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|  x                                            | ANNUAL      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT      OF 1934           |
|----------------------------------------------------|--------------------------------------------------------------------------------------------------------------|
| FOR      THE FISCAL YEAR ENDED DECEMBER 31, 2008OR |
|   ̈                                       | 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               |

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|          | Page          |
|---------------|---------------|
|          |          |
| Part      I   | Item      1.  | Business | 2 |
|          |          |   |   |
|          | Item      1A. | Risk      Factors | 4 |
|          |          |   |   |
|          | Item      1B. | Unresolved      Staff Comments | 7 |
|          |          |   |   |
|          | Item      2.  | Properties | 8 |
|          |          |   |   |
|          | Item      3.  | Legal      Proceedings | 8 |
|          |          |   |   |
|          | Item      4.  | Submission      of Matters to a Vote of Security Holders | 8 |
|          |          |   |   |
| Part      II  |          |   |   |
|          |          |   |   |
|          | Item      5.  | Market      for the Registrant's Common Equity, Related Shareholder Matters and Issuer      Purchases of Equity Securities |  8 |
|          |          |   |   |
|          | Item      6.  | Selected      Consolidated Financial Data |        12 |
|          |          |   |   |
|          | Item      7.  | Management's      Discussion and Analysis of Financial Condition and Results of      Operations |        13 |
|          |          |   |   |
|          | Item      7A. | Quantitative      and Qualitative Disclosures About Market Risk |        24 |
|          |          |   |   |
|          | Item      8.  | Consolidated      Financial Statements and Supplementary Data |        24 |
|          |          |   |   |
|          | Item      9.  | Changes      in and Disagreements with Accountants on Accounting and Financial      Disclosure |        24 |
|          |          |   |   |
|          | Item      9A. | Disclosure      Controls and Procedures |        24 |
|          |          |   |   |
|          | Item      9B. | Other      Information |        26 |
|          |          |   |   |
| Part      III |          |   |   |
|          |          |   |   |
|          | Item      10. | Directors,      Executive Officers, and Corporate Governance |        26 |
|          |          |   |   |
|          | Item      11. | Executive      and Director Compensation |        29 |
|          |          |   |   |
|          | Item      12. | Security      Ownership of Certain Beneficial Owners and Management |        33 |
|          |          |   |   |
|          | Item      13. | Certain      Relationships, Related Transactions and Director    Independence |        34 |
|          |          |   |   |
|          | Item      14. | Principal      Accountant Fees and Services |        34 |
|          |          |   |   |
|          | Item      15. | Exhibits      and Financial Statement Schedules |        34 |
|          |          |   |   |
|          |          | Signatures |        37 |

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| Quarter Ended      |   | High Bid |   |   | Low Bid |   |
|--------------------|--------|----------|--------|--------|---------|--------|
| March 31, 2008     |   |     | 3.33   |   |    |   | 1.63 |   |
| June 30, 2008      |   |     | 1.99   |   |    |   | .69 |   |
| September 30, 2008 |   |     | 1.87   |   |    |   | .70 |   |
| December 31, 2008  |   |     | 1.80   |   |    |   | 1.00 |   |
| March 31, 2007     |   |     | 4.10   |   |    |   | 2.00 |   |
| June 30, 2007      |   |     | 3.90   |   |    |   | 1.10 |   |
| September 30, 2007 |   |     | 5.05   |   |    |   | 2.39 |   |
| December 31, 2007  |   |     | 4.20   |   |    |   | 2.26 |   |

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| Statement of OperationsData                                                                                |   | 2008   |       |   | 2007   |   |       | 2006   |   |   | 2005        |   |   | 2004   |        |
|------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|--------|-------------|--------|--------|--------|-------------|
| Revenues                                                                                                   |   | $      | 42,986,513 |   |   | $      | 15,085,604 |   |   | $      | 18,051,601  |   |   | $      | 16,515,426  |   |   | $ | 11,067,834 |   |
| Cost of products and services (exclusive of      depreciation and amortization listed separately    below) |   | $      | 28,425,926 |   |   | $      | 8,339,933  |   |   | $      | 8,280,666   |   |   | $      | 7,849,597   |   |   | $ | 5,943,395 |   |
| Cost of products and services as % of      revenue                                                         |   |   | 66.13      | %      |   |   | 55.3       | %      |   |   | 45.9        | %      |   |   | 47.5        | % |   |   | 53.7 | % |
| Selling, general and administrative      expenses                                                          |   | $      | 10,499,863 |   |   | $      | 8,887,883  |   |   | $      | 11,480,677  |   |   | $      | 9,723,132   |   |   | $ | 5,986,267 |   |
| Selling, general and administrative as % of      revenues                                                  |   |   | 24.43      | %      |   |   | 58.9       | %      |   |   | 63.6        | %      |   |   | 58.9        | % |   |   | 54.1 | % |
| Depreciation and    amortization                                                                           |   | $      | 3,025,478  |   |   | $      | 3,623,903  |   |   | $      | 5,168,209   |   |   | $      | 4,780,436   |   |   | $ | 3,432,779 |   |
| Impairment of assets                                                                                       |   | $      | 132,209    |   |   | $      | -          |   |   | $      | 2,261,500   |   |   | $      | -           |   |   | $ | - |   |
| Income (loss) from    operations                                                                           |   | $      | 903,037    |   |   | $      | (5,766,115 | )      |   | $      | (9,139,451  | )      |   | $      | (5,837,739  | ) |   | $ | (4,294,607 | ) |
| Other income (expense), net                                                                                |   | $      | 1,826,061  |   |   | $      | (322,238   | )      |   | $      | (1,046,472  | )      |   | $      | (1,655,088  | ) |   | $ | (1,032,035 | ) |
| Income (loss) before income taxes and minority      interest in subsidiary                                 |   | $      | 2,729,098  |   |   | $      | (6,088,353 | )      |   | $      | (10,185,923 | )      |   | $      | (7,492,827  | ) |   | $ | (5,326,642 | ) |
| Provision for income taxes                                                                                 |   | $      | 1,132,000  |   |   | $      | -          |   |   | $      | -           |   |   | $      | -           |   |   | $ | - |   |
| Minority interest in net income of      subsidiary                                                         |   | $      | 652,167    |   |   | $      | -          |   |   |   |        |   |   |   |        |   |   |   |   |   |
| Income (loss) from continuing      operations                                                              |   | $      | 944,931    |   |   | $      | (6,088,353 | )      |   | $      | (10,185,923 | )      |   | $      | (7,492,827  | ) |   | $ | (5,326,642 | ) |
| Discontinued operations                                                                                    |   | $      | -          |   |   | $      | -          |   |   | $      | 2,200       |   |   | $      | 17,827      |   |   | $ | (4,457,320 | ) |
| Net income (loss)                                                                                          |   | $      | 944,931    |   |   | $      | (6,088,353 | )      |   | $      | (10,183,723 | )      |   | $      | (7,475,000  | ) |   | $ | (9,783,962 | ) |
| Loss attributable to common      stockholders                                                              |   | $      | (3,143,344 | )      |   | $      | (8,388,855 | )      |   | $      | (14,250,446 | )      |   | $      | (10,827,229 | ) |   | $ | (10,374,417 | ) |
| Income (loss) from continuing      operations                                                              |   | $      | (.34       | )      |   | $      | (1.16      | )      |   | $      | (2.11       | )      |   | $      | (1.86       | ) |   | $ | (1.27 | ) |
| Income (loss) from discontinued      operations                                                            |   | $      | (.00       | )      |   | $      | (.00       | )      |   | $      | (.00        | )      |   | $      | (.00        | ) |   | $ | (.96 | ) |
| Loss attributable to common      stockholders                                                              |   | $      | (.34       | )      |   | $      | (1.16      | )      |   | $      | (2.11       | )      |   | $      | (1.86       | ) |   | $ | (2.23 | ) |
| Weighted average shares      outstanding                                                                   |   |   | 9,302,570  |   |   |   | 7,237,473  |   |   |   | 6,757,643   |   |   |   | 5,819,585   |   |   |   | 4,661,519 |   |

| Balance Sheet Data                       |   | 2008 |       |   | 2007   |   |       | 2006   |   |   | 2005       |   |   | 2004 |       |
|------------------------------------------|--------|------|------------|--------|--------|--------|------------|--------|--------|--------|------------|--------|--------|------|------------|
| Working Capital(deficiency)              |   | $    | 2,465,209  |   |   | $      | (5,018,177 | )      |   | $      | (5,294,245 | )      |   | $    | (971,418   | ) |   | $ | (8,931,414 | ) |
| Total Assets                             |   | $    | 26,043,228 |   |   | $      | 8,893,429  |   |   | $      | 17,986,056 |   |   | $    | 26,271,405 |   |   | $ | 26,633,712 |   |
| Mandatory Redeemable Preferred Stock (1) |   | $    | 150,000    |   |   | $      | 220,256    |   |   | $      | 280,000    |   |   | $    | 333,334    |   |   | $ | 500,000 |   |
| Long-Term Debt, net (2)                  |   | $    | 345,874    |   |   | $      | 118,924    |   |   | $      | 2,969,764  |   |   | $    | 3,816,536  |   |   | $ | 3,498,657 |   |
| Capital Lease Obligations, net (2)       |   | $    | 317,628    |   |   | $      | 249,469    |   |   | $      | 491,672    |   |   | $    | 452,649    |   |   | $ | 481,249 |   |
| Stockholders’ Equity               |   | $    | 5,642,247  |   |   | $      | 673,838    |   |   | $      | 5,659,309  |   |   | $    | 14,968,295 |   |   | $ | 8,549,431 |   |

----

|                                                                                                  |   | 2008   |   |   | 2007   |   |
|-------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Revenues                                                                                              |   |   |   |   |   |   |
| Multiband                                                                                             |   |   | 0.00   | %      |   |   | 0.00 | % |
| MCS                                                                                                   |   |   | 8.68   | %      |   |   | 34.06 | % |
| MDU                                                                                                   |   |   | 36.20  | %      |   |   |  65.94 | % |
| HSP                                                                                                   |   |   | 55.12  | %      |   |   | - | % |
| Total      Revenues                                                                                   |   |   | 100.00 | %      |   |   | 100.00 | % |
|                                                                                                  |   |   |   |   |   |   |   |   |
| Cost      of Products and Services (exclusive of depreciation and      amortization)                  |   |   |   |   |   |   |   |   |
| Multiband                                                                                             |   |   | 0.00   | %      |   |   | 0.00 | % |
| MCS                                                                                                   |   |   | 6.19   | %      |   |   | 23.09 | % |
| MDU                                                                                                   |   |   | 22.11  | %      |   |   | 32.19 | % |
| HSP                                                                                                   |   |   | 37.83  | %      |   |   | - | % |
| Total      Cost of Products and Services (exclusive of depreciation  and      amortization) |   |   | 66.13  | %      |   |   | 55.28 | % |
| Selling,      General and Administrative Expenses                                                     |   |   | 24.43  | %      |   |   | 58.92 | % |
| Impairment      of Assets                                                                             |   |   | 0.31   | %      |   |   | 0.00 | % |
| Income      (Loss) from Continuing Operations                                                         |   |   | 2.20   | %      |   |   | (40.36 | )% |
| Net      Income (Loss)                                                                                |   |   | 2.20   | %      |   |   | (40.36 | )% |

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| Total      Assets |   | 2008   |       |   | 2007   |   |
|-------------------|--------|--------|------------|--------|--------|--------|
| Multiband         |   | $      | 5,567,052  |   |   | $      | 1,272,271 |   |
| MCS               |   |   | 3,373,305  |   |   |   | 2,968,249 |   |
| MDU               |   |   | 4,098,137  |   |   |   | 4,652,909 |   |
| HSP               |   |   | 13,004,734 |   |   |   | - |   |
| Total      Assets |   | $      | 26,043,228 |   |   | $      | 8,893,429 |   |

|                                                                                                        |   | As reported |       |   | Less:      DTHCRelated(1) |   |       | (unaudited)Proforma |   |
|-------------------------------------------------------------------------------------------------------------|--------|-------------|------------|--------|---------------------------|--------|------------|---------------------|--------|
| Accounts      receivable, net                                                                               |   | $           | 3,436,424  |   |                      | $      | (771,427   | )                   |   | $ | 2,664,997 |   |
| Other      receivable – related party                                                                 |   |        | 7,666,295  |   |                      |   | (7,666,295 | )                   |   |   | - |   |
| Prepaid      expenses and other                                                                             |   |        | 1,273,083  |   |                      |   | (518,024   | )                   |   |   | 755,059 |   |
| Accounts      payable                                                                                       |   |        | 8,274,003  |   |                      |   | (1,127,005 | )                   |   |   | 7,146,998 |   |
|                                                                                                        |   |        |       |   |                      |   |       |                |   |   |   |   |
| Revenues                                                                                                    |   |        | 42,986,513 |   |                      |   | (3,333,119 | )                   |   |   | 39,653,394 |   |
| Cost      of products and services (exclusive of depreciation and amortization shown      separately below) |   |        | 28,425,926 |   |                      |   | (2,895,176 | )                   |   |   | 25,530,750 |   |
| Selling,      general and administrative                                                                    |   |        | 10,499,863 |   |                      |   | 750,000    |                |   |   | 11,249,863 |   |
| Management      consulting income                                                                           |   |        | 2,366,466  |   |                      |   | (2,366,466 | )                   |   |   | - |   |

| (1) | All      adjustments described in the paragraphs of Note  16 |
|-----|--------------------------------------------------------------|

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|                                                                                                  |   | 2007   |   |   | 2006   |   |
|-------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Revenues                                                                                              |   |   |   |   |   |   |
| Multiband                                                                                             |   |   | 0.00   | %      |   |   | 0.00 | % |
| MCS                                                                                                   |   |   | 34.06  | %      |   |   | 41.96 | % |
| MDU                                                                                                   |   |   | 65.94  | %      |   |   |  58.04 | % |
| Total      Revenues                                                                                   |   |   | 100.00 | %      |   |   | 100.00 | % |
|                                                                                                  |   |   |   |   |   |   |   |   |
| Cost      of Products and Services (exclusive of depreciation and      amortization)                  |   |   |   |   |   |   |   |   |
| Multiband                                                                                             |   |   | 0.00   | %      |   |   | 0.00 | % |
| MCS                                                                                                   |   |   | 23.09  | %      |   |   | 22.56 | % |
| MDU                                                                                                   |   |   | 32.19  | %      |   |   | 23.31 | % |
| Total      Cost of Products and Services (exclusive of depreciation  and      amortization) |   |   | 55.28  | %      |   |   | 45.87 | % |
| Selling,      General and Administrative Expenses                                                     |   |   | 58.92  | %      |   |   | 63.60 | % |
| Impairment      of Assets                                                                             |   |   | 0.00   | %      |   |   | 12.53 | % |
| Loss      from Continuing Operations                                                                  |   |   | (40.36 | )%     |   |   | (56.42 | )% |
| Gain(Loss)      from Discontinued Operations                                                          |   |   | 0.00   | %      |   |   | 0.01 | % |
| Net      Loss                                                                                         |   |   | (40.36 | )%     |   |   | (56.41 | )% |

----

| Total      Assets |   | 2007   |      |   | 2006   |   |
|-------------------|--------|--------|-----------|--------|--------|--------|
| Multiband         |   | $      | 1,272,271 |   |   | $      | 2,478,638 |   |
| MCS               |   |   | 2,968,249 |   |   |   | 9,063,793 |   |
| MDU               |   |   | 4,652,909 |   |   |   | 6,443,625 |   |
| Total      Assets |   | $      | 8,893,429 |   |   | $      | 17,986,056 |   |

----

|                                                                                                          |   | Dec.      31,2008 |       |   | Sept.      30,2008 |   |       | June      30,2008 |   |   | March      31,2008 |   |   | Dec.      31,2007 |       |   | Sept.      30,2007 |   |       | June      30,2007 |   |   | March      31,2007 |   |
|---------------------------------------------------------------------------------------------------------------|--------|-------------------|------------|--------|--------------------|--------|------------|-------------------|--------|--------|--------------------|--------|--------|-------------------|------------|--------|--------------------|--------|------------|-------------------|--------|--------|--------------------|--------|
| Revenues:                                                                                                     |   |              |       |   |               |   |       |              |   |   |               |   |   |              |       |   |               |   |       |              |   |   |               |   |
| Multiband                                                                                                     |   |              | -          |   |               |   | -          |              |   |   | -                  |   |   |              | -          |   |               |   | -          |              |   |   | -                  |   |   |   | - |   |   |   | - |   |
| MCS                                                                                                           |   | $                 | 1,242,666  |   |               | $      | 799,445    |              |   | $      | 840,466            |   |   | $                 | 848,562    |   |               | $      | 797,164    |              |   | $      | 1,084,114          |   |   | $ | 1,404,398 |   |   | $ | 1,852,080 |   |
| MDU                                                                                                           |   | $                 | 5,164,136  |   |               | $      | 4,148,786  |              |   | $      | 3,360,696          |   |   | $                 | 2,885,711  |   |               | $      | 2,328,159  |              |   | $      | 2,569,486          |   |   | $ | 2,517,328 |   |   | $ | 2,532,875 |   |
| HSP                                                                                                           |   | $                 | 7,719,116  |   |               | $      | 7,392,428  |              |   | $      | 6,604,545          |   |   | $                 | 1,979,956  |   |               | $      | -          |              |   | $      | -                  |   |   | $ | - |   |   | $ | - |   |
| Total      Revenues                                                                                           |   | $                 | 14,125,918 |   |               | $      | 12,340,659 |              |   | $      | 10,805,707         |   |   | $                 | 5,714,229  |   |               | $      | 3,125,323  |              |   | $      | 3,653,600          |   |   | $ | 3,921,726 |   |   | $ | 4,384,955 |   |
| Cost      of Products & services (exclusive of depreciation and amortization      shown separately below) |   | $                 | 9,655,989  |   |               | $      | 8,556,168  |              |   | $      | 6,393,571          |   |   | $                 | 3,820,198  |   |               | $      | 1,944,754  |              |   | $      | 2,345,895          |   |   | $ | 1,871,238 |   |   | $ | 2,178,046 |   |
| SG&A      Expense                                                                                         |   | $                 | 3,326,506  |   |               | $      | 2,757,319  |              |   | $      | 2,560,755          |   |   | $                 | 1,855,283  |   |               | $      | 1,829,947  |              |   | $      | 2,360,254          |   |   | $ | 2,308,426 |   |   | $ | 2,389,256 |   |
| Depreciation      & Amortization                                                                          |   | $                 | 562,399    |   |               | $      | 846,317    |              |   | $      | 879,055            |   |   | $                 | 737,707    |   |               | $      | 808,922    |              |   | $      | 770,215            |   |   | $ | 995,068 |   |   | $ | 1,049,698 |   |
| Impairment      of assets                                                                                     |   | $                 | 66,757     |   |               |   | -          |              |   | $      | 7,406              |   |   | $                 | 58,046     |   |               |   | -          |              |   |   | -                  |   |   |   | - |   |   |   | - |   |
| Operating      Income (Loss)                                                                                  |   | $                 | 514,267    |   |               | $      | 180,855    |              |   | $      | 964,920            |   |   | $                 | (757,005   | )      |               | $      | (1,458,300 | )                 |   | $      | (1,822,764         | )      |   | $ | (1,253,006 | ) |   | $ | (1,232,045 | ) |
| Interest      Expense                                                                                         |   | $                 | (142,804   | )      |               | $      | (300,826   | )                 |   | $      | (113,000           | )      |   | $                 | (100,659   | )      |               | $      | (73,623    | )                 |   | $      | (108,847           | )      |   | $ | (168,010 | ) |   | $ | (153,407 | ) |
| Management      Income                                                                                        |   |              | 919,528    |   |               |   | 1,446,938  |              |   |   | -                  |   |   |              | -          |   |               |   | -          |              |   |   | -                  |   |   |   | - |   |   |   | - |   |
| Other      Income (Expenses)                                                                                  |   | $                 | 36,185     |   |               | $      | 8,109      |              |   | $      | 32,407             |   |   | $                 | 40,183     |   |               | $      | 4,288      |              |   | $      | 13,267             |   |   | $ | 141,037 |   |   | $ | 23,057 |   |
| Net      Income (Loss) Before Taxes and Minority    Interest                                                  |   | $                 | 1,327,176  |   |               | $      | 1,335,076  |              |   | $      | 884,327            |   |   | $                 | (817,481   | )      |               | $      | (1,527,635 | )                 |   | $      | (1,918,344         | )      |   | $ | (1,279,979 | ) |   | $ | (1,362,395 | ) |
| Income      Tax Provision                                                                                     |   | $                 | 382,542    |   |               | $      | 286,658    |              |   | $      | 434,300            |   |   | $                 | 28,500     |   |               |   | -          |              |   |   | -                  |   |   |   | - |   |   |   | - |   |
| Minority      Interest                                                                                        |   | $                 | 102,409    |   |               | $      | 137,755    |              |   | $      | 393,586            |   |   | $                 | 18,417     |   |               |   | -          |              |   |   | -                  |   |   |   | - |   |   |   | - |   |
| Net      Income (Loss)                                                                                        |   | $                 | 842,225    |   |               | $      | 910,663    |              |   | $      | 56,441             |   |   | $                 | (864,398   | )      |               | $      | (1,527,635 | )                 |   | $      | (1,918,344         | )      |   | $ | (1,279,979 | ) |   | $ | (1,362,395 | ) |
| Income      (Loss) attributable to commons stockholders                                                       |   | $                 | 802,646    |   |               | $      | 846,649    |              |   | $      | (47,221            | )      |   | $                 | (4,745,418 | )      |               | $      | (1,674,439 | )                 |   | $      | (3,711,641         | )      |   | $ | (1,400,453 | ) |   | $ | (1,602,322 | ) |
| Income      (Loss) per common share attributable to common stockholders –      basic                    |   | $                 | 0.08       |   |               | $      | 0.09       |              |   | $      | 0.00               |   |   | $                 | (0.56      | )      |               | $      | (0.23      | )                 |   | $      | (.50               | )      |   | $ | (.20 | ) |   | $ | (.23 | ) |
| Income      (Loss) per common share attributable to common stockholders –      diluted                  |   | $                 | 0.08       |   |               | $      | 0.09       |              |   | $      | 0.00               |   |   | $                 | (0.56      | )      |               | $      | (0.23      | )                 |   | $      | (.50               | )      |   | $ | (.20 | ) |   | $ | (.23 | ) |
| Weighted      average shares outstanding – basic                                                        |   |              | 9,634,174  |   |               |   | 9,561,718  |              |   |   | 9,499,469          |   |   |              | 8,497,734  |   |               |   | 7,415,629  |              |   |   | 7,356,413          |   |   |   | 7,093,071 |   |   |   | 7,079,781 |   |
| Weighted      average shares outstanding – diluted                                                      |   |              | 9,865,287  |   |               |   | 9,796,685  |              |   |   | 9,499,469          |   |   |              | 8,497,734  |   |               |   | 7,415,629  |              |   |   | 7,356,413          |   |   |   | 7,093,071 |   |   |   | 7,079,781 |   |

