AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 30, 2004

                                                   REGISTRATION NO. 333-
================================================================================

                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   -----------

                                    FORM S-1

                             REGISTRATION STATEMENT

                                      UNDER

                           THE SECURITIES ACT OF 1933

                                   -----------

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

          MINNESOTA                        4813                  41-1255001
(State or other jurisdiction of (Primary Standard Industrial  (I.R.S. Employer
 incorporation or organization) Classification Code Number)  Identification No.)

                            9449 SCIENCE CENTER DRIVE
                            NEW HOPE, MINNESOTA 55428
                                 (763) 504-3000
               (Address, including zip code, and telephone number,
        including area code of registrant's principal executive offices)

                                 JAMES L. MANDEL
                             CHIEF EXECUTIVE OFFICER
                              MULTIBAND CORPORATION
                            9449 SCIENCE CENTER DRIVE
                            NEW HOPE, MINNESOTA 55428
                                 (763) 504-3000
            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)
                                   -----------
                                   COPIES TO:

                              STEVEN M. BELL, ESQ.
                              MULTIBAND CORPORATION
                            9449 SCIENCE CENTER DRIVE
                            NEW HOPE, MINNESOTA 55428
                                 (763) 504-3000

                                   -----------

          APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
  As soon as practicable after this registration statement becomes effective.

                                   -----------

      If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box. |X|

      If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective date registration statement for the same offering. |_|

      If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|

      If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|

                                   -----------





                         CALCULATION OF REGISTRATION FEE

------------------------------------------------------------------------------------------------------
TITLE OF EACH CLASS OF                          PROPOSED MAXIMUM     PROPOSED MAXIMUM      AMOUNT OF
SECURITIES TO BE REGISTERED       AMOUNT TO     OFFERING PRICE          AGGREGATE         REGISTRATION
                                BE REGISTERED     PER UNIT (1)       OFFERING PRICE (1)       FEE
------------------------------------------------------------------------------------------------------
                                                                               
Shares of Common Stock
par value $0.01 per share        4,099,787          $1.45              $5,944,691           $753.00

Shares of Common Stock,
par value $0.01 per share,
underlying Warrants              4,087,915          $1.45              $5,927,476           $751.00

Totals                           8,187,702          $1.45             $11,872,167         $1,504.00
------------------------------------------------------------------------------------------------------


      (1) Estimated  solely for the purpose of calculating the  registration fee
pursuant to Rule 457(c) under the Securities  Act of 1933.  Based on the closing
price for the common  stock on December 22, 2004 as reported on the Nasdaq Stock
Market.

      THE REGISTRANT HEREBY AMENDS THIS  REGISTRATION  STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER  AMENDMENT  WHICH  SPECIFICALLY  STATES  THAT  THIS  REGISTRATION
STATEMENT SHALL  THEREAFTER  BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE  SECURITIES  ACT OF 1933 OR UNTIL THE  REGISTRATION  STATEMENT  SHALL BECOME
EFFECTIVE  ON SUCH  DATE  AS THE  SECURITIES  AND  EXCHANGE  COMMISSION,  ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.

                                       2

                                TABLE OF CONTENTS

                                                                         Page

Prospectus Summary                                                          4
Risk Factors                                                                7
Forward-Looking Statements                                                  9
Use of Proceeds                                                            10
Dividend Policy                                                            10
Capitalization                                                             10
Selected Financial Data                                                    11
Management's Discussion and Analysis of
 Financial Condition and Results of Operations                             12
Business                                                                   19
Management                                                                 24
Certain Transactions                                                       31
Principal and Selling Shareholders                                         33
Plan of Distribution                                                       36
Description of Securities                                                  37
Legal Matters                                                              39
Experts                                                                    39
Where You Can Find More Information                                        39
Index to Financial Statements                                              F1

                              MULTIBAND CORPORATION

                                  COMMON STOCK

                                8,187,702 SHARES

                                   PROSPECTUS

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

                                DECEMBER 30, 2004

                                       3


(Subject to Completion)  THE  INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND
MAY BE  CHANGED.  WE MAY  NOT  SELL  THESE  SECURITIES  UNTIL  THE  REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE  COMMISSION IS EFFECTIVE.  THIS
PROSPECTUS IS NOT AN OFFER TO SELL  SECURITIES AND WE ARE NOT SOLICITING  OFFERS
TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

PROSPECTUS ISSUED DECEMBER 30, 2004

                              MULTIBAND CORPORATION

                        8,187,702 SHARES OF COMMON STOCK

      The selling  shareholders  are  offering up to an  aggregate  of 8,187,702
shares of our common  stock.  Of the shares of common stock being offered by the
selling  shareholders,  (i) 4,087,915  shares may be purchased  upon exercise of
outstanding   warrants  and  (ii)  4,099,787   shares  are  currently  owned  by
shareholders  who  acquired  such  shares in private  placements  to  accredited
investors.

      We will not  receive  any  proceeds  from the sale of common  stock by the
selling  shareholders under this prospectus.  However,  we will receive proceeds
upon any exercise of the warrants. See "Use of Proceeds" on page 7.

      Our common  stock is traded on the Nasdaq Small Cap Stock Market under the
symbol  "MBND." On December 22, 2004,  the closing  price of our common stock as
reported by NASDAQ was $1.45 per share.

      The selling  shareholders  may offer the shares  through public or private
transactions,  on or  off  the  NASDAQ  Small  Cap  Stock  Market  exchange,  at
prevailing  market  prices  or  at  privately  negotiated  prices.  The  selling
shareholders may make sales directly to purchasers or through agents, dealers or
underwriters.

                                   -----------

                 YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS
               CONTAINED IN THIS PROSPECTUS. A HIGH DEGREE OF RISK
                      EXISTS WITH REGARDS TO THE OFFERING.

                                   -----------

      The Securities and Exchange  Commission  and state  securities  regulators
have not  approved  or  disapproved  these  securities,  or  determined  if this
prospectus  is truthful or  complete.  Any  representation  to the contrary is a
criminal offense.

                                   -----------

                THE DATE OF THIS PROSPECTUS IS DECEMBER 30, 2004.

                                       4


                               PROSPECTUS SUMMARY

      This summary highlights selected  information and does not contain all the
information  that is important to you. You should carefully read this prospectus
and  the  documents  we  have  referred  you to in  "Where  You  Can  Find  More
Information" for more information about Multiband and our financial  statements.
In this  prospectus,  references to "Multiband,"  "we," "us" "our" and "Company"
refer to Multiband Corporation and its subsidiaries.

                                   OUR COMPANY

      Multiband   Corporation  (formerly  named  Vicom,  Inc.)  is  a  Minnesota
corporation formed in September 1975. Multiband has two operating divisions:  1)
Multiband Business Services (MBS, legally known as Corporate Technologies,  USA,
Inc dba Multiband), and Multiband Consumer Services (MCS), which encompasses the
subsidiary  corporations,  Multiband USA, Inc.,  URON, Inc.,  Minnesota  Digital
Universe, Inc., and Rainbow Satellite Group, LLC.

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

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

      As of September  30,  2004,  MBS was  providing  telephone  equipment  and
service to approximately 600 customers,  with approximately 10,000 telephones in
service.   In  addition,   MBS  provided   computer  products  and  services  to
approximately 1,800 customers. Telecommunications systems distributed by MBS are
intended to provide users with flexible, cost-effective alternatives as compared
to systems  available from major telephone  companies,  including those formerly
comprising the Bell System and from other interconnect telephone companies.

      MBS provides a full range of voice, data and video communications  systems
and service,  system integrations,  training and related communication sales and
support  activities for commercial,  professional and  institutional  customers,
most of which are located in Minnesota and North Dakota.  MBS purchases products
and equipment from NEC America, Inc. (NEC), Cisco Systems, Inc. (Cisco),  Nortel
Networks Corp (Nortel),  Tadiran  Telecommunications,  Inc. (Tadiran), and other
manufacturers of communications and electronic products and equipment.  MBS uses
these  products to design  telecommunications  and  computer  systems to fit its
customers' specific needs and demands.

      MCS provides  satellite  television,  local and long distance services and
internet services to residents of multi-dwelling units (MDUs), such as apartment
buildings and time share resorts. The Company obtains access agreements with the
owners of MDU properties  permitting us the rights to provide the aforementioned
services.

      At  September  30,  2004,  MCS had 32,336  subscribers  using its services
(3,299  using  voice  services,  25,357  using  video  services  and 3,680 using
internet services).

                                       5


                                  THE OFFERING

--------------------------------------------------------------------------------
Common stock offered                                  8,187,702  (1)
--------------------------------------------------------------------------------
Common stock to be outstanding after the offering    32,939,152  (2)

Use of proceeds                                      We intend to use the
                                                     net proceeds from
                                                     the exercise of the
                                                     warrants for working
                                                     capital and  other
                                                     general corporate
                                                     purposes. See"Use of
                                                     Proceeds".
--------------------------------------------------------------------------------

(1) The selling shareholders are offering up to an aggregate of 8,187,702 shares
of our common stock.  Of the shares of common stock being offered by the selling
shareholders, (i) 4,087,915 shares may be purchased upon exercise of outstanding
warrants and (ii)  4,099,787  shares are  currently  owned by  shareholders  who
acquired such shares in private placements to accredited investors.

The offering  shares  include  282,781 common shares related to the Company's 8%
Class G Cumulative Convertible Preferred Stock, which converts into common stock
at $1.60 per share;  and 84,838 one year warrants at an exercise  price of $1.25
per share and 84,838 five year warrants at an exercise price of $1.50 per share.
The offering shares also include the following shares.

On  November  12,  2004  Multiband  Corporation  entered  into a  Note  Purchase
Agreement and other related agreements with a number of accredited institutional
investors.  In summary, under the terms of the debt offering, the Company issued
secured  convertible  promissory  notes in the  aggregate  principal  amount  of
$2,100,003.  The convertible  notes accrue interest at the rate of 6% per annum,
payable  semi-annually  at the  option of the  company  in cash or shares of the
company's  common stock,  and are convertible into shares of common stock at the
rate of $1.00 per share.

On November 16, 2004, Multiband Corporation finalized a private placement of the
company's  Series H convertible  Preferred  Stock.  The Series H Preferred stock
offering was funded by a group of institutional and accredited investors.

Under the terms of the preferred  stock  offering,  the Company issued shares of
its Series H Convertible  Preferred  Stock in the aggregate  offering  amount of
$1,050,002.  The shares of Series H Convertible Preferred Stock accrue dividends
at the rate of 6% per  annum,  are  payable  semi-annually  at the option of the
Company in cash or shares of the Company's common stock at the rate of $1.00 per
share. In addition,  the investors  received  five-year  warrants to purchase an
aggregate of approximately 3,150,005 shares of common stock at an exercise price
of $1.25 per share.

(2) The information is based on the number of shares of common stock outstanding
as of  November  24,  2004 and  assumes  that all of the  warrants  to  purchase
4,087,915  shares  were  exercised.  The number of shares  outstanding  does not
include the following:

o     11,849,085  shares of common stock  issuable upon the exercise of warrants
      outstanding as of November 24, 2004 with a weighted average exercise price
      of $1.68 per share;

o     3,339 shares of unvested  restricted  stock grants as of November 24, 2004
      with a weighted average grant price of $ .88 per share;

o     5,500,000  shares of common stock reserved for additional  issuances under
      our stock plans as of November  24, 2004 (4.3 million  shares  reserved in
      our employee stock option plan,  400,000  shares  reserved in our employee
      stock purchase plan and 800,000 shares  reserved in our Director's  option
      plan.)

o     2,866,736 shares of common stock issuable upon the conversion of shares of
      our  8%  Class  A  Cumulative   Convertible   Preferred  Stock  ("Class  A
      Preferred"),  10% Class B Cumulative Convertible Preferred Stock ("Class B
      Preferred"),  10% Class C Cumulative Convertible Preferred Stock ("Class C
      Preferred"),  10% Class F Cumulative Convertible Preferred Stock ("Class F
      Preferred"),  8% Class G Cumulative  Convertible Preferred Stock ("Class G
      Preferred") and 6% Class H Cumulative  Convertible Preferred Stock ("Class
      H Preferred") outstanding as of November 24, 2004.

o     811,688 shares upon conversion of a note owed as of November 24, 2004.


                                       6


                             SUMMARY FINANCIAL DATA

      The  following  table  sets  forth  certain  summary  financial  data  for
Multiband  Corporation and should be read in conjunction  with the  Consolidated
financial  Statements  of  Multiband  Corporation  included  in this  Prospectus
Supplement.



                                                                                           NINE MONTHS
STATEMENT OF OPERATIONS DATA:                YEARS ENDED DECEMBER 31,                   ENDED SEPTEMBER 30,
                                   --------------------------------------------    ----------------------------
                                      2003            2002             2001            2004            2003
                                   ------------    ------------    ------------    ------------    ------------
                                                                                    
Revenues                           $ 22,640,421    $ 24,540,969    $ 32,260,777    $ 22,734,594    $ 17,843,508
                                   ------------    ------------    ------------    ------------    ------------
Loss from operations               $ (3,496,307)   $ (2,833,073)   $ (3,997,148)   $ (3,861,799)   $ (2,023,408)
                                   ------------    ------------    ------------    ------------    ------------
Loss                               $ (4,365,004)   $ (4,438,059)   $ (5,325,552)   $ (4,819,931)   $ (2,733,406)
                                   ------------    ------------    ------------    ------------    ------------
Loss per share-basic and diluted   $      (0.29)   $      (0.39)   $      (0.66)   $      (0.21)   $      (0.18)
                                   ------------    ------------    ------------    ------------    ------------
Weighted average shares
 outstanding basic and diluted       16,112,231      11,735,095       8,762,814    $ 22,494,250    $ 15,168,069
                                   ------------    ------------    ------------    ------------    ------------


BALANCE SHEET DATA::                    YEARS ENDED DECEMBER 31,             AS OF SEPTEMBER 30, 2004
                             ------------------------------------------    ----------------------------
                                                                              ACTUAL       AS ADJUSTED (1)
                                 2003           2002            2001        (UNAUDITED)    (UNAUDITED)
                             ------------   ------------    ------------   ------------    ------------

Cash                         $  2,945,960   $    540,375    $    624,845   $    465,885    $  4,530,648
                             ------------   ------------    ------------   ------------    ------------
Total assets                 $ 13,902,885   $ 10,347,316    $ 12,209,681   $ 30,014,118    $ 34,078,881
                             ------------   ------------    ------------   ------------    ------------
Working capital (deficit)    $  1,118,792   $   (252,870)   $    426,549   $ (8,565,266)   $ (4,500,503)
                             ------------   ------------    ------------   ------------    ------------
Total liabilities            $  8,068,540   $  7,705,031    $  8,025,680   $ 17,854,443    $ 17,854,443
                             ------------   ------------    ------------   ------------    ------------
Total stockholders' equity   $  5,807,711   $  2,642,285    $  4,184,001   $ 12,159,675    $ 16,224,438
                             ------------   ------------    ------------   ------------    ------------


(1) The As Adjusted  column  gives  effect to the  exercise  of all  warrants to
purchase  the  shares  of  common  stock  covered  by  this  prospectus  and the
application  of the net  proceeds  from  the  exercise  of the  warrants,  after
deducting our estimated offering expenses.


                                       7


                                  RISK FACTORS

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

General

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

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

      In  early  2000,  Multiband  created  its  MCS  division,   employing  the
aforementioned  expertise,  to provide communications and entertainment services
(local dial tone,  long  distance,  high-speed  internet and expanded  satellite
television services) to residents in  Multi-Dwelling-Unit  properties (MDU's) on
one  billing  platform.   Although  MCS  revenues  (recurring  subscriber  fees)
accounted  for less than 6% of overall  Multiband  revenues  in 2003,  Multiband
expects MCS related  revenues to increase  significantly in 2004 as a percentage
of overall revenues. These revenues are expected to provide higher gross margins
than the Company's more traditional sales to commercial enterprises.

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

NET LOSSES

      The  Company  had net  losses of  $4,365,004  for the  fiscal  year  ended
December 31, 2003,  $4,438,059  for the fiscal year ended December 31, 2002, and
$5,325,552 for the fiscal year ended  December 31, 2001.  Multiband may never be
profitable.

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

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

      o     our capital expenditure objectives;

      o     our debt service obligations; or

      o     our working capital needs.

DEPENDENCE ON ASSET-BASED FINANCING

      Multiband currently depends on asset-based  financing to purchase product,
and we cannot  guarantee  that such  financing  will be available in the future.
Furthermore,  we need additional  financing to support the anticipated growth of
our MCS  subsidiary.  We cannot  guarantee  that we will be able to obtain  this
additional financing.

      However,  the Company  recently  introduced a program where it can control
capital  expenditures by contracting  Multiband services and equipment through a
landlord or third party  investor  owned  equipment  program.  This program both
significantly   reduces  any  Company  expenditures  in  a   Multi-dwelling-unit
installation  and permits the Company to record  revenues  and profits  from the
third party sale of said  equipment.  The program also provides the owner of the
equipment  with an ongoing  variable fee based on net revenues  generated by the
MDU's Subscriber Services.

GOODWILL

      In June 2001,  the Financial  Accounting  Standards  Board (FASB)  adopted
Statement of Financial  Accounting  Standards  (SFAS) 142,  "Goodwill  and Other
Intangible  Assets" which changes the  amortization  rules on recorded  goodwill
from a monthly amortization to a periodic "impairment" analysis for fiscal years
beginning after December 15, 2001. In 2003, the Company  retained an independent
outside  expert to evaluate the impact of this new  accounting  standard and the
expert concluded there was no impairment to goodwill.  As of September 30, 2004,
the Company had recorded  goodwill of approximately  $2.2 million.  In 2004, the
Company recorded  goodwill  impairment of $527,879 as a result of an independent
appraisal.


                                       8


DEREGULATION

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

DEPENDENCE ON STRATEGIC ALLIANCES

      Several suppliers,  or potential  suppliers of Multiband,  such as McLeod,
WorldCom,  WS Net, XO  Communications  and others have filed for  bankruptcy  in
recent  years.  While the  financial  distress  of its  suppliers  or  potential
suppliers  could  have  a  material  adverse  effect  on  Multiband's  business,
Multiband believes that enough alternate suppliers exist to allow the Company to
execute its business plans.

CHANGES IN TECHNOLOGY

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

ATTRACTION AND RETENTION OF EMPLOYEES

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

INTELLECTUAL PROPERTY RIGHTS

      Multiband  relies  on  a  combination  of  trade  secret,  copyright,  and
trademark laws, license  agreements,  and contractual  arrangements with certain
key employees to protect its proprietary  rights and the  proprietary  rights of
third parties from which Multiband  licenses  intellectual  property.  If it was
determined that Multiband infringed the intellectual  property rights of others,
it could be required to pay  substantial  damages or stop  selling  products and
services that contain the infringing  intellectual property,  which could have a
material adverse effect on Multiband's business, financial condition and results
of operations.  Also,  there can be no assurance that Multiband would be able to
develop  non-infringing  technology  or  that  it  could  obtain  a  license  on
commercially reasonable terms, or at all. Multiband's success depends in part on
its  ability  to  protect  the  proprietary  and  confidential  aspects  of  its
technology  and the products  and  services it sells.  There can be no assurance
that the legal protections afforded to Multiband or the steps taken by Multiband
will  be  adequate  to  prevent  misappropriation  of  Multiband's  intellectual
property.

VARIABILITY OF QUARTERLY OPERATING RESULTS; SEASONALITY

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


                                       9


CERTAIN ANTI-TAKEOVER EFFECTS

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

VOLATILITY OF MULTIBAND'S COMMON STOCK

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

FUTURE SALES OF OUR COMMON STOCK MAY LOWER OUR STOCK PRICE

      If our existing  shareholders  sell a large number of shares of our common
stock,  the market price of the common stock could  decline  significantly.  The
perception in the public market that our existing shareholders might sell shares
of common stock could  depress our market  price.  The  exercise of  outstanding
options or warrants  could also lead to future  sales of our common  stock which
could depress our market price.

COMPETITION

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

                           FORWARD-LOOKING STATEMENTS

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

                                 USE OF PROCEEDS

      We will not receive any of the proceeds  from the sale of shares of common
stock by the  selling  shareholders  under  this  prospectus.  However,  we will
receive  proceeds of $4,064,763  from the exercise of the warrants  estimated at
$4,044,763 after payment of the offering expenses.  We have agreed to pay all of
the expenses related to this offer, estimated to be approximately $20,000.

      We  expect  to use the net  proceeds  from the  exercise  of the  warrants
primarily for working capital and other general  corporate  purposes,  including
expenditures for sales and marketing and fixed assets and inventory. No specific
amount has been  allocated to any  particular  purpose.  Pending  these uses, we
intend  to  invest  the net  proceeds  of this  offering  in  investment  grade,
interest-bearing securities.


                                       10


                                 DIVIDEND POLICY

      We have never paid cash  dividends  on our  common  stock,  nor do we have
plans to do so in the  foreseeable  future.  The  declaration and payment of any
cash dividends on our common stock in the future will be determined by our Board
of  Directors,  in its  discretion,  and will  depend  on a number  of  factors,
including our earnings, capital requirements and overall financial condition.

      The holders of our Series A  Cumulative  Convertible  Preferred  Stock are
entitled to receive a cumulative dividend of 8% per year, payable quarterly, and
the holders of our Series B Convertible and Series C Convertible Preferred Stock
are entitled to receive  cumulative  dividends of 10% per year, payable monthly,
the holders of our Series E Convertible  Preferred Stock are entitled to receive
a cumulative dividend of 15% per year, payable in kind quarterly. The holders of
our Series F  Convertible  Preferred  Stock are entitled to receive a cumulative
dividend  of 10% per year,  payable in kind  quarterly,  and the  holders of our
Series G  Convertible  Preferred  Stock are  entitled  to  receive a  cumulative
dividend of 6% per year, payable in kind quarterly.

                                 CAPITALIZATION

The following table sets forth our consolidated  capitalization  as of September
30, 2004 and our  capitalization as adjusted to reflect the issuance and sale of
4,087,915  shares  of  common  stock  upon  exercise  of the  warrants  and  the
historical  financial  statements and notes thereto  included  elsewhere in this
prospectus.




                                                                                               AS OF SEPTEMBER 30, 2004
                                                                                               ACTUAL       AS ADJUSTED
                                                                                             (UNAUDITED)    (UNAUDITED)
                                                                                             -----------    -----------
Preferred stock:
                                                                                                       
   8% Class  A cumulative convertible - no par value 27,931 shares issued and outstanding        419,752        419,752
                                                                                             -----------    -----------
   10% Class B cumulative convertible - no par value 8,700 shares issued and outstanding          62,000         62,000
                                                                                             -----------    -----------
   10% Class C cumulative convertible - no par value 125,400 shares issued and outstanding     1,611,105      1,611,105
                                                                                             -----------    -----------
   10% Class F cumulative convertible - no par value 200,000 shares issued and outstanding     2,000,000      2,000,000
                                                                                             -----------    -----------
   10% Class G cumulative convertible - no par value 7,500 shares issued and outstanding          70,672        452,540
                                                                                             -----------    -----------
     6% Class H cumulative convertible - no par value 11.5 shares issued and outstanding               0     *1,150,002
                                                                                             -----------    -----------
Common stock - no par value 25,621,084 and 29,708,999 issued, 25,617,745 and 29,705,660
outstanding                                                                                   16,678,538     20,849,349
                                                                                             -----------    -----------
Stock Subscription receivable                                                                   (368,243)      (368,243)
                                                                                             -----------    -----------
Options and Warrants                                                                          31,379,338     31,379,338
                                                                                             -----------    -----------
Unamortized Compensation                                                                          (1,724)        (1,724)
                                                                                             -----------    -----------
Accumulated deficit                                                                          (39,691,763)   (39,691,763)
                                                                                             -----------    -----------

*     The Class H shares were issued in November 2004.



