
are expected to increase in 2005, even without further acquisitions, as the
Company will experience a full year's worth of revenues from these acquisitions
made in 2004.
<PAGE>

Cost of Products and Services

      The cost of products and services was $5,943,395 in 2004 compared to
$884,536 in 2003. The significant increase in costs of products and services
resulted from the revenue generated from acquisition of subscriber related
assets. The Company expects costs of products and services as a percentage of
revenue to remain stable in future perids due to the relative predictability of
the costs.

Selling, General and Administrative Expenses

      These expenses from continuing operations increased 125.08% to $5,960,050
in 2004, compared to $2,647,870 in 2003. The increase in expenses was directly
related to the Company's increase in revenues. Furthermore, the Company's
integration of various accounting, information technology and customer service
activities from its 2004 acquisitions produced material start up and additional
expense. Selling, general and administrative expenses were, as a percentage of
revenues, 53.85 % for 2004 and 183.73% for 2003. The Company expects these
expenses to decline as a percentage of revenues throughout 2005 as the
aforementioned integration expenses should be mitigated.

Interest Expense

      Interest expense was $1,055,488 for 2004 versus $488,156 for 2003,
reflecting an increase in debt related to acquisitions.

Net Loss

      The Company, in 2004, showed a net loss of $9,783,962, inclusive of the
loss from discontinued operations, which totaled $4,457,320. The Company's net
loss in 2003 totaled $4,365,004 which included a discontinued operations loss of
$692,956. Included in the loss from discontinued operations was an impairment of
goodwill of $2,748,879 for the year ended December 31, 2004 (see Note 1 to the
consolidated financial statements for further detail).

Years Ended December 31, 2003 and December 31, 2002

Results of Operations

      The following table sets forth certain items from the Company's
consolidated statements of operations expressed as a percentage of total
revenue.
<PAGE>

                                                           2003          2002
                                                         -------       -------
Revenues

Multiband                                                      0%            0%
MCS                                                        100.0%        100.0%
                                                         -------       -------
                             Total Revenues                100.0%        100.0%
                                                         =======       =======
Cost of Products and Services (exclusive of
  depreciation and amortization)

Multiband                                                      0%            0%
MCS                                                        61.38%        72.43%
                                                         -------       -------
Total Cost of Products and Services (exclusive
  of depreciation and amortization)                        61.38%        72.43%
                                                         =======       =======
Selling, General and Administrative
  expenses                                                183.73%       341.56%
Operating loss from continuing operations                (254.81%)     (770.04%)
Loss from discontinued operations                         (48.08%)       (1.17%)
Net Loss                                                 (302.89%)     (768.87%)


Revenues

      Total revenues increased 149.7% to $1,441,118 in 2003 from $577,221 in
2002.

      This increase is due to the expansion of MCS services to nineteen
apartment properties and eighteen timeshare properties.

Cost of Products and Services

      The cost of products and services was $884,536 in 2003 compared to
$418,093 in 2002. The increase is due to the expansion of MCS services to
nineteen apartment properties and eighteen timeshare properties.

Selling, General and Administrative Expenses

      Selling, general and administrative expenses increased 34.3% to
$2,647,870, compared to $1,971,584 in 2002. This increase in expenses is
primarily related to increased payroll and facility expense and costs incurred
for re-branding Vicom operating divisions as Multiband. Increased payroll
primarily resulted from acquisition related payroll expense and increase in
officer compensation in 2003. Selling, general and administrative expenses were,
as a percentage of revenues, 183.7% for 2003 and 341.5% for 2002.

Interest Expense

      Interest expense was $488,156 for 2003, versus $1,256,965 for 2002
reflecting a substantial decrease in Original Issue Discount expense associated
with long term debt and a significant decrease in cash interest expense
associated with notes payable.

Net Loss

      In 2003, the Company incurred a net loss of $4,365,004 compared to a net
loss of $4,438,059 for 2002.
<PAGE>

Unaudited Quarterly Results

      The following table sets forth certain unaudited quarterly operating
information for each of the eight quarters in the two-year period ending
December 31, 2004. This data includes, in the opinion of management, all normal
recurring adjustments necessary for the fair presentation of the information for
the periods presented when read in conjunction with the Company's consolidated
financial statements and related notes thereto. Results for any previous fiscal
quarter are not necessarily indicative of results for the full year or for any
future quarter. The Company has historically experienced a seasonal fluctuation
in its operating results, with a larger proportion of its revenues in the third
quarter of the fiscal year.

<TABLE>
<CAPTION>
----------------- ------------- ------------ ------------ ------------- ------------ ------------- ------------ -----------
                       Dec.31,    Sept. 30,    June 30,      March 31,     Dec. 31,    Sept. 30,   June 30,      March 31,
                         2004       2004         2004          2004          2003        2003       2003           2003
----------------- ------------- ------------ ------------ ------------- ------------ ------------- ------------ -----------
<S>                  <C>          <C>          <C>             <C>          <C>           <C>          <C>         <C>
Revenues:
----------------- ------------- ------------ ------------ ------------- ------------ ------------- ------------ -----------
Vicom                        0            0            0             0            0             0            0           0
----------------- ------------- ------------ ------------ ------------- ------------ ------------- ------------ -----------
MCS                  3,475,576    3,918,342    2,911,261       762,655      429,141       418,897      357,961     235,120
----------------- ------------- ------------ ------------ ------------- ------------ ------------- ------------ -----------
Total
Revenues             3,475,576    3,918,342    2,911,261       762,655      429,141       418,897      357,961     235,120
----------------- ------------- ------------ ------------ ------------- ------------ ------------- ------------ -----------
Cost of Products
and Services (exclu-
sive of depreciation
and amortization
listed separately
below)               1,889,980    1,952,631    1,712,280       410,962      290,391       238,336      202,065     153,647
----------------- ------------- ------------ ------------ ------------- ------------ ------------- ------------ -----------
SG&A Expense         2,148,570    1,845,547    1,137,780       828,153      931,304       592,868      649,768     474,136
----------------- ------------- ------------ ------------ ------------- ------------ ------------- ------------ -----------
Depreciation &
Amortization           881,826    1,048,031    1,150,677       352,245      295,131       279,812      263,330     227,379
----------------- ------------- ------------ ------------ ------------- ------------ ------------- ------------ -----------
Operating Loss     (1,444,800)    (927,867)  (1,089,476)     (828,705)  (1,087,685)     (692,119)    (757,202)   (620,042)
----------------- ------------- ------------ ------------ ------------- ------------ ------------- ------------ -----------
Interest Expense     (382,854)    (254,314)    (188,986)     (229,334)    (135.411)      (97,977)    (113,580)   (131,795)
----------------- ------------- ------------ ------------ ------------- ------------ ------------- ------------ -----------
Other Income
(Expenses)              13,403     (15,423)        6,851        14,863     (12,136)           323        5,548    (63,290)
----------------- ------------- ------------ ------------ ------------- ------------ ------------- ------------ -----------
Minority
Interest                                                                     38,170       (3,460)      (1,392)           0
----------------- ------------- ------------ ------------ ------------- ------------ ------------- ------------ -----------
Net Loss Before
Taxes              (1,814,251)  (1,197,604)  (1,271,611)   (1,043,176)  (1,197,062)     (793,233)    (866,626)   (815,127)
----------------- ------------- ------------ ------------ ------------- ------------ ------------- ------------ -----------
Income Tax
(Benefit)
Provision                    0            0            0             0            0             0            0           0
----------------- ------------- ------------ ------------ ------------- ------------ ------------- ------------ -----------
Income (loss)
from continuing
operations         (1,814,251)  (1,197,604)  (1,271,611)   (1,043,176)  (1,197,062)     (793,233)    (866,626)   (815,127)
----------------- ------------- ------------ ------------ ------------- ------------ ------------- ------------ -----------
Discontinued
Operations         (3,149,780)    (653,989)    (179,863)     (473,688)    (434,537)      (39,389)     (68,038)   (150,992)
----------------- ------------- ------------ ------------ ------------- ------------ ------------- ------------ -----------
Net Loss           (4,964,031)  (1,851,593)  (1,451,474)   (1,516,864)  (1,631,599)     (832,622)    (934,664)   (966,119)
----------------- ------------- ------------ ------------ ------------- ------------ ------------- ------------ -----------
Net Loss Per
Common Share
Basic and Diluted        (.20)        (.07)        (.06)         (.08)        (.09)         (.05)        (.06)       (.07)
----------------- ------------- ------------ ------------ ------------- ------------ ------------- ------------ -----------
</TABLE>
<PAGE>

Liquidity and Capital Resources

Year Ended December 31, 2004

Available working capital for 2004 decreased to $8,931,414 primarily due to
acquisition related debt load. Accounts receivable increased by $ 1,125,668 in
2004 due to a significant increase in consumer revenues. Current liabilities
increased in 2004 $8,298,728 due primarily to higher accounts payable and
accrued liabilities directly related to the increase in consumer revenues. In
addition, current maturities of long-term debt increased $500,000 and short-term
debt increased $4.5 million as of December 31, 2004 versus December 31, 2003 due
to the short-term debt issued related to the 2004 acquisitions. Inventories
decreased by $135,024 due to the Company's need to carry less inventory in its
consumer services division versus its discontinued business services division.

Total long term debt and capital lease obligations increased by $1,717,015
during the year ended December 31, 2004. Multiband paid out $74,902 related to
capital lease obligations and $345,578 related to long term debt during the year
ended December 31, 2004 versus $276,069 paid out in 2003.

The Company used $748,704 for capital expenditures during 2004, as compared to
$526,936 in 2003. This increase was related to additional purchases required as
a result of the business acquisitions made during 2004. Capital expenditures in
2005 are expected to be consistent with those in 2004.

In November 2004, the Company borrowed $2,166,667 from a group of accredited
institutional investors. The notes are convertible into shares of common stock
at $1.00 per share. The notes accrue interest at the rate of 6% per annum, which
interest is payable semi-annual in cash or common stock at the Company's
election.

Net cash used by operations in 2004 was $2,289,645 as compared to cash used by
operations in 2003 of $2,580,248. This reduction reflects improved performance
from operations, exclusive of non cash expenses. During the years ended December
31, 2004 and December 31, 2003, the Company incurred significant net losses.
Although the majority of those losses were due to non-cash expenses, the Company
in 2004 still continued to incur cash losses as well due to general corporate
expense. However, those cash losses decreased significantly in 2004 versus 2003
by the on-going additions of MCS properties in the Company's portfolio which
provided improved cash flows.

      The Company, as is common in the cable and telecommunications industries,
uses earnings before interest, taxes, depreciation, and amortization ("EBITDA")
as a measure of performance to demonstrate earnings exclusive of interest and
non-cash events. The Company manages its business based on its cash flows. The
majority of the Company's non-cash expense results from amortization of
intangible right of entry agreement assets obtained through acquisition. The
Company, in its daily management of its business affairs and analysis of its
monthly, quarterly and annual performance, makes its decisions based on cash
flows; not on the amortization of the aforementioned assets obtained through
historical activities. The Company, in managing its current and future affairs,
cannot affect the amortization of the intangible assets to any material degree,
and therefore uses EBITDA as its primary management guide. Since an outside
investor may base its evaluation of the Company's performance based on the
Company's net income not its cash flows, there is a limitation to the EBITDA
measurement. EBITDA is not, and should not be considered an alternative to net
income, income from operations, or any other measure for determining operating
performance or liquidity, as determined under accounting principals generally
accepted in the United States.

The most directly comparable GAAP reference in the Company's case is the removal
of interest, depreciation, amortization and other non cash charges. The
following table reconciles Company EBITDA to our consolidated net loss as
computed under GAAP.

<PAGE>

<TABLE>
<CAPTION>
                                          Three Months Ended December 31,    Twelve Months Ended December 31,
                                               2004             2003             2004             2003
                                           -----------      -----------      -----------      -----------
<S>                                        <C>              <C>              <C>              <C>
EBITDA                                     $  (549,569)     $  (792,446)     $  (838,373)     $(2,091,288)
Interest Expense, other                       (102,203)          23,862         (211,669)         (69,133)
Depreciation and Amortization                 (881,828)        (295,129)      (3,432,779)      (1,065,652)
Loss from discontinued operations           (3,149,780)        (434,537)      (4,457,320)        (692,956)
Other Non Cash Expense associated with
common stock issuance                         (280,651)        (133,349)        (843,818)        (445,975)
                                           -----------      -----------      -----------      -----------

Net Loss                                   $(4,964,031)     $(1,631,599)     $(9,783,962)     $(4,365,004)
                                           ===========      ===========      ===========      ===========
</TABLE>

In February 2005, the Company sold ten million dollars worth of Class I
convertible preferred stock. With this investment and the Company's anticipated
EBITDA for 2005 based on 2004 trends, Multiband management believes that it can
meet the anticipated liquidity and capital resource requirements of its business
in 2005.

Year Ended December 31, 2003

      Available working capital for 2003 increased $1,371,662 primarily to a
stronger cash position due to investing activities. Multiband successfully
completed an offering of institutional financing in the second half of 2003
raising net proceeds of $2,223,150. Multiband had a decrease of $289,890 in
accounts receivable as a result of a reduction in sales. Current liabilities
increased in 2003 by $1,373,968 as a result of higher current portion of long
term debt and accrued liabilities. Inventories increased by $509,762 primarily
due to a planned expansion to provide wireless intranet service.

      Total long term debt and capital lease obligation decreased by $1,010,459
during the year ended December 31, 2003. Multiband paid out $75,301 related to
capital lease obligations and $200,768 related to long term debt during the year
ended December 31, 2003 versus $1,069,433 paid out in 2002.

      The Company used $526,936 for capital expenditures during 2003, as
compared to $1,275,434 in 2002. The decrease was primarily attributed to a
reduction in self-financed MCS construction. In 2004 capital expenditures are
expected to be limited to the Company's internal information technology
infrastructure and are expected to be less than 2003 expenditures.

      In 2003, the Company reached an agreement to convert the remaining
$962,000 of a Note Payable to equity. Terms of the conversion state the note
will be converted to equity over a 14 month period at a price generally
equivalent to a 10% discount to market price.

      In November of 2003, the Company borrowed $1,500,000 and issued a
three-year warrant to the lender to purchase 535,000 common shares at $2.21 per
share through November 2006. The debt is also convertible into common stock of
the Company at a conversion rate of $1.40 per share through November 2006.

      On June 30, 2003, the Company borrowed $124,000 as an unsecured note from
a stockholder of the Company, with monthly payments of $5,600 at an interest
rate of 7.85%.

      Net cash used by operations in 2003 was $2,580,248 as compared to cash
used by operations in 2002 of $869,721. The cash used by operations in 2003 is
due primarily to net operating losses and a reduction in the wholesale line of
credit. During the years ended December 31, 2003, and December 31, 2002, the
Company incurred significant net losses. Although the majority of these losses
were due to non-cash expenses, The Company still continued to incur cash losses
as well due to general corporate expense. The on-going addition of MCS
properties in the Company's portfolio provided additional cash flows in 2003 and
those cash flows are projected to improve in 2004 with additional expansions.
Management of Multiband believes that, for the near future, cash generated from
new investments combined with existing credit facilities are adequate to meet
the anticipated liquidity in capital resource requirements of its business,
contingent upon Company operating results for the next twelve months.

Critical Accounting Policies

Impairment of Long-Lived Assets

The Company's long-lived assets include property, equipment and leasehold
improvement. At December 31, 2004, the Company had net property and equipment of
$4,372,474 , which represents approximately 16% 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. In 2004 and 2003, the Company did not record any impairment. In 2002
the Company recorded impairment of $119,480 on property, plant and equipment.

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,
which amounts to $812,366, as of December 31, 2004, may be impaired. Any
resulting impairment loss could have a material adverse impact on our financial
condition and results of operations. In 2004, the Company recorded an impairment
charge of $527,879 related to Multiband Business Services. In 2004, the Company
wrote off $2,221,000 worth of goodwill from discontinued operations. During the
years ended December 31, 2003 and 2002 , the Company did not record any
impairment losses related to goodwill.

Inventories

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

Recent Accounting Pronouncements

In November 2004, FASB issued SFAS No. 151 "Inventory Costs" which amends the
guidance in ARB No. 43, Chapter 4 "Inventory Pricing," to clarify the accounting
for abnormal amounts of idle facility expense, freight, handling costs, and
wasted material (spoilage). Paragraph 5 of ARB 43, Chapter 4, previously stated
that under some circumstances, items such as idle facility expense, excessive
spoilage, double freight, and rehandling costs may be so abnormal as to require
treatment as current period charges. SFAS No. 151 requires that those items be
recognized as current-period charges regardless of whether they meet the
criterion of "so abnormal." In addition, SFAS No, 151 requires that allocation
of fixed production overheads to the costs of conversion be based on the normal
capacity of the production facilities. SFAS No. 151 shall be effective for
inventory costs incurred during fiscal years beginning after June 15, 2005.
Earlier application is permitted for inventory costs incurred during fiscal
years beginning after the date SFAS No. 151 was issued. SFAS No. 151 shall be
applied prospectively. The Company does not expect the adoption of SFAS No. 151
to have a material effect on its consolidated financial statements.

In December 2004, FASB issued SFAS No. 153 "Exchanges of Nonmonetary Assets"
which amends APB Opinion No. 29, "Accounting for Nonmonetary Transactions." APB
No. 29 is based on the principle that exchanges of nonmonetary assets should be
measured based on the fair value of the assets exchanged. The guidance in that
Opinion, however, included certain exceptions to that principle. SFAS No. 153
amends APB No. 29 to eliminate the exception for nonmonetary exchanges of
similar productive assets and replaces it with a general exception for exchanges
of nonmonetary assets that do not have commercial substance. A nonmonetary
exchange has commercial substance if the future cash flows of the entity are
expected to change significantly as a result of the exchange. SFAS No. 153 shall
be effective for nonmonetary asset exchanges occurring in fiscal periods
beginning after June 15, 2005. Earlier application is permitted for nonmonetary
asset exchanges occurring in fiscal periods beginning after the date SFAS No.
153 was issued. SFAS No. 153 shall be applied prospectively. The Company does
not expect the adoption of SFAS No. 153 to have a material effect on its
consolidated financial statements.