----

| 1. | Reduction      of operating expenses by controlling payroll, professional fees and other      general and administrativeexpenses. |
|----|-----------------------------------------------------------------------------------------------------------------------------------|

| 2. | Delivery      of video services to residents of single family      homes.  Effective March 1, 2008 the Company purchased 51% of the      outstanding stock of Michigan Microtech, Inc. (MMT), formerly a wholly      owned subsidiary of DTHC.  MMT installs DirecTV video services      in single family homes.  Historically, MMT has been      profitable.  In 2008, by combining MMT operations with Multiband      operations, Multiband achieved a beneficial impact to its consolidated      cash flows and operating results.  In January 2009, Multiband      significantly expanded its single family home video installation business      by purchasing the former operations of DTHC.  However, there is      no guarantee that the results of the HSP business segment will be      favorable to the Company in futureperiods. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

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

| 6. | Expansion      of call center support via sales of call center services to both existing      and future system operators and to buyers of the Company’s video      subscribers. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7. | Sale      of video assets on a strategic basis. The Company, based on recent      transactions, believes there is an active market for its video subscriber      assets. The Company believes it can sell these assets, under certain      circumstances, at prices at or above their current carrying value.      However, there is no guarantee these sales will ultimately be favorable to      the Company. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

|                              |   | Total  |      |   | 1 Year or Less |   |      | 2-3 Years |   |   | Over 3Years |   |
|-----------------------------------|--------|--------|-----------|--------|----------------|--------|-----------|-----------|--------|--------|-------------|--------|
| Operating      leases - buildings |   | $      | 2,335,000 |   |           | $      | 625,000   |      |   | $      | 944,000     |   |   | $ | 766,000 |   |
| Operating      leases - vehicles  |   |   | 3,412,000 |   |           |   | 1,060,000 |      |   |   | 1,814,000   |   |   |   | 538,000 |   |
| Capital      leases               |   |   | 722,370   |   |           |   | 368,639   |      |   |   | 349,948     |   |   |   | 3,783 |   |
| Long-term      debt               |   |   | 2,255,589 |   |           |   | 1,721,198 |      |   |   | 40,597      |   |   |   | 493,794 |   |
| Totals                            |   | $      | 8,724,959 |   |           | $      | 3,774,837 |      |   | $      | 3,148,545   |   |   | $ | 1,801,577 |   |

|   Year |   | Amount |       |
|------------------|--------|--------|------------|
| 2009             |   |   | 6,397,000  |   |
| 2010             |   |   | 5,640,000  |   |
| 2011             |   |   | 4,501,000  |   |
| 2012             |   |   | 1,667,000  |   |
| 2013             |   |   | 451,000    |   |
| Thereafter       |   |   | 901,000    |   |
|             |   | $      | 19,557,000 |   |

----

----

----

| Name of Director and/or Executive Officer |    | Age |    | Position                                                            |    | Director Since |
|--------------------------------------------------------------------|--------------|-----|--------------|---------------------------------------------------------------------|--------------|---------------------|
| Steven Bell                                                   |         | 49  |         | President      & Chief Financial Officer, Multiband Corporation |         | 1994                |
| Frank      Bennett                                                 |         | 52  |         | President,      Artesian Management, Inc.                           |         | 2002                |
| Jonathan      Dodge                                                |         | 57  |         | Partner,      Dodge & Fox C.P.A. Firm                           |         | 1997                |
| Eugene      Harris                                                 |         | 44  |         | Managing      Director, Flagstone Securities                        |         | 2004                |
| James      L. Mandel                                               |         | 51  |         | Chief      Executive Officer, Multiband Corporation                 |         | 1998                |
| Donald      Miller                                                 |         | 68  |         | Chairman,      Multiband Corporation                                |         | 2001                |
| Bernard      Schafer                                               |         | 49  |         | Director,      DirecTECH Holding Company, Inc.                      |         | 2008                |

----

| · | recommends      to our Board of Directors the independent registered public accountants to      conduct the annual audit of our books and  records; |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| · | reviews      the proposed scope and results of theaudit; |
|--------|----------------------------------------------------------|

| · | approves      the audit fees to be paid; |
|--------|------------------------------------------|

| · | reviews      accounting and financial controls with the independent registered public      accountants and our financial and accounting staff;  and |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| · | reviews      and approves transactions between us and our Directors, officers and      affiliates. |
|--------|----------------------------------------------------------------------------------------------------|

----

----

| · | reviews      and recommends the compensation arrangements for management, including the      compensation for our chief executive officer;  and |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

| · | establishes      and reviews general compensation policies with the objective to attract      and retain superior talent, to reward individual performance and to      achieve our financial goals. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Item      11. | Executive      and Director Compensation |
|---------------|------------------------------------------|

----

| Name and principalposition          |   | Year |   | Salary |    |   | Bonus  |   |    | (1)Stockawards |   |   | Optionawards |   |   | Non-equityincentive plancompensation |   |   | Change inpension valueand nonqualifieddeferredcompensationearnings |   |   | All othercompensation |   |   | Total |   |
|-----------------------------------------------|--------|------|--------|--------|---------|--------|--------|--------|---------|----------------|--------|--------|--------------|--------|--------|-------------------------------------------|--------|--------|-----------------------------------------------------------------------------------|--------|--------|----------------------------|--------|--------|-------|--------|
| James      MandelChief      Executive Officer |   | 2008 |   | $      | 259,615 |   |   | $      | 155,500 |           |   | $      | 15,750       |   |   | $                                         | -      |   |                                                                              | $      | -      |                       |   | $      | -     |   |   | $ | 7,848 |   |   | $ | 438,713 |   |
| Steven      BellChief      Financial Officer  |   | 2008 |   |   | 208,814 |   |   |   | 7,000   |           |   |   | 7,875        |   |   |                                      | -      |   |                                                                              |   | -      |                       |   |   | -     |   |   |   | 7,848 |   |   |   | 231,537 |   |
| Dave      EkmanChief      Information Officer |   | 2008 |   |   | 155,764 |   |   |   | 2,183   |           |   |   | -            |   |   |                                      | -      |   |                                                                              |   | -      |                       |   |   | -     |   |   |   | 5,000 |   |   |   | 162,947 |   |

|  | (1) | The      amounts in this column are calculated based on FAS 123R and equal the      financial statement compensation expense as reported in our 2008      consolidated statement of operations for the fiscal  year. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Name                      |   | Fees earnedor paid incash |   |   | Stock awards |   |   | (1)Optionawards |   |   | Non-equityincentive plancompensation |   |   | Change inpension valueand nonqualifieddeferredcompensationearnings |   |   | (2)All othercompensation |   |   | Total  |   |
|---------------------------|--------|------------------------------------------|--------|--------|-------------------|--------|--------|-----------------|--------|--------|-------------------------------------------|--------|--------|-----------------------------------------------------------------------------------|--------|--------|-------------------------------|--------|--------|--------|--------|
| F  Bennett      |   | $                                        | 10,000 |   |              | $      | -      |            |   | $      | 8,694                                     |   |   | $                                                                                 | -      |   |                          | $      | -      |   |   | $ | 2,216 |   |   | $ | 20,910 |   |
| J   Dodge  |   |                                     | 10,000 |   |              |   | -      |            |   |   | 8,694                                     |   |   |                                                                              | -      |   |                          |   | -      |   |   |   | - |   |   |   | 18,694 |   |
| E   Harris |   |                                     | 10,000 |   |              |   | -      |            |   |   | 8,694                                     |   |   |                                                                              | -      |   |                          |   | -      |   |   |   | 3,754 |   |   |   | 22,448 |   |
| D   Miller |   |                                     | 10,000 |   |              |   | -      |            |   |   | 17,387                                    |   |   |                                                                              | -      |   |                          |   | -      |   |   |   | 1,251 |   |   |   | 28,638 |   |

|  | (1) | The      amounts in this column are calculated based on FAS 123R and equal the      financial statement compensation expense as reported in our 2008      consolidated statement of operations for the fiscal year.  Total      board of directors options outstanding at December 31, 2008 are      164,400 |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (2) | Represents      payment of expenses incurred in conjunction with attending board      meetings. |
|--|-----|-------------------------------------------------------------------------------------------------|

----

| Option      Awards   |   | Stock      Awards                                                        |    |
|----------------------|--------|--------------------------------------------------------------------------|---------|
| Name                 |   | Number ofSecuritiesUnderlyingUnexercisedOptionsExercisable (#) |    |   | Number ofSecurities UnderlyingUnexercisedOptionsUnexercisable (#) |   |   | EquityIncentive PlanAwards: Number ofSecuritiesUnderlyingUnexercisedUnearned Options (#) |   |   | OptionExercisePrice ($) |   | OptionExpirationDate |   | Number ofShares or Units of Stock ThatHave NotVested (#) |   |   | Market Value ofShares or Units of Stock That Have Not Vested ($) |   |   | Equity Incentive Plan Awards:Number of Unearned Shares, Units or Other Rights That Have NotVested (#) |   |   | Equity Incentive Plan Awards: Market or Payout Value of UnearnedShares, Units or Other Rights That Have Not Vested ($) |   |
| Steven      M. Bell  |   |                                                                     | 2,000   | (1) |   |   | - |   |   |   | - |   |   | $ | 22.00 |   | 1/31/2011 |   |   | - |   |   | $ | - |   |   |   | - |   |   | $ | - |   |
|                 |   |                                                                     | 100     | (2) |   |   | - |   |   |   | - |   |   |   | 7.50 |   | 8/28/2011 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                 |   |                                                                     | 10,000  | (3) |   |   | - |   |   |   | - |   |   |   | 5.50 |   | 1/8/2013 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                 |   |                                                                     | 5,000   | (4) |   |   | - |   |   |   | - |   |   |   | 9.45 |   | 4/23/2014 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                 |   |                                                                     | 10,000  | (5) |   |   | - |   |   |   | - |   |   |   | 7.25 |   | 6/18/2014 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                 |   |                                                                     | 80,000  | (6) |   |   | - |   |   |   | - |   |   |   | 7.35 |   | 1/16/2015 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                 |   |                                                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| David      Ekman     |   |                                                                     | 30,000  | (7) |   |   | - |   |   |   | - |   |   |   | 10.00 |   | 12/29/2009 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                 |   |                                                                     | 100     | (8) |   |   | - |   |   |   | - |   |   |   | 7.50 |   | 8/28/2011 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                 |   |                                                                     | 40,000  | (9) |   |   | - |   |   |   | - |   |   |   | 6.75 |   | 4/27/2015 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                 |   |                                                                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| James      L. Mandel |   |                                                                     | 100     | (10) |   |   | - |   |   |   | - |   |   |   | 7.50 |   | 8/28/2011 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                 |   |                                                                     | 60,000  | (11) |   |   | - |   |   |   | - |   |   |   | 7.50 |   | 1/8/2013 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                 |   |                                                                     | 20,000  | (12) |   |   | - |   |   |   | - |   |   |   | 7.25 |   | 6/18/2014 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                 |   |                                                                     | 120,000 | (13) |   |   | - |   |   |   | - |   |   |   | 7.35 |   | 1/6/2015 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |

| (1) | The      stock option was granted January 31, 2001 and is fully    vested. |
|-----|----------------------------------------------------------------------------|

| (2) | The      stock option was granted August 28, 2001 and is fully    vested. |
|-----|---------------------------------------------------------------------------|

| (3) | The      stock option was granted January 8, 2003 and is fully    vested. |
|-----|---------------------------------------------------------------------------|

| (4) | The      stock option was granted April 23, 2004 and is fully    vested. |
|-----|--------------------------------------------------------------------------|

| (5) | The      stock option was granted June 18, 2004 and is fully  vested. |
|-----|-----------------------------------------------------------------------|

| (6) | The      stock option was granted January 6, 2005 and is fully    vested. |
|-----|---------------------------------------------------------------------------|

| (7) | The      stock option was granted December 29, 1999 and is fully      vested. |
|-----|-------------------------------------------------------------------------------|

| (8) | The      stock option was granted August 28, 2001 and is fully    vested. |
|-----|---------------------------------------------------------------------------|

| (9) | The      stock option was granted April 27, 2005 and is fully    vested. |
|-----|--------------------------------------------------------------------------|

| (10) | The      stock option was granted August 28, 2001 and is fully    vested. |
|------|---------------------------------------------------------------------------|

| (11) | The      stock option was granted January 8, 2003 and is fully    vested. |
|------|---------------------------------------------------------------------------|

| (12) | The      stock option was granted June 18, 2004 and is fully  vested. |
|------|-----------------------------------------------------------------------|

| (13) | The      stock option was granted January 6, 2005 and is fully    vested. |
|------|---------------------------------------------------------------------------|

----

----

| Name and Address of Beneficial Owners                                            |   | Number of Shares1Beneficially Owned |      |   | Percent ofCommon SharesOutstanding |   |
|-----------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|-----------|--------|----------------------------------------------|--------|
| Steven      Bell9449      Science Center DriveNew      Hope, MN  55428                          |   |                                               | 225,313   | 2      |                                         |   | 2.34 | % |
| Frank      Bennett301      Carlson Parkway – Suite 120Minnetonka,      Minnesota  55305   |   |                                               | 228,000   | 3      |                                         |   | 2.36 | % |
| Jonathan      Dodge715      Florida Avenue South – Suite 402Golden      Valley, MN  55426 |   |                                               | 56,100    | 4      |                                         |   | * |   |
| David      Ekman200      44th      Street SWFargo,      ND  58103                               |   |                                               | 433,917   | 5      |                                         |   | 4.50 | % |
| Eugene      Harris7773      Forsyth BlvdClayton,      MO  63105                                 |   |                                               | 101,290   | 6      |                                         |   | 1.05 | % |
| James      L. Mandel9449      Science Center DriveNew      Hope, MN 55428                                 |   |                                               | 247,367   | 7      |                                         |   | 2.57 | % |
| Donald      Miller1924      Cocoplum WayNaples,      FL  34105                                  |   |                                               | 337,021   | 8      |                                         |   | 3.50 | % |
| Bernard      Schafer2185      East Remus RoadMt.      Pleasant, MI 48858                                  |   |                                               | -         |   |                                         |   | * |   |
| Special      Situations Fund II QP, LP527      Madison AvenueNew      York, NY 10022                      |   |                                               | 982,481   |   |                                         |   | 10.19 | % |
| DirecTECH      Holding Company, Inc.33      West Second Street, Suite 504Maysville,      KY 41056-1166    |   |                                               | 1,490,000 |   |                                         |   | 15.45 | % |
| Lacuna,      LLC1100      Spruce StreetBoulder,      CO 80302                                             |   |                                               | 881,000   |   |                                         |   | 9.14 | % |
| All      Directors and executive officers as a group (eightpersons)                                       |   |                                               | 1,629,008 |   |                                         |   | 16.90 | % |

----

|                    |   | 2008   |    |   | 2007   |   |
|-------------------------|--------|--------|---------|--------|--------|--------|
| Audit      Fees         |   | $      | 308,787 |   |   | $      | 227,996 |   |
| Audit-Related      Fees |   |   | 13,836  | (1)    |   |   | 18,230 | (2) |
| Tax      Fees           |   |   | 25,979  |   |   |   | 20,258 |   |
| Total                   |   | $      | 348,602 |   |   | $      | 266,484 |   |

| (1) | Fees      related to accounting required for the acquisition of  MMT. |
|-----|-----------------------------------------------------------------------|

| (2) | Fees      related to S-3 and S-1 filings and accounting for possible merger with the      Form S-4 filings. |
|-----|-------------------------------------------------------------------------------------------------------------|