                                       11


                             SELECTED FINANCIAL DATA

The following  selected  financial data should be read in  conjunction  with our
consolidated  financial  statements  including the  accompanying  notes and with
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations". The data as of December 31, 2003 and 2002 and the nine months ended
September 30, 2004 and for each of the three years in the period ended  December
31, 2003 and the nine months ended September 30, 2004 and 2003 have been derived
from our consolidated  financial  statements and accompanying notes contained in
this  prospectus.  The Statement of Operations Data for the years ended December
31, 2000 and 1999 and the Balance Sheet Data at December 31, 2001, 2000 and 1999
have been derived from our audited financial  statements which are not contained
in this prospectus.




STATEMENT OF
OPERATIONS DATA                            YEARS ENDED DECEMBER 31,                                  NINE MONTHS ENDED SEPTEMBER 30,
                 --------------------------------------------------------------------------------    ------------------------------
                     2003             2002             2001             2000             1999             2004            2003
                 ------------     ------------     ------------     ------------     ------------     ------------     ------------

                                                                                                  
Revenues         $ 22,640,421     $ 24,540,969     $ 32,260,777     $ 39,781,846     $ 20,388,870     $ 22,734,594     $ 17,843,508
                 ------------     ------------     ------------     ------------     ------------     ------------     ------------
Cost of products
 and services    $ 15,952,019     $ 18,036,750     $ 25,295,186     $ 31,698,569     $ 16,247,898     $ 15,580,482     $ 12,718,951
                 ------------     ------------     ------------     ------------     ------------     ------------     ------------
Gross Profit     $  6,688,402     $  6,504,219     $  6,965,591     $  8,083,277     $  4,140,972     $  7,154,112     $  5,124,557
                 ------------     ------------     ------------     ------------     ------------     ------------     ------------
%of revenues             29.5%            26.5%            21.6%            20.3%            20.3%            31.5%            28.7%
                 ------------     ------------     ------------     ------------     ------------     ------------     ------------
Selling, general
& administrative
expenses         $ 10,184,709     $  9,337,292     $ 10,962,739     $ 11,852,041     $  5,823,945     $  7,930,244     $  6,097,989
                 ------------     ------------     ------------     ------------     ------------     ------------     ------------
% of revenues            45.0%            38.0%            34.0%            29.8%            28.6%            34.8%            34.2%
                 ------------     ------------     ------------     ------------     ------------     ------------     ------------
Loss from
 operations      $ (3,496,307)    $ (2,833,073)    $ (3,997,148)    $ (3,768,764)    $ (1,682,973)    $ (3,861,799)    $ (2,023,408)
                 ------------     ------------     ------------     ------------     ------------     ------------     ------------
Other
 expense, net    $   (902,063)    $ (1,604,986)    $ (1,328,404)    $   (458,067)    $   (139,461)    $   (958,132)    $   (705,145)
                 ------------     ------------     ------------     ------------     ------------     ------------     ------------
Loss before
 income taxes    $ (4,365,004)    $ (4,438,059)    $ (5,325,552)    $ (4,226,831)    $ (1,822,434)    $ (4,819,931)    $ (2,733,406)
                 ------------     ------------     ------------     ------------     ------------     ------------     ------------
Income tax
 provision       $          0     $          0     $          0     $      9,000     $    241,200     $          0     $          0
                 ------------     ------------     ------------     ------------     ------------     ------------     ------------
Net Loss         $ (4,365,004)    $ (4,438,059)    $ (5,325,552)    $ (4,235,831)    $ (2,063,634)    $ (4,819,931)    $ (2,733,406)
                 ------------     ------------     ------------     ------------     ------------     ------------     ------------
Loss per
 share basic
 and diluted     $      (0.29)    $      (0.39)    $      (0.66)    $      (0.72)    $      (0.55)    $      (0.21)    $      (0.18)
                 ------------     ------------     ------------     ------------     ------------     ------------     ------------
Weighted average
shares
outstanding        16,112,231       11,735,095        8,762,814        7,009,751        3,821,978       22,494,250       15,168,069
                 ------------     ------------     ------------     ------------     ------------     ------------     ------------





BALANCE SHEET
DATA
                                        YEARS ENDED DECEMBER 31,
                 -------------------------------------------------------------------------
                                                                                              SEPTEMBER 30,
                     2003           2002            2001           2000           1999            2004
                 ------------   ------------    ------------   ------------   ------------    ------------
                                                                            
Working
 capital
 (deficiency)    $  1,118,792   $   (252,870)   $    426,549   $  2,870,114   $ (2,882,907)   $ (8,565,266)
                 ------------   ------------    ------------   ------------   ------------    ------------
Total assets     $ 13,902,885   $ 10,347,316    $ 12,209,681   $ 15,614,573   $ 12,598,745    $ 30,014,118
                 ------------   ------------    ------------   ------------   ------------    ------------
Long-term debt   $  2,262,891   $  3,273,350    $  3,316,870   $  3,362,083   $    926,821    $  2,519,530
                 ------------   ------------    ------------   ------------   ------------    ------------
Stockholders'
 equity          $  5,807,711   $  2,642,285    $  4,184,001   $  5,876,352   $  1,026,344    $ 12,159,675
                 ------------   ------------    ------------   ------------   ------------    ------------



                                       12


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

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

NINE MONTHS ENDED SEPTEMBER 30, 2004 AND SEPTEMBER 30, 2003

Revenues

      Revenues  increased 44.3% to $9,068,758 in the quarter ended September 30,
2004, as compared to $6,283,365 for the quarter ended September 30, 2003.

      Revenues for MBS  decreased  11.2% in the third  quarter of fiscal 2004 to
$5,203,269  as  compared  to  $5,864,468  in the third  quarter  of fiscal  2003
primarily  as a result of reduced  spending by a few larger MBS  customers.  The
Company is diversifying its customer base to add medium and small businesses and
as a result the Company hopes revenues will stabilize in future quarters.

      Revenues for MCS increased 822.8% to $3,865,489 as compared to $418,897 in
the third quarter of fiscal 2003.  This increase is due to expansion of MCS as a
result of the acquisitions of MDU, Rainbow and 21st Century.

      Revenues  for the nine month  period ended  September  30, 2004  increased
27.4% to $22,734,594  from  $17,843,508  for the same period in 2003, due to the
aforementioned increase in MCS revenues obtained as a result of the acquisitions
noted above.

Gross Margin

      The Company's gross margin increased 82.8% or $1,483,195 to $3,272,731 for
the quarter ended  September 30, 2004 as compared to $1,789,536  for the similar
quarter last year.  For the quarter  ended  September30,  2004,  as a percent of
total  revenues,  gross  margin was 36.0% as  compared  to 28.5% for the similar
period last year.

      Gross  margin for MBS  decreased  by 18.1% to  $1,318,270  for the quarter
ended  September  30, 2004,  as compared to  $1,608,975  in the third quarter of
fiscal 2003 due to lower MBS sales and lower profits on those sales.

      Gross margin for MCS for the quarter ended  September  30, 2004  increased
977.2% to  $1,945,065  as compared  to $180,561 in the second  quarter of fiscal
2003 reflecting on the increase of revenue being billed.

      For the nine month period ended  September 30, 2004, as a percent of total
revenues,  gross  margin was 31.5% as  compared  to 28.7% for the same period in
2003.  For the  remainder  of fiscal year 2004,  gross  margin  percentages  are
expected  to remain  constant  as the  Company  continues  to enhance  recurring
subscriber revenues.

Selling, General and Administrative Expenses

      Selling,  general and administrative  expenses including  depreciation and
amortization  increased  76.2% to $4,245,983 in the quarter ended  September 30,
2004,  compared  to  $2,409,227  in the prior year  quarter.  This  increase  is
primarily a result of increased  operating and amortization  expenses related to
the  purchase  and  addition  of new MDU  property  assets in the MCS  division.
Selling,  general and administrative expenses were, as a percentage of revenues,
46.8% for the  quarter  ended  September  30,  2004 and  38.4.1% for the similar
period a year ago.

      For the  nine  month  period  ended  September  30,  2004  these  expenses
increased  46.1% to  $10,488,032  as compared to $7,147,965  for the nine months
ended  September  30, 2003. As a percentage  of revenues,  selling,  general and
administrative  expenses  are 46.1% for the period ended  September  30, 2004 as
compared to 40.0% for the same period 2003.

Interest Expense

      Interest  expense was $347,647 for the quarter  ended  September 30, 2004,
versus $202,958 for the similar period a year ago, reflecting an increase in the
Company's long term debt as a result of financing the acquisitions  noted above.
Amortization  of original  issue discount was $171,773 and $85,364 for the three
months ended September 30, 2004 and 2003, respectively.


                                       13


      Interest expense was $949,129 for the nine months ended September 30, 2004
and $648,368 for the same period last year. For the nine months ended  September
30, 2004  amortization  of original  issue discount was $483,787 and $285,345 in
the same period last year, respectively.

Net Loss

      In the third  quarter of fiscal 2004,  the Company  incurred a net loss of
$1,851,593  compared to a net loss of $832,622 for the third  fiscal  quarter of
2003. This includes a goodwill  impairment  charge of $527,879 and  amortization
primarily related to identifiable  intangible assets obtained in acquisitions of
$754,971.

      For the nine months ended  September 30, 2004, the Company  recorded a net
loss of $4,819,931 as compared to $2,733,406 for the nine months ended September
30, 2003.

YEARS ENDED DECEMBER 31, 2003 AND DECEMBER 31, 2002

                              Results of Operations

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

                                    2003         2002
                                    ----         ----
Revenues

Multiband                             0%           0%
MBS                               93.63%       97.65%
MCS                                6.37%        2.35%
                                   -----        -----
                Total Revenues    100.0%       100.0%
                                  ======       ======
Cost of Sales
Multiband                             0%           0%
MBS                               66.55%       71.89%
MCS                                3.91%        1.61%
                                   -----        -----
Total Cost of Sales               70.46%       73.50%
                                  ======       ======
Gross Margin                      29.54%        26.5%
Selling, General and              44.98%       37.39%
Administrative expenses
Operating Loss                   (15.44%)     (11.34%)
Net Loss                         (19.28%)     (17.78%)

REVENUES

      Total revenues  decreased 7.7% to $22,640,421 in 2003 from  $24,540,969 in
2002.

      Revenues  from the MBS segment  which  traditionally  sells  telephone and
computer  technologies  products and services  decreased 11.5% to $21,199,303 in
2003 from  $23,963,748 in 2002. This decrease in MBS segment  revenues  resulted
primarily  from  weaker  economic  conditions  in 2003 and from MBS's  desire to
increase gross margins versus  maintaining top line revenues.  MBS is increasing
margins by focusing more on sales of services versus sales of product.

      Multiband segment had no revenues.

      Revenues from MCS increased  149.7% to $1,441,118 in 2003 from $577,221 in
2002.  This  increase  is due to the  expansion  of  MCS  services  to  nineteen
apartment properties and eighteen timeshare properties.

GROSS MARGIN

      The  Company's  gross  margin was  $6,688,402  for 2003,  as  compared  to
$6,504,219  for  2002.  The  increase  of 2.8% in 2003 was  primarily  due to an
increase in consumer  recurring  revenues  comprising  a greater  percentage  of
overall revenues. For 2003, gross margin, as a percentage of total revenues, was
29.5% versus 26.5% for 2002.  The Company  expects  gross margins to maintain or
even slightly increase in future periods as recurring  revenues become a greater
percentage of the Company's overall revenue mix.


                                       14


SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

      Selling, general and administrative expenses increased 9.1% to $10,184,709
in 2003,  compared to $9,337,292 in 2002. This increase in expenses is primarily
related to  increased  payroll  and  facility  expense  and costs  incurred  for
re-branding  Multiband  operating  divisions  as  Multiband.  Increased  payroll
primarily  resulted from  acquisition  related  payroll  expense and increase in
officer compensation in 2003. Selling, general and administrative expenses were,
as a  percentage  of  revenues,  45.0% for 2003 and 38.0% for 2002.  The Company
expects  these  expenses  to  remain  stable  or  even  slightly  decrease  as a
percentage of revenues in 2004.

INTEREST EXPENSE

      Interest  expense  was  $897,704  for  2003,  versus  $1,604,512  for 2002
reflecting a substantial  decrease in Original Issue Discount expense associated
with  long  term  debt  and a  significant  decrease  in cash  interest  expense
associated with notes payable.

NET LOSS

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

YEARS ENDED DECEMBER 31, 2002 AND DECEMBER 31, 2001

                              Results of Operations

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

                                   2002         2001
                                   ----         ----
Revenues

Multiband and VMTS                    0%           0%
MBS                               97.65%        99.2%
MCS                                2.35%         .78%
                                  ------       -----
                Total Revenues    100.0%       100.0%
                                  =====        =====
Cost of Sales
Multiband and VMTS                    0%         .02%
MBS                               71.89%       77.39%
MCS                                1.61%         .69%
                                  -----        -----
Total Cost of Sales               73.50%       78.10%
                                  =====        =====
Gross Margin                       26.5%       21.88%
Selling, General and              37.39%       34.45%
Administrative expenses
Operating Loss                   (11.34%)     (12.56%)
Net Income Loss                  (17.78%)     (16.73%)

REVENUES

      Total revenues  decreased 23.9% to $24,540,969 in 2002 from $32,260,777 in
2001.

      Revenues  from  the  MBS  segment  which   traditionally   sells  computer
technologies  products and services  decreased 25.1% to $23,963,748 in 2002 from
$31,994,781 in 2001. This decrease in MBS segment  revenues  resulted  primarily
from weaker economic  conditions in 2002 and from MBS's desire to increase gross
margins versus maintaining top line revenues.

      Multiband segment had no revenues.

      Revenues from  Multiband  increased 131% to $577,221 in 2002 from $249,590
in 2001.  This  increase is due to the  expansion of  Multiband  services to ten
properties.


                                       15


GROSS MARGIN

      The  Company's  gross  margin was  $6,504,219  for 2002,  as  compared  to
$6,965,591 for 2001.  The decrease of 6.6% in 2002 was due to reduced  revenues.
For 2002,  gross margin,  as a percentage of total  revenues,  was 26.50% versus
21.5% for 2001.  This  increase in gross margin  revenues is primarily due to an
increase  in sale of  services  constituting  a greater  percentage  of  overall
revenues than in the prior year. As the Company  continues to strive for bundled
sales of services,  and bundled  sales of equipment  and  services,  the Company
anticipates that it will maintain its gross margin percentages in fiscal 2003.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

      Selling,   general  and   administrative   expenses  decreased  14.83%  to
$9,337,292 in 2002,  compared to $10,962,739 in 2001.  This decrease in expenses
is primarily  related to reductions in payroll,  benefits and vehicle  expenses.
Selling,  general and administrative expenses were, as a percentage of revenues,
38.0% for 2002 and 33.9% for 2001.

INTEREST EXPENSE

      Interest  expense was  $1,604,512  for 2002,  versus  $1,446,868  for 2001
reflecting  an increase in debt due to capital  raising  efforts,  valuation  of
warrants  issued with  Preferred  Stock and  convertible  notes,  and additional
borrowings.

NET LOSS

      In 2002, the Company  incurred a net loss of $4,438,059  compared to a net
loss of  $5,325,552  for 2001.  The decrease in net loss is  primarily  due to a
significant  reduction in payroll and benefit  related  expenses  from the prior
year.


                                       16


UNAUDITED QUARTERLY RESULTS

      The  following  table sets forth  certain  unaudited  quarterly  operating
information  for  each of the  eight  quarters  in the  two-year  period  ending
December 31, 2003. This data includes, in the opinion of management,  all normal
recurring adjustments necessary for the fair presentation of the information for
the periods  presented when read in conjunction with the Company's  consolidated
financial statements and related notes thereto.  Results for any previous fiscal
quarter are not  necessarily  indicative of results for the full year or for any
future quarter. The Company has historically  experienced a seasonal fluctuation
in its operating results,  with a larger proportion of its revenues in the third
quarter of the fiscal year.




                    Dec. 31,     Sept. 30,      June 30,     March 31,     Dec. 31,      Sept. 30,     June 30,      March 31,
                      2003          2003          2003          2003          2002          2002         2002          2002
                   ----------    ----------    ----------    ----------    ----------    ----------    ----------    ----------
                                                                                              
Revenues:

Multiband                   0             0             0             0             0             0             0             0
                   ----------    ----------    ----------    ----------    ----------    ----------    ----------    ----------
MBS                 4,367,773     5,864,468     5,330,420     5,636,642     5,758,953     6,227,683     5,815,531     6,161,581
                   ----------    ----------    ----------    ----------    ----------    ----------    ----------    ----------
MCS                   429,140       418,897       357,961       235,120       192,771       154,950       128,893       100,607
                   ----------    ----------    ----------    ----------    ----------    ----------    ----------    ----------
Total
Revenues            4,796,913     6,283,365     5,688,381     5,871,762     5,951,724     6,382,633     5,944,424     6,262,188
                   ----------    ----------    ----------    ----------    ----------    ----------    ----------    ----------
Cost of Sales       3,233,068     4,493,829     3,914,420     4,310,702     4,212,240     4,680,582     4,354,714     4,789,214
                   ----------    ----------    ----------    ----------    ----------    ----------    ----------    ----------
Gross Margin        1,563,845     1,789,536     1,773,961     1,561,060     1,739,484     1,702,051     1,589,710     1,472,974
                   ----------    ----------    ----------    ----------    ----------    ----------    ----------    ----------
SG&A Expense        3,036,745     2,409,227     2,502,741     2,235,996     2,484,108     2,376,225     2,240,223     2,236,736
                   ----------    ----------    ----------    ----------    ----------    ----------    ----------    ----------
Operating Loss     (1,472,900)     (619,691)     (728,780)     (674,936)     (744,624)     (674,174)     (650,513)     (763,762)
                   ----------    ----------    ----------    ----------    ----------    ----------    ----------    ----------
Interest Expense     (249,336)     (202,958)     (219,723)     (225,687)     (462,420)     (349,388)     (426,869)     (365,835)
                   ----------    ----------    ----------    ----------    ----------    ----------    ----------    ----------
Other Income
(Expenses)             52,418        (6,513)       15,232       (65,496)       47,740       (93,171)       25,281        19,676
                   ----------    ----------    ----------    ----------    ----------    ----------    ----------    ----------
Minority
Interest               38,219        (3,460)       (1,393)            0             0             0             0             0
                   ----------    ----------    ----------    ----------    ----------    ----------    ----------    ----------
Net Loss
Before
Taxes              (1,631,599)     (832,622)     (934,664)     (966,119)   (1,159,304)   (1,116,733)   (1,052,101)   (1,109,921)
                   ----------    ----------    ----------    ----------    ----------    ----------    ----------    ----------

Income Tax
(Benefit)
Provision                   0             0             0             0             0             0             0             0
                   ----------    ----------    ----------    ----------    ----------    ----------    ----------    ----------
Net Loss           (1,631,599)     (832,622)     (934,664)     (966,119)   (1,159,304)   (1,116,733)   (1,052,101)   (1,109,921)
                   ----------    ----------    ----------    ----------    ----------    ----------    ----------    ----------
Loss Per Common
Share Basic and
Diluted                  (.10)         (.05)         (.06)         (.08)         (.11)         (.09)         (.09)         (.10)
                   ----------    ----------    ----------    ----------    ----------    ----------    ----------    ----------


                                       17


                         LIQUIDITY AND CAPITAL RESOURCES

NINE MONTHS ENDED SEPTEMBER 30, 2004

      Available working capital,  at September 30, 2004 decreased  significantly
over the similar  period  last year  primarily  due to short term notes  payable
issued  during  the  third  quarter  and in the  course  of the  second  quarter
acquisitions.

      The Company  continues to face a very  competitive  environment in its MBS
division which in the second  quarter of 2004 produced both  declining  revenues
and  margins  versus the same  period a year ago.  The  Company's  MCS  division
continues  to  experience   significant  growth,   primarily  due  to  increased
subscriber  related  recurring   revenues  acquired  via  various   transactions
previously mentioned herein.

      The Company,  between September 30, 2004 and January 1, 2005, is obligated
to pay approximately $5.8 million to retire the notes payable related to its MDU
Inc. and Rainbow acquisitions. The Company as of September 30, 2004 did not have
available  cash on hand  sufficient to retire said notes  payable.  Nonetheless,
management of Multiband  believes that,  for the near future,  cash generated by
sales of stock, and existing credit  facilities,  in aggregate,  are adequate to
meet  the  anticipated  liquidity  and  capital  resource  requirements  of  its
business. The Company also believes,  although it cannot guarantee, that it will
continue to be able to raise money for the purposes of  financing  acquisitions.
During  the  nine  months  ended   September  30,  2004,   the  Company   raised
approximately $3.2 million via sales of its common stock to accredited investors
primarily for such purposes.  In addition,  for the quarter ended  September 30,
2004,  the  Company  achieved   positive   earnings  before   interest,   taxes,
depreciation,  amortization and a non cash goodwill impairment charge ("EBITDA")
of $146,314.

      The Company, as is common in the cable and telecommunications  industries,
uses EBITDA as a measure of  performance to  demonstrate  earnings  exclusive of
interest and non cash events.  EBITDA is not, and should not be  considered,  an
alternative  to net income,  income from  operations,  or any other  measure for
determining operating  performance or liquidity,  as determined under accounting
principles generally accepted in the United States. The most directly comparable
GAAP reference in the Company's  case is the removal of interest,  depreciation,
amortization and other non cash charges.  The following table reconciles Company
EBITDA to our consolidated net loss as computed under GAAP.




                                        THREE MONTHS ENDED            NINE MONTHS ENDED
                                            SEPTEMBER 30,                SEPTEMBER 30,
                                        2004          2003            2004           2003
                                    -----------    -----------    -----------    -----------
                                                                     
EBITDA                              $   146,314    $  (239,706)   $  (504,564)   $(1,035,062)
                                    -----------    -----------    -----------    -----------
Interest Expense, other                (350,462)      (212,931)      (958,132)      (648,368)
                                    -----------    -----------    -----------    -----------
Depreciation and Amortization        (1,119,566)      (379,985)    (2,557,788)    (1,049,976)
                                    -----------    -----------    -----------    -----------
Goodwill Impairment                    (527,879)             0       (527,879)             0
                                    -----------    -----------    -----------    -----------
Other Non-Cash Expense associated
with Common stock issuance                    0              0       (271,568)             0

Net Loss                            $(1,851,593)   $  (832,622)   $(4,819,931)   $(2,733,406)
                                    ===========    ===========    ===========    ===========


CAPITAL EXPENDITURES

      The Company used $483,810 for capital  expenditures during the nine months
ended  September  30, 2004,  as compared to $356,291 in the similar  period last
year. Capital expenditures consisted of equipment acquired for internal use. The
Company anticipates future capital purchases will remain consistent with current
year expenditures.