In December 2004, FASB issued SFAS No. 123 (revised 2004), "Share-Based
Payment", that focuses primarily on accounting for transactions in which an
entity obtains employee services in share-based payment transactions. This
statement replaces SFAS No. 123, "Accounting for Stock-Based Compensation", and
supersedes APB Opinion No. 25, "Accounting for Stock Issued to Employees."
Beginning with the quarterly period that begins July 1, 2006, the Company will
be required to expense the fair value of employee stock options and similar
awards. As a public company, the Company is allowed to select from two
alternative transition methods, each having different reporting implications.
The impact of SFAS No. 123R for the year ending December 31, 2006 is estimated
to range from approximately $150,000 and $200,000 based on the value of the
options outstanding as of December 31, 2004 that will vest during the third and
fourth quarters of 2006. This estimate does not include any expenses for options
that may be granted and vested during 2005.

In December 2003, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation No. 46 (Revised December 2003), "Consolidation of Variable
Interest Entities, an Interpretation of ARB No. 51" (FIN 46R). This standard
replaces FIN 46, Consolidation of Variable Interest Entities" that was issued in
January 2003. FIN 46R modifies or clarifies various provisions of FIN 46. FIN
46R addresses the consolidation of business enterprises of variable interest
entities (VIEs), as defined by FIN 46R. FIN 46R exempts certain entities from
its requirements and provides for special effective dates for entities that have
fully or partially applied FIN 46 prior to issuance of FIN 46R. Otherwise,
application of FIN 46R is required in financial statements of public entities
that have interest in structures commonly referred to as special purpose
entities for periods ending after December 15, 2003. Application by the Company
for all other types of VIEs is required in financial statements for periods
ending no later than the quarter ended January 31, 2005. The adoption of FIN 46R
did not have a material effect on the Company's consolidated financial
statements.

Disclosures about Contractual Obligations and Commercial Commitments

      The following summarizes our contractual obligations at December 31, 2004,
and the effect these contractual obligations are expected to have on our
liquidity and cash flows in future periods (in thousands):

<TABLE>
<CAPTION>
                                Total      1 Year or Less     1-3 Years      Over 3 Years
                             -----------     -----------     -----------     -----------
<S>                          <C>             <C>             <C>             <C>
Operating Leases             $ 6,684,000     $   530,000     $ 1,644,000     $ 4,510,000
Capital Leases                   778,640         247,531         508,841          22,268
Long Term Debt                 6,532,081       1,524,527       4,881,391         126,163
Wholesale Line of Credit         926,201         926,201              --              --
Short Term Debt                4,481,099       4,481,099              --              --
Note Payable Stockholder          84,801          84,801              --              --
                             -----------     -----------     -----------     -----------

Total                        $19,486,822     $ 7,794,159     $ 7,034,232     $ 4,658,431
                             ===========     ===========     ===========     ===========
</TABLE>

Forward Looking Statements

      From time to time, the Company may publish forward-looking statements
relating to such matters as anticipated financial performance, business
prospects, 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 document. 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 other
expectations expressed in the 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 the IT and
telecommunications industry; stability of foreign governments; market acceptance
of 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 investors
should not use historical trends to anticipate future period results.
<PAGE>

Item 7A

Quantitative and Qualitative 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 note payable to the Sellers of Rainbow Satellite Group, LLC, which
is at prime.

Item 8.

Consolidated Financial Statements and Supplementary Data
<PAGE>

                     MULTIBAND CORPORATION AND SUBSIDIARIES
                    FKA: VICOM, INCORPORATED AND SUBSIDIARIES

                                TABLE OF CONTENTS

--------------------------------------------------------------------------------

Report of Independent Registered Public Accounting Firm             1

Financial Statements

    Consolidated Balance Sheets                                     2

    Consolidated Statements of Operations                           3

    Consolidated Statements of Stockholders' Equity                4 - 12

    Consolidated Statements of Cash Flows                          13

    Notes to Consolidated Financial Statements                     14 - 39

Supplemental Information

    Report of Independent Registered Public Accounting Firm on
      Supplementary Information                                    40

    Valuation and Qualifying Accounts                              41
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To Stockholders, Board of Directors, and Audit Committee
Multiband  Corporation and subsidiaries  (formerly known as Vicom,  Incorporated
and subsidiaries)

We have audited the accompanying consolidated balance sheets of Multiband
Corporation and subsidiaries (formerly known as Vicom, Incorporated and
subsidiaries) as of December 31, 2004 and 2003, and the related consolidated
statements of operations, stockholders' equity and cash flows for each of the
three years in the period ended December 31, 2004. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Multiband Corporation and subsidiaries (formerly known as: Vicom, Incorporated
and subsidiaries) as of December 31, 2004 and 2003, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2004, in conformity with accounting principles generally accepted
in the United States of America.


                                              /s/ VIRCHOW, KRAUSE & COMPANY, LLP

Minneapolis, Minnesota
March 8, 2005 (except as to Note 16, as to which the date is April 8, 2005).
<PAGE>

                     MULTIBAND CORPORATION AND SUBSIDIARIES
                   (FKA: VICOM, INCORPORATED AND SUBSIDIARIES)

                           CONSOLIDATED BALANCE SHEETS
                           December 31, 2004 and 2003

<TABLE>
<CAPTION>
                                                                                    2004              2003
                                                                                ------------      ------------
<S>                                                                             <C>               <C>
                                     ASSETS

CURRENT ASSETS
    Cash and cash equivalents                                                   $    726,553      $  2,945,960
    Certificate of deposit                                                           650,000           250,000
    Accounts receivable, net                                                       2,783,774         1,658,114
    Inventories, net                                                                 231,993           367,017
    Current assets of discontinued operations                                        634,307         1,606,800
    Other current assets                                                             146,334            96,550
                                                                                ------------      ------------
        Total Current Assets                                                       5,172,961         6,924,441
                                                                                ------------      ------------

PROPERTY AND EQUIPMENT, NET                                                        4,372,474         3,538,415
                                                                                ------------      ------------

OTHER ASSETS
    Goodwill                                                                         812,366                 0
    Intangible assets, net                                                        16,081,635           503,625
    Other assets of discontinued operations                                           47,975         2,800,168
    Other assets                                                                     146,301           136,236
                                                                                ------------      ------------

        Total Other Assets                                                        17,088,277         3,440,029
                                                                                ------------      ------------

           TOTAL ASSETS                                                         $ 26,633,712      $ 13,902,885
                                                                                ============      ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Checks issued in excess of cash in bank                                     $    234,348      $    147,398
    Short-term debt                                                                4,481,099                 0
    Wholesale line of credit                                                         926,201           976,314
    Current portion of long-term debt                                              1,524,527           998,813
    Current portion of note payable - stockholder                                     84,801            81,554
    Current portion of capital lease obligations                                     201,530            54,939
    Accounts payable                                                               2,561,611         1,771,699
    Accrued liabilities                                                            3,030,024         1,308,838
    Contingent liability                                                             222,700                 0
    Customer deposits                                                                 59,875                 0
    Current liabilities of discontinued operations                                   370,921           421,275
    Deferred service obligations and revenue                                         406,738            44,819
                                                                                ------------      ------------
        Total Current Liabilities                                                 14,104,375         5,805,649

LONG-TERM LIABILITIES
    Long-term debt, net                                                            3,498,657         2,087,156
    Note payable - stockholder, net of current portion                                    --            32,837
    Capital lease obligations, net of current portion                                481,249           142,898
                                                                                ------------      ------------

        Total Liabilities                                                         18,084,281         8,068,540
                                                                                ------------      ------------

MINORITY INTEREST IN SUBSIDIARY                                                           --            26,634
                                                                                ------------      ------------
STOCKHOLDERS' EQUITY
    Cumulative convertible preferred stock, no par value:
        8% Class A ( 27,931 and 27,931  shares issued and outstanding,               419,752           419,752
         $293,276 and $293,276 liquidation preference)
        10% Class B (8,700 and 8,700  shares issued and outstanding,                  62,000            62,000
         $91,350 and $91,350 liquidation preference)
        10% Class C (125,400 and 125,400 shares issued and outstanding,            1,611,105         1,611,105
         $1,254,000 and  $1,254,000 liquidation preference)
        15% Class E (0 and 77,650  shares issued and outstanding, $0 and                   0           438,964
         $776,500 liquidation preference)
        10% Class F (150,000 and 0 shares issues and outstanding,                  1,500,000                 0
         $1,500,000 and $0 liquidation preference)
        8% Class G (45,245 and 0 shares issued and outstanding, $452,450             179,897                 0
         and  $0 liquidation preference)
        6% Class H (11.5 and 0 shares issued and outstanding, $1,150,000                   0                 0
         and $0 liquidation preference)
    Common stock, no par value (25,784,490 and 19,036,805  shares issued;         16,888,291         7,726,505
        25,781,818 and 19,019,786 shares outstanding)
    Stock subscriptions receivable                                                  (391,264)         (418,085)
    Options and warrants                                                          32,985,983        30,514,872
    Unamortized compensation                                                          (1,724)         (217,210)
    Accumulated deficit                                                          (44,704,609)      (34,330,192)
                                                                                ------------      ------------

           Total Stockholders' Equity                                              8,549,431         5,807,711
                                                                                ------------      ------------

               TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                       $ 26,633,712      $ 13,902,885
                                                                                ============      ============
</TABLE>

          See accompanying notes to consolidated financial statements.
<PAGE>

                     MULTIBAND CORPORATION AND SUBSIDIARIES
                   (FKA: VICOM, INCORPORATED AND SUBSIDIARIES)
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  Years Ended December 31, 2004, 2003 and 2002

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                               2004              2003              2002
                                                           ------------      ------------      ------------
<S>                                                        <C>               <C>               <C>
REVENUES                                                   $ 11,067,834      $  1,441,118      $    577,221
                                                           ------------      ------------      ------------

COST AND EXPENSES
    Cost of products and services (exclusive
     of depreciation and amortization shown
     separately below)                                        5,943,395           884,536           418,093
    Selling, general and administrative                       5,960,050         2,647,870         1,971,584
     Depreciation and amortization                            3,432,779         1,065,650         1,193,306
                                                           ------------      ------------      ------------

        Total costs and expenses                             15,336,224         4,598,056         3,582,983
                                                           ------------      ------------      ------------

LOSS FROM OPERATIONS                                         (4,268,390)       (3,156,938)       (3,005,762)
                                                           ------------      ------------      ------------

OTHER INCOME (EXPENSE)
    Interest expense                                         (1,055,488)         (488,156)       (1,256,965)
    Interest income                                               8,805            10,406            52,174
    Loss on sale of assets                                      (26,217)                0                 0
    Other income                                                 14,648           (70,726)         (234,278)
                                                           ------------      ------------      ------------

        Total Other Expense                                  (1,058,252)         (548,476)       (1,439,069)
                                                           ------------      ------------      ------------
LOSS BEFORE MINORITY INTEREST IN SUBSIDIARY                  (5,326,642)       (3,705,414)       (4,444,831)

    Minority interest in subsidiary                                   0            33,366                 0
                                                           ------------      ------------      ------------

LOSS FROM CONTINUING OPERATIONS                              (5,326,642)       (3,672,048)       (4,444,831)

LOSS FROM DISCONTINUED OPERATIONS                            (4,457,320)         (692,956)            6,772
                                                           ------------      ------------      ------------

NET LOSS                                                     (9,783,962)       (4,365,004)       (4,438,059)

    Preferred stock dividends                                   590,455           248,689           153,578
                                                           ------------      ------------      ------------

LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS                   $(10,374,417)     $ (4,613,693)     $ (4,591,637)
                                                           ============      ============      ============
BASIC AND DILUTED LOSS PER COMMON SHARE:
    LOSS FROM CONTINUING OPERATIONS                        $       (.23)     $       (.23)     $       (.38)
                                                           ============      ============      ============

    LOSS FROM DISCONTINUED OPERATIONS                      $       (.19)     $       (.04)     $       (.00)
                                                           ============      ============      ============

    NET LOSS                                               $       (.42)     $       (.27)     $       (.38)
                                                           ============      ============      ============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING -
    BASIC AND DILUTED                                        23,307,594        16,112,231        11,735,095
                                                           ============      ============      ============
</TABLE>

          See accompanying notes to consolidated financial statements.
<PAGE>

                      MULTIBAND COPORATION AND SUSIDIARIES
                   (FKA: VICOM, INCORPORATED AND SUBSIDIARIES)
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS'STOCKHOLDERS' EQUITY Years
                  Ended December 31, 2004, 2003, and 2002

<TABLE>
<CAPTION>
                                                                 Cumulative Convertible Preferred Stock

                                                      8% Class A             10% Class B            10% Class C
                                                ---------------------- ---------------------- ----------------------
                                                  Shares     Amount     Shares      Amount     Shares       Amount
                                                ---------- ---------- ----------  ---------- ----------  -----------
<S>                                                 <C>      <C>           <C>       <C>        <C>       <C>
BALANCES, December 31, 2001                         28,872   $433,867      8,700     $87,000    139,510   $1,800,447
 Stock issued:
    Cash                                                -          -          -           -          -             -
    Reduction of stock subscriptions                    -          -          -           -          -             -
       receivable for fees related to equity
       transactions
    Acquisition of assets                            1,859     18,590         -           -          -             -
    Guarantee of debt financing                         -          -          -           -          -             -
    Services rendered                                   -          -          -           -          -             -
    Conversion of accounts payable                      -          -          -           -          -             -
    Conversion of notes payable and accrued
      interest                                          -          -          -           -          -             -
    Conversion of accrued interest                      -          -          -           -          -             -
    Conversion of preferred stock                       -          -     (2,500)    (25,000)    (2,500)     (25,000)
 Redemption of preferred stock                     (2,900)   (29,000)         -           -     (5,500)     (55,000)
 Discount on preferred stock related to
   warrants issued                                      -     (5,205)         -           -          -      (21,040)
 Interest receivable on stock subscription              -          -          -           -          -             -
   receivable
 Warrants issued:
    Preferred stock                                     -          -          -           -          -             -
    Common stock                                        -          -          -           -          -             -
    Debt                                                -          -          -           -          -             -
 Deferred compensation expense related to
  stock options issued below fair market value          -          -          -           -          -             -
 Deferred compensation expense                          -          -          -           -          -             -
 Restricted stock:
    Issued and outstanding                              -          -          -           -          -             -
    Forfeited                                           -          -          -           -          -             -
    Amortization expense                                -          -          -           -          -             -
 Embedded value with Pyramid Trading warrants           -          -          -           -          -             -
 Preferred stock dividends                              -          -          -           -          -             -
 Net loss                                               -          -          -           -          -             -
                                                ---------- ---------- ----------  ---------- ----------  -----------

BALANCES, December 31, 2002                         27,831    418,252      6,200      62,000    131,510    1,699,407
 Stock issued:
    Cash                                               100      1,000      2,500      25,000         -             -
    Exercise of warrants                                -          -          -           -          -             -
    Cashless exercise of warrants                       -          -          -           -          -             -
    Exercise of stock options                           -          -          -           -          -             -
    Reduction of stock subscriptions                    -          -          -           -          -             -
       receivable for fees related to equity
       transactions
    Acquisition of assets                               -          -          -           -          -             -
    Conversion of accounts payable                      -          -          -           -       7,200       72,000
    Conversion of notes payable                         -          -          -           -          -             -
    Conversion of accrued interest                      -          -          -           -          -             -
    Conversion of preferred stock                       -          -          -           -     (4,000)     (40,000)
    Conversion of dividends payable                     -          -          -           -          -             -
 Redemption of preferred stock                          -          -          -           -     (9,310)     (93,100)
 Intrinsic value of convertible feature                 -         500         -           -          -      (27,202)
 Discount on preferred stock related to
   warrants issued                                      -          -          -     (25,000)         -             -
 Stock subscriptions receivable:
    Cash payments                                       -          -          -           -          -             -
    Increase reserve                                    -          -          -           -          -             -
    Interest collected                                  -          -          -           -          -             -
 Warrants issued:
    Preferred stock                                     -          -          -           -          -             -
    Common stock                                        -          -          -           -          -             -
    Debt                                                -          -          -           -          -             -
    Services rendered                                   -          -          -           -          -             -
 Deferred compensation expense related to
   stock options issued below fair market value         -          -          -           -          -             -
 Deferred compensation expense                          -          -          -           -          -             -
 Restricted stock:
    Forfeited                                           -          -          -           -          -             -
    Amortization expense                                -          -          -           -          -             -
 Embedded value with Laurus warrants                    -          -          -           -          -             -
 Preferred stock dividends                              -          -          -           -          -             -
 Net loss                                               -          -          -           -          -             -
                                                ---------- ---------- ----------  ---------- ----------  -----------

BALANCES, December 31, 2003                         27,931    419,752      8,700      62,000    125,400    1,611,105

 Stock issued:
    Cash                                                -          -           -          -           -          -
    Exercise of warrants                                -          -           -          -           -          -
    Cashless exercise of warrants                       -          -           -          -           -          -
    Reduction of stock subscriptions                    -          -           -          -           -          -
       receivable for fees related to equity
       transactions
    Acquisition of assets - remaining 50%               -          -           -          -           -          -
       ownership of MBUSA
    Acquisition of assets - URON, Inc.                  -          -           -          -           -          -
    Acquisition of assets - Satellite
       Broadcasting Corporation and affiliates          -          -           -          -           -          -
    Acquisition of assets - Minnesota Digital           -          -           -          -           -          -
       Universe, Inc.
    Acquisition of assets - Rainbow Satellite           -          -           -          -           -          -
       Group, LLC.
    Acquisition of assets  - 21st Century               -          -           -          -           -          -
       Satellite Communications
    Property and equipment                              -          -           -          -           -          -
    Conversion of notes payable                         -          -           -          -           -          -
    Conversion of accrued interest                      -          -           -          -           -          -