----

| 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                                                                                                                                                                                                     |
| 10.18       |   | Asset      Purchase Agreement between Multiband Corporation and Consolidated Smart      Broadband Systems dated March 1, 2007 (15)                                                                                                                       |
| 10.19       |   | Asset      Purchase Agreement between Multiband Corporation and MDU Communications      dated July 21, 2007 (16)                                                                                                                                         |
| 10.20       |   | Supplemental      Agreement and Plan of Share Exchange (18)                                                                                                                                                                                              |
| 10.21       |   | Stock      Purchase Agreement (19)                                                                                                                                                                                                                       |
| 10.22       |   | First      Amendment to Stock Purchase Agreement (20)                                                                                                                                                                                                    |
| 10.23       |   | Employment      Agreements of James Mandel, Steven Bell and J. Basil Mattingly      (21)                                                                                                                                                                 |
| 14          |   | Multiband      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)                                                                                                                                                                                                           |
| 23.1        |   | Consent      of Virchow, Krause & Company, LLP (17)                                                                                                                                                                                                  |
| 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      (17)                                                                                                                                                                   |
| 31.2        |   | Rule      13a-14 (s) Certification of Chief Financial Officer -  Steven      Bell (17)                                                                                                                                                         |
| 32.1        |   | Section      1350 of Sarbanes-Oxley Act of 2002 – James Mandel (17)                                                                                                                                                                                |
| 32.2        |   | Section      1350 of Sarbanes-Oxley Act of 2002 – Steven Bell  (17)                                                                                                                                                                                |

----

----

|                     | MULTIBAND      CORPORATION.Registrant |
|--------------------------|---------------------------------------|
| Date:      April 2, 2009 | By:                                   |   |
|                     |                                  | /s/ James L. Mandel |
|                     |                                  | James      L. MandelChief      Executive Officer |
| Date:      April 2, 2009 | By:                                   |   |
|                     |                                  | /s/ Steven M. Bell |
|                     |                                  | Steven      M. BellChief      Executive Officer(Principal      Financial and AccountingOfficer) |

----

| Report      of Independent Registered Public Accounting Firm                                   | F-2    |
|------------------------------------------------------------------------------------------------|--------|
| Financial      Statements                                                                      |   |
| Consolidated      Balance Sheets                                                               | F-3    |
| Consolidated      Statements of Operations                                                     | F-5    |
| Consolidated      Statements of Comprehensive Income (Loss)                                    | F-6    |
| Consolidated      Statements of Stockholders' Equity                                           | F-7    |
| Consolidated      Statements of Cash Flows                                                     | F-16   |
| Notes      to Consolidated Financial Statements                                                | F-17   |
| Supplemental      Information                                                                  |   |
| Report      of Independent Registered Public Accounting Firm on Supplementary      Information | F-51   |
| Valuation      and Qualifying Accounts                                                         | F-52   |

----

----

|                                                            |   | 2008   |       |   | 2007   |   |
|-----------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| CURRENT      ASSETS                                             |   |   |       |   |   |   |
| Cash      and cash equivalents                                  |   | $      | 4,346,377  |   |   | $      | 944,456 |   |
| Securities      available for sale                              |   |   | 45,594     |   |   |   | - |   |
| Accounts      receivable, net                                   |   |   | 3,436,424  |   |   |   | 1,560,123 |   |
| Other      receivable – related party                     |   |   | 7,666,295  |   |   |   | - |   |
| Inventories                                                     |   |   | 1,902,868  |   |   |   | 132,992 |   |
| Prepaid      expenses and other                                 |   |   | 1,273,083  |   |   |   | 135,589 |   |
| Current      portion of notes receivable                        |   |   | 61,321     |   |   |   | 59,861 |   |
| Total      Current Assets                                       |   |   | 18,731,962 |   |   |   | 2,833,021 |   |
| PROPERTY      AND EQUIPMENT, NET                                |   |   | 2,033,067  |   |   |   | 1,769,261 |   |
| OTHER      ASSETS                                               |   |   |       |   |   |   |   |   |
| Goodwill                                                        |   |   | 1,095,166  |   |   |   | 16,757 |   |
| Intangible      assets, net                                     |   |   | 3,667,866  |   |   |   | 4,072,076 |   |
| Notes      receivable – long-term, net of current portion |   |   | 39,095     |   |   |   | - |   |
| Other      assets                                               |   |   | 476,072    |   |   |   | 202,314 |   |
| Total      Other Assets                                         |   |   | 5,278,199  |   |   |   | 4,291,147 |   |
|                                                            |   |   |       |   |   |   |   |   |
| TOTAL      ASSETS                                               |   | $      | 26,043,228 |   |   | $      | 8,893,429 |   |

----

|                                                                                                                         |   | 2008      |        |   | 2007    |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|-----------|-------------|--------|---------|--------|
| CURRENT      LIABILITIES                                                                                                     |   |      |        |   |    |   |
| Mandatory      redeemable preferred stock, 15,000 and 22,026 Class F preferred      shares                                   |   | $         | 150,000     |   |    | $      | 220,256 |   |
| Current      portion of long-term debt                                                                                       |   |      | 1,608,778   |   |    |   | 1,658,342 |   |
| Current      portion of capital lease obligations                                                                            |   |      | 310,656     |   |    |   | 225,291 |   |
| Accounts      payable                                                                                                        |   |      | 8,274,003   |   |    |   | 2,950,596 |   |
| Accrued      liabilities                                                                                                     |   |      | 3,875,193   |   |    |   | 2,531,611 |   |
| Accrued      income taxes                                                                                                    |   |      | 499,153     |   |    |   | - |   |
| Customer      deposits                                                                                                       |   |      | 60,582      |   |    |   | 60,582 |   |
| Deferred      service obligations and revenue                                                                                |   |      | 1,488,388   |   |    |   | 204,520 |   |
| Total      Current Liabilities                                                                                               |   |      | 16,266,753  |   |    |   | 7,851,198 |   |
| LONG-TERM      LIABILITIES                                                                                                   |   |      |        |   |    |   |   |   |
| Long-term      debt, net of current portion                                                                                  |   |      | 345,874     |   |    |   | 118,924 |   |
| Capital      lease obligations, net of current portion                                                                       |   |      | 317,628     |   |    |   | 249,469 |   |
| Total      Liabilities                                                                                                       |   |      | 16,930,255  |   |    |   | 8,219,591 |   |
| COMMITMENTS      AND CONTINGENCIES                                                                                           |   |      |        |   |    |   |   |   |
| MINORITY      INTEREST                                                                                                       |   |      | 3,470,726   |   |    |   | - |   |
| STOCKHOLDERS'      EQUITY                                                                                                    |   |      |        |   |    |   |   |   |
| Cumulative      convertible preferred stock, no par value:                                                                   |   |      |        |   |    |   |   |   |
| 8%      Class A (14,171 and 24,728 shares issued and outstanding, $148,796 and      $259,644 liquidation preference)         |   |      | 213,353     |   |    |   | 371,708 |   |
| 10%      Class B (2,570 and 3,770  shares issued and outstanding, $26,985      and $39,585 liquidation preference) |   |      | 25,700      |   |    |   | 37,700 |   |
| 10%      Class C (114,080 and 120,250 shares issued and outstanding, $1,140,800 and      $1,202,500 liquidation preference)  |   |      | 1,481,918   |   |    |   | 1,548,352 |   |
| 10%      Class F (150,000 shares issued and outstanding, $1,500,000 liquidation      preference)                             |   |      | 1,500,000   |   |    |   | 1,500,000 |   |
| 8%      Class G (11,595 and 26,595 shares issued and outstanding, $115,950 and      $265,950 liquidation preference)         |   |      | 47,970      |   |    |   | 111,468 |   |
| 6%      Class H (2.0 shares issued and outstanding, $200,000 liquidation      preference)                                    |   |      | -           |   |    |   | - |   |
| Variable      rate % Class I (0 and 39,500 shares issued and outstanding, $0 and      $3,950,000 liquidation preference)     |   |      | -           |   |    |   | - |   |
| Common      stock, no par value (9,642,374 and 7,451,891 shares issued and      outstanding)                                 |   |      | 37,687,864  |   |    |   | 29,574,673 |   |
| Stock      subscriptions receivable                                                                                          |   |      | (84,071     | )      |    |   | (170,888 | ) |
| Options      and warrants                                                                                                    |   |      | 46,038,402  |   |    |   | 45,871,964 |   |
| Accumulated      other comprehensive income – unrealized gain on securities available for      sale                    |   |      | 45,594      |   |    |   | - |   |
| Accumulated      deficit                                                                                                     |   |      | (81,314,483 | )      |    |   | (78,171,139 | ) |
| Total      Stockholders' Equity                                                                                              |   | 5,642,247 |        |   | 673,838 |   |
| TOTAL      LIABILITIES AND STOCKHOLDERS' EQUITY                                                                              |   | $         | 26,043,228  |   |    | $      | 8,893,429 |   |

----

|                                                                                                        |   | 2008      |       |   | 2007      |   |       | 2006   |       |
|-------------------------------------------------------------------------------------------------------------|--------|-----------|------------|--------|-----------|--------|------------|--------|------------|
|                                                                                                        |   |      |       |   |      |   |       |   |       |
| REVENUES                                                                                                    |   | $         | 42,986,513 |   |      | $      | 15,085,604 |   |       | $ | 18,051,601 |   |
|                                                                                                        |   |      |       |   |      |   |       |   |       |   |   |   |
| COSTS      AND EXPENSES                                                                                     |   |      |       |   |      |   |       |   |       |   |   |   |
| Cost      of products and services (exclusive of depreciation and amortization shown      separately below) |   |      | 28,425,926 |   |      |   | 8,339,933  |   |       |   | 8,280,666 |   |
| Selling,      general and administrative                                                                    |   |      | 10,499,863 |   |      |   | 8,887,883  |   |       |   | 11,480,677 |   |
| Depreciation      and amortization                                                                          |   |      | 3,025,478  |   |      |   | 3,623,903  |   |       |   | 5,168,209 |   |
| Impairment      of assets                                                                                   |   |      | 132,209    |   |      |   | -          |   |       |   | 2,261,500 |   |
|                                                                                                        |   |      |       |   |      |   |       |   |       |   |   |   |
| Total      costs and expenses                                                                               |   |      | 42,083,476 |   |      |   | 20,851,719 |   |       |   | 27,191,052 |   |
|                                                                                                        |   |      |       |   |      |   |       |   |       |   |   |   |
| INCOME      (LOSS) FROM OPERATIONS                                                                          |   |      | 903,037    |   |      |   | (5,766,115 | )      |       |   | (9,139,451 | ) |
|                                                                                                        |   |      |       |   |      |   |       |   |       |   |   |   |
| OTHER      INCOME (EXPENSE)                                                                                 |   |      |       |   |      |   |       |   |       |   |   |   |
| Interest      expense                                                                                       |   |      | (657,289   | )      |      |   | (503,887   | )      |       |   | (1,206,196 | ) |
| Management      consulting income                                                                           |   |      | 2,366,466  |   |      |   | -          |   |       |   | - |   |
| Interest      income                                                                                        |   |      | 58,030     |   |      |   | 31,277     |   |       |   | 67,796 |   |
| Other      income                                                                                           |   | 58,854    |       |   | 150,372   |   |       |   | 91,928     |   |
|                                                                                                        |   |      |       |   |      |   |       |   |       |   |   |   |
| Total      other income (expense)                                                                           |   | 1,826,061 |       |   | (322,238) |   |       |   | (1,046,472 | ) |
|                                                                                                        |   |      |       |   |      |   |       |   |       |   |   |   |
| INCOME      (LOSS) BEFORE INCOME TAXES AND MINORITY INTEREST IN    SUBSIDIARY                               |   |      | 2,729,098  |   |      |   | (6,088,353 | )      |       |   | (10,185,923 | ) |
|                                                                                                        |   |      |       |   |      |   |       |   |       |   |   |   |
| PROVISION      FOR INCOME TAXES                                                                             |   |      | 1,132,000  |   |      |   | -          |   |       |   | - |   |
|                                                                                                        |   |      |       |   |      |   |       |   |       |   |   |   |
| MINORITY      INTEREST IN NET INCOME OF SUBSIDIARY                                                          |   |      | 652,167    |   |      |   | -          |   |       |   | - |   |
|                                                                                                        |   |      |       |   |      |   |       |   |       |   |   |   |
| INCOME      (LOSS) FROM CONTINUING OPERATIONS                                                               |   |      | 944,931    |   |      |   | (6,088,353 | )      |       |   | (10,185,923 | ) |
| GAIN      FROM DISCONTINUED OPERATIONS                                                                      |   | -         |       |   | -         |   |       |   | 2,200      |   |
|                                                                                                        |   |      |       |   |      |   |       |   |       |   |   |   |
| NET      INCOME (LOSS)                                                                                      |   |      | 944,931    |   |      |   | (6,088,353 | )      |       |   | (10,183,723 | ) |
| Preferred      stock dividends                                                                              |   |      | 4,088,275  |   |      |   | 2,300,502  |   |       |   | 4,066,723 |   |
| LOSS      ATTRIBUTABLE TO COMMON STOCKHOLDERS                                                               |   | $         | (3,143,344 | )      |      | $      | (8,388,855 | )      |       | $ | (14,250,446 | ) |
|                                                                                                        |   |      |       |   |      |   |       |   |       |   |   |   |
| LOSS      PER COMMON SHARE – BASIC AND DILUTED:                                                       |   |      |       |   |      |   |       |   |       |   |   |   |
|                                                                                                        |   |      |       |   |      |   |       |   |       |   |   |   |
|     LOSS      FROM CONTINUING OPERATIONS                                                |   | $         | (0.34      | )      |      | $      | (1.16      | )      |       | $ | (2.11 | ) |
|     GAIN      FROM DISCONTINUED OPERATIONS                                              |   | $         | -          |   |      | $      | -          |   |       | $ | 0.0 |   |
|     LOSS      ATTRIBUTABLE TO COMMON    STOCKHOLDERS                |   | $         | (0.34      | )      |      | $      | (1.16      | )      |       | $ | (2.11 | ) |
|                                                                                                        |   |      |       |   |      |   |       |   |       |   |   |   |
| Weighted      average common shares outstanding – basic and diluted                                   |   |      | 9,302,570  |   |      |   | 7,237,473  |   |       |   | 6,757,643 |   |

----

|                                                |   | 2008   |    |   | 2007   |   |       | 2006   |   |
|-----------------------------------------------------|--------|--------|---------|--------|--------|--------|------------|--------|--------|
|                                                |   |   |    |   |   |   |       |   |   |
| NET      INCOME (LOSS)                              |   | $      | 944,931 |   |   | $      | (6,088,353 | )      |   | $ | (10,183,723 | ) |
|                                                |   |   |    |   |   |   |       |   |   |   |   |   |
| OTHER      COMPREHENSIVE INCOME, NET OF TAX:        |   |   |    |   |   |   |       |   |   |   |   |   |
| Unrealized      gains on securities:                |   |   |    |   |   |   |       |   |   |   |   |   |
| Unrealized      holding gains arising during period |   |   | 45,594  |   |   |   | -          |   |   |   | - |   |
|                                                |   |   |    |   |   |   |       |   |   |   |   |   |
| COMPREHENSIVE      INCOME (LOSS)                    |   | $      | 990,525 |   |   | $      | (6,088,353 | )      |   | $ | (10,183,723 | ) |

----

|                                                                  |   | 8%      Class A |    |   | 10%      Class B |   |    | 10%      Class C |   |   | 10%      Class F |   |
|-----------------------------------------------------------------------|--------|-----------------|---------|--------|------------------|--------|---------|------------------|--------|--------|------------------|--------|
|                                                                  |   | Shares          |    |   | Amount           |   |    | Shares           |   |   | Amount           |   |   | Shares |   |   | Amount |   |   | Shares |   |   | Amount |   |
|                                                                  |   |            |    |   |             |   |    |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| BALANCES,      December 31, 2005                                      |   |            | 27,931  |   |             | $      | 419,752 |             |   |   | 8,390            |   |   | $ | 58,900 |   |   |   | 125,050 |   |   | $ | 1,607,605 |   |   |   | 150,000 |   |   | $ | 1,500,000 |   |
| Stock      issued:                                                    |   |            |    |   |             |   |    |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                                                                  |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Exercise      of options                                              |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Acquisition      of assets – Extreme Video                      |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| 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 revenue share payments                       |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Redemption      of preferred stock                                    |   |            | (1,273  | )      |             |   | (12,730 | )                |   |   | (920             | )      |   |   | (9,200 | ) |   |   | (920 | ) |   |   | (9,200 | ) |   |   | - |   |   |   | - |   |
| Intrinsic      value of convertible feature                           |   |            | -       |   |             |   | (6,365  | )                |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | (4,929 | ) |   |   | - |   |   |   | - |   |
| Adjustment      in Dinamo purchase price                              |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Stock      subscriptions receivable:                                  |   |            |    |   |             |   |    |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      received                                                    |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Interest      collected                                               |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Interest      earned                                                  |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Increase      in reserve                                              |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Warrants      issued for services                                     |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Options      expense                                                  |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Amortization      of deferred compensation                            |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Restricted      stock forfeited                                       |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Common      stock dividends related to spin-off of URON (see Note 10) |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Preferred      stock dividends                                        |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Net      loss                                                         |   |            |  - |   |             |   | -       |             |   |   | -                |   |   |   |  - |   |   |   | - |   |   |   |  - |   |   |   | - |   |   |   |  - |   |
|                                                                  |   |            |    |   |             |   |    |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| BALANCES,      December 31, 2006                                      |   |            | 26,658  |   |             | $      | 400,657 |             |   |   | 7,470            |   |   | $ | 49,700 |   |   |   | 124,130 |   |   | $ | 1,593,476 |   |   |   | 150,000 |   |   | $ | 1,500,000 |   |

----

|                                        |   | 8%      Class A |    |   | 10%      Class B |   |    | 10%      Class C |   |   | 10%      Class F |   |
|---------------------------------------------|--------|-----------------|---------|--------|------------------|--------|---------|------------------|--------|--------|------------------|--------|
|                                        |   | Shares          |    |   | Amount           |   |    | Shares           |   |   | Amount           |   |   | Shares |   |   | Amount |   |   | Shares |   |   | Amount |   |
| Stock      issued:                          |   |            |    |   |             |   |    |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                                        |   |            | -       |   |             | $      | -       |             |   |   | -                |   |   | $ | - |   |   |   | - |   |   | $ | - |   |   |   | - |   |   | $ | - |   |
| Conversion      of accrued interest         |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Conversion      of preferred stock          |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Conversion      of dividends payable        |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| In      lieu of cash for services           |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| In      lieu of cash for equipment          |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Redemption      of preferred stock          |   |            | (1,930  | )      |             |   | (19,300 | )                |   |   | (3,700           | )      |   |   | (37,000 | ) |   |   | (3,880 | ) |   |   | (38,800 | ) |   |   | - |   |   |   | - |   |
| Intrinsic      value of convertible feature |   |            | -       |   |             |   | (9,649  | )                |   |   | -                |   |   |   | 25,000 |   |   |   | - |   |   |   | (6,324 | ) |   |   | - |   |   |   | - |   |
| Stock      subscriptions receivable:        |   |            |    |   |             |   |    |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      received                          |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Interest      collected                     |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Interest      earned                        |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Increase      in reserve                    |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Warrants      issued for services           |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Options      expense                        |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Preferred      stock dividends              |   |            | -       |   |             |   | -       |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Net      loss                               |   |            |  - |   |             |   | -       |             |   |   | -                |   |   |   |  - |   |   |   | - |   |   |   |  - |   |   |   | - |   |   |   |  - |   |
|                                        |   |            |    |   |             |   |    |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| BALANCES,      December 31, 2007            |   |            | 24,728  |   |             | $      | 371,708 |             |   |   | 3,770            |   |   | $ | 37,700 |   |   |   | 120,250 |   |   | $ | 1,548,352 |   |   |   | 150,000 |   |   | $ | 1,500,000 |   |