YEAR ENDED DECEMBER 31, 2003

      Available  working capital for 2003 increased  $1,3771,662  primarily to a
stronger  cash  position due to  investing  activities.  Multiband  successfully
completed  an offering  of  institutional  financing  in the second half of 2003
raising net  proceeds  of  $2,223,150.  Multiband  had a decrease of $289,890 in
accounts  receivable  as a result of a reduction in sales.  Current  liabilities
increased in 2003 by  $1,373,968 as a result of higher  current  portion of long
term debt and accrued liabilities.  Inventories  increased by $509,762 primarily
due to a planned expansion to provide wireless intranet service.

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


                                       18


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

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

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

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

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

YEAR ENDED DECEMBER 31, 2002

      Available working capital, for 2002, decreased $679,419 due to Multiband's
net  operating  loss and net cash  used in  operating  activities  of  $869,721.
Proceeds from issuance of long term debt, stock and warrants totaling $2,121,597
helped  offset  Multiband's  net  operating  loss.  Multiband  had a decrease of
$38,344 in accounts  payable and other current  liabilities for 2002 versus last
year's period,  primarily due to significant  reductions in accounts receivables
which were used to reduce payables.

      Inventories  year to date  decreased  net of reserves  $182,783  over last
year's  prior   period   inventories   due  to  a  decrease  in  revenues.   The
aforementioned  decrease  in  revenues  also  led  to  a  decrease  in  accounts
receivable net of reserves of $576,509.

      Total long term debt and capital  lease  obligation  decreased by $102,631
during the year ended December 31, 2002.  The Company paid out $937,828  related
to capital lease  obligations and $131,605  related to long term debt during the
year ended December 31, 2002 versus $777,578 paid out in 2001.

      In 2001, the Company entered into a long-term debt agreement,  expiring in
2003,  with an  investment  fund.  The fund,  in exchange  for its $1.5  million
investment,  also  received  375,000  warrants  and the  right  to  convert  its
investment into Multiband  common stock at a predetermined  price. The effect of
recording the beneficial  conversion  feature and warrants  associated  with the
convertible loan resulted in a $1,500,000 discount  attributable to the warrants
in accordance with the Black-Scholes pricing model. The Company is expensing the
aforementioned  warrant  discount in eight quarterly  installments  over the two
year  term of the  loan.  $460,000  of the debt was  converted  to stock in 2002
pursuant to a formula tied to the trading price of the Company's Common Stock.

      In 2002, the Company  borrowed  $600,000 from a Director.  This investment
was later  converted  into Class E Preferred  Stock.  Also in 2002,  the Company
restructured  its  debenture  with  Convergent  Capital,  resetting  the date of
principal repayment to begin in August 2005.

      The Company used  $1,275,434  for capital  expenditures  during  2002,  as
compared to  $1,884,945  in 2001.  The decrease was  primarily  attributed  to a
reduction in self-financed MCS construction.

      In  2002,  the  Company  extinguished  $937,828  worth  of  capital  lease
obligations,  reduced its principal  indebtedness $460,000 to a note holder, and
converted  another  $600,000 worth of debt to Preferred Stock. All these events,
combined, with the aforementioned refinancing and delayed principal repayment to
its  largest  debt  holder,  should  materially  improve  projected  cash  flows
throughout 2003 provided Company operating losses continue to diminish.


                                       19


      Net cash used by operations was approximately  $869,721 in 2002 versus net
cash used by operations of $502,110 in 2001. The cash used by operations in 2002
is due primarily to net operating losses, and reductions in accounts payable and
wholesale line of credit balances in that year.  During the years ended December
31, 2002 and December 31, 2001,  the Company  incurred  significant  net losses.
Although the majority of these losses were due to non-cash expenses, the Company
still  continued to incur cash losses as well due to general  corporate  expense
and  continuing  expenses  related to the building  out of its MCS network.  The
Company  in 2002  significantly  cut its  selling,  general  and  administrative
expenses which led to a material decrease in cash losses.  The on-going addition
of MCS  properties in the Company's  portfolio also  generated  additional  cash
flows in 2002 and these MCS cash flows are projected to improve  meaningfully in
2003. Management of Multiband believes that, for the near future, cash generated
from new investments  combined with existing  credit  facilities are adequate to
meet the anticipated liquidity in capital resource requirements of its business,
contingent upon Company operating results for the next twelve months.

                                       20


                             DESCRIPTION OF BUSINESS

      Multiband   Corporation  (formerly  named  Vicom,  Inc.)  is  a  Minnesota
corporation formed in September 1975. Multiband has two operating divisions:  1)
Multiband Business Services (MBS, legally known as Corporate Technologies,  USA,
Inc dba Multiband), and Multiband Consumer Services (MCS), which encompasses the
subsidiary  corporations,  Multiband USA, Inc.,  URON, Inc.,  Minnesota  Digital
Universe, Inc., and Rainbow Satellite Group, LLC.

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

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

      As of September  30,  2004,  MBS was  providing  telephone  equipment  and
service to approximately 600 customers,  with approximately 10,000 telephones in
service.   In  addition,   MBS  provided   computer  products  and  services  to
approximately 1,800 customers. Telecommunications systems distributed by MBS are
intended to provide users with flexible, cost-effective alternatives as compared
to systems  available from major telephone  companies,  including those formerly
comprising the Bell System and from other interconnect telephone companies.

      MBS provides a full range of voice, data and video communications  systems
and service,  system integrations,  training and related communication sales and
support  activities for commercial,  professional and  institutional  customers,
most of which are located in Minnesota and North Dakota.  MBS purchases products
and equipment from NEC America, Inc. (NEC), Cisco Systems, Inc. (Cisco),  Nortel
Networks Corp (Nortel),  Tadiran  Telecommunications,  Inc. (Tadiran), and other
manufacturers of communications and electronic products and equipment.  MBS uses
these  products to design  telecommunications  and  computer  systems to fit its
customers' specific needs and demands.

      MCS provides  satellite  television,  local and long distance services and
internet services to residents of multi-dwelling units (MDUs), such as apartment
buildings and time share resorts. The Company obtains access agreements with the
owners of MDU properties  permitting us the rights to provide the aforementioned
services.

      At  September  30,  2004,  MCS had 32,336  subscribers  using its services
(3,299  using  voice  services,  25,357  using  video  services  and 3,680 using
internet services).

MULTIBAND BUSINESS INDUSTRY OVERVIEW

      MBS recently  expanded its efforts to establish  itself within the rapidly
evolving telecommunications and computer industries.

      In the current  climate of intense  global  competition  and  accelerating
technological  change,  businesses  increasingly  depend  upon  technology-based
solutions  to  enhance  their  competitive   position,   and  to  improve  their
productivity  and the quality of their products and services.  Today's  business
environment mandates the availability of efficient voice and video communication
channels  and  information  in  formats  suited  to a  wide  variety  of  users.
Businesses  are  looking  to a  variety  of  new  technologies  to  enhance  the
performance of their communication  systems and to allow Information  Technology
(IT)  systems  to  collect,  analyze  and  communicate  information  within  the
enterprise  and among  customers and  suppliers.  An  organization's  ability to
integrate  and deploy new  communication  and IT  technologies  in a unified and
cost-effective  manner has become critical to competing  successfully in today's
rapidly changing business environment.

      The  markets  and   technologies  for   communication   equipment  and  IT
applications  and  systems  continue  to  converge  as  communication  equipment
migrates  from  proprietary  switches to  software-driven  systems  operating on
standardized computer platforms.  As a result,  businesses are integrating their
communication  and IT  systems.  As  previously  separate  communication  and IT
technologies converge and their interoperability  increases,  more organizations
will seek a unified technology  solution.  MBS believes that these organizations
will  attempt  to  reduce  costs  and  management   complexity  by  establishing
relationships  with a small number of providers that offer a broad range of both
communication  and IT products and services  throughout the full life-cycle of a
project.  MBS  believes it has  positioned  itself to be one of those  providers
through expertise gained in its historical operations and via acquisitions.  MBS
has personnel that  understand the voice and data sides of the equation.  MBS is
able to provide a consultative  selling approach whereby it is able to match the
appropriate technology solution to its customers needs; whether that solution is
an IP telephony application, a traditional PBX application, or a hybrid of both.


                                       21


      While  customers   continue  to  rely  heavily  on  technology  to  reduce
transaction  costs by  increasing  operational  efficiencies,  the  bias  toward
software-centric  solutions in lieu of hardware  continues.  Notwithstanding the
slow economic  conditions,  growth  continues to occur in areas such as customer
contact  solutions,   CTI  (computer  telephony  integration),   unified  media,
convergence (IP telephony), and mobility.

      Current financial pressures also are making it increasingly  difficult for
communications  equipment  manufacturers to support a direct distribution model.
Most independent  distribution  channels lack an adequate geographic  footprint,
infrastructure,   processes,   and   resources   to   effectively   fulfill  the
manufacturer's  need to deploy complex high-end technology  solutions.  This has
resulted in the need for systems  integration and support services through third
party  providers.  A key competency being driven by the market is the ability to
effectively   integrate  disparate  technology  platforms  into  enterprise-wide
applications  solutions.  Again, the range and depth of MBS's experience enables
MBS to provide businesses with overall technology solutions.

      As a result  of these  factors,  demand  for  communication  services  and
products  has  been  relatively   flat.   InfoTech  ,  a  market  research  firm
specializing in telecommunications  market information,  estimates that the U.S.
market for traditional  voice PBX systems will continue to decline over the next
three years as  enterprises  shift to converged  solutions,  a combined  form of
voice and data,  also referred to as IP Telephony.  IP shipments are expected to
surpass  traditional  PBX  shipments  sometime  in  2006.  Recent  slowdowns  in
technology spending may delay this development, however. Overall revenues in the
U.S.  marketplace  for voice and convergence are projected to reach $5.5 billion
by 2006.  Field  maintenance  and repair is the  largest,  but  slowest  growing
segment in services  associated  with the voice  marketplace.  This includes the
maintenance and repair of PBX, Key/Hybrid,  Voice Processing:  IVR, CTI, ACD and
fax.

PRODUCTS AND SERVICES

CORPORATE TECHNOLOGIES, USA (MBS)

      MBS provides other technical and customer services as described hereafter.

PRICING AND AVAILABILITY

      We use our volume and purchasing power to achieve  competitive  pricing of
goods for our  clients.  We have the ability to provide a web-based  client site
that allows  clients to see  availability  and costs of hardware and software in
real time  through the Internet by accessing  current  pricing and  availability
from our manufacturers'  Internet websites.  This Internet-based model allows us
to extend product  procurement  services beyond the traditional 8 a.m. to 5 p.m.
schedule  and into a 7 days a week,  24 hours a day  service,  providing  a high
level of client flexibility.

WARRANTY POLICY

      We strongly  believe in the  philosophy  of "Service what you sell." We do
not knowingly sell any hardware  product that we do not have authorized  service
personnel  to  facilitate  any  warranty  work  that  needs to be  done.  We are
committed  to  fulfill  all  warranty  service  calls  in  accordance  with  the
manufacturer's warranty, which range in length from 30 days to one year from the
date of sale. Warranty costs incurred to date are minimal.

ON SITE AND DEPOT REPAIR

      MBS is  authorized  for  depot  and  on  site  warranty  repair  for  many
manufacturers,  including Apple Computers,  Nortel, Inc., Cisco, Hewlett Packard
Co., International Business Machines Corp. (IBM), Sun Microsystems, Inc., Compaq
Computer Corp., Xerox Corp., and Okidata Corp. With over $500,000 in spare parts
inventory,  we have made a conscious  effort to have the part clients need, when
they need it.

WIDE AREA NETWORK CONNECTIVITY

      Our staff of Cisco and Nortel Wide Area Network  (WAN)  trained  engineers
assist  organizations  with  integrating  their  multiple  sites,  allowing  the
exchange of information between geographically  separated sites. Our association
with local Internet  Service  Providers (ISPs) gives us the opportunity to offer
organizations  with  multiple  locations a single  source  provider  providing a
cost-effective solution to WAN needs.


                                       22


TECHNICAL SUPPORT FOR NETWORKING

      We are committed to obtaining the highest vendor authorizations  available
to  indicate  our  knowledge  and  expertise  to today's  complex  technological
environment.  Becoming the only  Microsoft  Solution  Partner,  Novell  Platinum
Reseller and Sun Microsystems Competency 2000 Certified reseller in North Dakota
is an indication of this  commitment.  Our staff of Certified  Novell  Engineers
(CNEs),  Microsoft  Certified System Engineers (MCSEs),  Sun Microsystems System
Engineers,  as well as certified  personnel in products such as Nortel and Cisco
routers,  gives MBS an  advantage  over other  resellers  in North  Dakota.  The
knowledge and skills of our system  engineers helps  organizations  meet today's
challenges  and  maintain  a  market  advantage.  Our  close  relationships  and
certification  levels with our vendors gives our staff access to resources  that
few other value added resellers can provide.

CONSULTING

      As a  multi-service,  multi-vendor,  multi-site  integrator,  MBS  has the
extensive  infrastructure  to offer  solutions to complex  technical  challenges
through our consulting service.  With years of experience in Local Area Networks
(LAN) and WAN technology,  our consultants are dedicated to finding the solution
that will solve our  customers'  needs now and in the future.  We  specialize in
providing an integrated cost-effective, single source solution.

SALES AND MARKETING

      As of November  16, 2004,  we had 25 sales and  marketing  personnel  with
expertise  in  telecommunications,  computers  and network  services.  MBS has a
consultative  approach  to  selling,  in  which  the  salesperson  analyzes  the
customer's  operations  and  then  designs  an  application-oriented   technical
solution to make the customer more  efficient and  profitable.  MBS uses several
techniques  to  pursue  new  customer   opportunities,   including  advertising,
participation in trade shows, seminars and telemarketing.

CUSTOMERS

      MBS provides its products  and services to  commercial,  professional  and
government  users  within  the  states  of  Minnesota  and North  Dakota.  MBS's
customers  are  diverse  and  represent  various  industries  such as  financial
services,  hospitality,  legal, manufacturing,  and education. In the year ended
December 31, 2003,  MBS received  17.5% of its revenues  from  Meritcare  Health
System and 6.0% of its revenues from Noridian  (Blue Cross Blue Shield).  In its
year ended December 31, 2002, MBS received  approximately  22.8% of its revenues
from two  customers,  Merit Care and Microsoft  Great Plains.  In its year ended
December 31, 2001,  MBS received  approximately  21.7 % of all revenues from two
customers.  Those two  customers  were  Microsoft  Great Plains and the State of
North Dakota.

CUSTOMER SERVICE

      MBS has 20 full-time  customer  service and related support  personnel who
assist in project management  duties,  post-sale  communications  (which include
site surveys),  coordinated  network services,  and end-user training.  Each key
account is assigned its own individual customer service representative to ensure
efficient implementation. The customer service representative works closely with
the  sales  representative  and  main  technician  assigned  to the  project  to
facilitate the utmost in customer satisfaction.

BACK OFFICE

      Back office  refers to the hardware and software  systems that support the
primary  functions of our operations,  including sales support,  order entry and
provisioning, and billing.

      Order  entry  involves  the  initial  loading  of  customer  data into our
information  system.  Currently  our sales  representatives  take orders and our
customer  service  and  purchasing  representatives  load the  initial  customer
information  into our ILS  (Integrated  Logistic  System) billing and accounting
system. We use the ILS to manage and track the timely completion of each step in
the provisioning and installation  process. Our system is designed to enable the
sales or customer service representative to keep an installation on schedule and
notify the customer of any potential  delays.  Once an order has been completed,
we update our  billing  system to  initiate  billing of  installed  products  or
services.

SUPPLIERS

      As previously  mentioned,  MBS purchases  products and equipment from NEC,
Tadiran,  Cisco,  Nortel, and other manufacturers of communications and computer
products.  The  telecommunication  products  are  purchased  directly  from  the
manufacturers.  The  computer  products are  purchased  both  directly  from the
manufacturer and also indirectly from major wholesalers such as Ingram Micro and
Tech Data Corporation.


                                       23


      In 2003,  Ingram Micro supplied 60.55% and Dell computer supplied 8.35% of
total products purchased. In 2002, Ingram Micro supplied 57.7% and Dell Computer
11.8% of total products purchased. In 2001, Ingram Micro supplied 37.8% and Tech
Data provided 18.9% of total products purchased.

      The  products MBS purchase  are  off-the-shelf  products.  MBS has several
alternate  suppliers of computer  products and could substitute any one of these
suppliers  with an  alternate  supplier  fairly  quickly  on the same or similar
terms.

      MBS  has  a  distribution   agreement  with  NEC,  its  main  supplier  of
telecommunication  products,  which expires June 30, 2004. MBS could replace NEC
with an alternate supplier fairly quickly,  but with a less competitive product.
However,  MBS's  replacement  of NEC could  have a  material  adverse  effect on
Multiband's business, operating results and financial condition.

MULTIBAND CONSUMER SERVICES

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

      o     Lower Cost Per Service

      o     Blended Satellite and Cable Television Package

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

      o     Better than Industry Average Response Times

      o     One Number for Billing and Service Needs

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

      o     "Instant On" Service Availability

      As we develop and market this package,  we will keep a marketing  focus on
two levels of customer for this  product.  The primary  decision-makers  are the
property  owners/managers.  Their  concerns  are  focused  on  delivering  their
residents  reliability,  quality of service,  short  response  times,  minimized
disruptions  on the property,  minimized  alterations  to the property and value
added  services.  Each of these  concerns is addressed in our contracts with the
property owner,  which include annual reviews and 10 to 15 year terms as service
providers on the  property.  The  secondary  customer is the  end-user.  We will
provide the property with on-going marketing support for their leasing agents to
deliver clear, concise and timely information on our services. This will include
simple sign up options that should maximize our penetration of the property.

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

MULTIBAND CONSUMER INDUSTRY ANALYSIS

Strategy

      For the  near  future,  the  services  described  below  will  be  offered
primarily in Midwestern states. Our primary competition will come from the local
incumbent providers of telephone and cable television services.

Local Telephone Service

      In   Minnesota,   we  expect  to   compete   with   Qwest   Communications
International,  Inc.  (Qwest) for local telephone  services.  Although Qwest has
become the standard for local telephone service,  we believe we have the ability
to  underprice   their  service  while   maintaining  high  levels  of  customer
satisfaction.


                                       24


Cable Television Service

      In Minnesota,  we expect to compete with Comcast Corporation (Comcast) for
pay-TV  customers.  Comcast is the cable  television  service  provider that has
resulted from the merger and  acquisition of two  competitive  cable  providers.
This actually has improved the overall continuity of service. However, we have a
significant  consumer  benefit in that we are  establishing  private rather than
public  television  systems,  which  allows us to deliver a package  that is not
laden with local "public access"  stations that clog the basic service  package.
In essence,  we will be able to deliver a  customized  service  offering to each
property based upon pre-installation market research that we perform.

Long Distance Telephone Service

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

Internet Access Service

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

Market Description

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

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

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

Number of Units/Customers

      At  September  30,  2004,  MCS had 32,336  subscribers  using its services
(3,299  using  voice  services,  25,357  using  video  services  and 3,680 using
internet services).

Employees

      As of November 24, 2004,  Multiband  employed  five  full-time  management
employees.  As of that same date, MBS had 57 full-time employees,  consisting of
19 in sales and marketing,  26 in technical positions,  5 in management and 7 in
administration  and  finance.  As of November  24,  2004,  MCS had 49  full-time
employees, 8 in sales and the rest in customer service and operations.


                                       25


                                   PROPERTIES

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

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

                                LEGAL PROCEEDINGS

      The  Company  is  involved  in legal  actions  in the  ordinary  course of
business.  However,  as of November 24, 2004,  Multiband  was not engaged in any
pending legal proceedings  where, in the opinion of the Company,  the outcome is
likely to have a material  adverse effect upon the business,  operating  results
and financial condition of the Company.




                             DIRECTORS AND OFFICERS

NAME               AGE   POSITION                                                       DIRECTOR SINCE
----               ---   --------                                                       --------------
                                                                               
Steven Bell.......  45    President & CFO, Multiband Incorporated                        1994
Frank Bennett.....  47    President, Artesian Capital                                    2002
Jonathan Dodge....  53    Partner, Dodge & Fox C.P.A. Firm                               1997
David Ekman.......  43    Chief Information Officer, Corporate Technologies USA, Inc.    1999
Eugene Harris.....  39    Shareholder, Eidelman, Finger, Harris & Co.                    2004
James L. Mandel...  47    Chief Executive Officer, Multiband Corporation                 1998
Donald Miller.....  64    Chairman, Multiband Corporation                                2001
David Weiss.......  41    Principal, Rangeline Capital, LLC                              2002


STEVEN BELL was general counsel and Vice President of the Company from June 1985
through  October 1994, at which time he became Chief Financial  Officer.  He was
also named  President  in July 1997.  He is a graduate of the  William  Mitchell
College of Law.

FRANK  BENNETT has been a Director of  Multiband  Corporation  since 2002 and is
currently a member of the Audit Committee.  Mr. Bennett is President of Artesian
Management,  Inc., which manages Artesian  Capital,  a private equity investment
firm  based  in  Minneapolis.  Artesian  Capital  invests  in  companies  in the
communications,  consumer,  financial services and health care industries. Prior
to  founding  Artesian  Capital in 1989,  he was a Vice  President  of  Mayfield
Corporation,  and a Vice  President  of  Corporate  Finance  of Piper  Jaffray &
Hopwood and a Vice President of Piper Jaffray  Ventures,  Inc. He is currently a
director of Fairfax  Financial  Holdings  Limited,  Odyssey Re  Holdings  Corp.,
Multiband  Corporation,  Northbridge  Financial  Corporation  and Crum & Forster
Holdings,  Inc. Mr. Bennett currently serves on the boards of several non-profit
organizations including the Social Enterprise Fund, American Federation of Arts,
St.  David's Child  Development  and Family  Services,  PACER Center and Wayzata
Community  Church.  Mr. Bennett,  a graduate of the University of Oregon,  lives
with his wife and five children in Long Lake, MN.

JONATHAN  DODGE has been the Senior  Partner  of the C.P.A.  firm of Dodge & Fox
since its  inception in March 1997.  Prior to that,  he was a partner in the CPA
firm of  Misukanis  and Dodge from 1992 to March 1997.  Mr. Dodge is a member of
both the AICPA and the Minnesota Society of CPA's.

DAVID EKMAN is Chief Information Officer of Corporate Technologies, USA, Inc., a
wholly owned subsidiary of Multiband. He has worked continuously in the computer
business  since 1981,  initially as a  franchisee  of  Computerland,  a personal
computer  dealer and  subsequently  from 1996 to December  1999 as  President of
Ekman,  Inc., a value-added  computer  reseller and the  predecessor  company to
Corporate Technologies, USA, Inc.