 Conversion of preferred stock                          -          -           -                      -          -
    Conversion of dividends payable                     -          -           -          -           -          -
    In lieu of cash for services                        -          -           -          -           -          -
    In lieu of cash for other current assets            -          -           -          -           -          -
 Stock repurchase                                       -          -           -          -           -          -
 Conversion of preferred stock into note
   payable                                              -          -           -          -           -          -
 Intrinsic value of convertible feature
 Discount on preferred stock related to                 -          -           -          -           -          -
    warrants issued
 Stock subscriptions receivable:                        -          -           -          -           -          -
    Cash payments                                       -          -           -          -           -          -
    Interest collected                                  -          -           -          -           -          -
 Warrants issued for debt modification                  -          -           -          -           -          -
 Deferred compensation expense related to               -          -           -          -           -          -
    stock options issued below fair market
    value
 Deferred compensation expense                          -          -           -          -           -          -
 Restricted stock:
    Forfeited                                           -          -           -          -           -          -
    Amortization expense                                -          -           -          -           -          -
 Preferred stock dividends                              -          -           -          -           -          -
 Net loss                                               -          -           -          -           -          -
                                                ---------- ----------  ---------- ----------  ---------- ----------

BALANCES, December 31, 2004                         27,931 $  419,752       8,700 $   62,000     125,400 $1,611,105
                                                ========== ==========  ========== ==========  ========== ==========
<CAPTION>
                                                 Cumulative Convertible Preferred Stock

                                                      14% Class D            15% Class E
                                                ---------------------- -----------------
                                                  Shares     Amount      Shares     Amount
                                                ---------- ----------  ---------- --------
<S>                                                 <C>       <C>         <C>      <C>
BALANCES, December 31, 2001                         40,000    $417,500         -          -
 Stock issued:
    Cash                                                -           -      10,000    100,000
    Reduction of stock subscriptions                    -           -          -          -
       receivable for fees related to equity
       transactions
    Acquisition of assets                               -           -          -          -
    Guarantee of debt financing                         -           -          -          -
    Services rendered                                   -           -          -          -
    Conversion of accounts payable                      -           -          -          -
    Conversion of notes payable and accrued
      interest                                    (30,000)   (300,000)     60,000    600,000
    Conversion of accrued interest                      -           -          -          -
    Conversion of preferred stock                 (10,000)   (100,000)         -          -
 Redemption of preferred stock                          -           -          -          -
 Discount on preferred stock related to
   warrants issued                                      -     (17,500)         -   (304,222)
 Interest receivable on stock subscription              -           -          -          -
   receivable
 Warrants issued:
    Preferred stock                                     -           -          -          -
    Common stock                                        -           -          -          -
    Debt                                                -           -          -          -
 Deferred compensation expense related to
   stock options issued below fair market value         -           -          -          -
 Deferred compensation expense                          -           -          -          -
 Restricted stock:
    Issued and outstanding                              -           -          -          -
    Forfeited                                           -           -          -          -
    Amortization expense                                -           -          -          -
 Embedded value with Pyramid Trading warrants           -           -          -          -
 Preferred stock dividends                              -           -          -          -
 Net loss                                               -           -          -          -
                                                ----------  ---------- ---------- ---------

BALANCES, December 31, 2002                             0           0      70,000    395,778
 Stock issued:
    Cash                                                -           -          -          -
    Exercise of warrants                                -           -          -          -
    Cashless exercise of warrants                       -           -          -          -
    Exercise of stock options                           -           -          -          -
    Reduction of stock subscriptions                    -           -          -          -
       receivable for fees related to equity
       transactions
    Acquisition of assets                               -           -       7,650     76,500
    Conversion of accounts payable                      -           -          -          -
    Conversion of notes payable                         -           -          -          -
    Conversion of accrued interest                      -           -          -          -
    Conversion of preferred stock                       -           -          -          -
    Conversion of dividends payable                     -           -          -          -
 Redemption of preferred stock                          -           -          -          -
 Intrinsic value of convertible feature                 -           -          -          -
 Discount on preferred stock related to
   warrants issued                                      -           -          -    (33,314)
 Stock subscriptions receivable:
    Cash payments                                       -           -          -          -
    Increase reserve                                    -           -          -          -
    Interest collected                                  -           -          -          -
 Warrants issued:
    Preferred stock                                     -           -          -          -
    Common stock                                        -           -          -          -
    Debt                                                -           -          -          -
    Services rendered                                   -           -          -          -
 Deferred compensation expense related to
   stock options issued below fair market value         -           -          -          -
 Deferred compensation expense                          -           -          -          -
 Restricted stock:
    Forfeited                                           -           -          -          -
    Amortization expense                                -           -          -          -
 Embedded value with Laurus warrants                    -           -          -          -
 Preferred stock dividends                              -           -          -          -
 Net loss                                               -           -          -          -
                                                ----------  ---------- ---------- ---------

BALANCES, December 31, 2003                             0           0      77,650    438,964

 Stock issued:                                          -           -          -           -
    Cash
    Exercise of warrants                                -           -          -           -
    Cashless exercise of warrants                       -           -          -           -
    Reduction of stock subscriptions                    -           -          -           -
       receivable for fees related to equity
       transactions                                     -           -          -           -
    Acquisition of assets - remaining 50%               -           -          -           -
       ownership of MBUSA
    Acquisition of assets - URON, Inc.                  -           -          -           -
    Acquisition of assets - Satellite
       Broadcasting Corporation and affiliates          -           -          -           -
    Acquisition of assets - Minnesota Digital           -           -          -           -
       Universe, Inc.
    Acquisition of assets - Rainbow Satellite           -           -          -           -
       Group, LLC.
    Acquisition of assets  - 21st Century                -           -          -           -
       Satellite Communications
    Property and equipment                               -           -          -           -
    Conversion of notes payable
    Conversion of accrued interest                      -           -          -           -
    Conversion of preferred stock                       -           -     (77,650)  (438,964)
    Conversion of dividends payable                     -           -          -           -
    In lieu of cash for services                        -           -          -           -
    In lieu of cash for other current assets            -           -          -           -
 Stock repurchase                                       -           -          -           -
 Conversion of preferred stock into note
   payable                                              -           -          -           -
 Intrinsic value of convertible feature
 Discount on preferred stock related to                 -           -          -           -
    warrants issued
 Stock subscriptions receivable:                        -           -          -           -
    Cash payments                                       -           -          -           -
    Interest collected                                  -           -          -           -
 Warrants issued for debt modification                  -           -          -           -
 Deferred compensation expense related to               -           -          -           -
    stock options issued below fair market
    value
 Deferred compensation expense                          -           -          -           -
 Restricted stock:                                                             -           -
    Forfeited                                           -           -          -           -
    Amortization expense                                -           -          -           -
 Preferred stock dividends                              -           -          -           -
 Net loss                                               -           -          -           -
                                                ----------  ---------- ----------  ---------

BALANCES, December 31, 2004                              0  $        0          0  $       0
                                                ==========  ========== ==========  =========
</TABLE>

          See accompanying notes to consolidated financial statements.
<PAGE>

                     MULTIBAND CORPORATION AND SUBSIDIARIES
                   (FKA: VICOM, INCORPORATED AND SUBSIDIARIES)
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS'STOCKHOLDERS' EQUITY Years
                  Ended December 31, 2004, 2003, and 2002

<TABLE>
<CAPTION>
                                                                    Cumulative Convertible Preferred Stock

                                                        10% Class F               8% Class G                 6% Class H
                                                   Shares        Amount        Shares      Amount        Shares
Amount
                                                -----------   -----------   -----------  -----------   -----------
-----------
<S>                                             <C>           <C>           <C>          <C>           <C>          <C>
BALANCES, December 31, 2001                              --   $        --            --  $        --            --
$      --
 Stock issued:
   Cash                                                  --            --            --           --
--           --
   Reduction of stock subscriptions receivable
      for fees related to equity transactions            --            --            --           --
--           --
   Acquisition of assets                                 --            --            --           --
   Guarantee of debt financing                           --            --            --           --
--           --
   Services rendered                                     --            --            --           --
--           --
   Conversion of accounts payable                        --            --            --           --
--           --
   Conversion of notes payable and accrued
     interest                                            --            --            --           --
--           --
   Conversion of accrued interest                        --            --            --           --
--           --
   Conversion of preferred stock                         --            --
Redemption of preferred stock                            --            --
Discount on preferred stock related to
warrants issued                                          --            --            --           --
Interest receivable on stock subscription
  receivable                                             --            --            --           --
--           --
Warrants issued:
   Preferred stock                                       --            --            --           --
--           --
   Common stock                                          --            --            --           --
--           --
    Debt                                                 --            --            --           --
--           --
 Deferred compensation expense related to
  stock options issued below fair market value           --            --            --           --
--           --
 Deferred compensation expense                           --            --            --           --
--           --
 Restricted stock:
    Issued and outstanding                               --            --            --           --
--           --
    Forfeited                                            --            --            --           --
--           --
    Amortization expense                                 --            --            --           --
--           --
 Embedded value with Pyramid Trading warrants            --            --            --           --
--           --
 Preferred stock dividends                               --            --            --           --
--           --
 Net loss                                                --            --            --           --
--           --
                                                -----------   -----------   -----------  -----------   -----------
-----------


BALANCES, December 31, 2002                               0             0             0            0
0            0
 Stock issued:
    Cash                                                 --            --
    Exercise of warrants                                 --            --            --           --
--           --
    Cashless exercise of warrants                        --            --            --           --
--           --
    Exercise of stock options                            --            --            --           --
--           --
    Reduction of stock subscriptions
       receivable for fees related to equity
       transactions                                      --            --            --           --
--           --
    Acquisition of assets                                --            --            --           --
--           --
    Conversion of accounts payable                       --            --            --           --
--           --
    Conversion of notes payable                          --            --            --           --
--           --
    Conversion of accrued interest                       --            --            --           --
--           --
    Conversion of preferred stock                        --            --            --           --
    Conversion of dividends payable                      --            --            --           --
--           --
 Redemption of preferred stock                           --            --            --           --
 Intrinsic value of convertible feature                  --            --            --           --
 Discount on preferred stock related to
    warrants issued                                      --            --            --
--                         --
 Stock subscriptions receivable:
    Cash payments                                        --            --            --           --
--           --
    Increase reserve                                     --            --            --           --
--           --
    Interest collected                                   --            --            --           --
--           --
 Warrants issued:
    Preferred stock                                      --            --            --           --
--           --
    Common stock                                         --            --            --           --
--           --
    Debt                                                 --            --            --           --
--           --
    Services rendered                                    --            --            --           --
--           --
 Deferred compensation expense related to
    stock options issued below fair market
    value                                                --            --            --           --
--           --
 Deferred compensation expense                           --            --            --           --
--           --
 Restricted stock:
    Forfeited                                            --            --            --           --
--           --
    Amortization expense                                 --            --            --           --
--           --
 Embedded value with Laurus warrants                     --            --            --           --
--           --
 Preferred stock dividends                               --            --            --           --
--           --
 Net loss                                                --            --            --           --
--           --
                                                -----------   -----------   -----------  -----------   -----------
-----------


BALANCES, December 31, 2003                               0             0             0            0
0            0
 Stock issued:
    Cash                                                 --            --        40,245      353,382          11.5
984,173
    Exercise of warrants                                 --            --            --           --
--           --
    Cashless exercise of warrants                        --            --            --           --
--           --
    Reduction of stock subscriptions
       receivable for fees related to equity
       transactions                                      --            --            --           --
--           --
    Acquisition of assets - remaining 50%
       ownership of MBUSA                                --            --            --           --
--           --
    Acquisition of assets - URON, Inc.                   --            --            --           --
--           --
    Acquisition of assets - Satellite
       Broadcasting Corporation and affiliates           --            --            --           --
--           --
    Acquisition of assets - Minnesota Digital
       Universe, Inc.                                    --            --            --           --
--           --
    Acquisition of assets - Rainbow Satellite
       Group, LLC                                   200,000     2,000,000            --           --
--           --
    Acquisition of assets  - 21st Century
       Satellite Communications                          --            --            --           --
--           --
    Property and equipment
    Conversion of notes payable                          --            --         5,000       50,000
--           --
    Conversion of accrued interest                       --            --            --           --
--           --
    Conversion of preferred stock                        --            --            --           --
--           --
    Conversion of dividends payable                      --            --            --           --
--           --
    In lieu of cash for services                         --            --            --           --
--           --
    In lieu of cash for other current assets             --            --            --           --
--           --
 Stock repurchase                                        --            --            --           --
--           --
 Conversion of preferred stock into note
    payable                                         (50,000)     (500,000)           --           --
--           --
 Intrinsic value of convertible feature                  --            --            --      (54,182)
--           --
 Discount on preferred stock related to
    warrants issued                                      --            --            --     (169,303)           --
(984,173)
 Stock subscriptions receivable:                         --            --            --           --
--           --
    Cash payments                                        --            --            --           --
--           --
    Interest collected                                   --            --            --           --
--           --
 Warrants issued for debt modification                   --            --            --           --
--           --
 Deferred compensation expense related to
    stock options issued below fair market
    value                                                --            --            --           --
--           --
 Deferred compensation expense                           --            --            --           --
--           --
 Restricted stock:                                       --            --            --           --
--           --
    Forfeited                                            --            --            --           --
--           --
    Amortization expense                                 --            --            --           --
--           --
 Preferred stock dividends                               --            --            --           --
--           --
 Net loss                                                --            --            --           --
--           --
                                                -----------   -----------   -----------  -----------   -----------
-----------
BALANCES, December 31, 2004                         150,000   $ 1,500,000        45,245  $   179,897          11.5
$         0
                                                ===========   ===========   ===========  ===========   ===========
===========
</TABLE>

          See accompanying notes to consolidated financial statements.
<PAGE>

                     MULTIBAND CORPORATION AND SUBSIDIARIES
                   (FKA: VICOM, INCORPORATED AND SUBSIDIARIES)
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS'STOCKHOLDERS' EQUITY Years
                  Ended December 31, 2004, 2003, and 2002

<TABLE>
<CAPTION>
                                                              Common Stock                Stock          Options
                                                      ---------------------------     Subscriptions        and
                                                        Shares         Amount          Receivable        Warrants
                                                      ----------     ------------     ------------     ------------
<S>                                                   <C>            <C>              <C>              <C>
BALANCES, December 31, 2001                           10,679,450     $  3,443,104     $   (631,619)    $ 24,957,912
  Stock issued:
      Cash                                             1,548,120          274,414            7,850  --           --
      Reduction of stock subscriptions
        receivable for fees related to
        equity transactions                                   --          (40,563)          40,563               --
      Acquisition of assets                                   --               --               --          (18,590)
      Guarantee of debt financing                         25,000           14,750               --               --
      Services rendered                                   35,214           27,700               --               --
      Conversion of accounts payable                       7,500            7,255               --               --
      Conversion of notes payable
        and accrued interest                             554,569          460,001               --               --
      Conversion of accrued interest                     117,787          119,881               --               --
      Conversion of preferred stock                      140,000          150,000               --               --
Redemption of preferred stock                                 --               --               --               --
Discount on preferred stock related
  to warrants issued                                          --               --               --               --
Interest receivable on stock
  subscription receivable                                     --               --          (49,989)              --
Warrants issued:                                              --               --               --               --
      Preferred stock                                         --               --               --          324,324
      Common stock                                            --               --               --          575,119
        Debt                                                  --               --               --          879,382
  Deferred compensation expense
    related to  stock options
    issued below fair market value                            --           53,745               --          (53,345)
  Deferred compensation expense                               --               --               --               --
  Restricted stock:
        Issued and outstanding                            22,434           21,255               --               --
        Forfeited                                        (19,597)         (65,710)              --               --
        Amortization expense                                  --               --               --               --
  Embedded value with Pyramid
    Trading warrants                                          --               --               --          (32,503)
  Preferred stock dividends                                   --               --               --               --
  Net loss                                                    --               --               --               --

BALANCES, December 31, 2002                           13,110,477        4,465,832         (633,195)      26,632,299
  Stock issued:
        Cash                                           4,477,279        1,947,197               --               --
        Exercise of warrants                             258,790          262,030               --               --
        Cashless exercise of warrants                    141,529               --               --               --
        Exercise of stock options                          3,000            3,750               --               --
        Reduction of stock subscriptions
          receivable for fees related to
          equity transactions                                 --          (36,977)          36,977               --
        Acquisition of assets                                 --               --               --               --
        Conversion of accounts payable                    85,000          120,690               --               --
        Conversion of notes payable                      654,202          762,000               --               --
        Conversion of accrued interest                    63,539           66,172               --               --
        Conversion of preferred stock                     66,666           40,000               --               --
        Conversion of dividends payable                  187,164          113,209               --               --
  Redemption of preferred stock                               --               --               --               --
  Intrinsic value of convertible feature                      --               --               --               --
  Discount on preferred stock
    related to warrants issued                                --               --               --               --
  Stock subscriptions receivable:
        Cash payments                                         --               --          105,806               --
        Increase reserve                                      --               --           71,000               --
        Interest collected                                    --               --            1,327               --
  Warrants issued:
        Preferred stock                                       --               --               --           58,314
        Common stock                                          --               --               --        2,050,507
        Debt                                                  --               --               --          883,711
        Services rendered                                     --               --               --          321,920
  Deferred compensation expense related
    to stock options issued below fair
    market value                                              --               --               --               --
  Deferred compensation expense                               --               --               --               --
  Restricted stock:
        Forfeited                                        (10,841)         (17,398)              --               --
        Amortization expense                                  --               --               --               --
  Embedded value with Laurus warrants                         --               --               --          568,121
  Preferred stock dividends                                   --               --               --               --
  Net loss                                                    --               --               --               --