----

|                                                                                           |   | 8%      Class A |    |   | 10%      Class B |   |     | 10%      Class C |   |   | 10%      Class F |   |
|------------------------------------------------------------------------------------------------|--------|-----------------|---------|--------|------------------|--------|----------|------------------|--------|--------|------------------|--------|
|                                                                                           |   | Shares          |    |   | Amount           |   |     | Shares           |   |   | Amount           |   |   | Shares |   |   | Amount |   |   | Shares |   |   | Amount |   |
| Stock      issued:                                                                             |   |            |    |   |             |   |     |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                                                                                           |   |            | -       |   |             | $      | -        |             |   |   | -                |   |   | $ | - |   |   |   | - |   |   | $ | - |   |   |   | - |   |   | $ | - |   |
| Acquisition      of assets – Michigan Microtech, Inc.                                    |   |            | -       |   |             |   | -        |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Acquisition      of assets – US Install                                                  |   |            | -       |   |             |   | -        |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Conversion      of notes payable                                                               |   |            | -       |   |             |   | -        |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Conversion      of accrued interest                                                            |   |            | -       |   |             |   | -        |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Conversion      of preferred stock                                                             |   |            | -       |   |             |   | -        |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Conversion      of dividends payable                                                           |   |            | -       |   |             |   | -        |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Restricted      stock issued                                                                   |   |            | -       |   |             |   | -        |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Cancellation      of note receivable                                                           |   |            | -       |   |             |   | -        |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| In      lieu of cash for services                                                              |   |            | -       |   |             |   | -        |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Redemption      of preferred stock                                                             |   |            | (10,557 | )      |             |   | (105,570 | )                |   |   | (1,200           | )      |   |   | (12,000 | ) |   |   | (6,170 | ) |   |   | (61,700 | ) |   |   | - |   |   |   | - |   |
| Intrinsic      value of convertible feature                                                    |   |            | -       |   |             |   | (52,785  | )                |   |   | -                |   |   |   |   |   |   |   | - |   |   |   | (4,734 | ) |   |   | - |   |   |   | - |   |
| Stock      subscriptions receivable:                                                           |   |            |    |   |             |   |     |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      received                                                                             |   |            | -       |   |             |   | -        |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Interest      collected                                                                        |   |            | -       |   |             |   | -        |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Interest      earned                                                                           |   |            | -       |   |             |   | -        |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Increase      in reserve                                                                       |   |            | -       |   |             |   | -        |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Warrants      issued for services                                                              |   |            | -       |   |             |   | -        |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Options      expense                                                                           |   |            | -       |   |             |   | -        |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Preferred      stock dividends                                                                 |   |            | -       |   |             |   | -        |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Other      comprehensive income – unrealized gains on securities available for      sale |   |            | -       |   |             |   | -        |             |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Net      income                                                                                |   |            |  - |   |             |   | -        |             |   |   | -                |   |   |   |  - |   |   |   | - |   |   |   |  - |   |   |   | - |   |   |   |  - |   |
|                                                                                           |   |            |    |   |             |   |     |             |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| BALANCES,      December 31, 2008                                                               |   |            | 14,171  |   |             | $      | 213,353  |             |   |   | 2,570            |   |   | $ | 25,700 |   |   |   | 114,080 |   |   | $ | 1,481,918 |   |   |   | 150,000 |   |   | $ | 1,500,000 |   |

----

|                                                                  |   | 8%      Class G |   |   | 6%      Class H |   |    | %      Class I |   |   | Common      Stock |   |
|-----------------------------------------------------------------------|--------|-----------------|--------|--------|-----------------|--------|---------|----------------|--------|--------|-------------------|--------|
|                                                                  |   | Shares          |   |   | Amount          |   |    | Shares         |   |   | Amount            |   |   | Shares |   |   | Amount |   |   | Shares |   |   | Amount |   |
|                                                                  |   |            |   |   |            |   |    |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| BALANCES,      December 31, 2005                                      |   |            | 45,245 |   |            | $      | 179,897 |           |   |   | 2                 |   |   | $ | - |   |   |   | 90,000 |   |   | $ | - |   |   |   | 6,426,912 |   |   | $ | 22,801,405 |   |
| Stock      issued:                                                    |   |            |   |   |            |   |    |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                                                                  |   |            | -      |   |            |   | -       |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (23,840 | ) |
| Exercise      of options                                              |   |            | -      |   |            |   | -       |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 6,000 |   |   |   | 18,000 |   |
| Acquisition      of assets – Extreme Video                      |   |            | -      |   |            |   | -       |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 32,500 |   |   |   | 162,500 |   |
| Conversion      of notes payable                                      |   |            | -      |   |            |   | -       |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 40,000 |   |   |   | 200,000 |   |
| Conversion      of accrued interest                                   |   |            | -      |   |            |   | -       |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 8,866 |   |   |   | 44,333 |   |
| Conversion      of preferred stock                                    |   |            | (7,050 | )      |            |   | (70,500 | )              |   |   | -                 |   |   |   | - |   |   |   | (32,500 | ) |   |   | - |   |   |   | 442,146 |   |   |   | 3,151,500 |   |
| Conversion      of dividends payable                                  |   |            | -      |   |            |   | -       |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 61,015 |   |   |   | 473,001 |   |
| In      lieu of cash for services                                     |   |            | -      |   |            |   | -       |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 16,000 |   |   |   | 57,600 |   |
| In      lieu of cash for revenue share payments                       |   |            | -      |   |            |   | -       |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 193 |   |   |   | 1,156 |   |
| Redemption      of preferred stock                                    |   |            | -      |   |            |   | -       |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Intrinsic      value of convertible feature                           |   |            | -      |   |            |   | 52,034  |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Adjustment      in Dinamo purchase price                              |   |            | -      |   |            |   | -       |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (12,400 | ) |
| Stock      subscriptions receivable:                                  |   |            |   |   |            |   |    |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      payments                                                    |   |            | -      |   |            |   | -       |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Interest      collected                                               |   |            | -      |   |            |   | -       |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Interest      earned                                                  |   |            | -      |   |            |   | -       |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Increase      in reserve                                              |   |            | -      |   |            |   | -       |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Warrants      issued for services                                     |   |            | -      |   |            |   | -       |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Options      expense                                                  |   |            | -      |   |            |   | -       |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Amortization      of deferred compensation                            |   |            | -      |   |            |   | -       |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Restricted      stock forfeited                                       |   |            | -      |   |            |   | -       |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Common      stock dividends related to spin-off of URON (see Note 10) |   |            | -      |   |            |   | -       |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Preferred      stock dividends                                        |   |            | -      |   |            |   | -       |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Net      loss                                                         |   |            | -      |   |            |   | -       |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                  |   |            |   |   |            |   |    |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| BALANCES,      December 31, 2006                                      |   |            | 38,195 |   |            | $      | 161,431 |           |   |   | 2                 |   |   | $ | - |   |   |   | 57,500 |   |   | $ | - |   |   |   | 7,033,632 |   |   | $ | 26,873,255 |   |

----

|                                        |   | 8%      Class G |    |   | 6%      Class H |   |     | %      Class I |   |   | Common      Stock |   |
|---------------------------------------------|--------|-----------------|---------|--------|-----------------|--------|----------|----------------|--------|--------|-------------------|--------|
|                                        |   | Shares          |    |   | Amount          |   |     | Shares         |   |   | Amount            |   |   | Shares |   |   | Amount |   |   | Shares |   |   | Amount |   |
| Stock      issued:                          |   |            |    |   |            |   |     |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                                        |   |            | -       |   |            | $      | -        |           |   |   | -                 |   |   | $ | - |   |   |   | - |   |   | $ | - |   |   |   | - |   |   | $ | (24,208 | ) |
| Conversion      of accrued interest         |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 3,536 |   |   |   | 17,680 |   |
| Conversion      of preferred stock          |   |            | (11,600 | )      |            |   | (116,000 | )              |   |   | -                 |   |   |   | - |   |   |   | (18,000 | ) |   |   | - |   |   |   | 254,500 |   |   |   | 1,822,400 |   |
| Conversion      of dividends payable        |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 88,223 |   |   |   | 637,209 |   |
| In      lieu of cash for services           |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 42,000 |   |   |   | 164,337 |   |
| In      lieu of cash for equipment          |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 30,000 |   |   |   | 84,000 |   |
| Redemption      of preferred stock          |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Intrinsic      value of convertible feature |   |            | -       |   |            |   | 66,037   |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Stock      subscriptions receivable:        |   |            |    |   |            |   |     |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      payments                          |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Interest      collected                     |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Interest      earned                        |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Increase      in reserve                    |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Warrants      issued for services           |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Options      expense                        |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Preferred      stock dividends              |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Net      loss                               |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                        |   |            |    |   |            |   |     |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| BALANCES,      December 31, 2007            |   |            | 26,595  |   |            | $      | 111,468  |           |   |   | 2                 |   |   | $ | - |   |   |   | 39,500 |   |   | $ | - |   |   |   | 7,451,891 |   |   | $ | 29,574,673 |   |

----

|                                                                                          |   | 8%      Class G |    |   | 6%      Class H |   |     | %      Class I |   |   | Common      Stock |   |
|-----------------------------------------------------------------------------------------------|--------|-----------------|---------|--------|-----------------|--------|----------|----------------|--------|--------|-------------------|--------|
|                                                                                          |   | Shares          |    |   | Amount          |   |     | Shares         |   |   | Amount            |   |   | Shares |   |   | Amount |   |   | Shares |   |   | Amount |   |
| Stock      issued:                                                                            |   |            |    |   |            |   |     |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                                                                                          |   |            | -       |   |            | $      | -        |           |   |   | -                 |   |   | $ | - |   |   |   | - |   |   | $ | - |   |   |   | - |   |   | $ | (30,379 | ) |
| Acquisition      of assets – Michigan Microtech, Inc.                                   |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,490,000 |   |   |   | 3,854,000 |   |
| Acquisition      of assets – US Install                                                 |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 37,880 |   |   |   | 101,516 |   |
| Conversion      of notes payable                                                              |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 7,500 |   |   |   | 19,500 |   |
| Conversion      of accrued interest                                                           |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 800 |   |   |   | 4,000 |   |
| Conversion      of preferred stock                                                            |   |            | (15,000 | )      |            |   | (150,000 | )              |   |   | -                 |   |   |   | - |   |   |   | (39,500 | ) |   |   | - |   |   |   | 545,417 |   |   |   | 3,894,600 |   |
| Conversion      of dividends payable                                                          |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 23,386 |   |   |   | 179,412 |   |
| Restricted      stock issued                                                                  |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 22,500 |   |   |   | 23,625 |   |
| Cancellation      of note receivable                                                          |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (12,000 | ) |   |   | (61,333 | ) |
| In      lieu of cash for future services rendered                                             |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 75,000 |   |   |   | 128,250 |   |
| Redemption      of preferred stock                                                            |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Intrinsic      value of convertible feature                                                   |   |            | -       |   |            |   | 86,502   |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Stock      subscriptions receivable:                                                          |   |            |    |   |            |   |     |           |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      payments                                                                            |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Interest      collected                                                                       |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Interest      earned                                                                          |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Increase      in reserve                                                                      |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Warrants      issued for services                                                             |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Options      expense                                                                          |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Preferred      stock dividends                                                                |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Other      comprehensive income – unrealized gain on securities available for      sale |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Net      income                                                                               |   |            | -       |   |            |   | -        |           |   |   | -                 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| BALANCES,      December 31, 2008                                                              |   |            | 11,595  |   |            | $      | 47,970   |           |   |   | 2                 |   |   | $ | - |   |   |   | - |   |   | $ | - |   |   |   | 9,642,374 |   |   | $ | 37,687,864 |   |

----

|                                                                  |   | StockSubscriptionsReceivable |     |   | OptionsandWarrants |   |       | UnamortizedCompensation |   |   | AccumulatedOtherComprehensiveIncome |   |   | AccumulatedDeficit |   |   | Total  |   |
|-----------------------------------------------------------------------|--------|------------------------------|----------|--------|--------------------|--------|------------|-------------------------|--------|--------|-------------------------------------|--------|--------|--------------------|--------|--------|--------|--------|
| BALANCES,      December 31, 2005                                      |   | $                            | (297,105 | )      |               | $      | 44,259,540 |                    |   | $      | (29,861                             | )      |   | $                  | -      |   |   | $      | (55,531,838 | ) |   | $ | 14,968,295 |   |
| Stock      issued:                                                    |   |                         |     |   |               |   |       |                    |   |   |                                |   |   |               |   |   |   |   |   |   |   |   |   |   |
| Cash                                                                  |   |                         | -        |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | (23,840 | ) |
| Exercise      of options                                              |   |                         | -        |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 18,000 |   |
| Acquisition      of assets – Extreme Video                      |   |                         | -        |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 162,500 |   |
| Conversion      of notes payable                                      |   |                         | -        |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 200,000 |   |
| Conversion      of accrued interest                                   |   |                         | -        |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 44,333 |   |
| Conversion      of preferred stock                                    |   |                         | -        |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | (3,081,000 | ) |   |   | - |   |
| Conversion      of dividends payable                                  |   |                         | -        |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 473,001 |   |
| In      lieu of cash for services                                     |   |                         | -        |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 57,600 |   |
| In      lieu of cash for revenue share payments                       |   |                         | -        |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 1,156 |   |
| Redemption      of preferred stock                                    |   |                         | -        |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | (31,130 | ) |
| Intrinsic      value of convertible feature                           |   |                         | -        |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | (40,740 | ) |   |   | - |   |
| Adjustment      in Dinamo purchase price                              |   |                         | -        |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | (12,400 | ) |
| Stock      subscriptions receivable:                                  |   |                         |     |   |               |   |       |                    |   |   |                                |   |   |               |   |   |   |   |   |   |   |   |   |   |
| Cash      payments                                                    |   |                         | 5,938    |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 5,938 |   |
| Interest      collected                                               |   |                         | 2,062    |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 2,062 |   |
| Interest      earned                                                  |   |                         | (2,257   | )      |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | (2,257 | ) |
| Increase      in reserve                                              |   |                         | 61,435   |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 61,435 |   |
| Warrants      issued for services                                     |   |                         | -        |   |               |   | 12,085     |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 12,085 |   |
| Options      expense                                                  |   |                         | -        |   |               |   | 821,757    |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 821,757 |   |
| Amortization      of deferred compensation                            |   |                         | -        |   |               |   | -          |                    |   |   | 29,480                              |   |   |               | -      |   |   |   | - |   |   |   | 29,480 |   |
| Restricted      stock forfeited                                       |   |                         | -        |   |               |   | (381       | )                       |   |   | 381                                 |   |   |               | -      |   |   |   | - |   |   |   | - |   |
| Common      stock dividends related to spin-off of URON (see Note 10) |   |                         | -        |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | (46,989 | ) |   |   | (46,989 | ) |
| Preferred      stock dividends                                        |   |                         | -        |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | (897,994 | ) |   |   | (897,994 | ) |
| Net      loss                                                         |   |                         | -        |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | (10,183,723 | ) |   |   | (10,183,723 | ) |
|                                                                  |   |                         |     |   |               |   |       |                    |   |   |                                |   |   |               |   |   |   |   |   |   |   |   |   |   |
| BALANCES,      December 31, 2006                                      |   | $                            | (229,927 | )      |               | $      | 45,093,001 |                    |   | $      | -                                   |   |   | $                  | -      |   |   | $      | (69,782,284 | ) |   | $ | 5,659,309 |   |

----

|                                        |   | StockSubscriptionsReceivable |     |   | OptionsandWarrants |   |       | UnamortizedCompensation |   |   | AccumulatedOtherComprehensiveIncome |   |   | AccumulatedDeficit |   |   | Total  |   |
|---------------------------------------------|--------|------------------------------|----------|--------|--------------------|--------|------------|-------------------------|--------|--------|-------------------------------------|--------|--------|--------------------|--------|--------|--------|--------|
| Stock      issued:                          |   |                         |     |   |               |   |       |                    |   |   |                                |   |   |               |   |   |   |   |
| Cash                                        |   | $                            | -        |   |               | $      | -          |                    |   | $      | -                                   |   |   | $                  | -      |   |   | $      | - |   |   | $ | (24,208 | ) |
| Conversion      of accrued interest         |   |                         | -        |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 17,680 |   |
| Conversion      of preferred stock          |   |                         | -        |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | (1,706,400 | ) |   |   | - |   |
| Conversion      of dividends payable        |   |                         | -        |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 637,209 |   |
| In      lieu of cash for services           |   |                         | -        |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 164,337 |   |
| In      lieu of cash for equipment          |   |                         | -        |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 84,000 |   |
| Redemption      of preferred stock          |   |                         | -        |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | (95,100 | ) |
| Intrinsic      value of convertible feature |   |                         | -        |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | (75,064 | ) |   |   | - |   |
| Stock      subscriptions receivable:        |   |                         |     |   |               |   |       |                    |   |   |                                |   |   |               |   |   |   |   |   |   |   |   |   |   |
| Cash      payments                          |   |                         | 62       |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 62 |   |
| Interest      collected                     |   |                         | 1,438    |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 1,438 |   |
| Interest      earned                        |   |                         | (2,461   | )      |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | (2,461 | ) |
| Increase      in reserve                    |   |                         | 60,000   |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 60,000 |   |
| Warrants      issued for services           |   |                         | -        |   |               |   | 67,540     |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 67,540 |   |
| Options      expense                        |   |                         | -        |   |               |   | 711,423    |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 711,423 |   |
| Preferred      stock dividends              |   |                         | -        |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | (519,038 | ) |   |   | (519,038 | ) |
| Net      loss                               |   |                         | -        |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | (6,088,353 | ) |   |   | (6,088,353 | ) |
|                                        |   |                         |     |   |               |   |       |                    |   |   |                                |   |   |               |   |   |   |   |   |   |   |   |   |   |
| BALANCES,      December 31, 2007            |   | $                            | (170,888 | )      |               | $      | 45,871,964 |                    |   | $      | -                                   |   |   | $                  | -      |   |   | $      | (78,171,139 | ) |   | $ | 673,838 |   |