EUGENE HARRIS is a Vice  President and major  shareholder  of Eidelman,  Finger,
Harris & Co., a St. Louis based registered  investment advisor. He has been with
Eidelman,  Finger,  Harris & Co. since 1994. Prior to joining Eidelman,  Finger,
Harris & Co., Mr. Harris held  positions in general  management and new business
development for the Monsanto  Company from  1990-1994.  He also was an Associate
Consultant  with Bain and Co.  from  1996-1998.  Mr.  Harris  received a B.S. in
Industrial  Engineering  from  Stanford  University  in  1996  and  an  M.S.  in
Management from the Sloan School of Management at the Massachusetts Institute of
Technology  in 1990.  He is a  Chartered  Financial  Analyst and a member of the
Financial Analysts Federation.  Mr. Harris was appointed to Multiband's Board of
Directors in April 2004.


                                       26


JAMES MANDEL has been the Chief Executive  Officer and a Director of the Company
since October 1, 1998.  From October 1991 to October 1996, he was Vice President
of Systems for Grand  Casinos,  Inc.,  where his duties  included  managing  the
design,  development,  installation and on-going maintenance for the 2,000 room,
$507 million  Stratosphere Hotel, Casino and Tower in Las Vegas. Mr. Mandel also
managed  the  systems  development  of  Grand  Casino  Mille  Lacs,  in  Onamia,
Minnesota,  Grand Casino  Hinckley in Hinckley,  Minnesota and six other casinos
nationwide.  He also serves as Chairman of the Board of CorVu Corporation and is
a trustee of the Boys and Girls Club of Minneapolis.

DONALD MILLER worked for Schwan's  enterprises between 1962 and 2001,  primarily
as Chief  Financial  Officer.  He is  currently  employed by Schwan's as Special
Assistant  to the CEO. He was  appointed  to  Multiband's  Board of Directors in
September  2001 and was elected  Chairman of the Board in April 2002. Mr. Miller
is also Chairman of Multiband's Audit Committee.

DAVID  WEISS has been a  Director  of  Multiband  since  2002.  He is  currently
Managing Principal for Rangeline Capital,  LLC, a real estate investment banking
company. Prior to forming Rangeline in 2002, Mr. Weiss was Managing Director for
the St. Louis office of Northland/Marquette Capital Group.

The Company knows of no  arrangements  or  understandings  between a Director or
nominee and any other person pursuant to which any person has been selected as a
Director  or  nominee.  There  is no  family  relationship  between  any  of the
nominees, Directors or executive officers of the company.

BOARD OF DIRECTORS AND ITS COMMITTEES

The Board has  determined  that a majority of its members are  "independent"  as
defined by the listing  standards of the NASDAQ Stock  Market.  The  independent
Directors are Messrs.  Frank  Bennett,  Eugene  Harris,  Donald Miller and David
Weiss.

The Board of Directors  met four times on a regular  basis in 2003. As permitted
by Minnesota  Law,  the Board of  Directors  also acted from time to time during
2003 by unanimous  written consent in lieu of conducting  formal meetings.  Last
year, there were four such actions and accompanying  Board  Resolutions  passed.
The Board has designated an audit committee consisting of Jonathan Dodge, Donald
Miller and Frank Bennett.  The Board also  designated a  compensation  committee
consisting of Frank Bennett and David Weiss.

Shareholder communication with the Board

Our Board welcomes your questions and comments. If you would like to communicate
directly  to our  Board,  or if you  have a  concern  related  to the  Company's
business  ethics or  conduct,  financial  statements,  accounting  practices  or
internal  controls,  then you may contact our website via  www.multibandusa.com,
section Investor  Relations.  All communications  will be forwarded to our audit
committee.

Directors'  attendance  at Annual  Meetings  can  provide  shareholders  with an
opportunity to communicate  with directors  about issues  affecting the Company.
The  Company  does not  have a policy  regarding  director  attendance,  but all
directors are  encouraged to attend the Annual Meeting of  Shareholders.  Six of
our directors attended our Annual Meeting in 2003.

AUDIT COMMITTEE

Our audit committee:

o     recommends to our Board of Directors the  independent  auditors to conduct
      the annual audit of our books and records;
o     reviews the proposed scope and results of the audit;
o     approves the audit fees to be paid;
o     reviews  accounting  and financial  controls with the  independent  public
      accountants and our financial and accounting staff; and
o     reviews and approves  transactions between us and our Directors,  officers
      and affiliates.

Our audit  committee has a formal  charter that is an exhibit to our most recent
annual report on Form 10K.


                                       27


Our audit committee met four times during 2003. The Audit Committee is comprised
entirely  of  individuals  who  meet the  independence  and  financial  literacy
requirements  of NASDAQ listing  standards.  Our Board has  determined  that all
three members qualify as an "audit committee  financial expert" independent from
management as defined by Item  401(h)(2) of Regulation  S-K under the Securities
Act of 1933, as amended.  Multiband  acknowledges  that the  designation  of the
members of the audit committee as financial  experts does not impose on them any
duties,  obligations or liability that are greater than the duties,  obligations
and liability  imposed on them as a member of the audit  committee and the Board
of Directors in the absence of such designation.

REPORT OF THE AUDIT COMMITTEE

      In accordance  with its written charter adopted by the Board of Directors,
the Audit  Committee  assists the Board in  fulfilling  its  responsibility  for
oversight  of the  quality  and  integrity  of  the  accounting,  auditing,  and
financial reporting practices of the Company. During the year ended December 31,
2003, the Committee met four times,  and Donald Miller,  as the Audit  Committee
chair and representative of the Audit Committee, discussed the interim financial
information  contained in quarterly  earnings  announcement  with the  Company's
Chief Financial Officer and the Company's  independent  auditors prior to public
release.

      In discharging its oversight  responsibility as to the audit process,  the
Audit  Committee  obtained  from  the  independent  auditors  a  formal  written
statement describing all relationships between the auditors and the Company that
might bear on the auditors' independence  consistent with Independence Standards
Board  Standard  No.  1,  "Independence   Discussions  with  Audit  Committees,"
discussed with the auditors any relationships  that may affect their objectivity
and  independence  and satisfied  itself as to the auditors'  independence.  The
Audit Committee also discussed with management and the independent  auditors the
quality and adequacy of the Company's  internal  controls.  The Audit  Committee
reviewed with both the independent  auditors their audit plans, audit scope, and
identification of audit risks.

      The Audit Committee discussed and reviewed with the Company's  independent
auditors all communications  required by generally accepted auditing  standards,
including those described in Statement on Auditing Standards No. 61, as amended,
"Communication  with Audit  Committees"  and,  both with and without  management
present,  discussed  and  reviewed  the  results  of the  independent  auditors'
examination of the Company's financial statements.  The Audit Committee reviewed
the audited  consolidated  financial statements of the Company as of and for the
fiscal  year  ended  December  31,  2003  with  management  and the  independent
auditors. Management has the responsibility for the preparation of the Company's
consolidated  financial  statements and the Company's  independent auditors have
the responsibility for the examination of those statements.

      Based on the review referred to above and discussions  with management and
the  independent  auditors,  the  Audit  Committee  recommended  to the Board of
Directors  that the  Company's  audited  consolidated  financial  statements  be
included in its Annual  Report on Form 10-K for the fiscal  year ended  December
31, 2003 for filing  with the  Securities  and  Exchange  Commission.  The Audit
Committee also recommended the reappointment,  subject to shareholder  approval,
of the  independent  auditors  and the  Board  of  Directors  concurred  in such
recommendation.

COMPENSATION COMMITTEE

Our compensation committee

o     reviews and  recommends  the  compensation  arrangements  for  management,
      including the compensation for our chief executive officer; and
o     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.

Our  compensation  committee  met  four  times  during  2003.  The  compensation
committee  is  comprised   entirely  of  Directors  who  meet  the  independence
requirements of the NASDAQ listing standards.

NOMINATING COMMITTEE

The Nominating Committee (the "Nominating Committee") was formed by our Board in
April  2004 and  consists  of Frank  Bennett  and David  Weiss.  The  Nominating
Committee's  duties include adopting  criteria for  recommending  candidates for
election or re-election to our Board and its committees,  considering issues and
making  recommendations  considering the size and composition of our Board.  The
Nominating  Committee  will also  consider  nominees for  Director  suggested by
shareholders in written submissions to the Company's Secretary.

The  Nominating  Committee  met in April 2004 to decide  upon the  nominees  for
Director at the Annual Meeting.


                                       28


DIRECTOR NOMINATION PROCEDURES

      DIRECTOR MANAGER  QUALIFICATIONS.  The Company's  Nominating Committee has
established  policies for the desired  attributes  of our Board as a whole.  The
Board will seek to ensure  that a majority of its  members  are  independent  as
defined in the NASDAQ listing  standards.  Each member of our Board must possess
the individual  qualities of integrity and  accountability,  informed  judgment,
financial  literacy,  high  performance  standards  and  must  be  committed  to
representing  the long-term  interests of the Company and the  shareholders.  In
addition,  Directors must be committed to devoting the time and effort necessary
to be  responsible  and  productive  members  of our  Board.  Our  Board  values
diversity,  in its broadest sense,  reflecting,  but not limited to, profession,
geography, gender, ethnicity, skills and experience.

      IDENTIFYING AND EVALUATING  NOMINEES.  The Nominating  Committee regularly
assesses the appropriate  number of Directors  comprising our Board, and whether
any  vacancies on our Board are expected due to  retirement  or  otherwise.  The
Nominating  Committee  may  consider  those  factors  it  deems  appropriate  in
evaluating Director candidates including judgment, skill, diversity, strength of
character,  experience with businesses and  organizations  comparable in size or
scope to the Company,  experience and skill relative to other Board members, and
specialized  knowledge or  experience.  Depending  upon the current needs of our
Board,  certain  factors may be weighed more or less  heavily by the  Nominating
Committee.  In considering  candidates for our Board,  the Nominating  Committee
evaluates  the  entirety of each  candidate's  credentials  and,  other than the
eligibility requirements established by the Nominating Committee,  does not have
any  specific  minimum  qualifications  that  must  be  met  by a  nominee.  The
Nominating  Committee  considers  candidates  for the Board from any  reasonable
source, including current Board members, shareholders, professional search firms
or  other  persons.  The  Nominating  Committee  does  not  evaluate  candidates
differently based on who has made the recommendation.  The Nominating  Committee
has the  authority  under its  charter to hire and pay a fee to  consultants  or
search firms to assist in the process of identifying and evaluating candidates.

      CHARTER  OF THE  NOMINATING  COMMITTEE.  A  copy  of  the  charter  of the
Nominating Committee is available on our website at www.multibandusa.com.

EXECUTIVE COMPENSATION

      The  following  table  sets  forth  certain  information  relating  to the
remuneration paid by the Company to its executive  officers whose aggregate cash
and  cash-equivalent  remuneration  approximated or exceeded $100,000 during the
Company's last three fiscal years ending December 31, 2003.


                                       29





                           SUMMARY COMPENSATION TABLE

                                    ANNUAL COMPENSATION                                LONG TERM COMPENSATION

NAME AND PRINCIPAL        YEAR   SALARY       BONUS        OTHER             RESTRICTED   SECURITIES    LTIP       ALL OTHER
POSITION                         ($)          ($)          ANNUAL            STOCK        UNDERLYING    PAYOUTS    COMPENSATION
                                                           COMPENSATION      AWARD(S)     OPTIONS/      ($)        ($)
                                                           ($)               ($)          SARS
                                                                                          (#)
(A)                       (B)    (C)          (D)          (E)               (F)          (G)           (H)        (I)
                                                                             AWARDS                     PAYOUTS
                                                                                            
James L. Mandel           2003   $250,727     $125,000     -0-               -0-          300,000       -0-        -0-
Chief Executive Officer   2002   $149,874     $100,000     -0-               -0-          -0            -0-        -0-
                          2001   $131,346     -0-          -0-               -0-          500           -0-        -0-

Steven Bell               2003   $120,484     -0-          -0-               -0-          50,000        -0-        -0-
Chief Financial Officer   2002   $99,014      -0-          -0-               -0-          10,500        -0-        -0-
                          2001   $108,365     -0-          -0-               -0-          500           -0-        -0-


Dave Ekman                2003   $111,154     -0-          -0-               -0-          -0-           -0-        -0-
Chief Information Officer 2002   $93,695      -0-          -0-               -0-          -0-           -0-        -0-
                          2001   $100,614     -0-          -0-               -0-          500           -0-        -0-


DIRECTORS FEES

      There  were no cash  fees paid to  Directors  in 2003.  Outside  Directors
receive a stock  option  of 30,000  shares at  market  price  upon  joining  the
Multiband Board. Additional awards or options to Directors are determined by the
Board's Compensation Committee.

                            OPTION GRANTS DURING 2003

      THE FOLLOWING TABLE PROVIDES  INFORMATION  REGARDING STOCK OPTIONS GRANTED
DURING FISCAL 2003 TO THE NAMED EXECUTIVE  OFFICERS IN THE SUMMARY  COMPENSATION
TABLE.




                                                                                       Potential Realizable Value at
                          Number of      Percent of                                    Assumed Annual Rates of Stock
                          Securities    Total Options                                  Price Appreciation for Option
                          Underlying     Granted to      Exercise or                              Term (1)
                           Options      Employees in      Base Price    Expiration
 Name                     Granted (#)   Fiscal Year (%)   ($/Share)       Date              5%              10%
 ----                     -----------   ---------------  -----------    ----------         ----            ----
                                                                                     
James L. Mandel             300,000         46.3            $1.50       1/8/2013            -0-           $258,092
Steven M. Bell               50,000         7.7             $1.10       1/8/2013          $19,115         $ 63,015
Dave Ekman                   -0-            -0-                 -              -                -                -



(1)   The "potential  realizable  value" shown  represents  the potential  gains
      based on annual  compound stock price  appreciation of 5% and 10% from the
      date of grant through the full option terms,  net of exercise  price,  but
      before taxes  associated  with  exercise.  The amounts  represent  certain
      assumed rates of appreciation  only,  based on the Securities and Exchange
      Commission  rules.  Actual  gains,  if any, on stock option  exercises are
      dependent on the future  performance  of the common stock,  overall market
      conditions  and the  option  holders,  continued  employment  through  the
      vesting period. The amounts reflected in this table may not necessarily be
      achieved and do not reflect the  Company's  estimate of future stock price
      growth.

      Each option  represents  the right to purchase one share of common  stock.
The options  shown in this table are all  non-qualified  stock  options.  To the
extent not already exercisable,  the options generally become exercisable in the
event of a  merger  in  which  Multiband  is not the  surviving  corporation,  a
transfer of all shares of stock of Multiband,  a sale of  substantially  all the
assets, or a dissolution or liquidation, of Multiband.


                                       30


AGGREGATED OPTION EXERCISES IN 2003 AND YEAR END OPTION VALUES

    The following table provides information as to options exercised by the
named executive officers in the Summary Compensation Table during fiscal 2003
and the number and value of options at December 31, 2003.




                       SHARES ACQUIRED
                       ON EXERCISE      VALUE (1)
NAME                                    REALIZED    EXERCISABLE/UNEXERCISABLE  EXERCISABLE/UNEXERCISABLE
                                                    NUMBER OF                  VALUE OF UNEXERCISED
                                                    UNEXERCISED OPTIONS AT     IN-THE-MONEY OPTIONS AT
                                                    DECEMBER 31, 2003          DECEMBER 31, 2003
                                                    -----------------          -----------------
                                                                            
James L. Mandel........   -0-              -0-      450,500      -0-            $554,115      $0
Steven M. Bell.........   -0-              -0-       57,166   3,334              $70,314  $4,100
David Ekman............   -0-              -0-      150,500      -0-            $185,115      $0


(1)   Value is  calculated  on the basis of the  difference  between  the option
      exercise  price and $1.23,  the fair market value of the Company's  common
      stock at  December  31, 2003 as quoted on the  NASDAQ,  multiplied  by the
      number of shares underlying the option.

OTHER COMPENSATION AND LONG-TERM INCENTIVE PLANS

      The  Company  has no  long-term  incentive  plans and issued no  long-term
incentive awards during 2003.

      The Company has an employment  agreement with Mr. Steven Bell,  President,
for the term  beginning  January 2002 and expiring  December  2004.  Mr.  Bell's
compensation  is not directly tied to the Company's  performance.  The agreement
states  that  annual  base  salary  for Mr.  Bell will be between  $125,000  and
$135,000 per year.  Other key provisions of the contract include an agreement by
Mr.  Bell  to  keep  confidential  information  secret  both  during  and  after
employment  by the Company and covenants not to compete with the Company for one
year from the date of termination of employment.  The contract also provides Mr.
Bell with 75,000 stock options at market price, vested over a three year period.

      The Company  maintains  key man life  insurance  policies in the amount of
$1,000,000 each on the lives of Steven Bell and Marvin Frieman, former Director.
The Company is the  beneficiary  of these policies and has adopted a plan to pay
fifty percent of all life insurance proceeds to the spouse or surviving children
of each such individual.

      The Company also has a three year employment agreement,  from January 2002
to December 2004, with James L. Mandel,  Chief Executive  Officer,  the terms of
which  involve an annual base salary of $200,000  and a stock  option of 300,000
shares at $1.50 per share,  vested over a three year  period.  Mr.  Mandel's job
responsibilities involve developing company business plans, developing expansion
and growth opportunities and directing other executive officers.

                                       31


                          1999 STOCK COMPENSATION PLAN

1999 STOCK COMPENSATION PLAN

      The total number of shares of stock reserved for awards to employees under
the Plan is 4.3  million  shares.  The  purpose  of the plan is to  promote  the
interest of the Company  and its  shareholders  by  providing  employees  of the
company with an opportunity to receive a proprietary interest in the Company and
thereby  develop a stronger  incentive to contribute to the Company's  continued
success  and growth.  The plan is  administered  by a Committee  of the Board of
Directors.  Awards  pursuant  to the 1999  plan  may be in the form of  either a
restricted  stock  grant,  which means that stock  issued will vest over a three
year vesting period, or stock options.

      Options  granted  under the Plan may be either  "incentive"  stock options
within the  meaning of  Section  422 of the  Internal  Revenue  Code  ("IRC") or
"nonqualified" stock options that do not qualify for special tax treatment under
the IRC. No  incentive  stock  option may be granted  with a per share  exercise
price less than the fair market value of a share of the  Company's  common stock
on the date the  option is  granted;  in the case of any  shareholder  owning 10
percent or more of the common stock to whom an  incentive  stock option has been
granted  under the Plan,  the exercise  price thereof is required to be not less
than 110  percent of the fair market  value of the common  stock on the date the
option is granted.  Options are not  transferable.  An  optionee,  or his or her
personal  representative,  may exercise his or her option for a period of ninety
(90) days following termination of employment,  disability or death. The term of
each option,  which is fixed by the Committee,  may not exceed 10 years from the
date the option is granted,  or 5 years in the case of incentive  stock  options
granted to  shareholder  owing 10  percent  or more of the common  stock to whom
options  have  been  granted.  Options  may be made  exercisable  in whole or in
installments as determined by the Committee or Board. The Committee or Board may
cancel an  option  of an  employee  who has been  terminated  for cause or takes
employment with a competitor. The closing sale price of a share of the Company's
common stock was $1.18 on November 16, 2004.

Federal Income Tax Matters

      Options.  Incentive stock options granted under the 1999 plan are intended
to qualify for favorable tax treatment under Section 422 of the Internal Revenue
Code of 1986, as amended.  Under Section 422, an optionee  recognizes no taxable
income when the option is granted.  Further,  the  optionee  generally  will not
recognize  any taxable  income when the option is  exercised if he or she has at
all times from the date of the option's grant until three months before the date
of exercise  been an  employee of the  Company.  The Company  ordinarily  is not
entitled to any income tax deduction  upon the grant or exercise of an incentive
stock option.  Certain other favorable tax  consequences may be available to the
optionee if he or she does not dispose of the shares  acquired upon the exercise
of an incentive  stock option for a period of two years from the granting of the
option and one year from the receipt of the shares.

      Under present law, an optionee will not realize any taxable  income on the
date a nonqualified  option is granted  pursuant to the 1999 plan. Upon exercise
of the option,  however,  the optionee must recognize,  in the year of exercise,
ordinary  income equal to the  difference  between the option price and the fair
market value of the  Company's  common  stock on the date of exercise.  Upon the
sale of the shares,  any resulting  gain or loss will be treated as capital gain
or loss.  The Company will receive an income tax deduction in its fiscal year in
which nonqualified  options are exercised equal to the amount of ordinary income
recognized by those optionees  exercising options,  and must withhold income and
other employment related taxes on such ordinary income.

      Restricted Stock Awards.  Generally, no income is taxable to the recipient
of a  restricted  stock  award in the year the award is  granted.  Instead,  the
recipient will recognize  compensation  taxable as ordinary  income equal to the
fair market value of the shares in the year in which the  transfer  restrictions
lapse.  Alternatively,  if a recipient  makes a "Section  83(b)"  election,  the
recipient  will,  in the  year  that the  restricted  stock  award  is  granted,
recognize compensation taxable as ordinary income equal to the fair market value
of the shares on the date of the award.  The  Company  normally  will  receive a
deduction  equal to the amount of  compensation  the  recipient  is  required to
recognize  as ordinary  taxable  income,  and must comply  with  applicable  tax
withholding requirements.

2000 NON-EMPLOYEE DIRECTOR STOCK COMPENSATION PLAN

      The total  number of shares  reserved for awards under the Plan is 800,000
shares.  The  purpose  of the 2000  Directors'  Plan is to enable  the  Company,
through the grant of  non-qualified  stock options to  non-employee  ("outside")
Directors  of the  Company,  to  attract  and  retain  highly-qualified  outside
Directors and, by providing them with such a stock-based incentive,  to motivate
them to promote the best interests of the Company and its shareholders.  For the
purposes  of the Plan,  outside  Directors  are  Directors  who,  at the time of
granting of options under the Plan, are not and for the prior twelve months have
not been employees of the Company or any of its subsidiaries.

                                       32


      All grants will  provide  for an exercise  price equal to 100% of the fair
market  value  of a  Share  at  the  date  of the  grant.  Options  will  become
exercisable approximately one year after date of grant and will expire ten years
after date of grant,  subject to earlier  exercise  and  termination  in certain
circumstances.  If an outside Director ceases to be a Director due to death, any
of his outstanding options that have not yet become exercisable will accelerate,
and all of his outstanding Options will remain exercisable for various specified
periods  of time up to a  maximum  of  approximately  one  year.  If an  outside
Director  ceases  to be a  Director  due  to  disability,  all  of  his  or  her
outstanding options not fully vested will immediately terminate,  and those that
are fully vested will remain  exercisable for various  specified periods of time
up to a maximum of approximately one year. If an outside Director ceases to be a
Director for any other reason,  all of his or her outstanding  options not fully
vested will immediately  terminate,  and those that are fully vested will remain
exercisable for 90 days.

The closing sale price of a share of the Company's common stock was $1.18 on
November 16, 2004.