BALANCES, December 31, 2003                           19,036,805        7,726,505         (418,085)      30,514,872
  Stock issued:
        Cash                                           2,001,832        2,059,093               --          791,483
        Exercise of warrants                             273,403          390,279               --               --
        Cashless exercise of warrants                    133,742               --               --               --
        Reduction of stock subscriptions
          receivable for fees related to
          equity transactions                                 --          (17,320)          17,320               --
        Acquisition of assets - remaining
          50% ownership of MBUSA                          30,000           39,000               --               --
        Acquisition of assets - URON, Inc.               180,000          235,800               --               --
        Acquisition of assets - Satellite
          Broadcasting Corporation and
          affiliates                                     135,076          270,152               --               --
        Acquisition of assets - Minnesota
          Digital Universe, Inc.                       2,300,000        3,960,000               --               --
        Acquisition of assets - Rainbow
          Satellite Group, LLC                                --               --               --               --
        Acquisition of assets  - 21st Century
          Satellite Communications                       230,333          364,584               --               --
        Property and equipment                            11,800           15,530               --               --
        Conversion of notes payable                      407,051          580,909               --               --
        Conversion of accrued interest                    47,393           56,687               --               --
        Conversion of preferred stock                    621,200          776,500               --               --
        Conversion of dividends payable                  156,110          124,618               --               --
        In lieu of cash for services                     213,464          329,581               --               --
        In lieu of cash for other current assets          36,000           42,120               --               --
  Conversion of preferred stock into notes payable            --               --               --               --
  Stock repurchase                                       (27,500)         (62,975)              --               --
  Intrinsic value of convertible feature                      --               --               --          457,500
  Discount on preferred stock related to
    warrants issued                                           --               --               --        1,153,476
  Stock subscriptions receivable:                             --               --               --               --
        Cash payments                                         --               --            6,731               --
        Interest collected                                    --               --            2,770               --
  Warrants issued for debt modification                       --               --               --           68,652
  Deferred compensation expense related to
    stock options issued below fair
    market value                                              --               --               --               --
  Deferred compensation expense                               --               --               --               --
  Restricted stock:                                           --               --               --               --
        Forfeited                                         (2,219)          (2,772)              --               --
        Amortization expense                                  --               --               --               --
  Preferred stock dividends                                   --               --               --               --
  Net loss                                                    --               --               --               --
                                                      ----------     ------------     ------------     ------------
BALANCES, December 31, 2004                           25,784,490     $ 16,888,291     $   (391,264)    $ 32,985,983
                                                      ==========     ============     ============     ============
<CAPTION>

                                                      Unamortized      Accumulated
                                                      Compensation       Deficit           Total
                                                      ------------     ------------     ------------
<S>                                                   <C>              <C>              <C>
BALANCES, December 31, 2001                           $ (1,209,143)    $(25,115,067)    $  4,184,001
  Stock issued:
      Cash                                                      --               --          382,264
      Reduction of stock subscriptions
        receivable for fees related to
        equity transactions                                     --               --               --
      Acquisition of assets                                     --               --               --
      Guarantee of debt financing                               --               --           14,750
      Services rendered                                         --               --           27,700
      Conversion of accounts payable                            --               --            7,255
      Conversion of notes payable
        and accrued interest                                    --               --          760,001
      Conversion of accrued interest                            --               --          119,881
      Conversion of preferred stock                             --               --               --
Redemption of preferred stock                                   --               --          (84,000)
Discount on preferred stock related
  to warrants issued                                            --           (9,295)        (357,262)
Interest receivable on stock
  subscription receivable                                       --               --          (49,989)
Warrants issued:                                                --
      Preferred stock                                           --               --          324,324
      Common stock                                              --               --          575,119
        Debt                                                    --               --          879,382
Deferred compensation expense
    related to  stock options
    issued below fair market value                           4,307               --            4,707
Deferred compensation expense                               78,292               --           78,292
Restricted stock:
        Issued and outstanding                             (21,255)              --               --
        Forfeited                                           65,710               --               --
        Amortization expense                               400,000               --          400,000
Embedded value with Pyramid
    Trading warrants                                            --               --          (32,503)
Preferred stock dividends                                       --         (153,578)        (153,578)
Net loss                                                        --       (4,438,059)      (4,438,059)

BALANCES, December 31, 2002                               (682,089)     (29,715,999)       2,642,285
  Stock issued:
        Cash                                                    --               --        1,973,197
        Exercise of warrants                                    --               --          262,030
        Cashless exercise of warrants                           --               --               --
        Exercise of stock options                               --               --            3,750
        Reduction of stock subscriptions
          receivable for fees related to
          equity transactions                                   --               --               --
        Acquisition of assets                                   --               --           76,500
        Conversion of accounts payable                          --               --          192,690
        Conversion of notes payable                             --               --          762,000
        Conversion of accrued interest                          --               --           66,172
        Conversion of preferred stock                           --               --               --
        Conversion of dividends payable                         --               --          113,209
  Redemption of preferred stock                                 --               --          (93,100)
  Intrinsic value of convertible feature                        --             (500)         (27,202)
  Discount on preferred stock
    related to warrants issued                                  --               --          (58,314)
  Stock subscriptions receivable:
        Cash payments                                           --               --          105,806
        Increase reserve                                        --               --           71,000
        Interest collected                                      --               --            1,327
  Warrants issued:
        Preferred stock                                         --               --           58,314
        Common stock                                            --               --        2,050,507
        Debt                                                    --               --          883,711
        Services rendered                                       --               --          321,920
  Deferred compensation expense related
    to stock options issued below fair
    market value                                               367               --              367
  Deferred compensation expense                             47,114               --           47,114
  Restricted stock:
        Forfeited                                           17,398               --               --
        Amortization expense                               400,000               --          400,000
  Embedded value with Laurus warrants                           --               --          568,121
  Preferred stock dividends                                     --         (248,689)        (248,689)
  Net loss                                                      --       (4,365,004)      (4,365,004)

BALANCES, December 31, 2003                               (217,210)     (34,330,192)       5,807,711
  Stock issued:
        Cash                                                    --               --        4,188,131
        Exercise of warrants                                    --               --          390,279
        Cashless exercise of warrants                           --               --               --
        Reduction of stock subscriptions
          receivable for fees related to
          equity transactions                                   --               --               --
        Acquisition of assets - remaining
          50% ownership of MBUSA                                --               --           39,000
        Acquisition of assets - URON, Inc.                      --               --          235,800
        Acquisition of assets - Satellite
          Broadcasting Corporation and
          affiliates                                            --               --          270,152
        Acquisition of assets - Minnesota
          Digital Universe, Inc.                                --               --        3,960,000
        Acquisition of assets - Rainbow
          Satellite Group, LLC                                  --               --        2,000,000
        Acquisition of assets  - 21st Century
          Satellite Communications                              --               --          364,584
        Property and equipment                                  --               --           15,530
        Conversion of notes payable                             --               --          630,909
        Conversion of accrued interest                          --               --           56,687
        Conversion of preferred stock                           --         (337,536)              --
        Conversion of dividends payable                         --               --          124,618
        In lieu of cash for services                            --               --          329,581
        In lieu of cash for other current assets                --               --           42,120
  Conversion of preferred stock into notes payable              --               --         (500,000)
  Stock repurchase                                              --               --          (62,975)
  Intrinsic value of convertible feature                        --           54,182          457,500
  Discount on preferred stock related to
    warrants issued                                             --               --               --
  Stock subscriptions receivable:                               --               --               --
        Cash payments                                           --               --            6,731
        Interest collected                                      --               --            2,770
  Warrants issued for debt modification                         --               --           68,652
  Deferred compensation expense related to
    stock options issued below fair
    market value                                               115               --              115
  Deferred compensation expense                             12,599               --           12,599
  Restricted stock:                                             --               --               --
        Forfeited                                            2,772               --               --
        Amortization expense                               200,000               --          200,000
  Preferred stock dividends                                     --         (307,101)        (307,101)
  Net loss                                                      --       (9,783,962)      (9,783,962)
                                                      ------------     ------------     ------------
BALANCES, December 31, 2004                           $     (1,724)    $(44,704,609)    $  8,549,431
                                                      ============     ============     ============
</TABLE>

          See accompanying notes to consolidated financial statements.
<PAGE>

                     MULTIBAND CORPORATION AND SUBSIDIARIES
                   (FKA: VICOM, INCORPORATED AND SUBSIDIARIES)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended December
                  31, 2004, 2003, and 2002

<TABLE>
<CAPTION>
                                                                      2004            2003            2002
                                                                   -----------     -----------     -----------
<S>                                                                <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net loss                                                       $(9,783,962)    $(4,365,004)    $(4,438,059)
    Adjustments to reconcile net loss to cash flows from
      operating activities:
        Depreciation                                                 1,305,431         948,796         981,985
        Amortization                                                 2,304,626          47,583         133,472
        Amortization of deferred compensation                          212,714         447,481         482,999
        Impairment of goodwill                                       2,748,879              --              --
        Amortization of original issue discount                        718,166         405,248       1,103,314
        Write off of notes receivable and investment                        --          19,069          60,000
        Reserve for stock subscriptions and interest receivable             --          71,000              --
        Impairment reserve on property and equipment                        --              --         119,480
        Common stock issued for services                               329,581              --          27,700
        Loss on sale of property and equipment                          26,217          79,394          31,412
        Interest receivable on stock subscription receivable                --           1,327         (49,989)
        Warrants issued for services                                        --         321,920              --
        Warrants issued with debt conversion                                --              --         183,903
        Minority interest in subsidiary                                     --         (33,366)             --
        Changes in operating assets and liabilities:                        --              --              --
           Accounts receivable, net                                 (1,158,198)        289,890         576,509
           Inventories, net                                          1,105,372        (509,762)        182,783
           Other current assets                                         (7,664)         70,264        (205,483)
           Other assets                                                (13,675)       (143,101)         43,210
           Wholesale line of credit                                    (50,113)       (314,069)        (34,424)
           Accounts payable and accrued liabilities                   (229,855)        122,403          38,344
           Deferred service obligations and revenue                    198,361         (39,321)       (106,877)
           Customer deposits                                             4,475              --              --
                                                                   -----------     -----------     -----------
               Net Cash Flows from Operating Activities             (2,289,645)     (2,580,248)       (869,721)
                                                                   -----------     -----------     -----------

CASH FLOWS FROM INVESTING ACTIVITIES
    Proceeds from sale of property and equipment                         2,712          15,492       1,239,313
    Purchases of property and equipment                               (748,704)       (526,936)     (1,275,434)
    Purchase of SBC                                                   (221,624)             --              --
    Purchase of MDU                                                 (1,009,730)             --              --
    Purchase of Rainbow                                             (1,000,000)             --              --
    Purchase of 21st Century                                          (250,000)             --              --
    Payments for investment in joint venture                                --         (64,878)             --
    Purchase of certificate of deposit                                (400,000)       (250,000)             --
                                                                   -----------     -----------     -----------
        Net Cash Flows from Investing Activities                    (3,627,346)       (826,322)        (36,121)
                                                                   -----------     -----------     -----------


CASH FLOWS FROM FINANCING ACTIVITIES
    Increase in checks issued in excess of cash in bank                 83,558         147,398              --
    Proceeds from long-term debt and warrants issued with
      long-term debt                                                 2,471,688       1,659,726       1,172,064
    Net payments on short-term debt                                 (2,688,900)             --              --
    Proceeds from note payable - stockholder                                --         124,000              --
    Payments received on stock subscriptions receivable                  9,501         105,806           6,786
    Payments on long-term debt                                        (345,578)       (200,768)       (131,605)
    Payments on note payable - stockholder                             (29,590)         (9,609)             --
    Payments on capital lease obligations                              (74,902)        (75,301)       (937,828)
    Proceeds from issuance of stock and warrants                     4,188,131       4,023,704         949,533
    Payments for debt issuance costs                                  (198,337)             --              --
    Redemption of preferred stock                                           --         (93,100)        (84,000)
    Preferred dividends                                                (45,291)       (135,481)       (153,578)
    Redemption of common stock                                         (62,975)             --              --
    Exercise of stock options                                               --           3,750              --
    Exercise of warrants                                               390,279         262,030              --
                                                                   -----------     -----------     -----------
        Net Cash Flows from Financing Activities                     3,697,584       5,812,155         821,372
                                                                   -----------     -----------     -----------

           Net Change in Cash and Cash Equivalents                  (2,219,407)      2,405,585         (84,470)

CASH AND CASH EQUIVALENTS - Beginning of Year                        2,945,960         540,375         624,845
                                                                   -----------     -----------     -----------

     CASH AND CASH EQUIVALENTS - END OF YEAR                       $   726,553     $ 2,945,960     $   540,375
                                                                   ===========     ===========     ===========
</TABLE>

          See accompanying notes to consolidated financial statements.
<PAGE>

                     MULTIBAND CORPORATION AND SUBSIDIARIES
                   (fka VICOM, INCORPORATED AND SUBSIDIARIES)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2004, 2003 and 2002

NOTE 1 - Summary of Significant Accounting Policies

      Nature of Business

Multiband Corporation and subsidiaries, formerly known as Vicom, Incorporated
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 years ended December 31, 2004, 2003, and 2002, the Company incurred net
losses of $ 9,783,962, $4,365,004 and $4,438,059, respectively. At December 31,
2004, the Company had an accumulated deficit of $44,704,609. The Company's
ability to continue as a going concern is dependent on it ultimately achieving
profitability and/or raising additional capital. On February 3, 2005, the
Company completed a $10 million private placement of the Company's Series I
Convertible Preferred Stock. Management intends to obtain additional debt or
equity capital to meet all of its existing cash obligations and fund commitments
on planned Multiband projects; however, there can be no assurance that the
sources will be available or available on terms favorable to the Company.
Management anticipates that the impact of the actions listed below will generate
sufficient cash flows to pay current liabilities, long-term debt and capital
lease obligations and fund the Company's future operations:

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

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

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

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

5. Establish market for wireless internet services.

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

      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., Minnesota Digital, Inc. (MDU), Rainbow Satellite Group,
LLC (Rainbow) and Multiband, Inc. (Multiband) which provides voice, data and
video services to residential multi-dwelling units. In February 2003, the
Company formed a 50% owned subsidiary, Multiband USA, Inc. (MB USA) with Pace
Electronics, Inc. (PACE) a video wholesaler, and provides the same services as
Multiband). On January 1, 2004, the Company purchased the 50% PACE interest in
Multiband USA. All significant intercompany transactions and balances have been
eliminated in consolidation.

On January 1, 2004, the Company merged Multiband into CTU.

      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). The Company began discussions and efforts to sell these assets in
the fourth quarter of 2004. These assets met the requirements of Statement of
Financial Accounting Standards No. 144, "Accounting for Impairment or Disposal
of Long-Lived Assets" as being held for sale. Operations and cash flows will be
eliminated as a result of the sale and the Company will not have any significant
involvement in the operations after the sale. In accordance with appropriate
accounting rules, the Company has 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 statement 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 have been revised to reflect only the results of continuing
operations (see Note 16). Based on the discussions and efforts to sell these
assets, the Company determined, based on the final purchase price which was
arrived at in the first quarter of 2005, it was required to take an impairment
charge to the goodwill of the Multiband Business Services division. As a result,
an impairment charge related to goodwill of $2,221,000 was recorded in the
fourth quarter of 2004.
<PAGE>

      Revenues and Cost Recognition

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

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

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

Customers contract for both the purchase and installation of voice and data
networking technology products and certain video technologies products on one
sales agreement, as installation of the product is essential to the
functionality of the product. Revenues are 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 years ended December 31,
2004, 2003 and 2002. 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.
<PAGE>

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

The Company reports the aforementioned video programming 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, including chargebacks.

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.

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.

      Certificate of Deposit

The Company has a certificate of deposit which matures in December 2005.

      Accounts Receivable

The Company reviews customers' credit history before extending unsecured credit
and establishes an allowance for uncollectible accounts based upon factors
surrounding the credit risk of specific customers and other information. Credit
risk on accounts receivable is minimized as a result of the large and diverse
nature of the Company's customer base. Invoices are due 30 days after
presentation. Accounts receivable over 30 days are considered past due. The
Company does not accrue interest on past due accounts receivable. Receivables
are written off only after all collection attempts have failed and are based on
individual credit evaluation and specific circumstances of the customer.
Accounts receivable are shown net of an allowance for uncollectible accounts of
$225,000 and $223,000 at December 31, 2004 and 2003, respectively. Accounts
receivable over 90 days were $559,000 and $433,000 at December 31, 2004 and
2003, respectively.
<PAGE>

                     MULTIBAND CORPORATION AND SUBSIDIARIES
                   (fka VICOM INCORPORATIED AND SUBSIDIARIES)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2004, 2003 and 2002

      Inventories

Inventories, included as inventories and current assets of discontinued
operations on the balance sheet, consisting principally of purchased
telecommunication, networking and computer equipment and parts, are stated at
the lower of cost or market. Cost is determined using an average cost method for
telecommunication and networking equipment and the first-in, first-out (FIFO)
method for computer equipment. Nonmonetary exchanges of inventory items with
third parties are recorded at the net book value of the items exchanged with no
gains or losses recognized.

      Property and Equipment

Property, equipment and leasehold improvements are recorded at cost.
Improvements are capitalized while repairs and maintenance costs are charged to
operations when incurred. Property and equipment is depreciated or amortized
using the straight-line method over estimated useful lives ranging from three to
seven years. Leasehold improvements are amortized using the straight-line method
over the shorter of the lease term or the estimated useful life of the assets.

      Debt Issuance Costs

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.