----

|                                                                                          |   | StockSubscriptionsReceivable |    |   | OptionsandWarrants |   |       | UnamortizedCompensation |   |   | AccumulatedOtherComprehensiveIncome |   |   | AccumulatedDeficit |   |   | Total  |   |
|-----------------------------------------------------------------------------------------------|--------|------------------------------|---------|--------|--------------------|--------|------------|-------------------------|--------|--------|-------------------------------------|--------|--------|--------------------|--------|--------|--------|--------|
| Stock      issued:                                                                            |   |                         |    |   |               |   |       |                    |   |   |                                |   |   |               |   |   |   |   |
| Cash                                                                                          |   | $                            | -       |   |               | $      | -          |                    |   | $      | -                                   |   |   | $                  | -      |   |   | $      | - |   |   | $ | (30,379 | ) |
| Acquisition      of assets – Michigan Microtech, Inc.                                   |   |                         | -       |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 3,854,000 |   |
| Acquisition      of assets – US Install                                                 |   |                         | -       |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 101,516 |   |
| Conversion      of notes payable                                                              |   |                         | -       |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 19,500 |   |
| Conversion      of accrued interest                                                           |   |                         | -       |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 4,000 |   |
| Conversion      of preferred stock                                                            |   |                         | -       |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | (3,744,600 | ) |   |   | - |   |
| Conversion      of dividends payable                                                          |   |                         | -       |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 179,412 |   |
| Restricted      stock issued                                                                  |   |                         | -       |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 23,625 |   |
| Cancellation      of note receivable                                                          |   |                         | 61,333  |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | - |   |
| In      lieu of cash for services                                                             |   |                         | -       |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 128,250 |   |
| Redemption      of preferred stock                                                            |   |                         | -       |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | (179,270 | ) |
| Intrinsic      value of convertible feature                                                   |   |                         | -       |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | (28,983 | ) |   |   | - |   |
| Stock      subscriptions receivable:                                                          |   |                         |    |   |               |   |       |                    |   |   |                                |   |   |               |   |   |   |   |   |   |   |   |   |   |
| Cash      payments                                                                            |   |                         | 348     |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 348 |   |
| Interest      collected                                                                       |   |                         | 2,652   |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 2,652 |   |
| Interest      earned                                                                          |   |                         | (2,463  | )      |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | (2,463 | ) |
| Increase      in reserve                                                                      |   |                         | 24,947  |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 24,947 |   |
| Warrants      issued for services                                                             |   |                         | -       |   |               |   | 1,641      |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 1,641 |   |
| Options      expense                                                                          |   |                         | -       |   |               |   | 164,797    |                    |   |   | -                                   |   |   |               | -      |   |   |   | - |   |   |   | 164,797 |   |
| Preferred      stock dividends                                                                |   |                         | -       |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | (314,692 | ) |   |   | (314,692 | ) |
| Other      comprehensive income – unrealized gain on securities available for      sale |   |                         | -       |   |               |   | -          |                    |   |   | -                                   |   |   |               | 45,594 |   |   |   | - |   |   |   | 45,594 |   |
| Net      income                                                                               |   |                         | -       |   |               |   | -          |                    |   |   | -                                   |   |   |               | -      |   |   |   | 944,931 |   |   |   | 944,931 |   |
|                                                                                          |   |                         |    |   |               |   |       |                    |   |   |                                |   |   |               |   |   |   |   |   |   |   |   |   |   |
| BALANCES,      December 31, 2008                                                              |   | $                            | (84,071 | )      |               | $      | 46,038,402 |                    |   | $      | -                                   |   |   | $                  | 45,594 |   |   | $      | (81,314,483 | ) |   | $ | 5,642,247 |   |

----

|                                                                                                                      |   | 2008   |       |   | 2007   |   |       | 2006   |   |
|---------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| OPERATING      ACTIVITIES                                                                                                 |   |   |       |   |   |   |       |   |   |
| Net      income (loss)                                                                                                    |   | $      | 944,931    |   |   | $      | (6,088,353 | )      |   | $ | (10,183,723 | ) |
| Adjustments      to reconcile net income (loss) to cash flows from operating      activities:                             |   |   |       |   |   |   |       |   |   |   |   |   |
| Depreciation      and amortization                                                                                        |   |   | 3,025,478  |   |   |   | 3,638,543  |   |   |   | 5,347,251 |   |
| Minority      interest in net income of consolidated subsidiary                                                           |   |   | 652,167    |   |   |   | -          |   |   |   | - |   |
| Amortization      of deferred compensation                                                                                |   |   | -          |   |   |   | -          |   |   |   | 29,480 |   |
| Amortization      of original issue discount                                                                              |   |   | -          |   |   |   | 30,413     |   |   |   | 436,108 |   |
| Amortization      of imputed interest discount                                                                            |   |   | 282,100    |   |   |   | -          |   |   |   | - |   |
| Gain      on debt extinguishment                                                                                          |   |   | (29,965    | )      |   |   | (131,529   | )      |   |   | - |   |
| Impairment      of goodwill, intangibles and property and equipment                                                       |   |   | 132,209    |   |   |   | -          |   |   |   | 2,261,500 |   |
| Loss      (gain) on sale of property and equipment                                                                        |   |   | 77,115     |   |   |   | 192,234    |   |   |   | (105,139 | ) |
| Gain      on sale of URON Inc. subsidiary                                                                                 |   |   | -          |   |   |   | -          |   |   |   | (26,669 | ) |
| Change      in allowance for doubtful accounts on accounts receivable                                                     |   |   | (15,000    | )      |   |   | (154,400   | )      |   |   | (155,130 | ) |
| Change      in reserve for stock subscriptions and interest receivable                                                    |   |   | 22,484     |   |   |   | 60,000     |   |   |   | 61,434 |   |
| Management      consulting income from DirecTECH                                                                          |   |   | (1,946,000 | )      |   |   | -          |   |   |   | - |   |
| Warrants      issued for services                                                                                         |   |   | 1,641      |   |   |   | 67,540     |   |   |   | 12,085 |   |
| Stock      issued for future services                                                                                     |   |   | 47,435     |   |   |   | 164,337    |   |   |   | 58,756 |   |
| Compensation      expense of restricted stock awards                                                                      |   |   | 23,625     |   |   |   | -          |   |   |   | - |   |
| Stock      based compensation expense                                                                                     |   |   | 164,797    |   |   |   | 711,423    |   |   |   | 821,757 |   |
| Reduction      in interest receivable by increase in note receivable                                                      |   |   | (2,257     | )      |   |   | -          |   |   |   | - |   |
| Changes      in operating assets and liabilities:                                                                         |   |   |       |   |   |   |       |   |   |   |   |   |
| Accounts      receivable                                                                                                  |   |   | 776,630    |   |   |   | 615,241    |   |   |   | 502,942 |   |
| Other      receivable – related party                                                                               |   |   | (2,364,995 | )      |   |   | -          |   |   |   | - |   |
| Inventories                                                                                                               |   |   | 455,867    |   |   |   | 208,388    |   |   |   | (102,800 | ) |
| Prepaid      expenses and other                                                                                           |   |   | (520,507   | )      |   |   | 82,133     |   |   |   | 34,924 |   |
| Other      assets                                                                                                         |   |   | (419,813   | )      |   |   | (81,778    | )      |   |   | 33,798 |   |
| Accounts      payable and accrued liabilities                                                                             |   |   | 211,798    |   |   |   | 27,236     |   |   |   | 707,265 |   |
| Accrued      income taxes                                                                                                 |   |   | 499,153    |   |   |   | -          |   |   |   | - |   |
| Customer      deposits                                                                                                    |   |   | -          |   |   |   | (750       | )      |   |   | (2,829 | ) |
| Liabilities      of discontinued operations                                                                               |   |   | -          |   |   |   | (125,000   | )      |   |   | (500,000 | ) |
| Deferred      service obligations and revenue                                                                             |   |   | 1,283,868  |   |   |   | (606,674   | )      |   |   | 119,004 |   |
| Net      cash flows from operating activities                                                                             |   |   | 3,302,761  |   |   |   | (1,390,996 | )      |   |   | (649,986 | ) |
| INVESTING      ACTIVITIES                                                                                                 |   |   |       |   |   |   |       |   |   |   |   |   |
| Purchases      of property and equipment                                                                                  |   |   | (171,133   | )      |   |   | (383,834   | )      |   |   | (993,108 | ) |
| Cash      acquired via purchase of Michigan Microtech, Inc.                                                               |   |   | 4,043,942  |   |   |   | -          |   |   |   | - |   |
| Cash      collected on other receivables – related party acquired via the purchase      of Michigan Microtech, Inc. |   |   | 2,815,488  |   |   |   | -          |   |   |   | - |   |
| Purchase      of US Install                                                                                               |   |   | (101,000   | )      |   |   | -          |   |   |   | - |   |
| Purchases      of intangible assets                                                                                       |   |   | -          |   |   |   | -          |   |   |   | (31,159 | ) |
| Proceeds      from sale of URON Inc. subsidiary                                                                           |   |   | -          |   |   |   | -          |   |   |   | 75,000 |   |
| Issuance      of other receivable-related party                                                                           |   |   | (5,843,942 | )      |   |   | -          |   |   |   | - |   |
| Proceeds      from sale of intangible assets and related equipment                                                        |   |   | 40,019     |   |   |   | 2,651,239  |   |   |   | 611,094 |   |
| Collections      on  notes receivable                                                                                |   |   | 6,716      |   |   |   | 9,995      |   |   |   | 2,801 |   |
| Net      cash flows from investing activities                                                                             |   |   | 790,090    |   |   |   | 2,277,400  |   |   |   | (335,372 | ) |
| FINANCING      ACTIVITIES                                                                                                 |   |   |       |   |   |   |       |   |   |   |   |   |
| Checks      issued in excess of cash in bank                                                                              |   |   | -          |   |   |   | (319,244   | )      |   |   | 226,239 |   |
| Payments      on long-term debt                                                                                           |   |   | (145,734   | )      |   |   | (139,209   | )      |   |   | (871,076 | ) |
| Payments      on capital lease obligations                                                                                |   |   | (212,734   | )      |   |   | (251,057   | )      |   |   | (235,517 | ) |
| Payments      on note payable to stockholder                                                                              |   |   | -          |   |   |   | (24,739    | )      |   |   | (8,098 | ) |
| Payment      on mandatory redeemable preferred stock                                                                      |   |   | (70,256    | )      |   |   | (59,744    | )      |   |   | (53,334 | ) |
| Payments      for stock issuance costs                                                                                    |   |   | (30,379    | )      |   |   | (24,208    | )      |   |   | (23,840 | ) |
| Proceeds      from issuance of long-term debt                                                                             |   |   | 100,000    |   |   |   | -          |   |   |   | - |   |
| Payments      received on stock subscriptions and interest receivables                                                    |   |   | 3,000      |   |   |   | 62         |   |   |   | 5,938 |   |
| Redemption      of preferred stock                                                                                        |   |   | (179,270   | )      |   |   | (95,100    | )      |   |   | (31,130 | ) |
| Preferred      stock dividends                                                                                            |   |   | (155,557   | )      |   |   | (49,684    | )      |   |   | (121,276 | ) |
| Exercise      of stock options                                                                                            |   |   | -          |   |   |   | -          |   |   |   | 18,000 |   |
| Net      cash flows from financing activities                                                                             |   |   | (690,930   | )      |   |   | (962,923   | )      |   |   | (1,094,094 | ) |
| INCREASE      (DECREASE) IN CASH AND CASH EQUIVALENTS                                                                     |   |   | 3,401,921  |   |   |   | (76,519    | )      |   |   | (2,079,452 | ) |
| CASH      AND CASH EQUIVALENTS - Beginning of Year                                                                        |   |   | 944,456    |   |   |   | 1,020,975  |   |   |   | 3,100,427 |   |
| CASH      AND CASH EQUIVALENTS - END OF YEAR                                                                              |   | $      | 4,346,377  |   |   | $      | 944,456    |   |   | $ | 1,020,975 |   |

----

|  NOTE      1 - Summary of Significant AccountingPolicies |
|---------------------------------------------------------------|

| 1. | Reduction      of operating expenses by controlling payroll, professional fees and other      general and administrativeexpenses. |
|----|-----------------------------------------------------------------------------------------------------------------------------------|

| 2. | Delivery      of video services to residents of single family      homes.  Effective March 1, 2008 the Company purchased 51% of the      outstanding stock of Michigan Microtech, Inc. (MMT), formerly a wholly      owned subsidiary of DirecTECH Holding Company, Inc. (DTHC).  MMT      installs DirecTV video services in single family      homes.  Historically, MMT has been profitable.  In      2008, by combining MMT operations with Multiband operations, Multiband      achieved a beneficial impact to its consolidated cash flows and operating      results.  In January 2009, Multiband significantly expanded its      single family home video installation business by purchasing the former      operations of DTHC (see Note 17).  However, there is no      guarantee that the results of the HSP business segment will be favorable      to the Company in future periods. While      the profitability of all the former operating subsidiaries of DTHC      (excluding MMT) has been inconsistent in prior periods and while the DTHC      operating subsidiaries as a whole (excluding MMT) were unprofitable in      2008, Multiband management, through management services agreements      conducted throughout 2008 helped, in conjunction with legacy DTHC      management, enact significant changes to those subsidiaries’ expense      structure, management and operating practices. These aforementioned      changes had a material improvement in the operating results of the DTHC      operating subsidiaries (excluding MMT) during the second half of 2008 as      selling, general and administrative expenses (as adjusted for certain one      time expenses such as legal accruals and transaction expenses related to      the Multiband acquisition) dropped significantly. The Company believes the      changes made to the former DTHC operating subsidiaries throughout 2008,      combined with stay at home consumers robust entertainment demands, will      continue to lead to materially improved operating results for those      subsidiaries during2009. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

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

| 6. | Expansion      of call center support via sales of call center services to both existing      and future system operators and to buyers of the Company’s video      subscribers. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7. | Sale      of video assets on a strategic basis. The Company, based on recent      transactions, believes there is an active market for its video subscriber      assets. The Company believes it can sell these assets, under certain      circumstances, at prices at or above their current carrying value.      However, there is no guarantee these sales will ultimately be favorable to      the Company. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

|                                           |   | December 31, 2008 |       |   | December 31, 2007 |   |
|------------------------------------------------|--------|-------------------|------------|--------|-------------------|--------|
|                                           |   | GrossCarrying     |       |   | Accumulated       |   |   | GrossCarrying |   |   | Accumulated |   |
|                                           |   | Amount            |       |   | Amortization      |   |   | Amount |   |   | Amortization |   |
| Intangible      assets subject to amortization |   |              |       |   |              |   |   |   |   |   |   |   |
| Right      of entry contracts                  |   | $                 | 800,751    |   |              | $      | 526,133 |   |   | $ | 993,393 |   |   | $ | 618,027 |   |
| Contracts      with DirecTV                    |   |              | 11,501,800 |   |              |   | 8,060,186 |   |   |   | 9,697,879 |   |   |   | 6,001,169 |   |
| Customer      contracts                        |   |              | 102,516    |   |              |   | 85,430 |   |   |   | - |   |   |   | - |   |
|                                           |   |              |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Total                                          |   |              | 12,405,067 |   |              |   | 8,671,749 |   |   |   | 10,691,272 |   |   |   | 6,619,196 |   |
|                                           |   |              |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Impairment      of intangibles                 |   |              | -          |   |              |   | 65,452 |   |   |   | - |   |   |   | - |   |
|                                           |   |              |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Total      including impairment                |   | $                 | 12,405,067 |   |              | $      | 8,737,201 |   |   | $ | 10,691,272 |   |   | $ | 6,619,196 |   |

----

|                                  |   | 2008           |   |   | 2007          |   |   | 2006          |   |
|---------------------------------------|--------|----------------|--------|--------|---------------|--------|--------|---------------|--------|
| Risk-free      interest rate          |   |           | 3.02   | %      |          |   | 4.56   | %             |   |   | 4.72 | % |
| Expected      life of options granted |   | 6.5      years |   |   | 10      years |   |   | 10      years |   |
| Expected      volatility range        |   |           | 94     | %      |          |   | 242    | %             |   |   | 216 | % |
| Expected      dividend yield          |   |           | 0      | %      |          |   | 0      | %             |   |   | 0 | % |

----

----

|  NOTE      2 – Business Acquisitions/Sales  Transactions |
|--------------------------------------------------------------------------|

----

|                                          |   | CondensedBalance      Sheet3/1/08 |       |
|-----------------------------------------------|--------|-----------------------------------|------------|
| Cash                                          |   | $                                 | 4,043,942  |   |
| Accounts      receivable                      |   |                              | 2,626,866  |   |
| Inventory                                     |   |                              | 2,209,567  |   |
| Other      current assets                     |   |                              | 2,827,135  |   |
| Property      and equipment, net              |   |                              | 73,995     |   |
| Other      assets                             |   |                              | 420,708    |   |
|                                          |   |                              |       |   |
| Total      assets                             |   | $                                 | 12,202,213 |   |
|                                          |   |                              |       |   |
| Accounts      payable and accrued liabilities |   | $                                 | 6,431,832  |   |
| Other      liabilities                        |   |                              | 18,218     |   |
| Total      liabilities                        |   |                              | 6,450,050  |   |
|                                          |   |                              |       |   |
| Stockholders      equity                      |   |                              | 5,752,163  |   |
|                                          |   |                              |       |   |
| Total      liabilities and equity             |   | $                                 | 12,202,213 |   |

----

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

|                                                                                          |   | 2008                    |       |   | 2008                    |   |       | 2007                    |   |   | 2007                    |   |
|-----------------------------------------------------------------------------------------------|--------|-------------------------|------------|--------|-------------------------|--------|------------|-------------------------|--------|--------|-------------------------|--------|
|                                                                                          |   | Consolidatedas reported |       |   | Pro      FormaDisclosed |   |       | Consolidatedas reported |   |   | Pro      FormaDisclosed |   |
| Years      ended December 31, 2008 and 2007                                                   |   |                    |       |   |                    |   |       |                    |   |   |                    |   |
| Revenues                                                                                      |   | $                       | 42,986,513 |   |                    | $      | 47,383,916 |                    |   | $      | 15,085,604              |   |   | $ | 40,942,051 |   |
|                                                                                          |   |                    |       |   |                    |   |       |                    |   |   |                    |   |   |   |   |   |
| Income      (loss) from operations                                                            |   |                    | 903,037    |   |                    |   | 1,240,722  |                    |   |   | (5,766,115              | )      |   |   | (7,100,653 | ) |
|                                                                                          |   |                    |       |   |                    |   |       |                    |   |   |                    |   |   |   |   |   |
| Net      income (loss)                                                                        |   |                    | 944,931    |   |                    |   | 1,108,594  |                    |   |   | (6,088,353              | )      |   |   | (7,071,729 | ) |
| Preferred      stock dividends                                                                |   |                    | 4,088,275  |   |                    |   | 4,088,275  |                    |   |   | 2,300,502               |   |   |   | 2,300,502 |   |
| Loss      attributable to common shareholders                                                 |   | $                       | (3,413,344 | )      |                    | $      | (2,979,681 | )                       |   | $      | (8,388,855              | )      |   | $ | (9,372,231 | ) |
|                                                                                          |   |                    |       |   |                    |   |       |                    |   |   |                    |   |   |   |   |   |
| Loss      attributable to common shareholders per common share – basic and      diluted |   | $                       | (.34       | )      |                    | $      | (.31       | )                       |   | $      | (1.16                   | )      |   | $ | (1.07 | ) |
|                                                                                          |   |                    |       |   |                    |   |       |                    |   |   |                    |   |   |   |   |   |
| Weighted      average shares outstanding – basic and diluted                            |   |                    | 9,302,570  |   |                    |   | 9,471,146  |                    |   |   | 7,237,473               |   |   |   | 8,727,473 |   |

----

|  NOTE      3 – Securities Available forSale |
|--------------------------------------------------------|