Federal Income Tax Matters

      Under present law, an optionee will not realize any taxable  income on the
date a nonqualified option is granted pursuant to the 2000 Directors' Plan. Upon
exercise of the option,  however,  the optionee must  recognize,  in the year of
exercise,  ordinary income equal to the difference  between the option price and
the fair market  value of the  Company's  common  stock on the date of exercise.
Upon the sale of the  shares,  any  resulting  gain or loss will be  treated  as
capital gain or loss.  The Company  will receive an income tax  deduction in its
fiscal year in which  nonqualified  options are exercised equal to the amount of
ordinary  income  recognized by those  optionees  exercising  options,  and must
withhold income and other employment related taxes on such ordinary income.

                       2000 EMPLOYEE STOCK PURCHASE PLAN

      The 2000  Employee  Stock  Purchase  Plan ("the  ESPP") was adopted by the
Multiband  shareholders  in August  2000.  The purpose of the ESPP is to provide
eligible employees with an opportunity to increase their proprietary interest in
the success of Multiband by purchasing  Common Stock from Multiband on favorable
terms and to pay for such purchase  through  payroll  deductions.  The aggregate
number of shares of stock available for purchase under the ESPP is 400,000.  The
ESPP is intended to qualify under section 423 of the Internal  Revenue Code. The
provisions   of  the  ESPP  shall  be  construed  so  as  to  extend  and  limit
participation  in a manner  consistent with the  requirements of that section of
the Code.

      The ESPP is administered by a committee of Multiband's board of directors.
The committee consists exclusively of one or more directors of Multiband who are
appointed by the Board.  The committee  interprets  the ESPP and makes all other
policy decisions  relating to the operation of the ESPP. The committee may adopt
such rules,  guidelines and forms as it deems appropriate to implement the ESPP.
The  committee's  determination  under  the ESPP are final  and  binding  on all
persons.

      The ESPP Year consists of a  twelve-month  period  commencing on January 1
and ending on December 31.  Notwithstanding  the foregoing,  the first ESPP Year
will be a short year  commencing on the effective date of the ESPP and ending on
December 31, 2000.

                             EMPLOYEE BENEFITS PLANS

      Multiband  has 401(k)  profit  sharing plans  covering  substantially  all
full-time  employees.  Employee  contributions are limited to the maximum amount
allowable by the Internal  Revenue Code of 1986, as amended.  Multiband  made no
significant discretionary contributions in years 1999, 1998 and 1997.

                              CERTAIN TRANSACTIONS

      The following is a summary of all significant  related party  transactions
for the three years ended December 31, 2003.

      Rangeline  Capital  is an entity  managed  and  co-owned  by David  Weiss,
Director. In 2002 and 2003, Rangeline made equipment purchases from the Company.
In both years, those purchases comprised less than 5% of Company annual revenues
($636,477 and $1,124,232).

      Multiband and its  subsidiaries  lease  principal  offices located at 2000
44th  Street  SW,  Fargo,  ND 58013 and 9449  Science  Center  Drive,  New Hope,
Minnesota 55428. The Fargo office lease expires in 2017 and covers approximately
22,500  square  feet.  The Fargo base rent  ranges  from  $21,577 to $24,360 per
month. The New Hope office lease expires in 2006 and covers approximately 47,000
square  feet.  The New Hope base rent ranges from  $16,000 to $17,653 per month.
Both the New Hope  and main  Fargo  leases  have  provisions  that  call for the
tenants to pay net operating expenses,  including property taxes, related to the
facilities.  Both offices have office,  warehouse and training  facilities.  The
main Fargo  property is owned in part by David Ekman.  The New Hope property was
owned  jointly by Steven  Bell and Marvin  Frieman  prior to its sale in August,
2003 to an independent third party.


                                       33


      Interest  and dividend  expense  paid by Multiband to related  parties was
approximately  $225,966 in 2003,  $228,000  in 2002 and $3,000 in 2001.  Related
parties include the Company's Chairman,  Chief Executive Officer,  President and
the President's mother.


                                       34


         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The  following  table  provides   information  as  of  November  24,  2004
concerning  the  beneficial  ownership of  Multiband's  common stock by (i) each
director of  Multiband,  (ii) the Named  Executive  Officers,  (iii) the persons
known by Multiband to own more than 5% of Multiband's  outstanding common stock,
and (iv) all directors and  executive  officers as a group.  Except as otherwise
indicated,  the persons named in the table have sole voting and investment power
with  respect  to all  shares  of  common  stock  owned  by them.  (The  selling
shareholders may actually sell all, some or none of the shares held by them.)



                                                                                                                       SHARES
                                                         SHARES BENEFICIALLY                                        BENEFICIALLY
                                                             OWNED PRIOR                        SHARES TO            OWNED AFTER
                                                            TO OFFERING (1)                      BE SOLD            OFFERING (20)
                                          ----------------------------------------------------  --------         ------------------
                                                        SHARES          TOTAL
                                                      UNDERLYING      NUMBER OF                                    TOTAL
BENEFICIAL OWNER                          SHARES(2)    WARRANTS        SHARES        PERCENT(3)                    NUMBER   PERCENT
----------------                          ---------   -----------     ---------      ----------  -------         ---------  -------
                                                                                                           
Steven Bell                                  0            0           589,063(4)          2.2%         0         589,063(5)     2.2
9449 Science Center Drive
New Hope, MN  55428

                                             0            0            89,600(6)            *          0          89,600(7)       *
Frank Bennett
301 Carlson Parkway - Suite 120
Minnetonka, Minnesota  55305

                                             0            0            70,100(8)            *          0          70,100(9)       *
Jonathan Dodge
715 Florida Avenue South - Suite 402
Golden Valley, MN  55426

                                             0            0         1,751,583(10)         6.4%         0       1,751,583(11)    6.4%
David Ekman
2000 44th Street SW
Fargo, ND 58103

                                             0            0            19,000(12)           *          0          19,000(13)      *
Eugene Harris
225 South Meramec - Suite 722
St. Louis, MO 63105

                                             0            0           464,133(14)         1.7%         0         464,133(15)    1.7%
James L. Mandel
9449 Science Center Drive
New Hope, MN 55428

                                             0            0         1,369,686(16)         5.0%         0       1,369,686(17)    5.0%
Donald Miller
1924 Cocoplum Way
Naples, FL  34105

                                             0            0           122,726(18)           *          0         122,726(19)      *
David Weiss
10829 Olive Blvd.
Suite 203
St. Louis, MO 63141
All Directors and
executive officers
as a group
(eight persons)                               0            0        4,475,891            15.3%         0         4,475,891     15.3%



--------
*     Less than one percent
(1)   Each person has sole voting and sole dispositive power with respect to all
      outstanding shares, except as noted.
(2)   Excludes shares underlying warrants.
(3)   Based on an average of 25,773,767 shares outstanding at November 24, 2004,
      and 29,861,682  shares  outstanding  after the exercise of warrants.  Each
      figure showing the percentage of outstanding shares owned beneficially has
      been  calculated  by treating as  outstanding  and owned the shares  which
      could be  purchased  by the  indicated  person upon the  exercise of stock
      options and warrants (including the warrants).
(4)   Includes  vested  options to acquire  35,500 shares of common  stock.  Mr.
      Bell's  Beneficial  Ownership  does include  31,250 shares of common stock
      owned  by his  spouse  as to  which  Mr.  Bell  disclaims  his  beneficial
      ownership.
(5)   Includes  vested  options to acquire  35,500 shares of common  stock.  Mr.
      Bell's  Beneficial  Ownership  does include  31,250 shares of common stock
      owned  by his  spouse  as to  which  Mr.  Bell  disclaims  his  beneficial
      ownership.
(6)   Includes vested options to purchase 69,600 shares of common stock.
(7)   Includes vested options to purchase 69,600 shares of common stock.
(8)   Includes vested options to acquire 69,600 shares of common stock.
(9)   Includes vested options to acquire 69,600 shares of common stock.
(10)  Includes vested options to purchase 150,500 shares of common stock.
(11)  Includes vested options to purchase 150,500 shares of common stock.
(12)  Mr. Harris's beneficial  ownership does include 19,000 shares owned by his
      spouse as to which Mr. Harris disclaims his beneficial ownership.
(13)  Mr. Harris's beneficial  ownership does include 19,000 shares owned by his
      spouse as to which Mr. Harris disclaims his beneficial ownership.
(14)  Includes vested options to purchase 300,500 shares of common stock.
(15)  Includes vested options to purchase 300,500 shares of common stock.
(16)  Includes  warrants and vested options to purchase 878,700 shares of common
      stock.
(17)  Includes  warrants and vested options to purchase 878,700 shares of common
      stock.
(18)  Includes vested options to purchase 69,600 shares of common stock.
(19)  Includes vested options to purchase 69,600 shares of common stock.


                                       35


                       PRINCIPAL AND SELLING SHAREHOLDERS

      The  following  table  provides   information  as  of  November  24,  2004
concerning the beneficial  ownership of Multiband's common stock by which can be
obtained by the selling  shareholders  upon conversion of the convertible  notes
and Series H preferred  stock and upon exercise of the warrants held by them and
is adjusted to reflect the sale of all their shares.  The information  regarding
ownership of shares of common  stock after the offering  assumes that all of the
shares registered under this prospectus have been sold. The selling shareholders
may actually sell all, some or none of the shares held by them.

      Beneficial   ownership  is  determined  in  accordance   with  Rule  13d-3
promulgated by the Securities and Exchange  Commission,  and generally  includes
voting or investment  power with respect to securities.  In computing the number
of shares  beneficially owned by the holder and the percentage  ownership of the
holder, shares of common stock issuable upon conversion of the convertible notes
and  preferred  stock and upon exercise of the warrants held by the holders that
are currently  convertible  or are  exercisable  or  convertible  or exercisable
within 60 days after the date of the table are deemed outstanding.

      To our  knowledge,  each of the selling  shareholders  has sole voting and
investment power with respect to all of the shares of common stock  beneficially
owned by it, except as noted below. None of the selling shareholders has held or
had any material relationship with us within the past three years.

      The terms of the convertible notes,  Series H preferred stock and warrants
issued to the selling  shareholders  whose underlying shares of common stock are
included for resale under this prospectus  prohibit  conversion of the notes and
preferred  stock or exercise of the warrants to the extent that such  conversion
and/or  exercise  would  result in the  holder,  together  with its  affiliates,
beneficially owning in excess of 4.9% of our outstanding shares of common stock.
A holder may waive the 4.9% limitation upon 61 days' prior written notice to us.
Also, this limitation does not preclude the holder from converting or exercising
the notes,  preferred stock or warrants and selling shares underlying the notes,
preferred  stock or warrants in stages over time where each stage does not cause
the  holder  and its  affiliates  to  beneficially  own  shares in excess of the
limitation amount.




                                                 SHARES BENEFICIALLY                              SHARES BENEFICIALLY
                                                     OWNED PRIOR                       SHARES         OWNED AFTER
                                                   TO OFFERING(20)                   TO BE SOLD       OFFERING(20)
                                      ------------------------------------------      ---------   --------------------
                                                    SHARES     TOTAL
                                                  UNDERLYING  NUMBER OF                             TOTAL
BENEFICIAL OWNER                      SHARES(21)   WARRANTS    SHARES    PERCENT(22)               NUMBER      PERCENT
----------------                      ---------   ---------   ---------     ----      ---------   ---------   ---------
                                                                                                    
Broyer, Judd L                           44,063      26,438      70,501     *            70,501           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Bushido Capital Master Fund, LP         354,000     300,000     654,000      2.6%       654,000           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Clarke, John R                                0     141,750     141,750     *           141,750           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Cooke, Carlene                                0       1,907       1,907     *             1,907           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Dain Rauscher, Inc. Custodian,
Charlean M. Steller (IRA)                15,625       9,375      25,000     *            25,000           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Dain Rauscher, Inc. Custodian,
Morris W. Steller (IRA)                  15,625       9,375      25,000     *            25,000           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Dain Rauscher, Inc.
Custodian, Robert P. Reiter              15,625       9,375      25,000     *            25,000           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Dain Rauscher, Inc.
Custodian, Donna Zastrow                  2,781       1,669       4,450     *             4,450           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Dain Rauscher, Inc.
Custodian, Irvin F. Zastrow (IRA)         7,188       4,313      11,501     *            11,501           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Dain Rauscher, Inc.
Custodian, Doug Pietig (IRA)             15,625       9,375      25,000     *            25,000           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Enable Growth Partners L.P.             354,000     300,000     654,000      2.6%       654,000           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Fuchs, Ari J                                  0      31,500      31,500     *            31,500           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Gamma Opportunity
Capital Partners, LP                    354,000     300,000     654,000      2.6%       654,000           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Gryphon Master Fund, LP                 590,001     500,001   1,090,002      4.2%     1,090,002           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
GSSF Master Fund, LP                    590,001     500,001   1,090,002      4.2%     1,090,002           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
H.C. Wainwright & Co. (23)                    0     315,000     315,000      1.3%       315,000           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Heinzen, Tom                                  0       5,469       5,469     *             5,469           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Hendricks, Randy J                       15,625       9,375      25,000     *            25,000           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Iroquois Capital LP                     501,501     425,001     926,502      3.6%       926,502           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Koch, Scott F                                 0     141,750     141,750     *           141,750           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Luethmers, Howard                        15,625       9,375      25,000     *            25,000           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
McKelvey, Robert                          5,900       5,000      10,900     *            10,900           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
McKelvey, Robert                              0       3,582       3,582     *             3,582           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
McNab, Daryl R                           29,500      25,000      54,500     *            54,500           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Mutschler, John or Faye                  29,500      25,000      54,500     *            54,500           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Nelson, Diane Lea                        16,250       9,750      26,000     *            26,000           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
RHP Master Fund, Ltd.                   354,000     300,000     654,000      2.6%       654,000           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Savitski, Donald or Anne                 62,500      37,500     100,000     *           100,000           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
SRG Capital, LLC                        159,000     150,000     309,000      1.2%       309,000           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Steller, Morris W                        15,625       9,375      25,000     *            25,000           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Stonestreet LP                          295,001     250,001     545,002     *           545,002           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Tilton, Theodore                         29,500      25,000      54,500     *            54,500           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Tilton, Theodore                         31,250      18,750      50,000     *            50,000           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Tilton, Theodore                              0       1,582       1,582     *             1,582           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Tutewohl, Leo or Sharon                  23,600      20,000      43,600     *            43,600           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Voldness, Peter                               0      25,700      25,700     *            25,700           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Wesolek, Gregory or Patricia              9,375       5,625      15,000     *            15,000           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
Whalehaven Capital Fund Limited         147,501     125,001     272,502      1.0%       272,502           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------
TOTAL                                 4,099,787   4,087,915   8,187,702     24.8%     8,187,702           0           0
                                      ---------   ---------   ---------     ----      ---------   ---------   ---------






(20)  Each person has sole voting and sole dispositive power with respect to all
      outstanding shares, except as noted.
(21)  Excludes shares underlying warrants.
(22)  Based on an average of 25,773,767 shares outstanding at November 24, 2004,
      and 29,861,682  shares  outstanding  after the exercise of warrants.  Each
      figure showing the percentage of outstanding shares owned beneficially has
      been  calculated  by treating as  outstanding  and owned the shares  which
      could  be  purchased  by the  indicated  person  within  60 days  upon the
      exercise of stock options and warrants (including the warrants).
23)   Warrants  were issued to the firm of H.C.  Wainwright  and its  employees,
      John R Clarke,  Ari J Fuchs and Scott F. Koch for services provided to the
      Company related to the private placement transactions.


                                       36


                              PLAN OF DISTRIBUTION

      The selling  shareholders may, from time to time, sell any or all of their
shares of common  stock on any stock  exchange,  market or trading  facility  on
which the shares are traded or in private  transactions.  These  sales may be at
fixed or negotiated prices. The selling  shareholders may use any one or more of
the following methods when selling shares:

o     ordinary   brokerage   transactions   and   transactions   in  which   the
      broker-dealer solicits purchasers;

o     block trades in which the broker-dealer will attempt to sell the shares as
      agent but may  position  and resell a portion of the block as principal to
      facilitate the transaction;

o     purchases by a broker-dealer as principal and resale by the  broker-dealer
      for its account;

o     an exchange  distribution  in accordance  with the rules of the applicable
      exchange;

o     privately negotiated transactions;

o     short sales;

o     broker-dealers may agree with the selling shareholders to sell a specified
      number of such shares at a stipulated price per share;

o     a combination of any such methods of sale; and

o     any other method permitted pursuant to applicable law.

      The selling  shareholders  may also sell  shares  under Rule 144 under the
Securities Act, if available, rather than under this prospectus.

      The selling  shareholders  may also engage in short sales against the box,
puts and calls and other  transactions  in our  securities or derivatives of our
securities and may sell or deliver shares in connection with these trades.

      Broker-dealers  engaged by the selling  shareholders may arrange for other
brokers-dealers to participate in sales.  Broker-dealers may receive commissions
or discounts from the selling  shareholders  (or, if any  broker-dealer  acts as
agent  for the  purchaser  of  shares,  from the  purchaser)  in  amounts  to be
negotiated.  The  selling  shareholders  do not  expect  these  commissions  and
discounts to exceed what is customary in the types of transactions involved. Any
profits on the  resale of shares of common  stock by a  broker-dealer  acting as
principal might be deemed to be underwriting  discounts or commissions under the
Securities  Act.  Discounts,   concessions,   commissions  and  similar  selling
expenses,  if any, attributable to the sale of shares will be borne by a selling
shareholder.  The selling  shareholders may agree to indemnify any agent, dealer
or broker-dealer that participates in transactions involving sales of the shares
if liabilities are imposed on that person under the Securities Act.

      The selling  shareholders may from time to time pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties  may offer and sell the  shares of common  stock from time to time under
this prospectus  after we have filed an amendment to this prospectus  under Rule
424(b)(3) or other  applicable  provision of the Securities Act of 1933 amending
the list of selling  shareholders  to include the pledgee,  transferee  or other
successors in interest as selling shareholders under this prospectus.

      The selling  shareholders  also may transfer the shares of common stock in
other circumstances, in which case the transferees, pledgees or other successors
in  interest  will  be the  selling  beneficial  owners  for  purposes  of  this
prospectus  and may sell the shares of common stock from time to time under this
prospectus  after we have  filed an  amendment  to this  prospectus  under  Rule
424(b)(3) or other  applicable  provision of the Securities Act of 1933 amending
the list of selling  shareholders  to include the pledgee,  transferee  or other
successors in interest as selling shareholders under this prospectus.

      The  selling  shareholders  and any  broker-dealers  or  agents  that  are
involved  in  selling   the  shares  of  common   stock  may  be  deemed  to  be
"underwriters"  within the meaning of the Securities Act in connection with such
sales. In such event, any commissions  received by such broker-dealers or agents
and any profit on the resale of the shares of common stock purchased by them may
be deemed to be underwriting commissions or discounts under the Securities Act.

      We are required to pay all fees and expenses  incident to the registration
of the  shares  of  common  stock.  We have  agreed  to  indemnify  the  selling
shareholders against certain losses, claims, damages and liabilities,  including
liabilities under the Securities Act.

      The selling  shareholders  have advised us that they have not entered into
any  agreements,   understandings  or  arrangements  with  any  underwriters  or
broker-dealers  regarding the sale of their shares of common stock, nor is there
an underwriter or coordinating  broker acting in connection with a proposed sale
of shares of common stock by any selling shareholder.  If we are notified by any
selling  shareholder that any material  arrangement has been entered into with a
broker-dealer for the sale of shares of common stock, if required,  we will file
a supplement to this prospectus. If the selling shareholders use this prospectus
for any  sale of the  shares  of  common  stock,  they  will be  subject  to the
prospectus delivery requirements of the Securities Act.

      The anti-manipulation  rules of Regulation M under the Securities Exchange
Act of 1934 may apply to sales of our common stock and activities of the selling
shareholders.

                                       37


                            DESCRIPTION OF SECURITIES

CAPITAL STRUCTURE

      The Articles of  Incorporation of Multiband  authorize  Multiband to issue
100  million  shares of capital  stock,  which have no par value.  However,  the
shares  have a par value of one cent per share for the  purpose  of a statute or
regulation imposing a tax or fee based upon the capitalization of a corporation.
As  of  November  16,  2004  there  were  24,763,322   shares  of  common  stock
outstanding,  5.5 million  shares  reserved for issuance  under our stock plans,
11,849,085  shares of common  stock  reserved  for  issuance  under  outstanding
warrants,  2,866,736  shares of common stock  issuable  upon the  conversion  of
shares of our Classes A through H  cumulative  convertible  Preferred  Stock and
811,688 shares upon conversion of a note payable.

COMMON STOCK

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

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

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

WARRANTS

      The warrants being  registered  hereunder have a three year term with each
warrant  allowing the warrant  holder to purchase one share of Multiband  common
stock for $1.25 per share.

        MARKET PRICE OF MULTIBAND'S COMON AND RELATED STOCKHOLDER MATTERS

      Through May 17,  2000,  Multiband's  common stock was traded and quoted on
the OTC Bulletin  Board(R)  ("OTCBB") under the symbol "VICM." From May 18, 2000
until August 21, 2000,  the common stock was quoted under the VICM symbol on the
Pink  Sheets(R)  operated by Pink Sheets LLC.  From August 21, 2000, to December
12, 2000,  Multiband's common stock was traded and quoted on the OTCBB under the
VICM  symbol.  Since  then,  the stock has been  traded and quoted on the Nasdaq
Smallcap  market system.  The table below sets forth the high and low bid prices
for the common  stock  during each  quarter in the two years ended  December 31,
2002 and  December 31,  2003,  and for the quarters  ended March 31, June 30 and
September 30, 2004, as provided by Nasdaq.

                      QUARTER ENDED               HIGH BID       LOW BID
                      -------------               --------       -------

March 31, 2002..................................    1.90           1.37
June 30, 2002...................................    1.75            .80
September 30, 2002..............................     .92            .52
December 31, 2002...............................    1.12            .50
March 31, 2003..................................    1.37            .77
June 30, 2003...................................    2.49           1.03
September 30, 2003..............................    2.20           1.52
December 31, 2003...............................    1.85           1.23
March 31, 2004..................................    1.68           1.04
June 30, 2004...................................    2.54           1.30
September 30, 2004..............................    1.45            .96


                                       38


      As of November 12, 2004,  Multiband had 679  shareholders of record of its
common stock and 24,763,322 shares of common stock outstanding. As of that date,
eight shareholders held a total of 27,931 of Class A Preferred, two shareholders
held  8,700  shares  of Class B  Preferred,  five  shareholders  held a total of
125,400  shares of Class C  Preferred,  and eight  shareholders  held a total of
77,650 shares of Class E Preferred.

PREFERRED STOCK

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

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

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

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

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

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

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

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

      During the second  quarter of 2004,  $776,500  worth of Class E  Preferred
Stock was converted into Common Stock at a price of $1.25 per share.  During the
third quarter of 2004, two million  dollars worth of Class F Preferred Stock was
issued.  During the fourth quarter of 2004,  $452,450 worth of Class G Preferred
Stock was issued and $1,050,002 worth of Class H Preferred Stock was issued.