      Goodwill and Other Intangible Assets

In June 2001, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 141, "Business Combinations",
effective for acquisitions initiated on or after July 1, 2001, and No. 142,
"Goodwill and Other Intangible Assets", effective for fiscal years beginning
after December 15, 2001. SFAS No. 141 requires that the purchase method of
accounting be used for all business combinations initiated after June 30, 2001,
and includes guidance on the initial recognition and measurement of goodwill and
other intangible assets arising from business combinations. SFAS No. 142
indicates that goodwill (and intangible assets deemed to have indefinite lives)
will no longer be amortized but will be subject to annual impairment tests.
Other intangible assets will continue to be amortized over their useful lives.
The Company adopted SFAS No. 142 effective January 1, 2002. The Company
performed the required goodwill impairment test during the years ended December
31, 2004, 2003 and 2002.
<PAGE>

                     MULTIBAND CORPORATION AND SUBSIDIARIES
                    (fka VICOM INCORPORATED AND SUBSIDIARIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2004, 2003 and 2002

As part of compliance with this standard, the Company obtained an independent
appraisal to assess the fair value of its business units to determine whether
goodwill carried on its books was impaired and the extent of such impairment, if
any for the years ended December 31, 2004 and 2003. For the quarter ended
September 30, 2004 and for the year ended December 31, 2003, the independent
appraisal used the discounted future returns method to measure the fair value of
its business units. During the three months ended September 30, 2004, the
Company completed its review of goodwill through an independent appraisal and
determined it was partially impaired. The Company recorded impairment charges to
goodwill of $527,879 related to the Corporate Technologies (CTU) acquisition
during the quarter ended September 30, 2004. Under the discounted future returns
method, future benefits over a period of time are estimated and then discounted
back to present value. The independent appraiser used a discount factor of 15.8%
and 16.8% for the years ended December 31, 2004 and 2003, respectively. Based
upon the 2003 independent appraisal, the Company determined that its current
goodwill balances were not impaired as of December 31, 2003. As of December 31,
2004, goodwill related to discontinued operations of $2,221,000 was entirely
written off and was included in discontinued operations. Goodwill related to
continuing operations was $812,366 as of December 31, 2004.

Components of intangible assets are as follows:

<TABLE>
<CAPTION>
                                                      December 31, 2004             December 31, 2003
                                                 --------------------------    --------------------------
                                                   Gross                         Gross
                                                  Carrying      Accumulated     Carrying     Accumulated
                                                   Amount      Amortization      Amount      Amortization
                                                 -----------    -----------    -----------    -----------
<S>                                              <C>            <C>            <C>            <C>
Intangible assets subject to amortization
     Domain name                                 $    83,750    $    55,833    $    83,750    $    39,083
     Access contracts                            $    60,000    $    33,333         60,000         13,334
     Debt issuance costs                         $   313,837    $    47,214        115,500          3,208
     Right of entry                              $17,226,759    $ 1,933,294             --             --
     Customer cable lists                        $   753,930    $   286,967        300,000             --
                                                 -----------    -----------    -----------    -----------
         Total                                   $18,438,276    $ 2,356,641    $   559,250    $    55,625
                                                 ===========    ===========    ===========    ===========

Intangible assets not subject to amortization
     Goodwill                                    $   812,366    $         0    $ 3,531,157    $   782,278
                                                 ===========    ===========    ===========    ===========
</TABLE>

Amortization of intangible assets was $2,301,016, $33,291 and $16,750 for the
years ended December 31, 2004, 2003 and 2002, respectively. Estimated
amortization expense of intangible assets for the years ending December 31,
2005, 2006, 2007, 2008, 2009 and 2010 is $3,297,005, $3,047,921, $2,974,281,
$2,908,666, $2,817,297 and $1,036,464, respectively. The weighted average
remaining life of the intangibles is 5.5 years with right of entry average life
of 6.0 years and customer cable lists of 2.6 years <PAGE>

                     MULTIBAND CORPORATION AND SUBSIDIARIES
                    (fka VICOM INCORPORATED AND SUBSIDIARIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2004, 2003 and 2002

      The Company amortizes a domain name acquired during the year ended
December 31, 2001 over its estimated useful life of five years using the
straight-line method. The Company amortizes access contracts and customer cable
lists, on an average, over their useful estimated lives ranging from two to five
years. The Company is amortizing the right of entry contracts, on an average,
over their estimated useful lives ranging from 36 to 73 months.

      Advertising Costs

Advertising costs are charged to expense as incurred. Advertising costs were
$176,592, $146,906, $104,788 for the years ended December 31, 2004, 2003 and
2002, respectively, and are included in selling, general and administrative
expenses in the consolidated statements of operations.

      Shipping and Handling Costs

In accordance with Emerging Issues Task Force (EITF) Issue 00-10, "Accounting
for Shipping and Handling Fees and Costs," the Company is including shipping and
handling revenues in revenues and shipping and handling costs in cost of
products and services.

      Income Taxes

The Company utilizes the liability method of accounting for income taxes. Under
this method, deferred tax assets and liabilities are recognized for the expected
future tax consequences attributable to temporary differences between the
financial statement and income tax reporting bases of assets and liabilities.
Deferred tax assets are reduced by a valuation allowance to the extent that
realization is not assured.

      Stock-Based Compensation

In accordance with Accounting Principles Board (APB) Opinion No. 25 and related
interpretations, the Company uses the intrinsic value-based method for measuring
stock-based compensation cost which measures compensation cost as the excess, if
any, of the quoted market price of the Company's common stock at the grant date
over the amount the employee must pay for the stock. The Company's general
policy is to grant stock options at fair value at the date of grant. Options and
warrants issued to nonemployees are recorded at fair value, as required by SFAS
No. 123 "Accounting for Stock-Based Compensation," (SFAS No. 123), using the
Black Scholes pricing model. The Company has adopted the disclosure only
provision of SFAS No. 148, "Accounting for Stock-Based Compensation."

Pursuant to APB No. 25 and related interpretations $212,714, $447,481, and
$482,999 of compensation cost has been recognized in the accompanying
consolidated statements of operations for the years ended December 31, 2004,
2003 and 2002, respectively. Had compensation cost been recognized based on the
fair values of options at the grant dates consistent with the provisions of SFAS
No. 123, the Company's loss attributable to common stockholders and basic and
diluted loss per common share would have increased to the following pro forma
amounts for the years ended December 31:
<PAGE>

<TABLE>
<CAPTION>
                                                        2004             2003             2002
                                                   ------------     ------------     ------------
<S>                                                <C>              <C>              <C>
Loss attributable to common stockholders           $(10,374,417)    $ (4,613,693)    $ (4,591,637)
Pro forma loss attributable to common shares       $(10,984,354)    $ (5,363,381)    $ (4,915,649)

Basic and diluted loss attributable to common shareholders:
   As reported                                     $       (.45)    $      (0.29)    $      (0.39)

   Pro forma loss attributable to common shares    $       (.47)    $      (0.33)    $      (0.42)

Stock-based compensation:
   As reported                                     $    212,714     $    447,481     $    482,999
   Pro forma                                       $    609,937     $    749,688     $    324,012
</TABLE>

In determining the compensation cost of the options granted during fiscal 2004,
2003, and 2002, 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:

<TABLE>
<CAPTION>
                                             2004             2003             2002
                                           --------         --------         --------
<S>                                        <C>              <C>              <C>
Risk-free interest rate                        3.31%            3.00%            4.40%
Expected life of options granted           10 years         10 years         10 years
Expected volatility range                       184%             170%             170%
Expected dividend yield                           0%               0%               0%
</TABLE>

      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 years ended December 31, 2004, 2003 and 2002 were
anti-dilutive.

      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. The Company's segments have similar
economic characteristics and are similar in the nature of the services provided,
type of customers, methods used to distribute the Company's services and
regulatory environment. Management believes that the Company meets the criteria
for aggregating its operating segments into a single reporting segment.

      Recently Issued Accounting Pronouncements

In November 2004, FASB issued SFAS No. 151 "Inventory Costs" which amends the
guidance in ARB No. 43, Chapter 4 "Inventory Pricing," to clarify the accounting
for abnormal amounts of idle facility expense, freight, handling costs, and
wasted material (spoilage). Paragraph 5 of ARB 43, Chapter 4, previously stated
that under some circumstances, items such as idle facility expense, excessive
spoilage, double freight, and rehandling costs may be so abnormal as to require
treatment as current period charges. SFAS No. 151 requires that those items be
recognized as current-period charges regardless of whether they meet the
criterion of "so abnormal." In addition, SFAS No, 151 requires that allocation
of fixed production overheads to the costs of conversion be based on the normal
capacity of the production facilities. SFAS No. 151 shall be effective for
inventory costs incurred during fiscal years beginning after June 15, 2005.
Earlier application is permitted for inventory costs incurred during fiscal
years beginning after the date SFAS No. 151 was issued. SFAS No. 151 shall be
applied prospectively. The Company does not expect the adoption of SFAS No. 151
to have a material effect on its consolidated financial statements.

In December 2004, FASB issued SFAS No. 153 "Exchanges of Nonmonetary Assets"
which amends APB Opinion No. 29, "Accounting for Nonmonetary Transactions." APB
No. 29 is based on the principle that exchanges of nonmonetary assets should be
measured based on the fair value of the assets exchanged. The guidance in that
Opinion, however, included certain exceptions to that principle. SFAS No. 153
amends APB No. 29 to eliminate the exception for nonmonetary exchanges of
similar productive assets and replaces it with a general exception for exchanges
of nonmonetary assets that do not have commercial substance. A nonmonetary
exchange has commercial substance if the future cash flows of the entity are
expected to change significantly as a result of the exchange. SFAS No. 153 shall
be effective for nonmonetary asset exchanges occurring in fiscal periods
beginning after June 15, 2005. Earlier application is permitted for nonmonetary
asset exchanges occurring in fiscal periods beginning after the date SFAS No.
153 was issued. SFAS No. 153 shall be applied prospectively. The Company does
not expect the adoption of SFAS No. 153 to have a material effect on its
consolidated financial statements.

In December 2004, FASB issued SFAS No. 123 (revised 2004), "Share-Based
Payment", which focuses primarily on accounting for transactions in which an
entity obtains employee services in share-based payment transactions. This
statement replaces SFAS No. 123, "Accounting for Stock-Based Compensation", and
supersedes APB Opinion No. 25, "Accounting for Stock Issued to Employees."
Beginning with the quarterly period that begins July 1, 2005, the Company will
be required to expense the fair value of employee stock options and similar
awards. As a public company, the Company is allowed to select from two
alternative transition methods, each having different reporting implications.
The impact of SFAS No. 123R for the year ending December 31, 2005 is estimated
to range from approximately $150,000 and $200,000 based on the value of the
options outstanding as of December 31, 2004 that will vest during the third and
fourth quarters of 2005. This estimate does not include any expenses for options
that may be granted and vested during 2005.

In December 2003, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation No. 46 (Revised December 2003), "Consolidation of Variable
Interest Entities, an Interpretation of ARB No. 51" (FIN 46R). This standard
replaces FIN 46, Consolidation of Variable Interest Entities" that was issued in
January 2003. FIN 46R modifies or clarifies various provisions of FIN 46. FIN
46R addresses the consolidation of business enterprises of variable interest
entities (VIEs), as defined by FIN 46R. FIN 46R exempts certain entities from
its requirements and provides for special effective dates for entities that have
fully or partially applied FIN 46 prior to issuance of FIN 46R. Otherwise,
application of FIN 46R is required in financial statements of public entities
that have interest in structures commonly referred to as special purpose
entities for periods ending after December 15, 2003. Application by the Company
for all other types of VIEs is required in financial statements for periods
ending no later than the quarter ended January 31, 2005. The adoption of FIN 46R
did not have a material effect on the Company's consolidated financial
statements.

      Management's Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Significant management estimates relate to the allowances for doubtful accounts,
inventory obsolescence, and stock subscriptions and interest receivable,
property and equipment estimated useful lives, goodwill carrying value and the
valuation of deferred income tax assets.
<PAGE>

      Financial Instruments

The carrying amounts for all financial instruments approximates fair value. The
carrying amounts for cash and cash equivalents, accounts receivable, accounts
payable, accrued liabilities, and short-term debt approximate fair value because
of the short maturity of these instruments. The fair value of capital lease
obligations, note payable-stockholder and long-term debt approximates the
carrying amounts based upon the Company's expected borrowing rate for debt with
similar remaining maturities and comparable risk.
<PAGE>

                     MULTIBAND CORPORATION AND SUBSIDIARIES
                    (fka VICOM INCORPORATED AND SUBSIDIARIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2004, 2003 and 2002

      Reclassifications

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

NOTE 2 - Business Acquisitions

During February 2003, the Company incorporated a new subsidiary, MB USA. This
subsidiary was formed as a 50% owned joint venture agreement with PACE (Note 1).
The reason for the joint venture with PACE is to continue to expand the
Company's services related to multi-users of voice, data and video services. The
remaining 50% ownership was purchased January 1, 2004.

On April 25, 2003, the Company, through MB USA, purchased certain video
equipment assets, related rights to video subscribers and rights of access
agreements from Suncoast Automation, Inc. (Suncoast). The purchase price was
allocated to the acquired assets and assumed certain liabilities based on the
estimated fair values as of the acquisition date. The purchase price was
allocated to assets and liabilities acquired as follows:

       Property and equipment                            $         504,224
       Access contracts                                             60,000
       Capital lease obligations                                  (54,224)
                                                         -----------------
          Net purchase price                             $         510,000
                                                         =================

The net purchase price of $510,000 consisted entirely of cash paid. The
consolidated results of operations on an unaudited pro forma basis are not
presented separately as the results do not differ significantly from historical
amounts presented herein.

On December 31, 2003, the Company purchased certain customer lists from Florida
Cable, Inc. (Florida Cable) for $300,000 which was paid to Florida Cable on
January 2, 2004. In addition, the Company agreed to lease from Florida Cable
equipment used in the operation of the cable television systems for six months
for $1.00. After the six month lease period has expired, the Company has agreed
to purchase the equipment for $165,000. If the Company fails to pay the $165,000
in full, all rights and title of the customer lists mentioned above will revert
back to Florida Cable. At December 31, 2003, the Company has recorded the
$165,000 liability associated with the contingent purchase of equipment.

On January 1, 2004, the Company entered into a stock purchase agreement with
URON, Inc. (URON) to purchase all of the outstanding capital stock of URON for a
total purchase price of 350,000 shares of the Company's common stock to be
issued in installments as follows: a) 180,000 shares issued at closing, b)
170,000 shares held in escrow. The common shares were valued at fair market
value on the date of agreement which was $1.31 per share for a purchase price of
$458,500. The terms of the escrow are as follows: 50,000 shares to be released
upon URON providing the Company with documentation satisfactory to the Company
of a release from a certain vendor or any related entity of all liabilities
incurred to a certain vendor by URON; 120,000 shares to be released in 40,000
share increments upon the Company's receipt of distributable gross profits,
generated by certain customers, in increments of $75,000 cash. The escrow shall
be terminated 24 months after the date of the agreement and any shares not
released will be rescinded to the Company. The Company must register all shares
issued within one year from the date of issuance. The reason for the purchase of
URON is to continue to expand the Company's services related to voice, data, and
video services. The purchase price of $458,500 was allocated to customer list of
$453,930 and property and equipment of $4,570. The customer list will be
amortized over its estimated useful lives of two years and the property and
equipment for fifteen months. At December 31, 2004, the Company was not
obligated to issue any of the contingent shares of common stock.

In April 2004, the Company purchased certain assets consisting of data and video
subscribers and systems from Satellite Broadcasting Corporation and affiliates
(SBC). The total purchase price for said assets was approximately $679,200.

On April 2, 2004, Multiband Corporation and subsidiaries (the Company), (fka
Vicom, Incorporated and subsidiaries), completed its acquisition of Minnesota
Digital Universe, Inc. (MDU) for approximately 7.7 million dollars, half of
which was paid for in Multiband Corporation common stock, valued at $1.75 per
share, ($3,850,000), $1.1 million paid in cash and the balance in promissory
notes due by January 2005. Included in the purchase price is $700,000 related to
a finders fee. In December 2004, the notes with an outstanding balance of
$990,000 were extended through May 2005, with $200,000 of the outstanding note
balance being extended to July 2006. These notes are unsecured and bear no
interest. The stock value was a negotiated price between the Seller and the
Buyer. The consideration paid was based on the Company's analysis of likely
future net income to be generated over a six year period by the acquired
company. The cash was provided by funds the Company had previously raised in a
private placement. The assets were acquired from Pace Electronics. Prior to the
transaction, there was no material relationship between the owners of MDU and
the Company other than the fact that Pace Electronics previously owned a 50%
interest in a company subsidiary, Multiband USA, Inc., which Multiband bought
out the remaining 50% of ownership from Pace Electronics in January 2004 for
30,000 shares of the Company's common stock valued at $39,000.

With the MDU acquisition, the Company became a nationwide agent for DirecTV. MDU
services nearly 40,000 video subscribers through a network of private cable
operators located throughout the United States. The purchase also permits the
Company to receive ongoing residual payments from DirecTV, during the term of
the master system operator agreement with DirecTV, which initially had
approximately 25 months remaining at the time of purchase.

On July 9, 2004, Multiband (the Company) completed its acquisition, which had an
acquisition date of June 1, 2004, of the outstanding membership interests of
Rainbow Satellite Group, LLC (Rainbow), a provider of Satellite television
services to multi dwelling units, for approximately 7.5 million dollars, two
million of which was paid for in Multiband Preferred Stock, valued at $2.00 per
share on a conversion formula to Multiband common stock, one million dollars of
which was paid for in cash and the balance in promissory notes due by January
2005. In December 2004 these notes were extended to May 1, 2005. Included in the
purchase price is $321,850 related to a finders fee. These notes are
collateralized by Rainbow assets and bear interest at the prime rate (5.25% at
December 31, 2004.) In connection with the debt extension, the Company issued
75,000 two year warrants with an exercise price of $1.35 valued at $68,652 using
the Black Scholes pricing model. The stock value was a negotiated price between
the Buyer and Seller. In the event Multiband defaults in the payment of said
promissory notes, the former owners of Rainbow have certain rights to repurchase
the aforementioned membership interests for 20% less than any sums Multiband has
paid prior to the date of the default. The consideration paid was based on the
Company's analysis of likely future net incomes to be generated over a six year
period by the acquired Company. The cash was provided by funds Multiband had
previously raised in a private placement. The aforementioned purchase price is
subject to adjustment pursuant to the parties agreement if the number of Rainbow
subscribers increases or decreases as of an adjustment date. The assets were
acquired from the members/owners of Rainbow. Prior to the transaction, there was
no material relationship between the owners of sellers and the Company. With
this acquisition, the Company acquired over 16,000 video subscribers which are
primarily located in California, Colorado, Texas, Florida, Illinois and New
York.