----

| Securities      available for sale consisted of the following at December    31: |   |   |    |   |   |   |
|----------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                                                             |   | 2008   |    |   | 2007   |   |
| Initial      investment                                                          |   | $      | 121,582 |   |   | $      | - |   |
| Decrease      in value                                                           |   |   | (75,988 | )      |   |   | - |   |
| Total                                                                            |   | $      | 45,594  |   |   | $      | - |   |

|  NOTE      4 – Inventories |
|---------------------------------------|

| Inventories      consisted of the following at December 31: |   |   |      |   |   |   |
|-------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                                        |   | 2008   |      |   | 2007   |   |
| DirecTV      – serialized                             |   | $      | 813,480   |   |   | $      | - |   |
| DirecTV      – nonserialized                          |   |   | 669,911   |   |   |   | - |   |
| Other                                                       |   |   | 419,477   |   |   |   | 132,992 |   |
| Total                                                       |   | $      | 1,902,868 |   |   | $      | 132,992 |   |

|  NOTE      5 - Property and Equipment |
|--------------------------------------------|

| Property      and equipment consisted of the following at December 31: |   |   |       |   |   |   |
|------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                                                   |   |   |       |   |   |   |
|                                                                   |   | 2008   |       |   | 2007   |   |
| Leasehold      improvements                                            |   | $      | 771,435    |   |   | $      | 844,828 |   |
| Office      equipment and furniture                                    |   |   | 4,955,807  |   |   |   | 3,239,315 |   |
| Subscriber      related equipment                                      |   |   | 2,855,487  |   |   |   | 2,916,796 |   |
| Property      and equipment under capital lease obligations            |   |   | 810,535    |   |   |   | 467,878 |   |
| Total      property and equipment                                      |   |   | 9,393,264  |   |   |   | 7,468,817 |   |
| Less      accumulated depreciation and amortization                    |   |   | (7,016,467 | )      |   |   | (5,421,422 | ) |
| Less      accumulated depreciation and amortization capital leases     |   |   | (343,730   | )      |   |   | (278,134 | ) |
| Total      property and equipment, net                                 |   | $      | 2,033,067  |   |   | $      | 1,769,261 |   |

----

|  NOTE      6 – Notes Receivable |
|--------------------------------------------|

|                                                                                                                                                                                                                                                                                                                                                                                      |   | 2008   |    |   | 2007   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Note      receivable – SBC-OK/TX, variable monthly principal payments based on      revenue generated plus interest of 7%, due October 2008.  Note      is collateralized by certain assets.  During 2008, this note      receivable was combined with note receivable – SBC-Ohio, and then a new      note receivable was signed with Satellite Systems. |   | $      | -       |   |   | $      | 40,235 |   |
|                                                                                                                                                                                                                                                                                                                                                                                      |   |   |    |   |   |   |   |   |
| Note      receivable – SBC-Ohio, variable monthly principal payments based on      revenue generated plus interest of 7%, due October 2008.  Note      is collateralized by certain assets.  During 2008, this note      receivable was combined with note receivable – SBC-OK/TX, and then a new      note receivable was signed with Satellite Systems. |   |   | -       |   |   |   | 19,626 |   |
|                                                                                                                                                                                                                                                                                                                                                                                      |   |   |    |   |   |   |   |   |
| Notes      receivable – Satellite Systems, variable monthly principal payments based      on revenue generated plus interest of 7%, due October      2009.  Note is collateralized by certain assets.                                                                                                                                                                     |   |   | 61,321  |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                      |   |   |    |   |   |   |   |   |
| Notes      receivable – S Scott, L.L.C., fixed monthly payments of $670, including      interest at 6%, due October 2015.  Note is collateralized by      said property.                                                                                                                                                                                                  |   |   | 39,095  |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                      |   |   |    |   |   |   |   |   |
| Total      notes receivable                                                                                                                                                                                                                                                                                                                                                               |   |   | 100,416 |   |   |   | 59,861 |   |
| Less:      current portion                                                                                                                                                                                                                                                                                                                                                                |   |   | (61,321 | )      |   |   | (59,861 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                      |   |   |    |   |   |   |   |   |
| Long-term      portion of notes receivable                                                                                                                                                                                                                                                                                                                                                |   | $      | 39,095  |   |   | $      | - |   |

|  NOTE      7 – Accrued Liabilities |
|-----------------------------------------------|

|                                                           |   | 2008   |      |   | 2007   |   |
|----------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Payroll      and related taxes                                 |   | $      | 1,354,419 |   |   | $      | 512,960 |   |
| Accrued      legal settlements and contingencies (see Note 15) |   |   | 960,000   |   |   |   | - |   |
| Accrued      preferred stock dividends                         |   |   | 622,118   |   |   |   | 642,395 |   |
| Accrued      liability – vendor chargeback               |   |   | -         |   |   |   | 630,800 |   |
| Other                                                          |   |   | 938,656   |   |   |   | 745,456 |   |
|                                                           |   | $      | 3,875,193 |   |   | $      | 2,531,611 |   |

----

|  NOTE      8 - Long-term Debt |
|------------------------------------|

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | 2008   |       |   | 2007   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |   |   |
| Debenture      payable - Convergent Partners I, L.P., see terms in note      below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | $      | 1,400,000  |   |   | $      | 1,500,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |   |   |   |   |
| Note      payable – DirecTECH Holding Company, Inc., secured with MMT common stock      (51%), net of imputed interest of $35,210 and $0 at December 31, 2008 and      2007.  Parties have agreed to offset management performance      bonuses payable to the Company against the note payable (see Note      16).  Balance is due in full including interest at 5%, February      2013.  The balance of this note payable is included in the note      payable issued for the purchase of the 29% of MMT (see Note      17). |   |   | 264,790    |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |   |   |   |   |
| Note      payable – Bas Mattingly, unsecured, due in full including interest at 7%,      August 2009 (see Note 2).                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   | 100,000    |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |   |   |   |   |
| Notes      payable – group of accredited institutional investors, net of original      issue discount and beneficial conversion of note payable into common stock      of $0 and $30,413 at December 31, 2008 and 2007.  Interest is 6%      payable semi-annually in cash or common stock at the Company’s election,      due November 2007, collateralized by certain assets of the Company and      subordinated.  This note payable is past due (see Note      below).                                                         |   |   | 66,666     |   |   |   | 66,666 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |   |   |   |   |
| Note      payable – DeLage Landen Financial Services, monthly installments of $1,765      including interest at 10.40%, due July 2010.                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | 30,804     |   |   |   | 46,460 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |   |   |   |   |
| Note      payable – Lexstar Tower One, LP, monthly installments of $2,737 including      interest at 4.00%, due August 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   | 52,741     |   |   |   | 82,818 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |   |   |   |   |
| Note      payable – repaid on January 18, 2008, with the issuance of 7,500 shares of      common stock at $2.60 per share, resulting in a gain on extinguishment of      debt of $29,965.                                                                                                                                                                                                                                                                                                                                                                    |   |   | -          |   |   |   | 44,446 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |   |   |   |   |
| Note      payable, interest at 7%, the Company’s intent is to pay this note via      reduction of life insurance proceeds, collateralized by life insurance      policy owned by  the Company.                                                                                                                                                                                                                                                                                                                                                     |   |   | 39,651     |   |   |   | 36,876 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |   |   |   |   |
| Total      long-term debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   | 1,954,652  |   |   |   | 1,777,266 |   |
| Less:      current portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   | (1,608,778 | )      |   |   | (1,658,342 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |       |   |   |   |   |   |
| Long-term      debt, net of current portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $      | 345,874    |   |   | $      | 118,924 |   |

| 2009                               |   | $      | 1,608,778 |   |
|------------------------------------|--------|--------|-----------|--------|
| 2010                               |   |   | 25,080    |   |
| 2011                               |   |   | -         |   |
| 2012                               |   |   | -         |   |
| 2013                               |   |   | 281,143   |   |
| Thereafter                         |   |   | 39,651    |   |
| Total      future minimum payments |   | $      | 1,954,652 |   |

----

|  NOTE      9 - Capital Lease Obligations |
|-----------------------------------------------|

| 2009                                                   |   | $      | 368,639  |   |
|--------------------------------------------------------|--------|--------|----------|--------|
| 2010                                                   |   |   | 209,039  |   |
| 2011                                                   |   |   | 140,909  |   |
| 2012                                                   |   |   | 3,782    |   |
| Less:      amounts representing interest               |   |   | (94,085  | )      |
| Present      value of future minimum lease payments    |   |   | 628,284  |   |
| Less:      current portion                             |   |   | (310,656 | )      |
| Capital      lease obligations, net of current portion |   | $      | 317,628  |   |

----

|  NOTE      10 - Stockholders' Equity |
|-------------------------------------------|

| ·       | 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, |
|--------------------------------------------|-------------------------------------------------------------------------|

| ·       | 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 |
|--------------------------------------------|-------------------------------------------------------------------------|

| ·            | 100,000      shares of Class I cumulative convertible preferred  stock |
|--------------------------------------------|------------------------------------------------------------------------|

----

----

|                          |   | Options |    |   | Weighted-Average Exercise    Price |   |
|-------------------------------|--------|---------|---------|--------|------------------------------------|--------|
|                          |   | 2008    |    |   | 2007                               |   |   | 2006 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
| Outstanding,      January 1   |   |    | 659,832 |   |                               |   | 613,331 |   |   |   | 611,986 |   |   | $ | 7.15 |   |   | $ | 7.55 |   |   | $ | 7.70 |   |
| Granted                       |   |    | 41,500  |   |                               |   | 57,600 |   |   |   | 41,300 |   |   |   | 1.87 |   |   |   | 2.75 |   |   |   | 5.45 |   |
| Exercised                     |   |    | -       |   |                               |   | - |   |   |   | (6,000 | ) |   |   | - |   |   |   | - |   |   |   | 3.00 |   |
| Cancelled                     |   |    | (8,300  | )      |                               |   | (11,099 | ) |   |   | (33,955 | ) |   |   | 3.82 |   |   |   | 5.66 |   |   |   | 8.60 |   |
| Expired                       |   |    | (30,000 | )      |                               |   | - |   |   |   | - |   |   |   | 3.00 |   |   |   | - |   |   |   | - |   |
| Outstanding,      December 31 |   |    | 663,032 |   |                               |   | 659,832 |   |   |   | 613,331 |   |   | $ | 7.05 |   |   | $ | 7.15 |   |   | $ | 7.55 |   |

----

|   |                                    |   |   | Outstanding |   |   | Exercisable        |   |    |
|--------|-----------------------------------------|--------|--------|-------------|--------|--------|--------------------|--------|---------|
|   |                                    |   |   |        |   |   | Weighted - Average |   |    |   |   |   | Weighted- |   |   |
|   | Range of Exercise Prices |   |   | Options     |   |   | ExercisePrice      |   |    | Remaining Contractual Life-Years |   |   | Options |   |   | AverageExercisePrice |   |   |
| $      | 0.96                                    | to     |   | $           | 3.85   |   |               |   | 92,900  |   |   | $ | 2.38 |   |   |   | 7.19 |   |   |   | 59,202 |   |   | $ | 2.61 |   |
| $      | 4.25                                    | to     |   | $           | 6.90   |   |               |   | 159,180 |   |   |   | 6.13 |   |   |   | 5.79 |   |   |   | 155,447 |   |   |   | 6.17 |   |
| $      | 7.00                                    | to     |   | $           | 8.60   |   |               |   | 348,118 |   |   |   | 7.37 |   |   |   | 5.48 |   |   |   | 348,118 |   |   |   | 7.37 |   |
| $      | 9.25                                    | to     |   | $           | 14.38  |   |               |   | 45,100  |   |   |   | 10.05 |   |   |   | 1.48 |   |   |   | 45,100 |   |   |   | 10.05 |   |
| $      | 21.57                                   | to     |   | $           | 33.75  |   |               |   | 17,734  |   |   |   | 25.93 |   |   |   | 1.17 |   |   |   | 17,734 |   |   |   | 25.93 |   |
| $      | 0.96                                    | to     |   | $           | 33.75  |   |               |   | 663,032 |   |   | $ | 7.05 |   |   |   | 5.41 |   |   |   | 625,601 |   |   | $ | 7.34 |   |

|                          |   | Outstanding |       |   | Weighted - Average Exercise      Price |   |
|-------------------------------|--------|-------------|------------|--------|----------------------------------------|--------|
|                          |   | 2008        |       |   | 2007                                   |   |   | 2006 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
| Outstanding,      January 1   |   |        | 3,088,873  |   |                                   |   | 3,488,329 |   |   |   | 3,743,196 |   |   | $ | 7.64 |   |   | $ | 8.05 |   |   | $ | 8.40 |   |
| Granted                       |   |        | 2,920      |   |                                   |   | 24,202 |   |   |   | 3,134 |   |   |   | 2.20 |   |   |   | 2.96 |   |   |   | 5.25 |   |
| Exercised                     |   |        | -          |   |                                   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Forfeited                     |   |        | (1,605,960 | )      |                                   |   | (423,658 | ) |   |   | (258,001 | ) |   |   | 7.85 |   |   |   | 10.62 |   |   |   | 12.90 |   |
| Outstanding,      December 31 |   |        | 1,485,833  |   |                                   |   | 3,088,873 |   |   |   | 3,488,329 |   |   | $ | 7.25 |   |   | $ | 7.64 |   |   | $ | 8.05 |   |

|   |                         |   |   |     |   |   | Weighted - Average         |   |
|--------|------------------------------|--------|--------|----------|--------|--------|--------------------------------------|--------|
|   | Range      of ExercisePrices |   |   | Warrants |   |   | Remaining contractual life |   |   | Exerciseprices |   |
| $      | 2.06                         | to     |   | $        | 5.50   |   |                                 |   | 239,720 |   |   |   | 1.01 |   |   | $ | 4.28 |   |
| $      | 6.25                         | to     |   | $        | 6.50   |   |                                 |   | 747,981 |   |   |   | 1.38 |   |   |   | 6.05 |   |
| $      | 7.00                         | to     |   | $        | 8.25   |   |                                 |   | 67,273 |   |   |   | 1.42 |   |   |   | 7.60 |   |
| $      | 10.00                        | to     |   | $        | 11.25  |   |                                 |   | 430,859 |   |   |   | 1.75 |   |   |   | 10.35 |   |
| $      | 2.06                         | to     |   | $        | 11.25  |   |                                 |   | 1,485,833 |   |   |   | 1.43 |   |   | $ | 7.08 |   |

----

|                   |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Common      stock      |   |   | -      |   |   |   | -      |   |   |   | - |   |
| Services      rendered |   |   | 2,920  |   |   |   | 24,202 |   |   |   | 3,134 |   |
| Preferred      stock   |   |   | -      |   |   |   | -      |   |   |   | - |   |
|                   |   |   | 2,920  |   |   |   | 24,202 |   |   |   | 3,134 |   |

|                         |   | 2008         |   |   | 2007         |   |   | 2006           |   |
|------------------------------|--------|--------------|--------|--------|--------------|--------|--------|----------------|--------|
| Risk-free      interest rate |   |         | 1.12   | %      |         |   | 4.58   | %              |   |   | 4.88 | % |
| Expected      life           |   | 3      years |   |   | 3      years |   |   | 3.5      years |   |
| Expected      volatility     |   |         | 95     | %      |         |   | 244    | %              |   |   | 216 | % |
| Expected      dividend rate  |   |         | 0      | %      |         |   | 0      | %              |   |   | 0 | % |

----

|  NOTE      11– Business Segments |
|---------------------------------------------|

| Year      Ended December 31, 2008  |   | Multiband Corp |       |   | MDU    |   |       | MCS    |   |   | HSP        |   |   | Total  |       |
|------------------------------------|--------|----------------|------------|--------|--------|--------|------------|--------|--------|--------|------------|--------|--------|--------|------------|
| Revenues                           |   | $              | -          |   |   | $      | 15,559,329 |   |   | $      | 3,731,139  |   |   | $      | 23,696,045 |   |   | $ | 42,986,513 |   |
| Income      (loss) from operations |   |           | (2,942,641 | )      |   |   | 3,782,927  |   |   |   | (2,271,821 | )      |   |   | 2,334,572  |   |   |   | 903,037 |   |
| Identifiable      assets           |   |           | 5,567,231  |   |   |   | 4,098,137  |   |   |   | 3,373,305  |   |   |   | 13,004,734 |   |   |   | 26,043,407 |   |
| Depreciation      and amortization |   |           | 698,008    |   |   |   | 1,587,570  |   |   |   | 707,368    |   |   |   | 32,532     |   |   |   | 3,025,478 |   |
| Capital      expenditures          |   |           | 59,736     |   |   |   | -          |   |   |   | 87,476     |   |   |   | 23,921     |   |   |   | 171,133 |   |
|                               |   |           |       |   |   |   |       |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Year      Ended December 31, 2007  |   | Multiband Corp |       |   | MDU    |   |       | MCS    |   |   |       |   |   |   | Total      |   |
| Revenues                           |   | $              | -          |   |   | $      | 9,947,848  |   |   | $      | 5,137,756  |   |   | $      | -          |   |   | $ | 15,085,604 |   |
| Income      (loss) from operations |   |           | (4,320,701 | )      |   |   | 2,953,736  |   |   |   | (4,399,150 | )      |   |   | -          |   |   |   | (5,766,115 | ) |
| Identifiable      assets           |   |           | 1,272,271  |   |   |   | 4,652,909  |   |   |   | 2,968,249  |   |   |   | -          |   |   |   | 8,893,429 |   |
| Depreciation      and amortization |   |           | 239,411    |   |   |   | 1,604,905  |   |   |   | 1,779,587  |   |   |   | -          |   |   |   | 3,623,903 |   |
| Capital      expenditures          |   |           | 4,554      |   |   |   | 5,153      |   |   |   | 374,127    |   |   |   | -          |   |   |   | 383,834 |   |
|                               |   |           |       |   |   |   |       |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Year      Ended December 31, 2006  |   | Multiband Corp |       |   | MDU    |   |       | MCS    |   |   |       |   |   |   | Total      |   |
| Revenues                           |   | $              | -          |   |   | $      | 10,477,802 |   |   | $      | 7,573,799  |   |   | $      | -          |   |   | $ | 18,051,601 |   |
| Income      (loss) from operations |   |           | (4,713,896 | )      |   |   | 4,066,850  |   |   |   | (8,492,405 | )      |   |   | -          |   |   |   | (9,139,451 | ) |
| Identifiable      assets           |   |           | 2,478,638  |   |   |   | 6,443,625  |   |   |   | 9,063,793  |   |   |   | -          |   |   |   | 17,986,056 |   |
| Depreciation      and amortization |   |           | 232,211    |   |   |   | 1,604,313  |   |   |   | 3,331,685  |   |   |   | -          |   |   |   | 5,168,209 |   |
| Capital      expenditures          |   |           | 42,150     |   |   |   | -          |   |   |   | 950,958    |   |   |   | -          |   |   |   | 993,108 |   |

|  NOTE      12 - Income Taxes |
|-----------------------------------|

|     |   | Federal |    |   | State  |   |    | Total  |   |
|----------|--------|---------|---------|--------|--------|--------|---------|--------|--------|
| Current  |   | $       | 952,000 |   |   | $      | 180,000 |   |   | $ | 1,132,000 |   |
| Deferred |   |    | -       |   |   |   | -       |   |   |   | - |   |
| Total    |   | $       | 952,000 |   |   | $      | 180,000 |   |   | $ | 1,132,000 |   |