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

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


                                       39


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

                    INDEMNIFICATION OF DIRECTORS AND OFFICERS

      Under Section  302A.251 of the Minnesota  statutes,  a corporation  shall,
unless  prohibited  or  limited  by its  Articles  of  Incorporation  or Bylaws,
indemnify  its  directors,  officers,  employees and agents  against  judgments,
penalties, fines, settlements and reasonable expenses, including attorneys' fees
and disbursements, incurred by such person who was, or is threatened to be, made
a party to a  proceeding  by  reason  of the fact  that the  person  is or was a
director,  officer,  employee or agent of the  corporation  if  generally,  with
respect to the acts or omissions of the person  complained of in the proceeding,
the person (i) has not been indemnified by another  organization with respect to
the same acts or omissions; (ii) acted in good faith; (iii) received no improper
personal benefit;  (iv) in the case of a criminal proceeding,  had no reasonable
cause to believe the conduct  was  unlawful;  and (v)  reasonably  believed  the
conduct  was  in  the  best   interest  of  the   corporation   or,  in  certain
circumstances,  reasonably believed that the conduct was not opposed to the best
interests of the  corporation.  Minnesota  corporate  law also  provides  that a
corporation  may purchase and  maintain  insurance on behalf of any  indemnified
party against any  liability  asserted  against such person,  whether or not the
corporation  would have been required to indemnify the person against  liability
under the  provisions  of  Minnesota  corporate  law.  Multiband's  Articles  of
Incorporation  provide for indemnification  pursuant to Minnesota  statutes.  We
also have  directors'  and officers'  insurance in the amount of $3,000,000  per
occurrence.

                                  LEGAL MATTERS

      The  validity  of the  shares  of  common  stock  being  offered  by  this
prospectus  will be  passed  upon for us by Steven M.  Bell,  Esq.  of New Hope,
Minnesota.

                                     EXPERTS

      Financial  statements  of Multiband  included in this  prospectus  for the
years  ended  December  31,  2003,  2002 and 2001 have been  audited by Virchow,
Krause & Company, LLP, independent certified public accountants, as indicated in
their report with respect thereto,  and are included herein in reliance upon the
authority of such firm as experts in giving said report.

                       WHERE YOU CAN FIND MORE INFORMATION

      We will be filing annual,  quarterly and current reports, proxy statements
and other information with the Securities and Exchange Commission under File No.
0-13529.  You may read and copy any  document  in our public  files at the SEC's
offices at:

   o        Judiciary Plaza
            450 Fifth Street, NW
            Room 1024
            Washington, D.C. 20549

   o        500 West Madison Street
            Suite 1400
            Chicago, Illinois 60606

   o        3475 Lenox, N.E.
            Suite 1000
            Atlanta, Georgia 30326


                                       40


      Please  call the SEC at  1-800-SEC-0330  for  further  information  on the
public  reference  rooms.  Our SEC filings are also available to the public from
the SEC's  website at  http://www.sec.gov,  through  the SEC's  electronic  data
gathering  analysis and retrieval  system,  EDGAR. Our common stock is traded on
the NASDAQ Stock Market under the symbol  "MBND."  Information  about us is also
available from the National  Association  of Securities  Dealers,  Inc.,  1735 K
Street, N.W., Washington, D.C. 20006.

      This prospectus is part of a registration statement that we filed with the
SEC. You should rely only on the information  provided in this prospectus or any
supplement.  We have not  authorized  anyone else to provide you with  different
information.  You should not assume that the  information in this  prospectus or
any  supplement  is  accurate as of any date other than the date on the front of
that document.

                                       41


                INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

      The  following  documents,  which we have filed with the  Commission,  are
incorporated by reference in this Prospectus:

      o     our Annual  Report on Form 10-K for the fiscal  year ended  December
            31, 2003;

      o     our proxy statement for the 2004 Annual Meeting of Shareholders;

      o     our quarterly  reports on Form 10-Q for the quarters ended September
            30, 2004, June 30, 2004 and March 31, 2004;

      o     our Forms 8-K filed with the Commission; and

      o     the  description of our common stock  contained in our  Registration
            Statement on Form 10.

      All documents we file in the future  pursuant to Section 13(a),  13(c), 14
or 15(d) of the Exchange Act after the date of this  Prospectus and prior to the
termination  of the  offering  are also  incorporated  by  reference  and are an
important  part  of this  Prospectus.  Any  statement  contained  in a  document
incorporated by reference in this Prospectus shall be modified or superseded for
purposes of this  Prospectus  to the extent that a statement  contained  in this
Prospectus or in any other  subsequently filed document which is incorporated by
reference modifies or supersedes such statement.

      We will provide  without charge to each person to whom this  Prospectus is
delivered, upon request, a copy of any or all documents that have been or may be
incorporated  by  reference  in the  Prospectus  (other  than  exhibits  to such
documents  which  are not  specifically  incorporated  by  reference  into  such
documents).  Your requests should be directed to our Chief Financial  Officer at
our principal executive offices at:

                            9449 Science Center Drive
                            New Hope, Minnesota 55428
                         Telephone Number (763) 504-3000

                INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS

      All  statements   contained  in  this  Prospectus  and  the  documents  we
incorporate  be  reference  that  are not  statements  of  historical  fact  are
"forward-looking  statements".  Sometimes  these  statements  contain words like
"believe", "belief", "plan", "anticipate",  "expect", "estimate", "may", "will",
or  similar  terms.   Forward-looking   statements   involve  known  or  unknown
uncertainties and other factors that could cause actual results to be materially
different  from  historical  results or from any  future  results  expressed  or
implied by the forward-looking statements. The "Risk Factors" section summarizes
certain of the  material  risks and  uncertainties  that could  cause our actual
results, performance or achievements to differ materially from what we have said
in this  Prospectus  and the documents we  incorporate  by  reference.  The Risk
Factors   apply  to  all  of  our   forward-looking   statements.   Given  these
uncertainties,  you should not place  undue  reliance  on these  forward-looking
statements,  which  speak  only as of the date of this  Prospectus.  We will not
revise these forward-looking statements to reflect events or circumstances after
the date of this  Prospectus  or to  reflect  the  occurrence  of  unanticipated
events.

                                       42


                         INDEX TO FINANCIAL STATEMENTS.

MULTIBAND CORPORATION AND SUBSIDIARIES - CONSOLIDATED BALANCE SHEETS AS OF
SEPTEMBER 30, 2004, DECEMBER 31, 2003 AND 2002 AND CONSOLIDATED STATEMENTS OF
OPERATIONS, CONSOLIDATED STOCKHOLDERS' EQUITY AND CONSOLIDATED CASH FLOWS FOR
THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001 AND FOR THE NINE MONTHS ENDED
SEPTEMBER, 2004 AND 2003.

DESCRIPTION                                                  PAGES
-----------                                                  -----

Report of Independent Registered Public Accounting Firm       F2
Consolidated Balance Sheets                                   F3
Consolidated Statements of Operations                         F4
Consolidated Statements of Stockholders' Equity               F5
Consolidated Statements of Cash Flows                         F9
Notes to Consolidated Financial Statements                    F10


                                      F-1


                          INDEPENDENT AUDITOR'S REPORT

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

We have  audited  the  accompanying  consolidated  balance  sheets of  Multiband
Corporation and subsidiaries  (fka Vicom,  Incorporated and  subsidiaries) as of
December  31,  2003  and  2002,  and  the  related  consolidated  statements  of
operations,  stockholders'  equity and cash flows for each of the three years in
the period ended December 31, 2003. These consolidated  financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Multiband   Corporation   and   subsidiaries   (fka  Vicom,   Incorporated   and
subsidiaries)  as of  December  31,  2003 and  2002,  and the  results  of their
operations  and their cash flows for each of the three years in the period ended
December  31,  2003,  in  conformity  with U.S.  generally  accepted  accounting
principles.

Minneapolis, Minnesota
February 16, 2004

                                      F-2





                     MULTIBAND CORPORATION AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                                     ASSETS

                                                                                                      NINE MONTHS ENDED
                                                                         YEARS ENDED DECEMBER           SEPTEMBER 30,
                                                                        2003              2002              2004
                                                                    ------------       ------------      ------------
                                                                                                          (UNAUDITED)
CURRENT ASSETS
                                                                                                
    Cash and cash equivalents                                       $  2,945,960       $    540,375      $    465,885
    Certificate of deposit                                               250,000                 --           250,000
    Accounts receivable, net                                           1,658,114          1,948,004         3,752,302
    Inventories, net                                                   1,973,817          1,463,658         1,363,698
    Other current assets                                                  96,550            226,774            78,563
                                                                    ------------       ------------      ------------
        Total Current Assets                                           6,924,441          4,178,811         5,910,448
                                                                    ------------       ------------      ------------

PROPERTY AND EQUIPMENT, NET                                            3,589,704          3,248,973         4,269,736
                                                                    ------------       ------------      ------------
OTHER ASSETS

    Goodwill                                                           2,748,879          2,748,879         2,233,366
    Intangible assets, net                                                    --                 --        17,270,536
    Other assets                                                         639,861            170,653           330,032
                                                                    ------------       ------------      ------------
        Total Other Assets                                             3,388,740          2,919,532        19,833,934
                                                                    ------------       ------------      ------------

           TOTAL ASSETS                                             $ 13,902,885       $ 10,347,316      $ 30,014,118
                                                                    ============       ============      ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

    Checks issued in excess of cash in bank                         $    147,398                 --      $     32,969
    Wholesale line of credit                                             976,314          1,290,383         1,069,359
    Short term debt                                                           --                 --         5,849,906
    Current portion of long-term debt                                    998,813            321,589           637,254
    Current portion of note payable - stockholder                         81,554                 --            94,794
    Current portion of capital lease obligations                          54,939             59,570           102,362
    Accounts payable                                                   1,771,699          1,735,931         2,575,675
    Accrued liabilities                                                1,459,705            714,479         3,700,035
    Deferred service obligations and revenue                             315,227            309,729           413,360
                                                                    ------------       ------------      ------------
        Total Current Liabilities                                      5,805,649          4,431,681        14,475,714

LONG-TERM LIABILITIES

    Long-term debt, net                                                2,087,156          3,114,006         2,519,530
    Other long term debt                                                      --                 --           222,700
    Note payable - stockholder, net of current portion                    32,837                 --                --
    Capital lease obligations, net of current portion                    142,898            159,344           636,499
                                                                    ------------       ------------      ------------
        Total Liabilities                                              8,068,540          7,705,031        17,854,443
                                                                    ------------       ------------      ------------

MINORITY INTEREST IN SUBSIDIARY                                           26,634                 --                --
                                                                    ------------       ------------      ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY

    Cumulative convertible preferred stock, no par value:
        8% Class A (27,931, 27,831, and 27,931 shares issued
         and outstanding, $293,276, $292,226 and $293,276
         liquidation preference)                                         419,752            418,252           419,752
        10% Class B (8,700, 6,200 and 8,700 shares issued and
         outstanding, $91,350, $65,100 and $91,350 liquidation
         preference)                                                      62,000             62,000            62,000
        10% Class C (125,400, 131,510 and 125,400 shares
         issued and outstanding, $1,254,000, $1,315,100 and
         $1,254,000 liquidation preference)                            1,611,105          1,699,407         1,611,105
        15% Class E (77,650, 70,000 and 77,650 shares issued
         and outstanding, $776,500, $700,000 and $776,500
         liquidation preference)                                         438,964            395,778                --
        10% Class F (200,000 and 0 shares issued and
         outstanding, $2,000,000 liquidation preference)                      --                 --         2,000,000
        10$ Class G (7,500 and 0 shares issued and
         outstanding, $75,000 liquidation preference)                         --                 --            70,672
    Common stock, no par value (19,036,805, 13,110,477and
        19,450,294 shares issued; 19,019,786, 13,065,410 and
        19,440,150 shares outstanding)                                 7,726,505          4,465,832        16,678,538
    Stock subscriptions receivable                                     (418,085)          (633,195)         (368,243)
    Options and warrants                                              30,514,872         26,632,299        31,379,338
    Unamortized compensation                                           (217,210)          (682,089)           (1,724)

    Accumulated deficit                                             (34,330,192)       (29,715,999)      (39,691,763)
                                                                    ------------       ------------      ------------

           Total Stockholders' Equity                                  5,807,711          2,642,285        12,159,675
                                                                    ------------       ------------      ------------

               TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY           $ 13,902,885       $ 10,347,316      $ 30,014,118
                                                                    ============       ============      ============



          See accompanying notes to consolidated financial statements.


                                      F-3





                      CONSOLIDATED STATEMENTS OF OPERATIONS

         Years Ended December 31, 2003, 2002 and 2001, Nine Months Ended
                    September 30, 2004 and 2003 (unaudited)

                                                                                                 NINE MONTHS ENDED
                                                         YEARS ENDED DECEMBER 31                     SEPTEMBER 30
                                              --------------------------------------------    ----------------------------
                                                  2003            2002            2001           2004            2003
                                              ------------    ------------    ------------    ------------    ------------
                                                                                              (UNAUDITED)      (UNAUDITED)
                                                                                               
REVENUES                                      $ 22,640,421    $ 24,540,969    $ 32,260,777    $ 22,734,594    $ 17,843,508
                                              ============    ============    ============    ============    ============

COST AND EXPENSES

    Cost of products and services               15,952,019      18,036,750      25,295,186      15,580,482      12,718,951
    Selling, general and administrative         10,184,709       9,337,292      10,962,739      10,488,032       7,147,965
       Impairment of goodwill                           --              --              --         527,879              --
                                              ============    ============    ============    ============    ============

        Total costs and expenses                26,136,728      27,374,042      36,257,925      26,596,393      19,866,916
                                              ------------    ------------    ------------    ------------    ------------


LOSS FROM OPERATIONS                            (3,496,307)     (2,833,073)     (3,997,148)     (3,861,799)     (2,023,408)
                                              ------------    ------------    ------------    ------------    ------------


OTHER INCOME (EXPENSE)

    Interest expense                              (897,704)     (1,604,512)     (1,446,868)       (949,129)       (643,368)
    Other income                                    (4,359)           (474)        118,464          (9,003)        (56,777)
                                                                                              ------------    ------------
        Total Other Expense                       (902,063)     (1,604,986)     (1,328,404)       (958,132)       (705,145)
                                              ------------    ------------    ------------    ------------    ------------

LOSS BEFORE MINORITY INTEREST IN SUBSIDIARY     (4,398,370)     (4,438,059)     (5,325,552)     (4,819,931)     (2,728,553)


    Minority interest in subsidiary                 33,366              --              --              --          (4,853)

NET LOSS                                        (4,365,004)     (4,438,059)     (5,325,552)     (4,819,931)     (2,733,406)

    -Preferred stock dividends                     248,689         153,578         432,669         541,640         135,353
                                              ------------    ------------    ------------    ------------    ------------

LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS      $ (4,613,693)   $  4,591,637)   $ (5,758,221)   $ (5,361,571)   $ (2,868,759)
                                              ============    ============    ============    ============    ============


LOSS PER COMMON SHARE- BASIC AND DILUTED      $      (0.29)   $      (0.39)   $      (0.66)   $      (0.21)   $     (0.18)
                                              ============    ============    ============    ============    ============

WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - BASIC AND DILUTED                 16,112,231      11,735,095       8,762,814      22,494,250      15,168,069
                                              ============    ============    ============    ============    ============



          See accompanying notes to consolidated financial statements.

                                      F-4





                     MULTIBAND CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                  Years Ended December 31, 2003, 2002, and 2001

                                                                Cumulative Convertible Preferred Stock

                                                      8% Class A             10% Class B            10% Class C
                                                ---------------------- ---------------------- ----------------------
                                                  Shares     Amount     Shares      Amount     Shares       Amount
                                                ---------- ---------- ----------  ---------- ----------  -----------
                                                                                       

BALANCES, December 31, 2000                             -  $       -      22,836  $  218,869    150,810  $ 1,951,003
 Stock issued:
    Cash                                            32,050    320,500         -           -          -             -
    Stock subscriptions receivable                      -          -          -           -          -             -
    Acquisition of assets                           10,640    106,400         -           -          -             -
    Purchase of intangible asset                        -          -          -           -          -             -
    Guarantee of debt financing                         -          -          -           -          -             -
    Conversion of accounts payable                   3,500     35,000         -           -          -             -
    Conversion of accrued liabilities                9,631     96,306         -           -          -             -
    Conversion of notes payable                      5,804     58,044         -           -          -             -
    Conversion of preferred stock                 (31,000)  (310,000)   (13,150)   (131,500)    (7,800)     (78,000)
    Conversion of dividends payable                  6,030     60,300         -           -          -             -
 Redemption of preferred stock                     (7,783)   (77,830)      (986)       (369)    (3,500)     (35,000)
 Discount on preferred stock related to                 -     145,147         -           -          -      (37,556)
  warrants

 Interest receivable on stock subscription              -          -          -           -          -             -
  receivable

 Warrants issued:
    Preferred stock                                     -          -          -           -          -             -
    Common stock                                        -          -          -           -          -             -
    Debt                                                -          -          -           -          -             -
 Deferred compensation expense related to
  stock options issued below fair market value          -          -          -           -          -             -
 Deferred compensation expense                          -          -          -           -          -             -
 Restricted stock:
    Issued                                              -          -          -           -          -             -
    Forfeited                                           -          -          -           -          -             -
    Amortization expense                                -          -          -           -          -             -
 Repricing of warrants                                  -          -          -           -          -             -
 Embedded value with Pyramid Trading warrants           -          -          -           -          -             -
 Preferred stock dividends                              -          -          -           -          -             -
 Net loss                                               -          -          -           -          -             -
                                                ---------- ---------- ----------  ---------- ----------  -----------

BALANCES, December 31, 2001                         28,872    433,867      8,700      87,000    139,510    1,800,447
 Stock issued:
    Cash                                                -          -          -           -          -             -
    Reduction of stock subscriptions                    -          -          -           -          -             -
       receivable for fees related to equity
       transactions

    Acquisition of assets                            1,859     18,590         -           -          -             -
    Guarantee of debt financing                         -          -          -           -          -             -

    Services rendered                                   -          -          -           -          -             -
    Conversion of accounts payable                      -          -          -           -          -             -
    Conversion of notes payable and accrued
      interest                                          -          -          -           -          -             -
    Conversion of accrued interest                      -          -          -           -          -             -
    Conversion of preferred stock                       -          -     (2,500)    (25,000)    (2,500)     (25,000)
 Redemption of preferred stock                     (2,900)   (29,000)         -           -     (5,500)     (55,000)
 Discount on preferred stock related to
   warrants issued                                      -     (5,205)         -           -          -      (21,040)
 Interest receivable on stock subscription              -          -          -           -          -             -
 receivable
 Warrants issued:

    Preferred stock                                     -          -          -           -          -             -
    Common stock                                        -          -          -           -          -             -
    Debt                                                -          -          -           -          -             -
 Deferred compensation expense related to
  stock options issued below fair market value          -          -          -           -          -             -
 Deferred compensation expense                          -          -          -           -          -             -
 Restricted stock:
    Issued and outstanding                              -          -          -           -          -             -
    Forfeited                                           -          -          -           -          -             -
    Amortization expense                                -          -          -           -          -             -
 Embedded value with Pyramid Trading warrants           -          -          -           -          -             -
 Preferred stock dividends                              -          -          -           -          -             -
 Net loss                                               -          -          -           -          -             -
                                                ---------- ---------- ----------  ---------- ----------  -----------

BALANCES, December 31, 2002                         27,831    418,252      6,200      62,000    131,510    1,699,407
 Stock issued:
    Cash                                               100      1,000      2,500      25,000         -             -
    Exercise of warrants                                -          -          -           -          -             -
    Cashless exercise of warrants                       -          -          -           -          -             -
    Exercise of stock options                           -          -          -           -          -             -
    Reduction of stock subscriptions                    -          -          -           -          -             -
       receivable for fees related to equity
       transactions

    Acquisition of assets                               -          -          -           -          -             -
    Conversion of accounts payable                      -          -          -           -       7,200       72,000
    Conversion of notes payable                         -          -          -           -          -             -
    Conversion of accrued interest                      -          -          -           -          -             -
    Conversion of preferred stock                       -          -          -           -     (4,000)     (40,000)
    Conversion of dividends payable                     -          -          -           -          -             -
 Redemption of preferred stock                          -          -          -           -     (9,310)     (93,100)
 Intrinsic value of convertible feature                 -         500         -           -          -      (27,202)
 Discount on preferred stock related to
   warrants issued                                      -          -          -     (25,000)         -             -
 Stock subscriptions receivable:

    Cash payments                                       -          -          -           -          -             -
    Increase reserve                                    -          -          -           -          -             -
    Interest collected                                  -          -          -           -          -             -
 Warrants issued:

    Preferred stock                                     -          -          -           -          -             -
    Common stock                                        -          -          -           -          -             -

    Debt                                                -          -          -           -          -             -
    Services rendered                                   -          -          -           -          -             -
 Deferred compensation expense related to
   stock options issued below fair market value         -          -          -           -          -             -
 Deferred compensation expense                          -          -          -           -          -             -
 Restricted stock:
    Forfeited                                           -          -          -           -          -             -
    Amortization expense                                -          -          -           -          -             -
 Embedded value with Laurus warrants                    -          -          -           -          -             -
 Preferred stock dividends                              -          -          -           -          -             -
 Net loss                                               -          -          -           -          -             -
                                                ---------- ---------- ----------  ---------- ----------  -----------

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


          See accompanying notes to consolidated financial statements.