On August 9, 2004, Multiband Corporation (the Company) completed its acquisition
of certain assets of 21st Century Satellite Communications, Inc. (21st Century)
for $1,080,754, $333,333 of which was paid for in Company stock, valued at $1.60
per share, $250,000 of which was paid for in cash and the balance in equipment
lease payments due by August 2007. The stock value was a negotiated price
between the Buyer and Seller. Included in the purchase price is $86,750 related
to a finders fee. The consideration paid was based on the Company's analysis of
the value of the acquired video equipment and related video subscribers totaling
approximately 5,000. The cash was provided by funds Multiband had previously
raised in a private placement. In connection with the acquisition, the Company
incurred a $125,000 finder's fee which was paid for in Company stock, valued at
$1.42 for a total of $31,250, and the remaining $93,750 was paid by December 31,
2004.

With these acquisitions, the Company has substantially increased its subscriber
base.

<TABLE>
<CAPTION>
                                                   MDU             Rainbow        21st Century
                                               ----------        ----------        ----------
<S>                                            <C>               <C>               <C>
Allocation of Purchase Price:
Total Cash/Stock Consideration                 $7,000,000        $7,219,999        $  987,000
     Add: Transaction Costs                       726,550           361,850            93,754
     Add:  Liabilities assumed                  2,030,373           319,921                --
                                               ----------        ----------        ----------

Total Consideration                             9,756,923         7,901,770         1,080,754
     Less: Cash and accounts receivable            59,044                --                --
     Less: Tangible assets                             --           773,000           372,420
     Less: Goodwill                                    --           800,000                --
                                               ----------        ----------        ----------

Intangible assets, net                         $9,697,879        $6,328,770        $  708,334
                                               ==========        ==========        ==========
</TABLE>

Goodwill was recorded on the Rainbow transaction based on a six year future
projection of cash flows which indicated that those future cash flows would not
equal or exceed total consideration paid for all intangible Rainbow assets. The
goodwill is anticipated to be deductible for tax purposes.

      The following unaudited pro forma condensed results of operations for the
years ended December 31, 2004 and 2003 give effect to the acquisition of URON,
MDU, Rainbow, and 21st Century as if such transactions had occurred on January
1, 2003.
<PAGE>

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

<TABLE>
<CAPTION>
                                                           2004                                      2003
                                             ---------------------------------         ---------------------------------
                                             Consolidated                              Consolidated
                                              as reported          Pro Forma           as reported            Pro Forma
                                                per I/S            Disclosed              per I/S             Disclosed
                                             ------------         ------------         ------------         ------------
<S>                                          <C>                  <C>                  <C>                  <C>
Revenues                                     $ 11,067,834         $ 14,562,983         $  1,441,118         $ 13,625,488

Loss from continuing operations                (5,326,642)          (5,292,789)          (3,672,048)          (3,423,888)

Loss from discontinued operations              (4,457,320)          (4,457,320)            (692,956)            (692,956)

Net loss                                     $ (9,783,962)        $ (9,750,109)        $ (4,365,004)        $ (4,116,844)

Basic and diluted loss per share:
   Loss from continuing operations           $       (.23)        $       (.23)        $       (.23)        $       (.21)
   Loss from discontinued operations         $       (.19)        $       (.19)        $       (.04)        $       (.04)
   Net loss                                  $       (.42)        $       (.42)        $       (.27)        $       (.25)

Weighted average shares outstanding -
basic and diluted                              23,307,594           23,307,594           16,112,231           16,112,231
</TABLE>

The unaudited pro forma results of operations for the years ended December 31,
2004 and 2003 as a result of the SBC and Florida Cable acquisitions of video
subscribers and video equipment is not material to the historical financial
statements.
<PAGE>

NOTE 3 - Property and Equipment

Property and equipment consisted of the following at December 31:

<TABLE>
<CAPTION>
                                                          2004                2003
                                                      -----------         -----------
<S>                                                   <C>                 <C>
Leasehold improvements                                $   767,146         $   764,064
Property and equipment - owned                          7,035,911           5,100,984
Property and equipment under capital
  lease obligations                                       428,749             428,749
                                                      -----------         -----------
                                                        8,231,806           6,293,797
Less accumulated depreciation and amortization         (3,859,332)         (2,755,382)
                                                      -----------         -----------
                                                      $ 4,372,474         $ 3,538,415
                                                      ===========         ===========
</TABLE>

Depreciation and amortization expense on property and equipment for continuing
operations was $959,447, $516,432, and $499,598 for the years ended December 31,
2004, 2003 and 2002, respectively.

Depreciation and amortization expense on property and equipment for the
discontinued operations was $345,985, $432,366 and $482,387 for the years ended
December 31, 2004, 2003 and 2002, respectively.

NOTE 4 - Other Assets

Other assets consisted of the following at December 31:

                                                2004            2003
                                              --------        --------
Other current assets:
   Current portion of notes receivable        $     --        $  2,983
   Prepaid expenses and other                  146,334          93,567
                                              --------        --------
           Total other current assets         $146,334        $ 96,550
                                                              ========

Noncurrent assets:
   Prepaid expenses and other                 $146,301         136,236
                                              --------        --------
           Total other assets                 $146,301        $136,236
                                              ========        ========

At December 31, 2004 and 2003, the Company had notes receivable of $0 and
$2,983, respectively. The remaining note was due in December 2003 with interest
of 12% was unsecured and was paid during 2004.
<PAGE>

                     MULTIBAND CORPORATION AND SUBSIDIARIES
                    (fka VICOM INCORPORATED AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2004, 2003 and 2002

NOTE 5 - Accrued Liabilities

Accrued liabilities consisted of the following at December 31:

                                             2004              2003
                                         ----------        ----------
Payroll and related taxes                $  389,394        $  363,649
Accrued preferred stock dividends           415,120           277,928
Payable - Florida Cable                          --           465,000
Accrued liability - vendor chargeback     1,901,972                --
Other                                       323,538           202,261
                                         ----------        ----------
                                         $3,030,024        $1,308,838
                                         ==========        ==========
<PAGE>

                     MULTIBAND CORPORATION AND SUBSIDIARIES
                    (fka VICOM INCORPORATED AND SUBSIDIARIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2004, 2003 and 2002

NOTE 6 - Wholesale Line of Credit

At December 31, 2004 and 2003, the Company had a $1,750,000 wholesale line of
credit agreement with a financial institution, for the purchase of certain
resale merchandise from certain suppliers. Interest is generally at 0% (if paid
within certain terms of up to 45 days), and the wholesale line of credit is
collateralized by the accounts receivable up to $300,000 as well as all of the
inventory financed and the $1,450,000 letters of credit which expire through
April 2006. The wholesale line of credit agreement is an agreement between the
Company, financial institution, and certain vendors of the Company. The Company
receives no funds from the financial institution, but pays the financial
institution rather than certain vendors. The balance outstanding was $926,201
and $976,314 at December 31, 2004 and 2003, respectively. The line of credit was
paid off in full on March 31, 2005 (see Note 16).

NOTE 7 - Long-term Debt

<TABLE>
<CAPTION>
Long-term debt consisted of the following at December 31:
                                                                                              2004                2003
                                                                                           -----------         -----------
<S>                                                                                        <C>                 <C>
          Note payable - Pyramid Trading Limited Partnership, LLC
          This note was converted to stock in 2004                                         $        --         $   140,443

          Debenture payable - Convergent Capital Partners I, L.P., net of
          original issue discount of $269,714 and $432,504 at December 31, 2004
          and 2003, respectively, monthly interest only payments through July
          2005, monthly installments of $102,273 including interest at 14%
          (effective interest rate 18.4%) thereafter, due May 2007,
          collateralized by substantially all
          of the assets of the Company                                                       2,130,286           1,967,496

          Demand debenture payable - Convergent Capital Partners I, L.P.,
          monthly interest only payments at 14% through May 2007, due on demand
          or May
          2007, collateralized by substantially all of the assets of the Company               100,000             100,000

          Note payable - Lexus Tower Limited Partnership, monthly installments
          of $5,987 including interest at 8.4%, due November 2010,
          collateralized
          by certain assets of the Company                                                     336,486             379,332

          Note payable - Laurus Master Fund LTD, net of unamortized original
          issue discount and beneficial conversion of note payable into common
          stock of $794,391 and $1,208,847 at December 31, 2004 and 2003,
          monthly installments of $45,455 beginning in March 2004, including
          interest at prime rate plus 3% but not less than 7% (8.25% and 7% at
          December 31, 2004 and 2003) (effective interest rate of 174.6%), due
          through November
          2006, collateralized by certain assets of the Company                                226,518             291,153

          Notes payable, net of original issue discount and beneficial
          conversion of note payable into common stock of $444,792 at December
          31, 2004 Interest is 6% payable semi-annually in cash or common stock
          at the Company's election, due in November 2007, collateralized by
          certain
          assets of the Company and subordinated                                             1,721,875                  --

          Note payable - Dell Marketing C.P., monthly installments of $10,000
          beginning in September 2004 through August 2006, with a final payment of
          $65,021. This note does not bear interest and is unsecured                           265,021

          Note payable - Vern Swedin, Note payable in 18 monthly installments,
          beginning January 30, 2005 with an interest
          rate of 6%, unsecured and due in July 2006                                           200,000                  --

          Notes payable, interest at 5.25% to 20% due through May 2007,
          collateralized by certain assets of the Company                                       42,998             207,545
                                                                                           -----------         -----------

           Total long-term debt                                                              5,023,184           3,085,969
          Less: current portion                                                             (1,524,527)
(998,813)
                                                                                           -----------         -----------
           Long-term debt, net                                                             $ 3,498,657         $ 2,087,156
                                                                                           ===========         ===========
</TABLE>

Future maturities of long-term debt are as follows for the years ending December
31:

         2005                                               $     1,524,527
         2006                                                     2,036,024
         2007                                                     2,786,295
         2008                                                        59,072
         2009                                                        64,011
         Thereafter                                                  62,152
                                                            ---------------
         Total future minimum payments                            6,532,081
         Less: original issue discounts and beneficial
           conversion feature                                   (1,508,897)
                                                            ---------------
         Total long-term debt                                     5,023,184
         Less: current portion                                  (1,524,527)
                                                            ---------------
             Long-term debt, net                            $     3,498,657
                                                            ===============
<PAGE>

In 2000, the Company entered into a $2,250,000 debenture agreement with
Convergent Capital Partners I, L.P., with interest at 14% payable monthly and
monthly payments of $102,273 from August 1, 2003 through June 1, 2005. The
timing of repayment was changed to August 2005 through May 2007 as part of the
amendment made in 2002. The debenture is collateralized by substantially all
Company assets. In connection with this debenture, the Company issued 150,000
five-year warrants to purchase common stock at prices ranging from $1.50 to
$5.20 per share. The proceeds of $2,250,000 were allocated between the debenture
and the warrant based on the relative fair values of the securities at the time
of issuance. The warrants were valued using the Black Scholes pricing model. The
resulting original issue discount, the fair value of the warrants, is being
amortized over the life of the debenture using the straight-line method, which
approximates the interest method.

In 2002, the Company amended the debenture agreement with Convergent Capital
Partners I, L.P., and borrowed an additional $150,000 with interest at 14%
payable monthly and monthly principal payments from August 2005 through May
2007. In connection with this debenture, the Company issued an additional
500,000 seven-year warrants to purchase common stock at $1.10 per share. The
additional warrants were valued using the Black Scholes pricing model. The
resulting original issue discount, the fair value of the warrants, is being
amortized over the life of the debenture using the straight-line method, which
approximates the interest method. The Company was in violation of certain
covenants of this debt agreement. A waiver was obtained from the lender. The
debenture payable may be redeemed at the Company's option at a premium declining
ratably thereafter to par value in April 2005.

In January 2001, the Company borrowed $1,500,000 from Pyramid Trading Limited
Partnership and issued a five-year warrant to the lender to purchase 375,000
common shares at $4.00 per share through January 2003. The debt was also
convertible into common stock of the Company at a conversion rate of $4.75 per
share through January 2003. The proceeds of $1,500,000 were allocated between
the note and the fair value of the warrants using the Black Scholes pricing
model. An additional 375,000 five-year warrants were issued in April 2002 and
the fair value of the warrants was expensed as additional interest expense as of
December 31, 2002. The resulting original issue discount, the fair value of the
warrants, and the beneficial conversion of the note payable into common stock as
defined in EITF 00-27 "Application of Issue No. 98-5 to Certain Convertible
Instruments"(EITF 00-27), is being amortized over the life of the note using the
straight-line method, which approximates the interest method. This note was
converted into stock during 2004.

In February 2003, the Company reached an agreement to convert $962,000 of its
note payable with Pyramid Trading Limited Partnership to equity and to extend
the due date to May 2004. Terms of the conversion state that the note will be
converted to equity over a 14 month period at a price generally equivalent to a
10% discount to market price. The Company issued an additional 253,000 five-year
warrants at an exercise price of $1.00 with the note payable extension. These
warrants, valued at $208,447 using the Black Scholes pricing model, are being
expensed over the remaining term of the note agreement. During the year ended
December 31, 2003, the Company converted principal and accrued interest totaling
$828,172 into 717,741 shares of common stock. During the year ended December 31,
2004, the Company converted principal and accrued interest totaling $212,111
into 153,034 shares of common stock.

In November 2003, the Company borrowed $1,500,000 and issued a three-year
warrant to the lender to purchase 535,000 common shares at $2.21 per share
through November 2006. The debt is also convertible into common stock of the
Company at a conversion rate of $1.40 per share through November 2006. The
proceeds of $1,500,000 were allocated between the note, the intrinsic value of
the conversion option, and the fair value of the warrants using the Black
Scholes pricing model. The resulting original issue discount, the fair value of
the warrant, and the beneficial conversion of the note payable into common stock
as defined in EITF 00-27 is being amortized over the life of the note using the
straight-line method, which approximates the interest method. During the year
ended December 31, 2004, the Company converted principal of $230,909 into
164,836 shares of common stock.

In November 2004, the Company borrowed $2,166,667 from a group of accredited
institutional investors. The notes are convertible into shares of common stock
at a conversion rate of $1.00 per share through November 2007. The notes accrue
interest at the rate of 6% per annum, which interest is payable semi-annually in
cash or common stock at the Company's election. The proceeds of $2,166,667 were
allocated between the notes and the intrinsic value of the conversion option.
The resulting original issue discount and the beneficial conversion of the note
payable into common stock as defined in EITF 00-27 is being amortized over the
life of the note using the straight-line method, which approximates the interest
method. These notes are collateralized by certain assets and are subordinated.

NOTE 8 - Capital Lease Obligations

The Company has lease financing facilities for property, equipment and leasehold
improvements. Leases outstanding under these agreements bear interest at an
average rate of 7.67% and expires through June 2009. The obligations are secured
by the property under lease. Total cost and accumulated amortization of the
leased equipment was $988,593 and $349,647 at December 31, 2004 and $428,749 and
$221,432 at December 31, 2003. Amortization expense related to these obligations
is included in depreciation expense.
<PAGE>

                     MULTIBAND CORPORATION AND SUBSIDIARIES
                    (fka VICOM INCORPORATED AND SUBSIDIARIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2004, 2003 and 2002

Future minimum capital lease payments are as follows for the years ending
December 31:

          2005                                                    $     247,531
          2006                                                          151,099
          2007                                                          313,210
          2008                                                           44,532
          2009                                                           22,268
                                                                  -------------
          Total                                                         778,640

          Less: amounts representing interest                           (95,861)
                                                                  -------------
          Present value of future minimum lease payments                682,779

          Less: current portion                                        (201,530)
                                                                  -------------
          Capital lease obligations, net of current portion       $     481,249
                                                                  =============


NOTE 9 - Note Payable - Stockholder


On June 30, 2003, the Company borrowed $124,000 from a stockholder of the
Company with monthly payments of $5,600 including interest at 7.85%, due in June
2005, and unsecured. The balance due at December 31, 2004 and 2003 is $84,801
and $114,391, respectively. Interest expense related to this note payable was
$4,709 and $1,592 for the years ended December 31, 2004 and 2003, respectively.

NOTE 10 - Stockholders' Equity

      Capital Stock Authorized

The articles of incorporation authorize the Company to issue 100,000,000 shares
of no par capital stock. Authorization to individual classes of stock are
determined by a Board of Directors resolution. The authorized classes of stock
are the following: 275,000 shares of Class A cumulative convertible preferred
stock, 60,000 shares of Class B cumulative convertible preferred stock, 250,000
shares of Class C cumulative convertible preferred stock, 250,000 shares of
Class D cumulative convertible preferred stock, and 400,000 shares of Class E
cumulative convertible preferred stock, 500,000 shares of Class F cumulative
convertible preferred stock, 600,000 shares of Class G cumulative convertible
preferred stock, 15 Shares of Class H cumulative convertible preferred stock and
100 shares of Class I cumulative convertible preferred stock.
<PAGE>

                     MULTIBAND CORPORATION AND SUBSIDIARIES
                    (fka VICOM INCORPORATED AND SUBSIDIARIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2004, 2003 and 2002

      Cumulative Convertible Preferred Stock

Dividends on Class A, Class B, Class C, Class D, Class E, Class F, Class G and
Class H cumulative convertible preferred stock are cumulative and payable
quarterly at 8%, 10%, 10%, 14%, 15%, 10%, 8%, and 6% per annum, respectively.
Cumulative convertible preferred stock can be converted into common shares at
any time as follows: Class A and Class B - five shares, Class C - two shares,
Class D - two and one-half shares, Class E - eight shares, Class F- five shares,
Class G- six and one quarter shares, and Class H is convertible at $1.00 per
share. The intrinsic value of any beneficial conversion option is recorded as
preferred stock dividends at the time of preferred stock issuance. Dividends on
Class B preferred are cumulative and payable monthly at 10% per annum. The
dividends are based on $10 per share for all preferred shares. The Class B
preferred was offered to certain note payable holders at a conversion of $10 per
Class B preferred share. All preferred stock is non-voting. Warrants to purchase
shares of the Company's common stock were given with the issuance of Class A,
Class B, Class D, Class E, Class G and Class H preferred stock and were valued
at fair value using the Black Scholes pricing model. The Company may, but is not
obligated to, redeem the preferred stock at $10.50 per share for Class A and
Class B and $10.00 per share for Class C, Class D, Class E, Class F, and Class G
whenever the Company's common stock price exceeds certain defined criteria as
defined in the preferred stock agreements. The Class H shares can be redeemed
for $100,000 per share. Upon the Company's call for redemption, the holders of
the preferred stock called for redemption have the option to convert each
preferred share into shares of the Company's common stock. Holders of preferred
stock cannot require the Company to redeem their shares. The liquidation
preference is the same as the redemption price for each class of preferred
stock.