----

|                                                                |   | 2008   |        |   | 2007   |   |
|---------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| Deferred      income tax assets:                                    |   |   |        |   |   |   |
| Net      operating loss carryforwards and tax credits               |   | $      | 17,510,000  |   |   | $      | 18,705,000 |   |
|                                                                |   |   |        |   |   |   |   |   |
| Stock-based      compensation / compensation accruals               |   |   | 649,000     |   |   |   | 613,000 |   |
| Asset      valuation reserves                                       |   |   | -           |   |   |   | 182,000 |   |
| Accrued      liabilities                                            |   |   | 594,000     |   |   |   | 370,000 |   |
|                                                                |   |   | 18,753,000  |   |   |   | 19,870,000 |   |
| Less      valuation allowance                                       |   |   | (17,173,000 | )      |   |   | (18,320,000 | ) |
|                                                                |   |   | 1,580,000   |   |   |   | 1,550,000 |   |
| Deferred      income tax liabilities:                               |   |   |        |   |   |   |   |   |
| Amortization      of intangibles and goodwill, including impairment |   |   | (1,376,000  | )      |   |   | (1,329,000 | ) |
| Depreciation                                                        |   |   | (204,000    | )      |   |   | (221,000 | ) |
| Net      deferred income tax assets                                 |   | $      | -           |   |   | $      | - |   |

|                                               |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|----------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Federal      statutory tax provision(benefit) rate |   |   | 34.0   | %      |   |   | (34.0  | )%     |   |   | (34.0 | )% |
| State      tax, net of federal benefit             |   |   | 6.0    |   |   |   | (6.0   | )      |   |   | (6.0 | ) |
| Change      in valuation allowance                 |   |   | 2.0    |   |   |   | 40.0   |   |   |   | 40.0 |   |
| Effective      tax rate                            |   |   | 42.0   | %      |   |   | 0.0    | %      |   |   | 0.0 | % |

| Year of Expiration |   | Federal      NetOperating Loss |       |   | State      Net Operating Loss |   |
|--------------------|--------|--------------------------------|------------|--------|------------------------------------|--------|
| 2018               |   |                           | 255,000    |   |                               |   | 1,303,000 |   |
| 2019               |   |                           | 1,585,000  |   |                               |   | 2,723,000 |   |
| 2020               |   |                           | 4,839,000  |   |                               |   | 1,629,000 |   |
| 2021               |   |                           | 4,726,000  |   |                               |   | 4,003,000 |   |
| 2022               |   |                           | 4,353,000  |   |                               |   | 3,737,000 |   |
| 2023               |   |                           | 4,224,000  |   |                               |   | 4,311,000 |   |
| 2024               |   |                           | 6,052,000  |   |                               |   | 3,202,000 |   |
| 2025               |   |                           | 7,181,000  |   |                               |   | 4,589,000 |   |
| 2026               |   |                           | 5,249,000  |   |                               |   | 3,061,000 |   |
| 2027               |   |                           | 6,418,000  |   |                               |   | 7,980,000 |   |
|               |   | $                              | 44,882,000 |   |                               | $      | 36,538,000 |   |

----

|  NOTE 13      - Supplemental Cash FlowsInformation |
|--------------------------------------------------------------|

|                                                                                                                                       |   | 2008   |      |   | 2007   |   |      | 2006   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
| Cash      paid for interest, net of amortization of OID and interest      discount                                                         |   | $      | 346,814   |   |   | $      | 473,601   |   |   | $ | 368,612 |   |
| Cash      paid for federal and state income taxes                                                                                          |   |   | 681,500   |   |   |   | -         |   |   |   | - |   |
| Non-cash      investing and financing transactions:                                                                                        |   |   |      |   |   |   |      |   |   |   |   |   |
| Debt      reduced by other receivable-related party                                                                                        |   |   | 1,946,000 |   |   |   | -         |   |   |   | - |   |
| Reduction      of stock subscription receivable via cancellation of common      stock                                                      |   |   | 61,333    |   |   |   | -         |   |   |   | - |   |
| Reduction      of other receivable-related party with increase in fixed      assets                                                        |   |   | 542,642   |   |   |   | -         |   |   |   | - |   |
| Purchase      of 51% of Michigan Microtech, Inc. via issuance of notes payable and      common stock, net of discount for imputed interest |   |   | 5,782,690 |   |   |   | -         |   |   |   | - |   |
| Purchase      of property and equipment via increase in capital lease      obligations                                                     |   |   | 341,494   |   |   |   | -         |   |   |   | - |   |
| Purchase      of US Install via issuance of common stock                                                                                   |   |   | 101,516   |   |   |   | -         |   |   |   | - |   |
| Acquisition      of securities available for sale upon expiration of contingent      rights                                                |   |   | 121,582   |   |   |   | -         |   |   |   | - |   |
| Intrinsic      value of preferred dividends                                                                                                |   |   | 57,519    |   |   |   | -         |   |   |   | - |   |
| Note      payable issued for prepaid lease                                                                                                 |   |   | -         |   |   |   | 44,407    |   |   |   | - |   |
| Common      stock valued at $84,000, issued in lieu of cash for equipment, net of      reduction in accounts payable of $19,665            |   |   | -         |   |   |   | 64,335    |   |   |   | - |   |
| Common      stock issued in relation to acquisition of Dinamo Entertainment,      LLC                                                      |   |   | -         |   |   |   | -         |   |   |   | 12,400 |   |
| Conversion      of notes payable and accrued interest to common and preferred      stock                                                   |   |   | 23,500    |   |   |   | 17,680    |   |   |   | 244,333 |   |
| Conversion      of preferred stock to common stock                                                                                         |   |   | 3,894,600 |   |   |   | 1,822,400 |   |   |   | 3,151,500 |   |
| Capital      lease obligations related to property and equipment                                                                           |   |   | -         |   |   |   | -         |   |   |   | 539,529 |   |
| Conversion      of preferred stock dividends into common stock                                                                             |   |   | 179,412   |   |   |   | 637,209   |   |   |   | 473,001 |   |
| Purchase      of intangible assets                                                                                                         |   |   | -         |   |   |   | -         |   |   |   | 54,150 |   |
| Property      and equipment, intangibles and goodwill transferred to assets held for      sale                                             |   |   | -         |   |   |   | -         |   |   |   | 1,244,236 |   |
| Notes      payable issued in relation to the acquisition of Rand’M                                                                   |   |   | -         |   |   |   | -         |   |   |   | 116,030 |   |
| Notes      payable issued in relation to the acquisition of Extreme    Video                                                               |   |   | -         |   |   |   | -         |   |   |   | 311,900 |   |
| Common      stock issued in relation to the acquisition of Extreme    Video                                                                |   |   | -         |   |   |   | -         |   |   |   | 162,500 |   |
| Distribution      of URON, Inc common stock as stock dividends                                                                             |   |   | -         |   |   |   | -         |   |   |   | 46,989 |   |
| Deferred      revenue related to service agreement with URON, Inc. in exchange for other      current assets                               |   |   | -         |   |   |   | -         |   |   |   | 116,500 |   |
| Reduction      of notes payable, net of imputed interest in connection with the sale of      intangible assets and related equipment       |   |   | -         |   |   |   | 532,015   |   |   |   | - |   |
| Common      stock issued for services to be rendered, recorded as a prepaid      asset                                                     |   |   | 128,250   |   |   |   | -         |   |   |   | - |   |

----

|  NOTE      14 - Retirement Savings Plan |
|----------------------------------------------|

|  NOTE      15 - Commitments andContingencies |
|---------------------------------------------------|

|   Year |   | Amount |      |   |
|------------------|--------|--------|-----------|--------|
| 2009             |   |   | 625,000   |   |
| 2010             |   |   | 568,000   |   |
| 2011             |   |   | 375,000   |   |
| 2012             |   |   | 387,000   |   |
| 2013             |   |   | 263,000   |   |
| Thereafter       |   |   | 116,000   |   |
|             |   | $      | 2,334,000 |   |

----

|   Year |   | Amount |      |
|------------------|--------|--------|-----------|
| 2009             |   |   | 1,060,000 |   |
| 2010             |   |   | 975,000   |   |
| 2011             |   |   | 839,000   |   |
| 2012             |   |   | 310,000   |   |
| 2013             |   |   | 76,000    |   |
| Thereafter       |   |   | 152,000   |   |
|             |   | $      | 3,412,000 |   |

|   Year |   | Amount |       |
|------------------|--------|--------|------------|
| 2009             |   |   | 6,397,000  |   |
| 2010             |   |   | 5,640,000  |   |
| 2011             |   |   | 4,501,000  |   |
| 2012             |   |   | 1,667,000  |   |
| 2013             |   |   | 451,000    |   |
| Thereafter       |   |   | 901,000    |   |
|             |   | $      | 19,557,000 |   |

----

|  NOTE      16 – Related PartyTransactions |
|------------------------------------------------------|

----

|                                                                                                        |   | Multiband Corporation(as filed) |       |   | Less:      DTHCRelated(1)(unaudited) |   |       | Proforma(unaudited) |   |
|-------------------------------------------------------------------------------------------------------------|--------|---------------------------------|------------|--------|--------------------------------------|--------|------------|---------------------|--------|
| Accounts      receivable, net                                                                               |   | $                               | 3,436,424  |   |                                 | $      | (771,427   | )                   |   | $ | 2,664,997 |   |
| Other      receivable – related party                                                                 |   |                            | 7,666,295  |   |                                 |   | (7,666,295 | )                   |   |   | - |   |
| Prepaid      expenses and other                                                                             |   |                            | 1,273,083  |   |                                 |   | (518,024   | )                   |   |   | 755,059 |   |
| Accounts      payable                                                                                       |   |                            | 8,274,003  |   |                                 |   | (1,127,005 | )                   |   |   | 7,146,998 |   |
|                                                                                                        |   |                            |       |   |                                 |   |       |                |   |   |   |   |
| Revenues                                                                                                    |   |                            | 42,986,513 |   |                                 |   | (3,333,119 | )                   |   |   | 39,653,394 |   |
| Cost      of products and services (exclusive of depreciation and amortization shown      separately below) |   |                            | 28,425,926 |   |                                 |   | (2,895,176 | )                   |   |   | 25,530,750 |   |
| Selling,      general and administrative                                                                    |   |                            | 10,499,863 |   |                                 |   | 750,000    |                |   |   | 11,249,863 |   |
| Management      consulting income                                                                           |   |                            | 2,366,466  |   |                                 |   | (2,366,466 | )                   |   |   | - |   |

| (1) | All      adjustments described in the paragraphs of Note  16 |
|-----|--------------------------------------------------------------|

----

|  NOTE 17 – Subsequent      Event |
|---------------------------------------------|

----

| ·   | Total      purchase price |
|--------------------|---------------------------|

| ·   | Fair      value of net identifiable assets |
|--------------------|--------------------------------------------|

| ·   | Value      of DirecTECH’s workforce of skilled installation    technicians |
|--------------------|----------------------------------------------------------------------------------|

| ·   | Value      of DirecTECH’s installed subscriber base in the MDU (multi-dwelling unit)      segment |
|--------------------|---------------------------------------------------------------------------------------------------------|

| ·   | Intangible      assets that do not qualify for separate  recognition |
|--------------------|----------------------------------------------------------------------|

| ·   | DirecTV      HSP contract |
|--------------------|---------------------------|

| ·   | None      of the goodwill recorded is expected to be deductible for tax      purposes. |
|--------------------|----------------------------------------------------------------------------------------|

| ·   | The      goodwill recorded as a result of the acquisition is solely related to the      Company’s HSP segment. |
|--------------------|----------------------------------------------------------------------------------------------------------------------|

----

|                                                            |   | DirecTECH      Operating Subsidiaries December 31, 2008      (unaudited) |        |
|-----------------------------------------------------------------|--------|--------------------------------------------------------------------------|-------------|
|                                                            |   |                                                                     |        |
| CONSIDERATION      PAID                                         |   |                                                                     |        |
|                                                            |   |                                                                     |        |
| Cash                                                            |   | $                                                                        | 500,000     |   |
| Promissory      notes                                           |   |                                                                     | 40,700,000  |   |
| Contingent      consideration                                   |   |                                                                     | 1,608,000   |   |
| TOTAL      CONSIDERATION PAID                                   |   | $                                                                        | 42,808,000  |   |
|                                                            |   |                                                                     |        |   |
|                                                            |   |                                                                     |        |   |
| IDENTIFIABLE      ASSETS ACQUIRED AND LIABILITIES ASSUMED       |   |                                                                     |        |   |
|                                                            |   |                                                                     |        |   |
| Cash                                                            |   | $                                                                        | 2,292,676   |   |
| Receivables                                                     |   |                                                                     | 10,836,745  |   |
| Prepaid      expenses and deposits                              |   |                                                                     | 3,438,544   |   |
| Inventory                                                       |   |                                                                     | 15,839,173  |   |
| Fixed      assets                                               |   |                                                                     | 7,980,831   |   |
| Other      assets                                               |   |                                                                     | 2,497,849   |   |
| Identifiable      intangible assets                             |   |                                                                     | 36,700,000  |   |
| Accounts      payable                                           |   |                                                                     | (32,707,389 | ) |
| Other      current liabilities                                  |   |                                                                     | (16,333,367 | ) |
| Long-term      debt                                             |   |                                                                     | (42,808     | ) |
| TOTAL      IDENTIFIABLE ASSETS ACQUIRED AND LIABILITIES ASSUMED |   |                                                                     | 30,502,254  |   |
| Noncontrolling      interest                                    |   |                                                                     | (6,942,209  | ) |
| Goodwill                                                        |   |                                                                     | 19,247,955  |   |
| FAIR      VALUE OF CONTROLLING INTEREST                         |   | $                                                                        | 42,808,000  |   |

----

----

|                                                                                                        |   | Multiband      Corporation December 31, 2008 (as filed) |       |   | DirecTECH      Operating Subsidiaries December 31, 2008(unaudited) |       |        | Proforma Adjustments |   |       |       |   |   | Proforma      Results December 31, 2008      (unaudited) |   |
|-------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|------------|--------|--------------------------------------------------------------------|------------|-------------|----------------------|--------|------------|------------|--------|--------|----------------------------------------------------------|--------|
|                                                                                                        |   |                                                    |       |   |                                                               |       |        |                 |   |       |       |   |   |                                                     |   |
| REVENUES                                                                                                    |   | $                                                       | 42,986,513 |   |                                                               | $          | 196,755,415 |                 |   | $          | (3,311,098 | )      |   |                                                     | 1      |   |   | $ | 236,430,830 |   |
|                                                                                                        |   |                                                    |       |   |                                                               |       |        |                 |   |       |       |   |   |                                                     |   |   |   |   |   |   |
| COSTS AND      EXPENSES                                                                                     |   |                                                    |       |   |                                                               |       |        |                 |   |       |       |   |   |                                                     |   |   |   |   |   |   |
| Cost of products and services      (exclusive of depreciation and amortization shown separately      below) |   |                                                    | 28,425,926 |   |                                                               |       | 151,079,047 |                 |   |       | (3,311,098 | )      |   |                                                     | 1      |   |   |   | 176,193,875 |   |
| Selling, general and      administrative                                                                    |   |                                                    | 10,499,863 |   |                                                               |       | 52,100,361  |                 |   |       | (7,886,466 | )      |   |  2,      7                                          |   |   |   | 54,713,758 |   |
| Depreciation and      amortization                                                                          |   |                                                    | 3,025,478  |   |                                                               |       | 1,910,578   |                 |   |       | 7,000,000  |   |   |                                                     | 3      |   |   |   | 11,936,056 |   |
| Impairment of      assets                                                                                   |   |                                                    | 132,209    |   |                                                               |       | -           |                 |   |       | -          |   |   |                                                     |   |   |   |   | 132,209 |   |
|                                                                                                        |   |                                                    |       |   |                                                               |       |        |                 |   |       |       |   |   |                                                     |   |   |   |   |   |   |
| Total costs and      expenses                                                                               |   |                                                    | 42,083,476 |   |                                                               |       | 205,089,986 |                 |   |       | (4,197,564 | )      |   |                                                     |   |   |   |   | 242,975,898 |   |
|                                                                                                        |   |                                                    |       |   |                                                               |       |        |                 |   |       |       |   |   |                                                     |   |   |   |   |   |   |
| INCOME (LOSS) FROM      OPERATIONS                                                                          |   |                                                    | 903,037    |   |                                                               |       | (8,334,571  | )                    |   |       | 886,466    |   |   |                                                     |   |   |   |   | (6,545,068 | ) |
|  OTHER INCOME      (EXPENSE)                                                                           |   |                                                    |       |   |                                                               |       |        |                 |   |       |       |   |   |                                                     |   |   |   |   |   |   |
| Interest      expense                                                                                       |   |                                                    | (657,289   | )      |                                                               |       | (3,120,700  | )                    |   |       | (2,834,372 | )      |   |                                                     | 4      |   |   |   | (6,612,361 | ) |
| Management consulting      income                                                                           |   |                                                    | 2,366,466  |   |                                                               |       | -           |                 |   |       | (2,366,466 | )      |   |                                                     | 2      |   |   |   | - |   |
| Interest and other income                                                                                   |   | 116,884                                                 |       |   |                                                               | 514,867    |        |                 |   | -          |       |   |   |                                                     |   |   |   |   631,751 |   |
|                                                                                                        |   |                                                    |       |   |                                                               |       |        |                 |   |       |       |   |   |                                                     |   |   |   |   |   |   |
| Total other income      (expense)                                                                           |   | 1,826,061                                               |       |   |                                                               | (2,605,833 | )           |                 |   | (5,200,838 | )          |   |   |                                                     |   |   |   | (5,980,610 | ) |
|                                                                                                        |   |                                                    |       |   |                                                               |       |        |                 |   |       |       |   |   |                                                     |   |   |   |   |   |   |
| INCOME (LOSS) BEFORE INCOME TAXES      AND MINORITY INTEREST IN SUBSIDIARY                                  |   |                                                    | 2,729,098  |   |                                                               |       | (10,940,404 | )                    |   |       | (4,314,372 | )      |   |                                                     |   |   |   |   | (12,525,678 | ) |
|                                                                                                        |   |                                                    |       |   |                                                               |       |        |                 |   |       |       |   |   |                                                     |   |   |   |   |   |   |
| PROVISION FOR INCOME      TAXES                                                                             |   |                                                    | 1,132,000  |   |                                                               |       | 173,690     |                 |   |       | (870,000   | )      |   |                                                     | 6      |   |   |   | 435,690 |   |
|                                                                                                        |   |                                                    |       |   |                                                               |       |        |                 |   |       |       |   |   |                                                     |   |   |   |   |   |   |
| MINORITY INTEREST IN NET INCOME OF      SUBSIDIARY                                                          |   |                                                    | 652,167    |   |                                                               |       | -           |                 |   |       | (3,329,418 | )      |   |                                                     | 5      |   |   |   | (2,677,251 | ) |
|                                                                                                        |   |                                                    |       |   |                                                               |       |        |                 |   |       |       |   |   |                                                     |   |   |   |   |   |   |
| NET INCOME      (LOSS)                                                                                      |   |                                                    | 944,931    |   |                                                               |       | (11,114,094 | )                    |   |       | (114,954   | )      |   |                                                     |   |   |   |   | (10,284,117 | ) |
|                                                                                                        |   |                                                    |       |   |                                                               |       |        |                 |   |       |       |   |   |                                                     |   |   |   |   |   |   |
| Preferred stock      dividends                                                                              |   |                                                    | 4,088,275  |   |                                                               |       | --          |                 |   |       | -          |   |   |                                                     |   |   |   |   | 4,088,275 |   |
| LOSS ATTRIBUTABLE TO COMMON      STOCKHOLDERS                                                               |   | $                                                       | (3,143,344 | )      |                                                               | $          | (11,114,094 | )                    |   | $          | (114,954   | )      |   |                                                     |   |   |   | $ | (14,372,392 | ) |
|                                                                                                        |   |                                                    |       |   |                                                               |       |        |                 |   |       |       |   |   |                                                     |   |   |   |   |   |   |
| LOSS PER COMMON SHARE – BASIC AND      DILUTED:                                                       |   |                                                    |       |   |                                                               |       |        |                 |   |       |       |   |   |                                                     |   |   |   |   |   |   |
|                                                                                                        |   |                                                    |       |   |                                                               |       |        |                 |   |       |       |   |   |                                                     |   |   |   |   |   |   |
| LOSS ATTRIBUTABLE TO      COMMON STOCKHOLDERS                                                          |   | $                                                       | (0.34      | )      |                                                               |       |        |                 |   |       |       |   |   |                                                     |   |   |   | $ | (1.54 | ) |
|                                                                                                        |   |                                                    |       |   |                                                               |       |        |                 |   |       |       |   |   |                                                     |   |   |   |   |   |   |
| Weighted average common shares      outstanding – basic and diluted                                   |   |                                                    | 9,302,570  |   |                                                               |       | -           |                 |   |       | -          |   |   |                                                     |   |   |   |   | 9,302,570 |   |