                                       F-5





                                                   Cumulative Convertible Preferred Stock

                                                      14% Class D            15% Class E
                                                ---------------------  --------------------
                                                  Shares     Amount      Shares     Amount
                                                ---------- ----------  ----------  --------
                                                                         

BALANCES, December 31, 2000                         72,500 $  802,813          -  $       -
 Stock issued:
    Cash                                                -           -          -          -
    Stock subscriptions receivable                      -           -          -          -
    Acquisition of assets                               -           -          -          -
    Purchase of intangible asset                        -           -          -          -
    Guarantee of debt financing                         -           -          -          -
    Conversion of accounts payable                      -           -          -          -
    Conversion of accrued liabilities                   -           -          -          -
    Conversion of notes payable                     10,000     100,000         -          -
    Conversion of preferred stock                       -           -          -          -
    Conversion of dividends payable                     -           -          -          -
 Redemption of preferred stock                    (42,500)   (425,000)         -          -
 Discount on preferred stock related to                 -     (60,313)         -          -
  warrants

 Interest receivable on stock subscription              -           -          -          -
  receivable

 Warrants issued:                                                              -          -
    Preferred stock                                     -           -          -          -
    Common stock                                        -           -          -          -
    Debt                                                -           -          -          -
 Deferred compensation expense related to
  stock options issued below fair market valu           -           -          -          -
 Deferred compensation expense                          -           -          -          -
 Restricted stock:                                                             -          -
    Issued                                              -           -          -          -
    Forfeited                                           -           -          -          -
    Amortization expense                                -           -          -          -
 Repricing of warrants                                  -           -          -          -
 Embedded value with Pyramid Trading warrants           -           -          -          -
 Preferred stock dividends                              -           -          -          -
 Net loss                                               -           -          -          -
                                                ----------  ---------- ---------- ---------

BALANCES, December 31, 2001                         40,000     417,500         -          -
 Stock issued:
    Cash                                                -           -      10,000    100,000
    Reduction of stock subscriptions                    -           -          -          -
       receivable for fees related to equity
       transactions

    Acquisition of assets                               -           -          -          -
    Guarantee of debt financing                         -           -          -          -

    Services rendered                                   -           -          -          -
    Conversion of accounts payable                      -           -          -          -
    Conversion of notes payable and accrued
      interest                                    (30,000)   (300,000)     60,000    600,000
    Conversion of accrued interest                      -           -          -          -
    Conversion of preferred stock                 (10,000)   (100,000)         -          -
 Redemption of preferred stock                          -           -          -          -
 Discount on preferred stock related to
   warrants issued                                      -     (17,500)         -   (304,222)
 Interest receivable on stock subscription              -           -          -          -
 receivable
 Warrants issued:

    Preferred stock                                     -           -          -          -
    Common stock                                        -           -          -          -
    Debt                                                -           -          -          -
 Deferred compensation expense related to
  stock options issued below fair market valu           -           -          -          -
 Deferred compensation expense                          -           -          -          -
 Restricted stock:
    Issued and outstanding                              -           -          -          -
    Forfeited                                           -           -          -          -
    Amortization expense                                -           -          -          -
 Embedded value with Pyramid Trading warrants           -           -          -          -
 Preferred stock dividends                              -           -          -          -
 Net loss                                               -           -          -          -
                                                ----------  ---------- ---------- ---------

BALANCES, December 31, 2002                             -           -      70,000    395,778
 Stock issued:
    Cash                                                -           -          -          -
    Exercise of warrants                                -           -          -          -
    Cashless exercise of warrants                       -           -          -          -
    Exercise of stock options                           -           -          -          -
    Reduction of stock subscriptions                    -           -          -          -
       receivable for fees related to equity
       transactions

    Acquisition of assets                               -           -       7,650     76,500
    Conversion of accounts payable                      -           -          -          -
    Conversion of notes payable                         -           -          -          -
    Conversion of accrued interest                      -           -          -          -
    Conversion of preferred stock                       -           -          -          -
    Conversion of dividends payable                     -           -          -          -
 Redemption of preferred stock                          -           -          -          -
 Intrinsic value of convertible feature                 -           -          -          -
 Discount on preferred stock related to
   warrants issued                                      -           -          -    (33,314)
 Stock subscriptions receivable:

    Cash payments                                       -           -          -          -
    Increase reserve                                    -           -          -          -
    Interest collected                                  -           -          -          -
 Warrants issued:

    Preferred stock                                     -           -          -          -
    Common stock                                        -           -          -          -

    Debt                                                -           -          -          -
    Services rendered                                   -           -          -          -
 Deferred compensation expense related to
   stock options issued below fair market val           -           -          -          -
 Deferred compensation expense                          -           -          -          -
 Restricted stock:
    Forfeited                                           -           -          -          -
    Amortization expense                                -           -          -          -
 Embedded value with Laurus warrants                    -           -          -          -
 Preferred stock dividends                              -           -          -          -
 Net loss                                               -           -          -          -
                                                ----------  ---------- ---------- ---------

BALANCES, December 31, 2003                             -   $       -      77,650 $  438,964
                                                ==========  ========== ========== ==========


          See accompanying notes to consolidated financial statements.

                                      F-6





                     MULTIBAND CORPORATION AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                  Years Ended December 31, 2003, 2002, and 2001

                                                                                       Stock        Options
                                                             Common Stock          Subscriptions      and
                                                         Shares         Amount      Receivable     Warrants
                                                     -------------- ------------- ------------- --------------
                                                                                   
BALANCES, December 31, 2000                              8,137,181  $   1,340,074 $          -  $ 14,347,833
 Stock issued:
   Cash                                                  1,092,953        421,566           -             -
   Stock subscriptions receivable                          800,000        610,000    (610,000)            -
   Acquisition of assets                                    87,000        261,000           -             -
   Purchase of intangible assets                            50,000         83,750           -             -
   Guarantee of debt financing                             100,000        120,000           -             -
   Conversion of accounts payable                                -             -            -             -
   Conversion of accrued liabilities                        10,000          9,007           -             -
   Conversion of notes payable                              20,000         50,000           -             -
   Conversion of preferred stock                           382,027        528,742           -             -
   Conversion of dividends payable                               -             -            -             -
Redemption of preferred stock                                    -             -            -             -
Discount on preferred stock related to warrants                  -             -            -             -
Interest receivable on stock subscription receivable             -             -      (21,619)            -
Warrants issued:

   Preferred stock                                               -             -            -        87,403
   Common stock                                                  -             -            -       544,683
   Debt                                                          -             -            -     1,382,126
Deferred compensation expense related to stock
options issued below fair market value                                                            1,244,250
Deferred compensation expense                                    -             -            -             -
Restricted stock
   Issued                                                   83,000        308,145           -             -
   Forfeited                                              (82,711)      (289,180)           -             -
   Amortization expense                                          -             -            -             -
Repricing of warrants                                            -             -            -     6,919,692
Embedded value with Pyramid Trading warrants                     -             -            -       431,925
Preferred stock dividends                                        -             -            -             -
Net loss                                                         -             -            -             -
                                                     -------------- ------------- ------------ -------------
BALANCES, December 31, 2001                             10,679,450      3,443,104    (631,619)   24,957,912
 Stock issued:

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

BALANCES, December 31, 2002                            13,110,477      4,465,832     (633,195)     26,632,299
 Stock issued:
    Cash                                                4,477,279      1,947,197            -               -
    Exercise of warrants                                  258,790        262,030            -               -
    Cashless exercise of warrants                         141,529             -             -               -
    Exercise of stock options                               3,000          3,750            -               -
    Reduction of stock subscriptions receivable                 -       (36,977)        36,977              -
       for fees related to equity transactions
    Acquisition of assets                                       -             -             -               -
    Conversion of accounts payable                         85,000        120,690            -               -
    Conversion of notes payable                           654,202        762,000            -               -
    Conversion of accrued interest                         63,539         66,172            -               -
    Conversion of preferred stock                          66,666         40,000            -               -
    Conversion of dividends payable                       187,164        113,209            -               -
 Redemption of preferred stock                                  -             -             -               -
 Intrinsic value of convertible feature                         -             -             -               -
 Discount on preferred stock related to warrants                -             -             -               -
    issued

 Stock subscriptions receivable:

    Cash payments                                               -             -        105,806              -
    Increase reserve                                            -             -         71,000              -
    Interest collected                                          -             -          1,327              -
 Warrants issued:

    Preferred stock                                             -             -             -          58,314
    Common stock                                                -             -             -       2,050,507
    Debt                                                        -             -             -         883,711
    Services rendered                                           -             -             -         321,920
 Deferred compensation expense related to stock
    options issued below fair market value                      -             -             -               -
 Deferred compensation expense                                  -             -             -               -
 Restricted stock:

    Forfeited                                            (10,841)       (17,398)            -               -
    Amortization expense                                        -             -             -               -
 Embedded value with Laurus warrants                            -             -             -         568,121
 Preferred stock dividends                                      -             -             -               -
 Net loss                                                       -             -             -               -
                                                    -------------- -------------  ------------ --------------

BALANCES, December 31, 2003                            19,036,805  $   7,726,505  $  (418,085) $   30,514,872
                                                    ============== =============  ============ ==============


          See accompanying notes to consolidated financial statements.

                                       F-7





                                                         Unamortized    Accumulated
                                                         Compensation     Deficit        Total
                                                       --------------- ------------- ----------
                                                                           
BALANCES, December 31, 2000                            $     (278,138) $(12,506,102) $ 5,876,352
 Stock issued:
   Cash                                                            -             -       742,066
   Stock subscriptions receivable                                  -             -             -
   Acquisition of assets                                           -             -       367,400
   Purchase of intangible assets                                   -             -        83,750
   Guarantee of debt financing                                     -             -       120,000
   Conversion of accounts payable                                  -             -        35,000
   Conversion of accrued liabilities                               -             -       105,313
   Conversion of notes payable                                     -             -       208,044
   Conversion of preferred stock                                   -             -         9,242
   Conversion of dividends payable                                 -             -        60,300
Redemption of preferred stock                                      -             -     (538,199)
Discount on preferred stock related to warrants                    -         68,948      116,226
Interest receivable on stock subscription receivable               -             -      (21,619)
Warrants issued:

   Preferred stock                                                 -             -        87,403
   Common stock                                                    -             -       544,683
   Debt                                                            -             -     1,382,126
Deferred compensation expense related to stock
options issued below fair market value                   (1,244,250)             -             -
Deferred compensation expense                                239,461             -       239,461
Restricted stock
   Issued                                                  (308,145)             -             -
   Forfeited                                                 289,180             -             -
   Amortization expense                                       92,749             -        92,749
Repricing of warrants                                              -    (6,919,692)            -
Embedded value with Pyramid Trading warrants                       -             -       431,925
Preferred stock dividends                                          -      (432,669)    (432,669)
Net loss                                                           -    (5,325,552)  (5,325,552)
                                                      --------------- ------------- ------------
BALANCES, December 31, 2001                              (1,209,143)   (25,115,067)    4,184,001
 Stock issued:

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

BALANCES, December 31, 2002                               (682,089)   (29,715,999)      2,642,285
 Stock issued:
    Cash                                                          -             -       1,973,197
    Exercise of warrants                                          -             -         262,030
    Cashless exercise of warrants                                 -             -              -
    Exercise of stock options                                     -             -           3,750
    Reduction of stock subscriptions receivable                   -             -              -
       for fees related to equity transactions
    Acquisition of assets                                         -             -          76,500
    Conversion of accounts payable                                -             -         192,690
    Conversion of notes payable                                   -             -         762,000
    Conversion of accrued interest                                -             -          66,172
    Conversion of preferred stock                                 -             -              -
    Conversion of dividends payable                               -             -         113,209
 Redemption of preferred stock                                    -             -        (93,100)
 Intrinsic value of convertible feature                           -          (500)       (27,202)
 Discount on preferred stock related to warrants                  -             -        (58,314)
    issued

 Stock subscriptions receivable:

    Cash payments                                                 -             -         105,806
    Increase reserve                                              -             -          71,000
    Interest collected                                            -             -           1,327
 Warrants issued:

    Preferred stock                                               -             -          58,314
    Common stock                                                  -             -       2,050,507
    Debt                                                          -             -         883,711
    Services rendered                                             -             -         321,920
 Deferred compensation expense related to stock
    options issued below fair market value                      367             -             367
 Deferred compensation expense                               47,114             -          47,114
 Restricted stock:

    Forfeited                                                17,398             -              -
    Amortization expense                                    400,000             -         400,000
 Embedded value with Laurus warrants                              -             -         568,121
 Preferred stock dividends                                        -      (248,689)      (248,689)
 Net loss                                                         -    (4,365,004)    (4,365,004)
                                                     --------------- -------------  -------------

BALANCES, December 31, 2003                          $    (217,210)  $(34,330,192)  $   5,807,711
                                                     =============== =============  =============


          See accompanying notes to consolidated financial statements.

                                       F-8









                     MULTIBAND CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                                           NINE MONTHS ENDED
                                                                    YEARS ENDED DECEMBER 31,                  SEPTEMBER 30,
                                                               2003           2002          2001           2004           2003
                                                           -----------    -----------    -----------    -----------    -----------
                                                                                                        
CASH FLOWS FROM OPERATING ACTIVITIES

    Net loss                                               $(4,365,004)   $(4,438,059)   $(5,325,552)   $(4,819,931)   $(2,733,406)
    Adjustments to reconcile net loss to
    cash flows from operating activities:
        Depreciation and amortization                          996,379      1,115,457      1,410,764      2,344,853        709,404
        Amortization of deferred compensation                  447,481        482,999        332,210        212,935        340,572
        Amortization of original issue discount                405,248      1,103,314        797,169        541,873        285,345
        Write off of notes receivable and investment            19,069         60,000              0              0              0
        Reserve for stock subscriptions and interest                 0              0
         receivable                                             71,000              0              0
        Impairment reserve on property and equipment                --        119,480              0              0              0
        Impairment of goodwill                                       0              0              0        527,879              0
        Common stock issued for services                            --         27,700              0        291,220        321,920
        Loss on sale of property and equipment                  79,394         31,412            846         26,217         76,269
        Interest receivable on stock subscription
         receivable                                              1,327        (49,989)       (21,619)      (273,900)        13,452
        Warrants issued for services                           321,920              0         87,403              0              0
        Warrants issued with debt conversion                         0        183,903              0              0              0
        Discount on preferred stock related to warrants              0              0        (33,178)             0              0
        Minority interest in subsidiary                        (33,366)             0              0              0          4,853
        Changes in operating assets and liabilities:

           Accounts receivable, net                            289,890        576,509      3,087,313     (2,134,902)      (329,189)
           Inventories, net                                   (509,762)       182,783        705,050        610,119       (411,092)
           Other current assets                                 70,264       (205,483)        47,031         17,987         (6,026)

           Other assets                                       (143,101)        43,210              0        (87,135)       (21,531)
           Wholesale line of credit                           (314,069)       (34,424)      (708,533)        93,045         33,384
           Accounts payable and accrued liabilities            122,403         38,344       (978,479)       620,817       (388,208
           Deferred service obligations and revenue            (39,321)      (106,877)        97,465         98,133         26,246
                                                           -----------    -----------    -----------    -----------    -----------
               Net Cash Flows from Operating Activities     (2,580,248)      (869,721)      (502,110)    (1,930,790)    (2,078,007)
                                                           -----------    -----------    -----------    -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES

    Proceeds from sale of property and equipment                15,492      1,239,313         60,019            649          6,145
    Purchases of property and equipment                       (526,936)    (1,275,434)    (1,884,945)      (483,810)      (356,291)
    Purchase of Satellite Broadcasting Corporation                   0              0              0       (187,424)             0
    Purchase of Minnesota Digital Universe Inc.                      0              0              0     (1,100,000)             0
    Purchase of Rainbow Satellite Group LLC                          0              0              0     (1,000,000)             0
    Purchase of 21st Century Satellite Communications Inc.           0              0              0       (250,000)             0
    Payments received on notes receivable                           --              0         59,084          3,172          5,806
    Payments for investment in joint venture                   (64,878)             0              0              0        (64,878)
    Purchase of certificate of deposit                        (250,000)             0              0              0              0
                                                           -----------    -----------    -----------    -----------    -----------
        Net Cash Flows from Investing Activities              (826,322)       (36,121)    (1,765,842)    (3,017,413)      (409,218)
                                                           -----------    -----------    -----------    -----------    -----------


CASH FLOWS FROM FINANCING ACTIVITIES
    Increase in checks issued in excess of cash in bank        147,398             --             --        (74,068)             0
    Proceeds from long-term debt and warrants issued
      with long-term debt                                    1,659,726      1,172,064      1,919,650        750,021        133,726
    Proceeds from note payable - stockholder                   124,000             --             --              0              0
    Payments received on stock subscriptions receivable        105,806          6,786             --              0              0
    Payments on long-term debt                                (200,768)      (131,605)      (461,808)    (1,215,788)      (183,936)
    Payments on note payable - stockholder                      (9,609)            --             --        (19,598)             0
    Payments on capital lease obligations                      (75,301)      (937,828)      (315,770)       (63,066)       (69,252)
    Proceeds from issuance of stock and warrants             4,023,704        949,533      1,270,612      2,888,836      3,654,388
    Redemption of preferred stock                              (93,100)       (84,000)      (538,199)             0         (2,100)
    Redemption of common stock                                       0              0              0        (62,975)             0
    Preferred dividends                                       (135,481)      (153,578)      (143,167)      (125,513)       (51,263)
    Exercise of stock options                                    3,750             --             --              0              0
    Exercise of warrants                                       262,030             --             --        390,279        312,030
                                                           -----------    -----------    -----------    -----------    -----------
        Net Cash Flows from Financing Activities             5,812,155        821,372      1,731,318     (2,468,128)     3,793,593
                                                           -----------    -----------    -----------    -----------    -----------
             NET CHANGE IN CASH AND CASH EQUIVALENTS         2,405,585        (84,470)      (536,634)    (2,480,075)     1,306,368

 CASH AND CASH EQUIVALENTS - Beginning of Year                 540,375        624,845      1,161,479      2,945,960        540,375
                                                           -----------    -----------    -----------    -----------    -----------

     CASH AND CASH EQUIVALENTS - END OF YEAR               $ 2,945,960    $   540,375    $   624,845    $   465,885    $ 1,846,743
                                                           ===========    ===========    ===========    ===========    ===========



                                      F-9


                     MULTIBAND CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002 and 2001

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


      Nature of Business

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

The accompanying  consolidated  financial statements have been prepared assuming
the Company will continue as a going concern that  contemplates  the realization
of assets and satisfaction of liabilities in the normal course of business.  For
the years ended  December 31, 2003,  2002,  and 2001,  the Company  incurred net
losses of $4,365,004,  $4,438,059 and $5,325,552,  respectively. At December 31,
2003,  the Company had an  accumulated  deficit of  $34,330,192.  The  Company's
ability to continue as a going concern is dependent on it  ultimately  achieving
profitability  and/or raising additional  capital.  Management intends to obtain
additional  debt or equity capital to meet all of its existing cash  obligations
and fund commitments on planned  Multiband  projects;  however,  there can be no
assurance that the sources will be available or available on terms  favorable to
the Company.  Management anticipates that the impact of the actions listed below
will generate sufficient cash flows to pay current  liabilities,  long-term debt
and capital lease obligations and fund the Company's future operations:

1.    Continued   reduction  of  operating  expenses  by  controlling   payroll,
      professional fees and other general and administrative expenses.
2.    Solicit  additional  equity  investment  in the Company by either  issuing
      preferred or common stock.
3.    Continue   to   market   Multiband   services   and   acquire   additional
      multi-dwelling unit customers.
4.    Control  capital  expenditures  by  contracting   Multiband  services  and
      equipment through a landlord-owned equipment program.
5.    Establish market for wireless internet services.

      Principles of Consolidation

The  consolidated   financial  statements  include  the  accounts  of  Multiband
Corporation   (Multiband)   and  its  wholly   owned   subsidiaries,   Corporate
Technologies,  USA, Inc. (CTU), and Multiband,  Inc.  (Multiband) which provides
voice, data and video services to residential  multi-dwelling units. In February
2003,  the Company formed a 50% owned  subsidiary,  Multiband USA, Inc. (MB USA)
with Pace  Electronics,  Inc. (PACE) a video  wholesaler,  and provides the same
services as Multiband). As part of the subsidiary agreement, the Company has the
right to elect two of the three board of  directors  and, at its sole option and
discretion,  shall  have  the  right,  but not the  obligation  to  convert  one
Multiband  common  share for every ten  shares of  Multiband  USA issued to PACE
(Notes  2 and  17).  Based  on the  Company's  control  of the  subsidiary,  the
operating  results  have  been   consolidated.   All  significant   intercompany
transactions and balances have been eliminated in consolidation.

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

      Revenues and Cost Recognition

The Company earns revenues from five sources:  1) Video and computer  technology
products  which  are  sold  but  not  installed,   2)  Voice,   video  and  data
communication products which are sold and installed, 3) Service revenues related
to communication products which are sold and both installed and not installed 4)
Multiband user charges to multiple dwelling units, and 5) MB USA user charges to
timeshares.


                                      F-10


                     MULTIBAND CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002 and 2001

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

Customers  contract  for both the purchase  and  installation  of voice and data
networking  technology  products and certain video technologies  products on one
sales   agreement,   as   installation  of  the  product  is  essential  to  the
functionality  of the  product.  Revenues are  recognized  when the products are
delivered  and  installed  and the  customer  has accepted the terms and has the
ability to fulfill the terms.

Service revenues related to technology products including  consulting,  training
and support are  recognized  when the services are  provided.  Service  revenues
accounted for less than 10% of total  revenues for the years ended  December 31,
2003, 2002 and 2001. The Company, if the customer elects,  enters into equipment
maintenance  agreements  for  products  sold  once the  original  manufacturer's
warranty has expired.  Revenues from all equipment  maintenance  agreements  are
recognized on a straight-line  basis over the terms of each contract.  Costs for
services are expensed as incurred.

Multiband  and MB USA user charges are  recognized as revenues in the period the
related services are provided.

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

      Cash and Cash Equivalents

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

      Certificate of Deposit

The Company has a certificate of deposit which matures in October 2004.

      Accounts Receivable

The Company reviews customers' credit history before extending  unsecured credit
and  establishes  an allowance  for  uncollectible  accounts  based upon factors
surrounding the credit risk of specific customers and other information.  Credit
risk on accounts  receivable  is  minimized as a result of the large and diverse
nature  of  the  Company's  customer  base.  Invoices  are  due  30  days  after
presentation.  Accounts  receivable  over 30 days are  considered  past due. The
Company does not accrue  interest on past due accounts  receivable.  Receivables
are written off only after all collection  attempts have failed and are based on
individual  credit  evaluation  and  specific  circumstances  of  the  customer.
Accounts receivable are shown net of an allowance for uncollectible  accounts of
$223,000  and  $236,000 at December  31, 2003 and 2002,  respectively.  Accounts
receivable  over 90 days were  $433,000  and  $331,000 at December  31, 2003 and
2002, respectively.


                                      F-11


                     MULTIBAND CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002 and 2001

      Inventories

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

      Property and Equipment

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

      Debt Issuance Costs

Debt  issuance  costs are amortized  over the life of the loan of  approximately
three years using the  straight-line  method,  which  approximates  the interest
method.

      Goodwilll and Other Intangible Assets

Goodwill  represents  the  excess of  acquisition  costs  over the fair value of
identifiable net assets acquired and was being amortized using the straight-line
method over ten years.  Accumulated  amortization  was  $782,278 at December 31,
2003 and 2002.

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

                                      F-12


                     MULTIBAND CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002 and 2001

As part of compliance  with this standard,  the Company  obtained an independent
appraisal  to assess the fair value of its business  units to determine  whether
goodwill carried on its books was impaired and the extent of such impairment, if
any for the years ended  December 31, 2003 and 2002. For the year ended December
31, 2003, the independent appraisal used the discounted future returns method to
measure the fair value of its business units rather than the income method which
was used for 2002.  The  method of  valuation  was  changed  due to the  Company
changing  its  business  model and  historical  results,  which are used for the
income  method,  would not  accurately  evaluate  the  value of future  economic
benefits.  Under the discounted  future returns  method,  future benefits over a
period of time are estimated and then discounted back to present value.  For the
year ended December 31, 2002, the  independent  appraisal used the income method
to measure the fair value of its business units. Under the income method,  value
is dependent on the present value of future economic benefits to be derived from
ownership.  Future net cash flows available for  distribution  are discounted at
market-based  rates of return to provide  indications of value.  The independent
appraiser  used a  discount  factor of 16.8%  and  18.35%  for the  years  ended
December 31, 2003 and 2002, respectively. Based upon this independent appraisal,
the Company  determined that its current goodwill  balances were not impaired as
of December 31, 2003 and 2002.