      Stock Compensation Plans

The Company has a 1999 Stock Compensation Plan, which permits the issuance of
restricted stock and stock options to key employees and agents. All outstanding
incentive stock options granted under the prior 1997 Stock Options Plan continue
until all agreements have expired. There are 4,300,000 shares of common stock
reserved for issuance through restricted stock, non-qualified stock option
awards and incentive stock option awards. The Plans also provide that the term
of each award be determined by the Board of Directors. Under the Plans, the
exercise price of incentive stock options may not be less than the fair market
value of the stock on the award date, and the options are exercisable for a
period not to exceed ten years from award date.

The Company also has a 2000 Non-employee Director Stock Compensation Plan, which
permits the issuance of stock options for 800,000 shares of common stock to
non-employee directors. The exercise price of the stock options is the fair
market value of the stock on the award date, and the options are exercisable for
a period not to exceed ten years from award date.

      Employee Stock Purchase Plan

The Company has a 2000 Employee Stock Purchase Plan, which allows for the sale
of 400,000 shares of Company common stock to qualified employees. At December
31, 2004 and 2003, no shares were issued under the Plan.
<PAGE>

                     MULTIBAND CORPORATION AND SUBSIDIARIES
                    (fka VICOM INCORPORATED AND SUBSIDIARIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2004, 2003 and 2002

      Stock Subscriptions Receivable

The Company has stock subscriptions receivable including interest receivable
totaling $391,264 and $418,085 due to the Company at December 31, 2004 and 2003,
respectively, from the issuance of common stock. Monthly interest only payments
at interest ranging from 9% to 10% were required through December 2003, with one
note being extended until March 2006, at which time any unpaid stock
subscription receivable was due. The receivables are secured by the common stock
issued. At both December 31, 2004 and 2003, the Company has reserved $71,000
related to stock subscriptions and interest receivable deemed to be
uncollectible. The Company does not record interest receivable on the
outstanding receivable balance once they have determined it to be uncollectible.

      Restricted Stock

The Company awards restricted common shares to selected employees. Recipients
are not required to provide any consideration other than services. Company share
awards are subject to certain restrictions on transfer, and all or part of the
shares awarded may be subject to forfeiture upon the occurrence of certain
events, including employment termination. The intrinsic value at the date of
grant related to the shares awarded is generally amortized over three years, the
vesting term of the awards. Compensation expense recorded during the years ended
December 31, 2004, 2003, and 2002 in connection with the amortization of the
award cost was $8,404, $47,119, and $78,292 respectively.

Restricted stock activity is as follows for the years ended December 31:

                                         2004            2003            2002
                                        -------         -------         -------
        Outstanding, January 1           17,019          45,066          75,337
             Issued                          --              --          22,434
             Vested                     (12,128)        (17,204)        (33,107)
             Forfeited                   (2,219)        (10,843)        (19,598)
                                        -------         -------         -------
        Outstanding, December 31          2,672          17,019          45,066
                                        =======         =======         =======

      Stock Options

Stock option activity is as follows for the years ended December 31:

<TABLE>
<CAPTION>
                                               Options                          Weighted-Average Exercise Price
                             ------------------------------------------      ----------------------------------------
                                 2004            2003            2002            2004           2003           2002
                             ----------      ----------      ----------      ----------     ----------     ----------
<S>                           <C>             <C>             <C>            <C>            <C>            <C>
Outstanding, January 1        1,657,432       1,093,157       1,050,024      $     1.81     $     2.45     $     2.55
     Granted                    621,500         747,775         249,300            1.48           1.35           0.96
     Exercised                       --          (3,000)             --              --           1.25             --
     Forfeited                  (90,500)       (180,500)       (206,167)           2.21           4.49           1.86
                             ----------      ----------      ----------      ----------     ----------     ----------

Outstanding, December 31      2,188,432       1,657,432       1,093,157      $     1.71     $     1.81     $     2.45
                             ==========      ==========      ==========      ==========     ==========     ==========
</TABLE>

The weighted-average grant-date fair value of options granted during the years
ended December 31, 2004, 2003, and 2002 was $1.48, $1.20 and $0.86 respectively.

Options outstanding and exercisable as of December 31, 2004, are as follows:

<TABLE>
<CAPTION>
                                               Outstanding                                    Exercisable
                           ----------------------------------------------------  -------------------------------------
                                                      Weighted - Average
                                                   ----------------------------
                                                                   Remaining                             Weighted-
 Range of Exercise Prices                          Exercise       Contractual                             Average
                                  Options            Price        Life-Years          Options         Exercise Price
---------------------------  -------------------   -----------   --------------   -----------------   ----------------
<S>                          <C>                   <C>           <C>              <C>                 <C>
            $.60                       255,000     $    0.60             5.43              255,000    $         0.60
       $.93   to     $1.38             588,500          1.21             8.58              456,500              1.24
      $1.43   to     $2.08           1,076,266          1.64             7.83              880,582              1.62
      $2.50   to     $2.88             118,000          2.64             5.93              118,000              2.64
      $3.98   to     $5.38              99,666          4.52             5.48               92,916              4.56
      $6.00   to     $6.75              51,000          6.59             5.21               51,000              6.59
                             -----------------     ----------    -------------    -----------------   --------------
       $.60   to     $6.75           2,188,432     $    1.71             7.48            1,853,998    $         1.74
                             =================     ==========    =============    =================   ==============
</TABLE>
<PAGE>

      Stock Warrants

Stock warrants activity is as follows for the years ended December 31:

<TABLE>
<CAPTION>
                                              Outstanding                               Weighted - Average Exercise Price
                             ---------------------------------------------
-------------------------------------------
                                 2004             2003             2002            2004             2003            2002
                             -----------      -----------      -----------      -----------     -----------
-----------
<S>                          <C>              <C>              <C>            <C>             <C>             <C>
Outstanding, January 1         7,421,874        4,327,396        9,564,450      $      1.83     $      2.05     $
2.37
     Granted                   4,902,658        3,687,447        2,546,690             1.35            1.53
1.46
     Exercised                  (528,891)        (556,881)              --             1.46            1.53
--
     Forfeited                        --          (36,088)      (7,783,744)              --            3.59
2.25
                             -----------      -----------      -----------      -----------     -----------
-----------
Outstanding, December 31      11,795,641        7,421,874        4,327,396      $      1.64     $      1.83     $
2.05
                             ===========      ===========      ===========      ===========     ===========
===========
</TABLE>

The weighted-average grant-date fair value of warrants granted during the years
ended December 31, 2004, 2003 and 2002 was $1.16, $1.10 and $1.00, respectively.

Warrants outstanding and exercisable as of December 31, 2004, are as follows:

                                                     Weighted - Average
                                             ----------------------------------
                                                                       Remaining
 Range of Exercise                           Exercise Price      Contractual
      Prices                 Warrants                            Life-Years
----------------------  -------------------  ---------------   ----------------
     $.85 to    $1.25           6,170,185     $        1.17              4.30
    $1.35 to    $2.00           2,545,341              1.63              1.59
    $2.20 to    $3.00           2,521,695              2.25              1.85
    $3.56 to    $5.20             558,420              4.11              1.51
                        -----------------     -------------    --------------
     $.85 to    $5.20          11,795,641     $        1.64              3.06
                        =================     =============    ==============
<PAGE>

                     MULTIBAND CORPORATION AND SUBSIDIARIES
                    (fka VICOM INCORPORATED AND SUBSIDIARIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2004, 2003 and 2002

Stock warrants issued for the years ended December 31 were awarded for:

                                    2004          2003          2002
                                 ---------     ---------     ---------
Common stock                       579,799     1,812,259       728,357

Services rendered                  828,278       941,288       103,333

Preferred stock                  3,419,581       145,900       420,000

Debt issuance and guarantees        75,000       788,000     1,295,000
                                 ---------     ---------     ---------

                                 4,902,658     3,687,447     2,546,690
                                 =========     =========     =========

During the year ended December 31, 2004, the Company issued to common stock
investors 579,799 two to five year warrants with a weighted average exercise
price of $2.21.

During the year ended December 31, 2004, The Company issued 828,278 three to
five year warrants for services related to equity financing with a weighted
average exercise price of $1.11.

During the year ended December 31, 2004, the Company issued to preferred stock
investors 3,419,581 two to five year warrants with a weighted average exercise
price of $1.26.

During the year ended December 31, 2003, 298,091 warrants were exercised with a
weighted average exercise price of $1.05. Based on the warrant agreements, these
warrants were exercised in lieu of cash with the warrant holder receiving
141,529 shares of common stock.
<PAGE>

During the year ended December 31, 2003, the Company issued 400,000 five-year
warrants with a weighted-average exercise price of $0.85 for services related to
investor relations. These warrants were valued at $321,920 using the Black
Scholes pricing model. During 2003, the Company issued 541,288 five-year
warrants with a weighted-average exercise price of $1.02 for services related to
equity financing.

During the year ended December 31, 2002, the Company issued 103,333 three-to
five-year warrants with a weighted-average exercise price of $1.56 for services
related to equity financing.

All warrants were recorded at fair value using the Black Scholes pricing model.

The fair value of stock warrants is the estimated present value at grant date
using the Black Scholes pricing model with the following weighted-average
assumptions:

                                  2004            2003            2002
                            ----------      ----------      ----------
Risk-free interest rate           2.96%           2.37%           3.90%

Expected life               3.35 years       3.4 years       4.5 years
Expected volatility                184%            170%          151.3%
Expected dividend rate               0%              0%              0%
<PAGE>

                     MULTIBAND CORPORATION AND SUBSIDIARIES
                    (fka VICOM INCORPORATED AND SUBSIDIARIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2004, 2003 and 2002

NOTE 11 - Income Taxes

The Company has generated federal and state net operating losses of
approximately $27,857,000 and $10,827,000, respectively, which, if not used,
will begin to expire in 2005. Future changes in the ownership of the Company may
place limitations on the use of these net operating loss carryforwards.


The Company has recorded a full valuation allowance against its deferred tax
asset due to the uncertainty of realizing the related benefits. The change in
the valuation allowance was $3,329,000, $1,722,000 and $402,000 for the years
ended December 31, 2004, 2003 and 2002, respectively.

Components of net deferred income taxes are as follows at December 31:

                                                       2004            2003
                                                   ------------    ------------
Deferred income tax assets:

     Net operating loss carryforwards              $ 11,143,000    $  9,387,000
     Goodwill, including impairment                   1,145,000          65,000
     Amortization of intangibles                        559,000              --
     Asset valuation reserves                           577,000         285,000
     Accrued liabilities                                 69,000          55,000
                                                   ------------    ------------

                                                     13,493,000       9,792,000
Less valuation allowance                            (13,203,000)     (9,674,000)
                                                   ------------    ------------
                                                        290,000         118,000
Deferred income tax liabilities - depreciation         (290,000)       (118,000)
                                                   ------------    ------------

Net deferred income tax assets                     $         --    $         --
                                                   ============    ============

Income tax computed at the federal statutory rate reconciled to the effective
tax rate is as follows for the years ended December 31:

                                            2004           2003           2002
                                        --------       --------       --------
Federal statutory tax rate benefits        (35.0)%        (35.0)%        (35.0)%
State tax, net of federal benefit           (5.0)          (5.0)          (5.0)
Change in valuation allowance               36.1           39.6           36.1
Other                                        3.9            0.4            3.9
                                        --------       --------       --------
Effective tax rate                           0.0%           0.0%           0.0%
                                        ========       ========       ========
<PAGE>

                     MULTIBAND CORPORATION AND SUBSIDIARIES
                    (fka VICOM INCORPORATED AND SUBSIDIARIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2004, 2003 and 2002

The Company has the following net operating loss carryforwards at December 31,
2004, for income tax purposes:

                                      Federal Net          State Net
            Year of Expiration      Operating Loss      Operating Loss
            ------------------      --------------      --------------

                  2005                    599,000            599,000
                  2007                    501,000            501,000
                  2008                     59,000             57,000
                  2009                     22,000             22,000
                  2011                    595,000            575,000
                  2012                     25,000                  -
                  2018                  1,122,000          1,096,000
                  2019                  1,585,000            992,000
                  2020                  4,839,000          1,587,000
                  2021                  4,726,000          1,435,000
                  2022                  4,353,000          1,230,000
                  2023                  4,275,000          1,239,000
                  2024                  5,156,000          1,494,000
                                   --------------     --------------
                                   $   27,857,000     $   10,827,000
                                   ==============     ==============

Under Internal Revenue Code Section 382, utilization of federal losses expiring
prior to 2019 are limited to approximately $375,000 each year.

NOTE 12 - Supplemental Cash Flows Information

<TABLE>
<CAPTION>
                                                              2004           2003           2002
                                                           ----------     ----------     ----------
<S>                                                        <C>            <C>            <C>
Cash paid for interest                                     $1,409,095     $  436,061     $  512,167
Noncash investing and financing transactions:
     Property and equipment in lieu of cash for
       accounts receivable                                     61,312             --             --
    Stock options issued for commissions earned                    --             --         53,745
    Issuance of preferred and common stock for
       acquisition of assets                                   57,650         76,500         18,590
    Current liabilities converted to stock                         --        192,690         59,755
    Common stock issued for guarantee of debt                      --             --         14,750
    Purchase of customer lists and equipment
       through payable to Florida Cable                            --        465,000             --
    Notes payable and accrued interest converted
       to common and preferred stock                          637,596        828,172      1,164,882
    Capitalized lease equipment purchases                          --             --        174,986
    Conversion of preferred stock to common stock             776,500         40,000        150,000
    Conversion of preferred stock into note payable                --             --        400,000
    Conversion of note payable into preferred stock            50,000             --             --
    Conversion of preferred stock into short-term debt        500,000             --             --
    Reduction of stock subscription receivable
       related to commission earned on equity
       transactions                                            17,320         36,977         40,563
    Warrants issued related to modifications of
       long-term debt                                              --        208,447        528,650
    Warrants issued for modification of short-term
       debt                                                    68,652             --             --
    Conversion of preferred stock dividends into
       common stock                                           124,618        113,209             --
    Issuance of common stock for acquisition of
       assets - SBC                                           270,152             --             --
    Capital lease assumed in acquisition of
       equipment from SBC                                     187,424             --             --
    Issuance of common stock, short-term debt, and
       long-term debt for acquisition of MDU
                                                            6,660,000             --             --
    Issuance of preferred stock, short-term debt
       and accrued expenses for acquisition of              6,541,849
       Rainbow
    Issuance of common stock and accrued expenses
       for acquisition of assets - 21st Century               364,584             --             --
    Capital lease assumed in acquisition of
       equipment from 21st Century                            372,420             --             --
    Issuance of common stock and contingent
       liability for acquisition of assets - URON,            458,500             --             --
       Inc
    Issuance of common stock for remaining 50%
       ownership of MBUSA                                      39,000             --             --
</TABLE>

NOTE 13 - Retirement Savings Plan

The Company has 401(k) profit sharing plan covering substantially all full-time
employees. Employee contributions are limited to the maximum amount allowable by
the Internal Revenue Code. The Company made no discretionary contributions for
any of the years presented.
<PAGE>

                     MULTIBAND CORPORATION AND SUBSIDIARIES
                    (fka VICOM INCORPORATED AND SUBSIDIARIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2004, 2003 and 2002

NOTE 14 - Commitments and Contingencies

      Operating leases

Office space was leased from an LLC which an officer of the Company was partial
owner of through August 2003. In addition to basic monthly rents ranging from
$16,640 to $17,653, the Company paid building maintenance costs, real estate
taxes and assessments. During 2003, the Company converted $72,000 of accrued
rent into 7,200 shares of Class C preferred stock. At December 31, 2004 and
2003, accrued rent of $19,500 and $56,560, respectively, was owed to this
related party. In August 2003, the Company signed a new lease agreement with an
unrelated party.

The Company has various other operating leases for its corporate office space,
vehicles and various equipment with lease terms expiring in August 2017. The
monthly base rents range from $84,321 to $97,910, net of payments received from
subleases. In July 2003, the Company entered into an agreement to sublease a
portion of their office space through August 2008 for approximately $5,000 per
month. The leases contain provisions for payments of real estate taxes,
insurance and common area costs.

Total rent expense for the years ended December 31, 2004, 2003 and 2002
including common area costs and real estate taxes was approximately $634,000,
$578,000 and $566,000, respectively. Rent expense with related parties for
December 31, 2004, 2003, 2002 was approximately $0, $59,000 and $462,000,
respectively.