----

|                                                                                                        |   | Multiband      Corporation December 31, 2007 (as filed) |       |   | DirecTECH      Operating Subsidiaries December 31, 2007 (unaudited) |     |        | Proforma      Adjustments |   |       |       |   |   | Proforma      Results December 31, 2007(unaudited) |   |
|-------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------|------------|--------|---------------------------------------------------------------------|----------|-------------|---------------------------|--------|------------|------------|--------|--------|----------------------------------------------------|--------|
|                                                                                                        |   |                                                         |       |   |                                                                |     |        |                      |   |       |       |   |   |                                               |   |
| REVENUES                                                                                                    |   | $                                                            | 15,085,604 |   |                                                                | $        | 213,843,932 |                      |   | $          | -          |   |   |                                               |   |   | $ | 228,929,536 |   |
|                                                                                                        |   |                                                         |       |   |                                                                |     |        |                      |   |       |       |   |   |                                               |   |   |   |   |   |
|                                                                                                        |   |                                                         |       |   |                                                                |     |        |                      |   |       |       |   |   |                                               |   |   |   |   |   |
| COSTS AND      EXPENSES                                                                                     |   |                                                         |       |   |                                                                |     |        |                      |   |       |       |   |   |                                               |   |   |   |   |   |
| Cost of products and services      (exclusive of depreciation and amortization shown separately      below) |   |                                                         | 8,339,933  |   |                                                                |     | 166,715,972 |                      |   |       | -          |   |   |                                               |   |   |   | 175,055,905 |   |
| Selling, general and      administrative                                                                    |   |                                                         | 8,887,883  |   |                                                                |     | 46,606,728  |                      |   |       | -          |   |   |                                               | 3      |   |   |   | 55,494,611 |   |
| Depreciation and      amortization                                                                          |   |                                                         | 3,623,903  |   |                                                                |     | 1,058,821   |                      |   |       | 7,000,000  |   |   |                                               | 1      |   |   |   | 11,682,724 |   |
|                                                                                                        |   |                                                         |       |   |                                                                |     |        |                      |   |       |       |   |   |                                               |   |   |   |   |   |   |
| Total costs and      expenses                                                                               |   |                                                         | 20,851,719 |   |                                                                |     | 214,381,521 |                      |   |       | 7,000,000  |   |   |                                               |   |   |   |   | 242,233,240 |   |
|                                                                                                        |   |                                                         |       |   |                                                                |     |        |                      |   |       |       |   |   |                                               |   |   |   |   |   |   |
| LOSS FROM      OPERATIONS                                                                                   |   |                                                         | (5,766,115 | )      |                                                                |     | (537,589    | )                         |   |       | (7,000,000 | )      |   |                                               |   |   |   |   | (13,303,704 | ) |
|                                                                                                        |   |                                                         |       |   |                                                                |     |        |                      |   |       |       |   |   |                                               |   |   |   |   |   |   |
| OTHER INCOME      (EXPENSE)                                                                                 |   |                                                         |       |   |                                                                |     |        |                      |   |       |       |   |   |                                               |   |   |   |   |   |   |
| Interest      expense                                                                                       |   |                                                         | (503,887   | )      |                                                                |     | (716,238    | )                         |   |       | (2,834,372 | )      |   |                                               | 2      |   |   |   | (4,054,497 | ) |
| Interest and other income                                                                                   |   | 181,649                                                      |       |   |                                                                | -        |        |                      |   | -          |       |   |   |                                               |   |   |   | 181,649 |   |
| Total other expense                                                                                         |   | (322,238)                                                    |       |   |                                                                | (716,238 | )           |                      |   | (2,834,372 | )          |   |   |                                               |   |   |   | (3,872,848 | ) |
|                                                                                                        |   |                                                         |       |   |                                                                |     |        |                      |   |       |       |   |   |                                               |   |   |   |   |   |   |
| LOSS BEFORE INCOME TAXES AND      MINORITY INTEREST IN SUBSIDIARY                                           |   |                                                         | (6,088,353 | )      |                                                                |     | (1,253,827  | )                         |   |       | (9,834,372 | )      |   |                                               |   |   |   |   | (17,176,552 | ) |
|                                                                                                        |   |                                                         |       |   |                                                                |     |        |                      |   |       |       |   |   |                                               |   |   |   |   |   |   |
| PROVISION FOR INCOME      TAXES                                                                             |   |                                                         | -          |   |                                                                |     | -           |                      |   |       | -          |   |   |                                               |   |   |   |   | - |   |
|                                                                                                        |   |                                                         |       |   |                                                                |     |        |                      |   |       |       |   |   |                                               |   |   |   |   |   |   |
| MINORITY INTEREST IN NET LOSS OF    SUBSIDIARY                                                              |   |                                                         | -          |   |                                                                |     | (250,765    | )                         |   |       | (1,966,875 | )      |   |                                               | 4      |   |   |   | (2,217,640 | ) |
|                                                                                                        |   |                                                         |       |   |                                                                |     |        |                      |   |       |       |   |   |                                               |   |   |   |   |   |   |
| NET LOSS                                                                                                    |   |                                                         | (6,088,353 | )      |                                                                |     | (1,003,062  | )                         |   |       | (7,867,497 | )      |   |                                               |   |   |   |   | (14,958,912 | ) |
|                                                                                                        |   |                                                         |       |   |                                                                |     |        |                      |   |       |       |   |   |                                               |   |   |   |   |   |   |
| Preferred stock      dividends                                                                              |   |                                                         | 2,300,502  |   |                                                                |     | -           |                      |   |       | -          |   |   |                                               |   |   |   |   | 2,300,502 |   |
| LOSS ATTRIBUTABLE TO COMMON      STOCKHOLDERS                                                               |   | $                                                            | (8,388,855 | )      |                                                                | $        | (1,003,062  | )                         |   | $          | (7,867,497 | )      |   |                                               |   |   |   | $ | (17,259,414 | ) |
|                                                                                                        |   |                                                         |       |   |                                                                |     |        |                      |   |       |       |   |   |                                               |   |   |   |   |   |   |
| LOSS PER COMMON SHARE – BASIC AND      DILUTED:                                                       |   |                                                         |       |   |                                                                |     |        |                      |   |       |       |   |   |                                               |   |   |   |   |   |   |
|                                                                                                        |   |                                                         |       |   |                                                                |     |        |                      |   |       |       |   |   |                                               |   |   |   |   |   |   |
| LOSS ATTRIBUTABLE TO COMMON      STOCKHOLDERS                                                               |   | $                                                            | (1.16      | )      |                                                                |     |        |                      |   |       |       |   |   |                                               |   |   |   | $ |   (2.38 | ) |
|                                                                                                        |   |                                                         |       |   |                                                                |     |        |                      |   |       |       |   |   |                                               |   |   |   |   |   |   |
| Weighted average common shares      outstanding – basic and diluted                                   |   |                                                         | 7,237,473  |   |                                                                |     | -           |                      |   |       | -          |   |   |                                               |   |   |   |   |   7,237,473 |   |

----

|                                                                         |   |                                                    |        |
|------------------------------------------------------------------------------|--------|---------------------------------------------------------|-------------|
|                                                                         |   | Multiband Corporation December 31,      2008 (as filed) |        |   | DirecTECH Operating      SubsidiariesDecember 31, 2008(unaudited) |   |   |        Purchase Price Adjustments      (A) |   | Proforma      Adjustments |   |   | Proforma Balance Sheet December      31, 2008 (unaudited) |   |
| Assets                                                                       |   |                                                    |        |   |   |   |   |   |   |
| Current    assets                                                            |   |                                                    |        |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash      equivalents                                               |   | $                                                       | 4,346,377   |   |   | $ | — |   | $ | (369,320 | )  | $ | — |   |   | $ | 3,977,057 |   |
| Accounts receivable,      net                                                |   |                                                    | 3,436,424   |   |   |   | 4,163,314 |   |   | — |   |   | (771,427 | )      (B) |   |   | 6,828,311 |   |
| Securities available for      sale                                           |   |                                                    | 45,594      |   |   |   | — |   |   | — |   |   | — |   |   |   | 45,594 |   |
| Other receivable - related      party                                        |   |                                                    | 7,666,295   |   |   |   | — |   |   | — |   |   | (7,666,295 | )      (C,E) |   |   | — |   |
| Inventories                                                                  |   |                                                    | 1,902,868   |   |   |   | 14,130,473 |   |   | — |   |   | — |   |   |   | 16,033,341 |   |
| Other current      assets                                                    |   |                                                    | 1,273,083   |   |   |   | 3,087,961 |   |   | — |   |   | (500,000 | ) (D) |   |   | 3,861,044 |   |
| Note receivable - current,      net                                          |   |                                                    | 61,321      |   |   |   | — |   |   | — |   |   | — |   |   |   | 61,321 |   |
| Total current      assets                                                    |   |                                                    | 18,731,962  |   |   |   | 21,381,748 |   |   | (369,320 | )  |   | (8,937,722 | ) |   |   | 30,806,668 |   |
|                                                                         |   |                                                    |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Property and equipment,      net                                             |   |                                                    | 2,033,067   |   |   | 7,373,972 |   |   | — |   |   | — |   |   | 9,407,039 |   |
|                                                                         |   |                                                    |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Otherassets                                                                  |   |                                                    |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Goodwill                                                                     |   |                                                    | 1,095,166   |   |   | — |   |   | 19,247,955 |   |   | — |   |   | 20,343,121 |   |
| Intangible assets,      net                                                  |   |                                                    | 3,667,866   |   |   | — |   |   | 36,700,000 |   |   | — |  |   | 40,367,866 |   |
| Notes receivable - long term,      net                                       |   |                                                    | 39,095      |   |   |   | 33,752 |   |   | — |   |   | — |   |   |   | 72,847 |   |
| Other long term      assets                                                  |   |                                                    | 476,072     |   |   |   | 1,406,987 |   |   | 1,396,298 |   |   | — |   |   |   | 3,279,357 |   |
| Total other      assets                                                      |   |                                                    | 5,278,199   |   |   |   | 1,440,739 |   |   | 57,344,253 |   |   | — |   |   |   | 64,063,191 |   |
| Totalassets                                                                  |   | $                                                       | 26,043,228  |   |   | $ | 30,196,459 |   | $ | 56,974,933 |   | $ | (8,937,722 | )  |   | $ | 104,276,898 |   |
|                                                                         |   |                                                    |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and Stockholders'      Equity                                    |   |                                                    |        |   |   |   |   |   |   |   |   |
| Current      liabilities                                                     |   |                                                    |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Checks issued in excess of cash in      bank                                 |   | $                                                       | —     |   |   | $ | 369,320 |   | $ | (369,320 | )   | $ | — |   |   | $ | — |   |
| Mandatory redeemable preferred      stock                                    |   |                                                    | 150,000     |   |   |   | — |   |   | — |   |   | — |   |   |   | 150,000 |   |
| Current portion of capital lease      obligations                            |   |                                                    | 310,656     |   |   |   | 79,839 |   |   | — |   |   | — |   |   |   | 390,495 |   |
| Current portion of long-term      debt                                       |   |                                                    | 1,608,778   |   |   |   | 109,904 |   |   | — |   |   | — |   |   |   | 1,718,682 |   |
| Accounts      payable                                                        |   |                                                    | 8,274,003   |   |   |   | 31,069,288 |   |   | — |   |   | (1,251,398 | )    (B,E) |   |   | 38,091,893 |   |
| Accounts payable - related      party                                        |   |                                                    | —     |   |   |   | 1,342,352 |   |   | — |   |   | (1,342,352 | )    (E) |   |   | — |   |
| Accrued      liabilities                                                     |   |                                                    | 3,875,193   |   |   |   | 11,735,201 |   |   | 1,483,083 | (F) |   | — |   |   |   | 17,093,477 |   |
| Accrued income taxes      payable                                            |   |                                                    | 499,153     |   |   |   | — |   |   | — |   |   | — |   |   |   | 499,153 |   |
| Customer      deposits                                                       |   |                                                    | 60,582      |   |   |   | — |   |   | — |   |   | — |   |   |   | 60,582 |   |
| Deferred      revenue                                                        |   |                                                    | 1,488,388   |   |   |   | 87,154 |   |   | — |   |   | — |   |   |   | 1,575,542 |   |
| Total current      liabilities                                               |   |                                                    | 16,266,753  |   |   |   | 44,793,058 |   |   | 1,113,763 |   |   | (2,593,750 | ) |   |   | 59,579,824 |   |
|                                                                         |   |                                                    |        |   |   |   |  |   |   |   |   |   |   |   |   |   |   |   |
| Long-term      liabilities                                                   |   |                                                    |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-term debt,      net                                                     |   |                                                    | 345,874     |   |   |   | 42,808 |   |   | 41,200,000 |   |   | (6,343,972 | ) (C,D) |   |   | 35,244,710 |   |
| Capital lease obligations, net of      current portion                       |   |                                                    | 317,628     |   |   |   | 127,270 |   |   | — |   |   | — |   |   |   | 444,898 |   |
| Total      liabilities                                                       |   |                                                    | 16,930,255  |   |   |   | 44,963,136 |   |   | 42,313,763 |   |   | (8,937,722 | ) |   |   | 95,269,432 |   |
|                                                                         |   |                                                    |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Minority      Interest                                                       |   |                                                    | 3,470,726   |   |   |   | — |   |   | (3,470,726 | ) |   | — |   |   |   | — |   |
|                                                                         |   |                                                    |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stockholders'      equity                                                    |   |                                                    |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cumulative convertible preferred      stock, no par value:                   |   |                                                    |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred stock - Class      A                                               |   |                                                    | 213,353     |   |   |   | — |   |   | — |   |   | — |   |   |   | 213,353 |   |
| Preferred stock - Class      B                                               |   |                                                    | 25,700      |   |   |   | — |   |   | — |   |   | — |   |   |   | 25,700 |   |
| Preferred stock - Class      C                                               |   |                                                    | 1,481,918   |   |   |   | — |   |   | — |   |   | — |   |   |   | 1,481,918 |   |
| Preferred stock - Class      F                                               |   |                                                    | 1,500,000   |   |   |   | — |   |   | — |   |   | — |   |   |   | 1,500,000 |   |
| Preferred stock - Class      G                                               |   |                                                    | 47,970      |   |   |   | — |   |   | — |   |   | — |   |   |   | 47,970 |   |
| Preferred stock - Class      H                                               |   |                                                    | —     |   |   |   | — |   |   | — |   |   | — |   |   |   | — |   |
| Common stock, no par      value                                              |   |                                                    | 37,687,864  |   |   |   | 64,435 |   |   | (64,435 | ) |   | — |   |   |   | 37,687,864 |   |
| Stock subscriptions      receivable                                          |   |                                                    | (84,071     | ) |   |   | — |   |   | — |   |   | — |   |   |   | (84,071 | ) |
| Options and      warrants                                                    |   |                                                    | 46,038,402  |   |   |   | — |   |   | — |   |   | — |   |   |   | 46,038,402 |   |
| Comprehensive income - unrealized      gain on securities available for sale |   |                                                    | 45,594      |   |   |   | — |   |   | — |   |   | — |   |   |   | 45,594 |   |
| Noncontrolling      interest                                                 |   |                                                    | —     |   |   |   | — |   |   | 6,942,209 |   |   | — |   |   |   | 6,942,209 |   |
| Accumulated      deficit                                                     |   |                                                    | (81,314,483 | ) |   |   | (14,831,112 | ) |   | 11,254,122 |   |   | — |   |   |   | (84,891,473 | ) |
| Total stockholders'      equity                                              |   |                                                    | 5,642,247   |   |   |   | (14,766,677 | ) |   | 18,131,896 |   |   | — |   |   |   | 9,007,466 |   |
| Total liabilities and      stockholders' equity                              |   | $                                                       | 26,043,228  |   |   | $ | 30,196,459 |   | $ | 56,974,933 |   | $ | (8,937,722 | ) |   | $ | 104,276,898 |   |

| (A) | Adjust historical DirecTECH      balances and record the assets acquired and liabilities assumed at fair      value considering the MMT related assets and liabilities previously      acquired |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (B) | Adjust receivables related to the      support center agreement along with offsetting accounts      payable |
|-----|-------------------------------------------------------------------------------------------------------------|

| (C) | Offset MMT receivable of      $5,843,972 against purchasedebt |
|-----|---------------------------------------------------------------|

| (D) | Adjust deposit in escrow at      December 31, 2008 against purchasedebt |
|-----|-------------------------------------------------------------------------|

| (E) | Related party receivable of      $1,822,323 offset against related party  payables recorded in      accounts payable |
|-----|---------------------------------------------------------------------------------------------------------------------------|

| (F) | Includes fair value of contingent      consideration recorded in accrued liabilities of      $1,608,000 |
|-----|---------------------------------------------------------------------------------------------------------|

| * Deferred taxes related to the      acquisition have not been recorded in this proforma      presentation |
|------------------------------------------------------------------------------------------------------------|

----

----

| Years      Ended December 31, 2008, 2007 and2006 |
|--------------------------------------------------|

| Column      A                                          |   | Column      B                          |    |   | Column      C                                               |   |   | Column      D |   |   | Column      E                    |   |
|--------------------------------------------------------|--------|----------------------------------------|---------|--------|-------------------------------------------------------------|--------|--------|---------------|--------|--------|----------------------------------|--------|
| Description                                            |   | Balance      at Beginning      of Year |    |   | Additions      Charged      to Costs      and Expenses |   |   | Deductions    |   |   | Balance      at End      of Year |   |
| ALLOWANCE      DEDUCTED FROM ASSET TO WHICH IT APPLIES |   |                                   |    |   |                                                        |   |   |          |   |   |                             |   |
| Allowance      for doubtful accounts receivable:       |   |                                   |    |   |                                                        |   |   |          |   |   |                             |   |
| 2008                                                   |   | $                                      | 75,000  |   |                                                        | $      | -      |          |   | $      | 15,000                           | (A)    |   | $ | 60,000 |   |
| 2007                                                   |   |                                   | 229,400 |   |                                                        |   | -      |          |   |   | 154,400                          | (A)    |   |   | 75,000 |   |
| 2006                                                   |   |                                   | 386,000 |   |                                                        |   | -      |          |   |   | 156,600                          | (A)    |   |   | 229,400 |   |
|                                                   |   |                                   |    |   |                                                        |   |   |          |   |   |                             |   |   |   |   |   |
| Stock      subscriptions and interest receivable       |   |                                   |    |   |                                                        |   |   |          |   |   |                             |   |   |   |   |   |
| 2008                                                   |   |                                   | 160,761 |   |                                                        |   | 60,000 |          |   |   | 35,053                           | (A)    |   |   | 185,708 |   |
| 2007                                                   |   |                                   | 100,761 |   |                                                        |   | 60,000 |          |   |   | -                                |   |   |   | 160,761 |   |
| 2006                                                   |   |                                   | 98,000  |   |                                                        |   | 70,000 |          |   |   | 67,239                           | (A)    |   |   | 100,761 |   |

| (A) |   | Write-off      uncollectible receivables |
|-----|--------|------------------------------------------|

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