Future minimum rental payments, net of payments received from subleases, are as
follows for the years ending December 31:

        Year                         Amount
        ----                      -----------
        2005                      $   530,000
        2006                          516,000
        2007                          541,000
        2008                          587,000
        2009                          638,000
     Thereafter                     3,872,000
                                  -----------
                                  $ 6,684,000
                                  ===========

      Legal proceedings

The Company is involved in legal actions in the ordinary course of its business,
including an action brought by Private Investor's Equity Group (PIEG) brought in
the third quarter of 2004, Although the outcome of any such legal actions cannot
be predicted, management believes that there is 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 master agent for DirecTV pursuant to a system operator agreement
with DirecTV dated May 22, 2003. 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
amounted to 44.3% of total revenue in 2004.
<PAGE>

                     MULTIBAND CORPORATION AND SUBSIDIARIES
                    (fka VICOM INCORPORATED AND SUBSIDIARIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2004, 2003 and 2002

NOTE 15 - Related Party

The Company had revenues from companies that are associated with a director, who
was elected to the board of directors during 2003, of approximately $0,
$1,124,000 and $636,000 for the years ended December 31, 2004, 2003, and 2002,
respectively. In addition, the Company had accounts receivable outstanding from
these companies of approximately $140,000, $142,000, and $171,000 at December
31, 2004, 2003, and 2002, respectively.

NOTE 16 - Subsequent Events

      Private Placement

On February 3, 2005, Multiband Corporation completed a $10 million private
placement of the company's Series I Convertible Preferred Stock.

The offering was made by Mercator Advisor Group, LLC of Los Angeles, California,
through its designated funds, Monarch Pointe Fund, Ltd, Mercator Momentum Fund,
LP. Mercator Momentum Fund III, LP., and certain investors.

Under the terms of the preferred stock offering, the Company issued 100,000
shares of its Series I Convertible Preferred Stock in the aggregate offering
amount of $10 million. The shares of Series I Convertible Preferred Stock
contain a monthly dividend that is payable at prime plus 10% through August 31,
2005, at prime rate from September 1, 2005 through August 31, 2006, and at prime
rate plus 1% thereafter. The preferred shares are convertible into 7,142,858
shares of common stock at the fixed rate of $1.50 per share. In addition, the
investors received three-year warrants to purchase shares of Common Stock at
exercise prices of $1.57 and $1.73 per share. The Company is also required to
file a registration statement providing for the resale of shares issuable upon
the conversion of the Series I Convertible Preferred Stock and upon exercise of
the warrants.

      Acquisition of Assets

Effective April 1, 2005, the Company purchased certain video assets (equipment
and video subscribers) from Ultravision, Inc. for $275,000.
<PAGE>

      Sale of Multiband Business Services segment

Effective after the close of business 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 purchase price paid by the Buyer was $2,650,000 which consisted of
$1,683,184 in cash at closing, $366,816 in assumed vacation pay and warranty
liabilities, and the balance of $600,000 in a note receivable at 7% interest due
on December 31, 2005. The amount of the note receivable is subject to adjustment
based on certain representations and warranties provided by the Company in the
purchase agreement. The Company anticipates a reserve of $300,000 against this
note receivable due to uncertainty of collectibility of the note.

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
Seller's Minneapolis and Fargo locations and obtain access to certain aspects of
Seller'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 may receive additional
free rent for part or all of a second year depending on the results of a post
closing inventory appraisal. It is indeterminable at this time the results of
this appraisal, however the Company estimates the second year option will be
exercised and will be accruing the liability as part of the sale transaction.

In conjunction with the sale, the Company reduced its indebtedness to Convergent
Capital $2,000,000. Estimated gain on sale of MBS Business:

Sale Price:
      Cash proceeds                                                $ 1,700,183
      Note receivable, net of reserve of $300,000                      300,000
      Assumed liabilities                                              349,817
                                                                   -----------
              Total sale price                                       2,350,000

Assets sold:
      Inventory, net of reserve                                      1,053,661
      Property and equipment                                            60,120
                                                                   -----------
             Net assets sold                                         1,113,781

Less costs and expenses:
      Broker's fee                                                     100,000
      Sublease for one year at no charge                               500,000
      Additional estimated free rent related to
        potential inventory adjustment                                 500,000
      Legal and accounting costs                                        30,000
                                                                   -----------
             Total costs                                             1,130,000
                                                                   -----------
Net gain on sale                                                   $   106,219
                                                                   ===========

The following are condensed statements of operations of the discontinued
operations:

<TABLE>
<CAPTION>
Statement of Operations                     2004              2003              2002
                                        ------------      ------------      ------------
<S>                                     <C>               <C>               <C>
Revenues                                $ 18,604,855      $ 21,199,303      $ 23,963,748

Cost of sales                             14,564,286        15,067,483        17,618,617
Selling, general and administrative        5,092,867         6,038,823         5,690,015
Depreciation and amortization                345,985           432,366           482,387
Income (loss) from operations             (1,398,283)         (399,369)          172,689
Impairment of goodwill                    (2,748,879)               --                --
Other income (expense)                      (310,158)         (353,587          (165,917)
                                        ------------      ------------      ------------

Net Loss                                $ (4,457,320)     $   (692,956)     $      6,772
                                        ============      ============      ============
</TABLE>
<PAGE>

REPORT  OF  INDEPENDENT  REGISTERED  PUBLIC  ACCOUNTING  FIRM  ON  SUPPLEMENTARY
INFORMATION

To Stockholders, Board of Directors, and Audit Committee

Multiband Corporation and Subsidiaries
(formerly known as Vicom, Incorporated and subsidiaries)
New Hope, Minnesota

Our report on our audits of the basic consolidated financial statements of
Multiband Corporation and Subsidiaries (formerly known as Vicom, Incorporated
and subsidiaries) for the years ended December 31, 2004, 2003 and 2002 appears
on page 1. The audits were made for the purpose of forming an opinion on the
basic consolidated financial statements taken as a whole. The supplementary
information is presented for purposes of additional analysis and is not a
required part of the basic consolidated financial statements. Such information
has been subjected to the auditing procedures applied in the audits of the basic
consolidated financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic consolidated financial statements
taken as a whole.


                                              /s/ VIRCHOW, KRAUSE & COMPANY, LLP

Minneapolis, Minnesota March 8, 2005 (except as to Note 16 as to which the date
is April 8, 2005) <PAGE>

                     MULTIBAND CORPORATION AND SUBSIDIARIES
                    (fka VICOM INCORPORATED AND SUBSIDIARIES)

                        VALUATION AND QUALIFYING ACCOUNTS
                  Years Ended December 31, 2004, 2003 and 2002

<TABLE>
<CAPTION>
                    Column A                               Column B          Column C           Column D
Column E
---------------------------------------------------   -----------------   -------------      --------------
-----------------

                                                                            Additions
                                                                           Charged to
                                                         Balance at         Costs and
Balance at
                  Description                         Beginning of Year     Expenses           Deductions          End of
Year
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>                   <C>             <C>                    <C>
ALLOWANCE DEDUCTED FROM ASSET TO WHICH IT APPLIES
Allowance for doubtful accounts receivable:
         2004                                            $   223,000        $   2,000        $                      $
225,000
         2003                                                236,000               --            13,000 (A)
223,000
         2002                                                178,000           58,000                --
236,000
Notes receivable:
         2004                                                     --               --
--                    --
         2003                                                 30,000               --            30,000
(A)                --
         2002                                                     --           30,000                --
30,000
Stock subscriptions and interest receivable
         2004                                                 71,000
71,000
         2003                                                     --           71,000                 --
71,000
         2002                                                     --               --
--                   --
</TABLE>

   (A) Write-off uncollectible receivables <PAGE>

Item 9.

Changes in and  Disagreements  with  Accountants  on  Accounting  and  Financial
Disclosure

      None

Item 9A.

Controls and Procedures.

      The Company, under the supervision and with the participation of its
management, including the Chief Executive Officer, evaluated the effectiveness
of the design and operation of the Company's "disclosure controls and
procedures" (as defined in Rule 13a-15(e) under the Securities Exchange Act of
1934 (the Exchange Act)) as of the end of the period covered by this report.
Based on that evaluation, the Chief Executive Officer and the Chief Financial
Officer concluded that the Company's disclosure controls and procedures are
effective in timely making known to him material information relating to the
Company and the Company's consolidated subsidiaries required to be disclosed in
the Company's reports filed or submitted under the Exchange Act. There has been
no change in the Company's internal control over financial reporting during the
quarter ended December 31, 2004 that has materially affected, or is reasonably
likely to materially affect, the Company's internal control over financial
reporting.

      Management is aware that there is a lack of segregation of duties due to
the small number of employees dealing with general administrative and financial
matters. However, management has decided that considering the employees involved
and the control procedures in place, risks associated with such lack of
segregation are insignificant and the potential benefits of adding employees to
clearly segregate duties do not justify the expenses associated with such
increases.

Item 9B. None

PART III

Item 10.  Directors,  Executive  Officers,  Promoters and Control Persons of the
Registrant

      Information with respect to the directors and executive officers of the
Company set forth under "Information Concerning Directors, Nominees and
Executive Officers" and under "Compliance with Section 16 (a) "in the Company's
definitive proxy statement for the annual meeting of shareholders to be held on
or about June 30, 2005, is incorporated herein by reference.

Item 11. Executive Compensation

      Information with respect to Executive Compensation set forth under
"Executive Compensation" in the Company's definitive proxy statement for the
annual meeting of shareholders to be held on or about June 30, 2005 is
incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management

      Information with respect to security ownership of certain beneficial
owners and management, set forth under "Beneficial Ownership of Principal
Shareholders and Management" in the Company's definitive proxy statement for the
annual meeting of shareholders to be held on or about June 30, 2005, is
incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions

      Information with respect to certain relationships and related
transactions, set forth under "Information Concerning Directors, Nominees and
Executive Officers" in the Company's definitive proxy statement for the annual
meeting of shareholders to be held on or about June 30, 2005, is incorporated
herein by reference.

Item 14. Principal Accountant Fees and Services

      The Audit Committee of the Company selected Virchow, Krause & Company, LLP
("Virchow Krause"), certified public accountants with offices in Minneapolis,
Minnesota, to audit the Company's financial statements for the years ended
December 31, 2004, 2003 and 2002. The following table details the fees paid to
Virchow Krause for the years ended December 31, 2004 and 2003.

                                    2004                 2003
                                    ----                 ----
Audit Fees                       $135,390              $100,929
Audit-Related Fees                 38,950 (3)             2,150 (1)
Tax Fees                           15,540                15,000
All Other Fees                          0                 1,705 (2)
                                 --------              --------

Total                            $188,880              $119,784
                                 ========              ========

(1)   Fees related to review of Form S-3 Filings

(2)   Fees related to miscellaneous research projects

(3)   Fees related to review of Form S-1 filings, audits of acquisition and
      proforma required by Fork 8-K rules.

      The Company's Audit committee consists of Frank Bennett, Jonathan Dodge
and Donald Miller. All three are considered audit committee financial experts
independent from managers. The Company's current audit committee charter has
been filed previously as exhibit 3.5. The audit committee is responsible for
engaging the audit firm and fees related to their services.

      The policy of the Company's audit committee is to review and pre-approve
both audit and non-audit services to be provided by the independent auditors
(other than with de minimis exceptions permitted by the Sarbanes-Oxley Act of
2002). This duty may be delegated to one or more designated members of the audit
committee with such approval reported to the committee at its next regularly
scheduled meeting. Approval of non-audit services shall be disclosed to
investors in periodic reports required by section 13(a) of the Securities
Exchange Act of 1934. Approximately 95 % of the fees paid to Virchow Krause were
pre-approved by the audit committee.

      No services in connection with appraisal or valuations services, fairness
opinions or contribution-in-kind reports were rendered by Virchow Krause.
Furthermore, no work of Virchow Krause with respect to its services rendered to
the Company was performed by anyone other than Virchow Krause.

Item 15. Exhibits and Financial Statement Schedules.

      A.    Exhibits

            Exhibit 3.5 states Multiband's code of ethics for its senior
            officers. A copy of said code will be provided upon written request.
            Any waivers or amendments to said code will be posted to Multiband's
            website or disclosed in an 8K filing.

            Exhibit 3.6 provides Multiband's Audit committee charter

      Exhibits

See Index to Exhibits on page 51 of this report.
<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of Section 13 or Section 15(d) of Securities
Exchange Act of 1934, the registrant has duly caused this Amendment No. 2 10-K
Report to be signed on its behalf by the undersigned, thereunto duly authorized.

                                        Multiband Corporation
                                        Registrant


Date: May 25, 2005                      By:   /s/ James L. Mandel
                                              Chief Executive Officer


Date: May 25, 2005                      By:   /s/ Steven M. Bell
                                              Chief Executive Officer
                                              (Principal Financial and
                                              Accounting Officer)

      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.
<PAGE>

INDEX TO EXHIBITS

Exhibit No.    Description

2.1            Asset  Purchase  Agreement  and  related  documents  with  Enstar
               Networking Corporation dated December 31, 1998(1)

2.2            Agreement and Plan of Merger with Ekman,  Inc. dated December 29,
               1999(1)

2.3            Asset Purchase Agreement with Vicom Systems (14)

3.1            Amended and Restated Articles of Incorporation of Vicom, Inc.(1)

3.2            Restated Bylaws of Vicom, Incorporated(1)

3.3            Articles of Incorporation of Corporate Technologies, USA, Inc.(1)

3.5            Audit Committee Charter (9)

4.1            Certificate of Designation of the Relative  Rights,  Restrictions
               and  Preferences of 8% Class A Cumulative  Convertible  Preferred
               Stock  and 10% Class B  Cumulative  Convertible  Preferred  Stock
               dated December 9, 1998(1)

4.2            Form of Warrant Agreement(1)

4.3            Warrant Agreement with James Mandel dated December 29, 1999(1)

4.4            Warrant Agreement with Marvin Frieman dated December 29, 1999(1)

4.5            Warrant Agreement with Pierce McNally dated December 29, 1999(1)

4.6            Warrant Agreement with Enstar, Inc. dated December 29, 1999(1)

4.7            Warrant Agreement with David Ekman dated December 29, 1999(1)

4.8            Certificate of Designation of the Relative  Rights,  Restrictions
               and Preferences of 10% Class C Cumulative Convertible Stock(2)

4.9            Certificate of Designation of the Relative  Rights,  Restrictions
               and Preferences of 14% Class D Cumulative Convertible Stock(2)

4.10           Certificate of Designation of the Relative  Rights,  Restrictions
               and Preferences of 15% Class E Cumulative Convertible Stock(2)

4.11           Securities Purchase Agreement Dated September 18, 2003 (6)

4.12           Secured Convertible Note Agreement (7)

4.13           Wholesale Services Agreement Dated March 4, 2004 (8)

4.14           Note Purchase Agreement (11)

4.15           Series H Preferred Documents (12)

4.16           Series I Preferred Documents (13)

5.1            Opinion of Steven M. Bell, Esq.(6)

10.1           Vicom Lease with Marbell Realty dated June 20, 1996(1)

10.2           Employment Agreement with Marvin Frieman dated October 1, 1996(1)

10.3           Employment Agreement with Steven Bell dated October 1, 1996(1)

10.4           Employment Agreement with James Mandel dated August 14, 1998(1)

10.5           Vicom  Associate  Agreement  with NEC  America,  Inc.  dated June
               1999(1)

10.6           Loan Agreement with Wells Fargo dated June 17, 1999(1)

10.7           Employment Agreement with David Ekman dated December 29, 1999(1)

10.8           Debenture Loan Agreement with  Convergent  Capital dated March 9,
               2000(1)

10.9           Corporate  Technologies,  USA, Inc.  lease with David Ekman dated
               January 19, 2000(1)

10.10          Amendment  dated July 11, 2000 to debenture  loan  agreement with
               Convergent Capital dated March 9, 2000.(2)

10.11          Corporate  Technologies agreement with Siemens dated December 14,
               2001(4)

10.12          Note with Pyramid Trading, L.P. (4)

10.14          Employment Agreement of Steven M. Bell dated January, 1, 2002(5)

10.15          Employment Agreement of James Mandel dated January 1, 2002(5)

10.16          Acquisition Agreement of Minnesota Digital Universe (9)

10.17          Acquisition of Rainbow Satellite Group, LLC (10)

14             Vicom Code of Ethics for Senior Officers (9)

19.1           2000 Non-Employee Director Stock Compensation Plan (3)

19.2           2000 Employee Stock Purchase Plan (3)

21.1           List of subsidiaries of the registrant(1)

23             Consent of Virchow, Krause & Company, LLP (15)

24.1           Power  of  Attorney  (included  on  signature  page  of  original
               registration statement)

31.1           Rule 13a-14 (s)  Certification of Chief Executive Officer - James
               Mandel (15)

31.2           Rule 13a-14 (s) Certification of Chief Financial Officer - Steven
               Bell (15)

32.1           Section 1350 of Sarbanes-Oxley Act of 2002 - James Mandel (15)

32.2           Section 1350of Sarbanes-Oxley Act of 2002 - Steven Bell (15)

(1)   Previously filed as the same exhibit to the Registrant's Registration
      Statement on Form 10, as amended.

(2)   Previously filed as the same exhibit to the original Registration
      Statement on Form S-1 filed on August 11, 2000 and declared effective on
      August 18, 2000.

(3)   Previously filed as the same exhibit to Registrant's Proxy Statement on
      Form 14A, filed on July 31, 2000.

(4)   Previously filed as the same exhibit to the original Registration
      Statement on Form S-1 filed on August 15, 2001 and declared effective on
      August 20, 2001.

(5)   Previously filed as the same exhibit to Registrant's Form 10-Q filed May
      15, 2002

(6)   Previously filed as the same exhibit to Registrant's Form 8-K filed
      September 24, 2003.

(7)   Previously filed as the same exhibit to Registrant's Form 8-K filed
      December 16, 2003.

(8)   Previously filed as the same exhibit to Registrant's Form 8-K filed March
      17, 2004.

(9)   Previously filed as the same exhibit to registrants Form 8-K filed June 9,
      2004.

(10)  Previously filed as the same exhibit to registrants form 8-K filed July 9,
      2004.

(11)  Previously filed as the same exhibit to registrants form 8-K filed
      November 19, 2004.

(12)  Previously filed as the same exhibit to registrants form 8-K filed
      November 24, 2004.

(13)  Previously filed as the same exhibit to registrants form 8-K filed
      February 3, 2005.

(14)  Previously filed as the same exhibit to registrants form 8K filed April 6,
      2005 Filed herewith.

(15)  Filed herewith.