Components of intangible assets are as follows:

                                December 31, 2003       December 31, 2002
                            -----------------------   -----------------------
                               Gross                    Gross
                             Carrying   Accumulated    Carrying   Accumulated
                              Amount    Amortization    Amount    Amortization
                            ----------   ----------   ----------   ----------

Intangible assets
subject to amortization
     Domain name            $   83,750   $   39,083   $   83,750   $   22,333
     Access contracts           60,000       13,334           --           --
     Debt issuance costs       115,500        3,208           --           --
     Customer cable lists      300,000           --           --           --
                            ----------   ----------   ----------   ----------
         Total              $  559,250   $   55,625   $   83,750   $   22,333
                            ==========   ==========   ==========   ==========
Intangible assets
 not subject to
 amortization Goodwill      $3,531,157   $  782,278   $3,531,157   $  782,278
                            ==========   ==========   ==========   ==========

Amortization of intangible assets was $33,291,  $16,750 and $5,583 for the years
ended December 31, 2003,  2002 and 2001,  respectively.  Estimated  amortization
expense of intangible assets for the years ending December 31, 2004, 2005, 2006,
2007,  and  2008  is  $135,250,   $135,250,   $113,125,   $60,000  and  $60,000,
respectively. The Company's loss attributable to common stockholders,  excluding
goodwill  amortization  expense, for the years ended December 31, 2003, 2002 and
2001 would have been as follows had we adopted SFAS No. 142 on January 1, 2000:




                                                              2003            2002            2001
                                                         -------------    -------------    -----------
                                                                                  
Loss attributable to common stockholders - as reported   $  (4,613,693)   $  (4,591,637)   $(5,758,221)
SFAS No. 142 amortization adjustment                                --               --        345,600
Loss attributable to common stockholders - as adjusted      (4,613,693)      (4,591,637)    (5,412,621)
Basic and diluted net loss per share - as reported               (0.29)           (0.39)         (0.66)
Basic and diluted net loss per share - adjusted                  (0.29)           (0.39)         (0.62)




                                      F-13


                     MULTIBAND CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002 and 2001

      Intangible Assets

The Company  amortizes a domain name acquired during the year ended December 31,
2001 over its  estimated  useful  life of five  years  using  the  straight-line
method.  The Company  amortizes access contracts  acquired during the year ended
December  31,  2003  over the  estimate  useful  life of three  years  using the
straight-line  method.  The  Company  will  amortize  the  customer  cable lists
acquired on December 31, 2003 over five years beginning January 1, 2004.

      Advertising Costs

Advertising  costs are charged to expense as  incurred.  Advertising  costs were
$146,906,  $104,788 and $230,629 for the years ended December 31, 2003, 2002 and
2001,  respectively,  and are  included in selling,  general and  administrative
expenses in the consolidated statements of operations.

      Shipping and Handling Costs

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

      Income Taxes

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

      Stock-Based Compensation

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

Pursuant  to APB No. 25 and  related  interpretations,  $447,481,  $482,999  and
$332,210  of  compensation   cost  has  been  recognized  in  the   accompanying
consolidated  statements  of operations  for the years ended  December 31, 2003,
2002 and 2001, respectively.  Had compensation cost been recognized based on the
fair values of options at the grant dates consistent with the provisions of SFAS
No. 123, the Company's loss  attributable to common  stockholders  and basic and
diluted loss per common share would have  increased to the  following  pro forma
amounts for the years ended December 31:


                                      F-14





                     MULTIBAND CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002 and 2001

                                                     2003           2002            2001
                                                  -----------    -----------    -----------
                                                                       
Loss attributable to common stockholders          $(4,613,693)   $(4,591,637)   $(5,758,221)
Pro forma loss attributable to common shares      $(5,363,381)   $(4,915,649)   $(6,131,692)

Basic and diluted net loss per share:

   As reported                                    $     (0.29)   $     (0.39)   $     (0.66)
   Pro forma loss attributable to common shares   $     (0.33)   $     (0.42)   $     (0.70)

Stock-based compensation:

   As reported                                    $   447,481    $   482,999    $   332,210
   Pro forma                                      $   749,688    $   324,012    $   373,471

In determining the compensation  cost of the options granted during fiscal 2003,
2002,  and 2001,  as  specified  by SFAS No. 123,  the fair value of each option
grant has been  estimated  on the date of grant using the  Black-Scholes  option
pricing model and the weighted average  assumptions  used in these  calculations
are summarized as follows:

                                                      2003           2002          2001
                                                  -----------    -----------    -----------
Risk-free interest rate                                  3.00%          4.40%         5.00%
Expected life of options granted                     10 years       10 years      10 years
Expected volatility range                                 170%           170%          110%
Expected dividend yield                                     0%             0%            0%



      Net Loss per Common Share

Basic net loss per common share is computed by dividing the loss attributable to
common  stockholders by the weighted average number of common shares outstanding
for the  reporting  period.  Diluted  net loss per common  share is  computed by
dividing loss  attributable  to common  stockholders  by the sum of the weighted
average number of common shares  outstanding  plus all  additional  common stock
that would have been  outstanding if potentially  dilutive common shares related
to  common  share  equivalents  (stock  options,  stock  warrants,   convertible
preferred  shares,  and issued but not  outstanding  restricted  stock) had been
issued.  All options,  warrants,  convertible  preferred shares,  and restricted
stock  outstanding  during the years ended December 31, 2003, 2002 and 2001 were
anti-dilutive.

      Recently Issued Accounting Pronouncements

In April 2003,  the FASB issued SFAS No. 149,  "Amendment  of  Statement  133 on
Derivative  Instruments and Hedging Activities," effective for contracts entered
into or modified after June 30, 2003.  This amendment  clarifies when a contract
meets the characteristics of a derivative,  clarifies when a derivative contains
a financing  component and amends  certain other  existing  pronouncements.  The
adoption  of SFAS  No.  149 did not  have a  material  effect  on the  Company's
consolidated financial statements.


                                      F-15


                     MULTIBAND CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002 and 2001

In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain  Financial
lnstruments with  Characteristics  of both Liabilities and Equity." SFAS No. 150
is effective for financial  instruments  entered into or modified  after May 31,
2003,  and otherwise is effective at the  beginning of the first interim  period
beginning  after June 15, 2003.  SFAS No. 150 requires the  classification  as a
liability of any financial  instruments with a mandatory  redemption feature, an
obligation to repurchase equity shares, or a conditional obligation based on the
issuance of a variable  number of its equity  shares.  The Company does not have
any financial  instruments  as defined by SFAS No. 150. The adoption of SFAS No.
150 did not have a  material  effect  on the  Company's  consolidated  financial
statements.

In  November  2002,  the FASB issued FASB  Interpretation  No. 45,  "Guarantor's
Accounting  and  Disclosure  Requirements  for  Guarantees,  Including  Indirect
Guarantees  of   Indebtedness   of  Others"  (FIN  45).  FIN  45  clarifies  the
requirements  for  a  guarantor's  accounting  for  and  disclosure  of  certain
guarantees  issued  and  outstanding.   The  initial   recognition  and  initial
measurement provisions of FIN 45 are applicable to guarantees issued or modified
after December 31, 2002. The disclosure requirements of FIN 45 are effective for
financial statements for periods ending after December 15, 2002. The adoption of
FIN 45 did not effect the Company's consolidated financial statements.

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

      Management's Use of Estimates

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

      Financial Instruments

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


                                      F-16


                     MULTIBAND CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002 and 2001

      Reclassifications

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

NOTE 2 - BUSINESS ACQUISITIONS

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

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

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

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

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

                                      F-17


                     MULTIBAND CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002 and 2001

NOTE 3 - PROPERTY AND EQUIPMENT


Property and equipment consisted of the following at December 31:




                                                              2003           2002
                                                          -----------    -----------
                                                                   
Leasehold improvements                                    $   764,064    $   732,931
Property and equipment - owned                              5,318,243      4,230,560
Property and equipment under capital lease  obligations
                                                              428,749        456,124
                                                          -----------    -----------
                                                            6,511,056      5,419,615
Less accumulated depreciation and amortization             (2,921,352)    (2,170,642)
                                                          -----------    -----------
                                                          $ 3,589,704    $ 3,248,973
                                                          ===========    ===========

Depreciation  and  amortization  expense on property and equipment was $948,796,
$981,985 and $1,019,581  for the years ended  December 31, 2003,  2002 and 2001,
respectively.

NOTE 4 - OTHER ASSETS

Other assets consisted of the following at December 31:

                                                               2003           2002
                                                             --------       --------
       Other current assets:

   Current portion of notes receivable                       $  2,983       $ 52,977
   Prepaid expenses and other                                  93,567        173,797
                                                             --------       --------
           Total other current assets                        $ 96,550       $226,774
                                                             ========       ========

Noncurrent assets:

   Debt issuance costs, net                                  $112,292       $     --
   Access contracts, net                                       46,666             --
   Domain name, net                                            44,667         61,417
   Customer cable lists                                       300,000             --
   Prepaid expenses and other                                 136,236        109,236
                                                             --------       --------
           Total other assets                                $639,861       $170,653
                                                             ========       ========


At December 31, 2003 and 2002,  the Company had notes  receivable  of $2,983 and
$52,977, respectively. The remaining note was due in December 2003 with interest
of 12% and was unsecured.


                                      F-18


                     MULTIBAND CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002 and 2001

NOTE 5 - ACCRUED LIABILITIES

Accrued liabilities consisted of the following at December 31:

                                       2003         2002
                                    ----------   ----------
Payroll and related taxes           $  514,516   $  398,415
Accrued preferred stock dividends      277,928      138,288
Payable - Florida Cable                465,000           --
Other                                  202,261      177,776
                                    ----------   ----------
                                    $1,459,705   $  714,479
                                    ==========   ==========

NOTE 6 - WHOLESALE LINE OF CREDIT

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

At December 31,  2002,  the Company had a  $1,450,000  wholesale  line of credit
agreement  with a different  financial  institution,  which  expired with 30 day
notice by either  party,  for the purchase of certain  resale  merchandise  from
certain  suppliers.  Interest was generally at 0% (if paid within certain terms,
generally 30 days), and the wholesale line of credit was  collateralized  by the
related  inventories,  accounts receivable and the $1,450,000 letters of credit.
The wholesale  line of credit  agreement  was an agreement  between the Company,
financial institution,  and certain vendors of the Company. The Company received
no funds from the  financial  institution,  but paid the  financial  institution
rather than certain  vendors The balance  outstanding was $1,290,383 at December
31, 2002.

                                      F-19





                     MULTIBAND CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002 and 2001

NOTE 7 - LONG-TERM DEBT

Long-term debt consisted of the following at December 31:

                                                                                       2003           2002
                                                                                    ----------     ----------
                                                                                          
       Note payable - Pyramid Trading Limited Partnership, net of unamortized
       original issue discount and beneficial conversion of note payable into
       common stock of $59,557 and $59,250 at December 31, 2003 and 2002,
       respectively, quarterly interest payments at 10% (effective interest rate
       of 54.2%) through May 2004, monthly principal payments of $40,000, due
       May 2004, unsecured.                                                        $  140,443     $   902,971

       Debenture payable - Convergent Capital Partners I, L.P., net of original
       issue discount of $432,504 and $595,295 at December 31, 2003 and 2002,
       respectively, monthly interest only payments through July 2005, monthly
       installments of $102,273 including interest at 14% (effective interest
       rate 18.4%) thereafter, due May 2007, secured by substantially all of the
       assets of the Company.                                                       1,967,496       1,804,705

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

       Note payable - Lexus Tower Limited Partnership, monthly installments of
       $5,987 including interest at 8.4%, due November 2010, secured by certain
       assets of the Company.                                                         379,332         418,872

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

       Notes payable, interest at 5.25% to 20% due through May
       2007, secured by certain assets of the Company.                                207,545         209,047
                                                                                   ----------      ----------
        Total long-term debt                                                        3,085,969       3,435,595
       Less: current portion                                                         (998,813)       (321,589)
                                                                                   ----------      ----------
        Long-term debt, net                                                        $2,087,156      $3,114,006
                                                                                   ==========      ==========


                                      F-20


                     MULTIBAND CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002 and 2001

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

         2004                                                 $     998,813
         2005                                                     1,113,898
         2006                                                     1,838,008
         2007                                                       650,923
         2008                                                        59,072
         Thereafter                                                 126,163
                                                              -------------
         Total future minimum payments                            4,786,877
         Less: original issue discounts and beneficial
           conversion feature                                    (1,700,908)
                                                              -------------
         Total long-term debt                                     3,085,969
         Less: current portion                                     (998,813)
                                                              -------------
             Long-term debt, net                              $   2,087,156
                                                              =============

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

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

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

                                      F-21


                     MULTIBAND CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002 and 2001

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

During 2002, the Company borrowed $600,000 and issued a five-year warrant to one
of its  directors  to purchase  120,000  common  shares at $1.50 per share.  The
proceeds of $600,000 were  allocated  between the note and the fair value of the
warrants  using the Black Scholes  pricing model.  The resulting  original issue
discount,  the fair value of the warrants,  was being amortized over the life of
the note using the straight-line  method which approximates the interest method.
In December  2002,  the lender  converted the note payable into 60,000 shares of
Class E convertible  preferred stock. The remaining  unamortized  original issue
discount amount was expensed at the time of the conversion.

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

Interest  expense  related to long-term debt with related  parties for the years
ended  December 31, 2003,  2002,  and 2001 was  approximately  $0,  $228,000 and
$3,000, respectively.

NOTE 8 - CAPITAL LEASE OBLIGATIONS

The Company has lease financing facilities for property, equipment and leasehold
improvements.  Leases  outstanding  under these  agreements  bear interest at an
average rate of 8.25% and expires  through  October 2007.  The  obligations  are
secured by the property under lease. Total cost and accumulated  amortization of
the leased equipment was $428,749 and $221,432 at December 31, 2003 and $456,124
and  $219,332  at  December  31,  2002.  Amortization  expense  related to these
obligations is included in depreciation expense.

                                      F-22


                     MULTIBAND CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002 and 2001

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

          2004                                                     $   69,556
          2005                                                         69,556
          2006                                                         56,457
          2007                                                         34,610
                                                                   ----------
          Total                                                       230,179
          Less: amounts representing interest                         (32,342)
                                                                   ----------
          Present value of future minimum lease payments              197,837
          Less: current portion                                       (54,939)
                                                                   ----------
          Capital lease obligations, net of current portion        $  142,898
                                                                   ==========

NOTE 9 - NOTE PAYABLE - STOCKHOLDER

On June 30,  2003,  the Company  borrowed  $124,000  from a  stockholder  of the
Company with monthly payments of $5,600 including interest at 7.85%, due in June
2005, and  unsecured.  The balance due at December 31, 2003 is $114,391 of which
$81,554 is due in 2004 and $32,837 is due in 2005.  Interest  expense related to
this  note  payable -  stockholder  for the year  ended  December  31,  2003 was
approximately $1,600.

NOTE 10 - STOCKHOLDERS' EQUITY

      Capital Stock Authorized

The articles of incorporation  authorize the Company to issue 50,000,000  shares
of no par  capital  stock.  Authorization  to  individual  classes  of stock are
determined by a Board of Directors  resolution.  The authorized classes of stock
at December  31, 2003 are the  following:  275,000  shares of Class A cumulative
convertible  preferred  stock,  60,000 shares of Class B cumulative  convertible
preferred  stock,  250,000  shares of Class C cumulative  convertible  preferred
stock,  250,000 shares of Class D cumulative  convertible  preferred  stock, and
400,000 shares of Class E cumulative convertible preferred stock.

                                      F-23


                     MULTIBAND CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002 and 2001

    Cumulative Convertible Preferred Stock

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

      Stock Compensation Plans

The Company has a 1999 Stock  Compensation  Plan,  which permits the issuance of
restricted stock and stock options to key employees and agents.  All outstanding
incentive stock options granted under the prior 1997 Stock Options Plan continue
until all agreements  have expired.  There are 2,500,000  shares of common stock
reserved for  issuance  through  restricted  stock,  non-qualified  stock option
awards and incentive  stock option awards.  The Plans also provide that the term
of each award be  determined  by the Board of  Directors.  Under the Plans,  the
exercise  price of incentive  stock options may not be less than the fair market
value of the stock on the award  date,  and the options  are  exercisable  for a
period not to exceed ten years from award date.

The Company also has a 2000 Non-employee Director Stock Compensation Plan, which
permits the  issuance of stock  options  for 300,000  shares of common  stock to
non-employee  directors.  The  exercise  price of the stock  options is the fair
market value of the stock on the award date, and the options are exercisable for
a period not to exceed ten years from award date.

      Employee Stock Purchase Plan

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

                                      F-24


                     MULTIBAND CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002 and 2001

      Stock Subscriptions Receivable

The Company has stock  subscriptions  receivable  including interest  receivable
totaling $418,085 and $633,195 due to the Company at December 31, 2003 and 2002,
respectively,  from the issuance of common stock. Monthly interest only payments
at interest  ranging from 9% to 10% were required through December 2003 at which
time any unpaid  stock  subscription  receivable  was due. The  receivables  are
secured by the common  stock  issued.  At  December  31,  2003,  the Company has
reserved $71,000 related to stock  subscriptions and interest  receivable deemed
to be  uncollectible.  The Company does not record  interest  receivable  on the
outstanding receivable balance once they have determined it to be uncollectible.

      Restricted Stock

The Company awards  restricted common shares to selected  employees.  Recipients
are not required to provide any consideration other than services. Company share
awards are subject to certain  restrictions on transfer,  and all or part of the
shares  awarded  may be subject to  forfeiture  upon the  occurrence  of certain
events,  including  employment  termination.  The intrinsic value at the date of
grant related to the shares awarded is generally amortized over three years, the
vesting term of the awards. Compensation expense recorded during the years ended
December 31, 2003,  2002, and 2001 in connection  with the  amortization  of the
award cost was $47,119, $78,292 and $92,749, respectively.

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

                             2003        2002        2001
                           --------    --------    --------

Outstanding, January 1       45,066      75,337     113,829
     Issued                      --      22,434      83,000
     Vested                 (17,204)    (33,107)    (38,781)
     Forfeited              (10,843)    (19,598)    (82,711)
                           --------    --------    --------
Outstanding, December 31     17,019      45,066      75,337
                           ========    ========    ========

    Stock Options

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




                                                Options                            Weighted-Average Exercise Price
                             --------------------------------------------     ----------------------------------------
                                  2003            2002           2001             2003           2002          2001
                             -------------    ------------   ------------     ------------    -----------   ----------
                                                                                                
Outstanding, January 1           1,093,157       1,050,024      1,145,507    $       2.45    $      2.55   $      2.31
     Granted                       747,775         249,300        839,500            1.35           0.96          1.20
     Exercised                     (3,000)               -      (615,933)            1.25             --          0.51
     Forfeited                   (180,500)       (206,167)      (319,050)            4.49           1.86          2.11
                             -------------    ------------   ------------    ------------    -----------   -----------
Outstanding, December 31         1,657,432       1,093,157      1,050,024    $       1.81    $      2.45   $      2.55
                             =============    ============   ============    ============    ===========   ===========



The  weighted-average  grant-date fair value of options granted during the years
ended  December  31,  2003,   2002,  and  2001  was  $1.20,   $0.86  and  $2.94,
respectively.


                                      F-25



                     MULTIBAND CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002 and 2001

Options outstanding and exercisable as of December 31, 2003, are as follows:




                                               Outstanding                                   Exercisable
                           ----------------------------------------------------  -------------------------------------
                                                      Weighted - Average
                                                  ----------------------------
                                                                   Remaining                             Weighted-
                                                   Exercise       Contractual                             Average
Range of Exercise Prices          Options            Price        Life-Years          Options         Exercise Price
---------------------------  -------------------   -----------   --------------   -----------------   ----------------
                                                                                 
            $.60                       255,000     $    0.60             6.43              255,000    $         0.60
       $.93   to     $1.38             409,800          1.15             9.18              256,433              1.24
      $1.43   to     $2.08             688,766          1.67             7.90              620,658              1.68
      $2.50   to     $2.88             140,000          2.67             6.81              140,000              2.67
      $3.98   to     $5.38             109,666          4.48             6.67               92,166              4.57
      $6.00   to     $6.75              54,200          6.60             6.24               46,900              6.57
                             -----------------     ----------    -------------   -----------------    --------------
       $.60   to     $6.75           1,657,432     $    1.81             7.76            1,411,157    $         1.85
                             =================     ==========    =============   =================    ==============

      Stock Warrants

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

                                               Outstanding                       Weighted - Average Exercise Price
                             --------------------------------------------    -----------------------------------------
                                  2003            2002           2001            2003           2002          2001
                             -------------    ------------   ------------    ------------    -----------   -----------
Outstanding, January 1           4,327,396       9,564,450      8,093,464    $       2.05    $      2.37   $      8.71
     Granted                     3,687,447       2,546,690      9,483,530            1.53           1.46          2.32
     Exercised                   (556,881)               -              -            1.53              -             -
     Forfeited                    (36,088)     (7,783,744)    (8,012,544)            3.59           2.25          8.75
                             -------------    ------------   ------------    ------------    -----------   -----------
Outstanding, December 31         7,421,874       4,327,396      9,564,450    $       1.83    $      2.05   $      2.37
                             =============    ============   ============    ============    ===========   ===========


The weighted-average  grant-date fair value of warrants granted during the years
ended December 31, 2003, 2002 and 2001 was $1.10, $1.00 and $1.79, respectively.

Warrants outstanding and exercisable as of December 31, 2003, are as follows:

                                                       Weighted - Average
                                               --------------------------------
                                                                    Remaining
   Range of Exercise                                               Contractual
        Prices                 Warrants         Exercise Price     Life-Years
------------------------  -------------------  ---------------   --------------
       $.85 to    $1.25           2,465,997     $        1.02              4.13
      $1.50 to    $2.25           3,946,432              1.90              2.49
      $2.40 to    $3.56             501,025              2.52              3.15
      $4.00 to    $5.20             508,420              4.16              2.45
                          -----------------     -------------    --------------
       $.85 to    $5.20           7,421,874     $        1.83              3.08
                          =================     =============    ==============

                                      F-26


                     MULTIBAND CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002 and 2001

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

                                 2003         2002       2001
                               ---------   ---------   ---------

Warrant repricing                     --          --   8,012,544
Common stock                   1,812,259     728,357     441,642
Services rendered                941,288     103,333     455,756
Preferred stock                  145,900     420,000      48,588
Debt issuance and guarantees     788,000   1,295,000     525,000
                               ---------   ---------   ---------
                               3,687,447   2,546,690   9,483,530
                               =========   =========   =========

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

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

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

During the year ended  December  31, 2001,  the Company  issued  455,756  one-to
five-year warrants with a weighted-average  exercise price of $2.16 for services
related to equity  financing.  During 2001,  the Company  issued  48,588  two-to
five-year warrants with a weighted-average  exercise price of $3.69 for services
related to  preferred  stock  financing  which were valued at $87,403  using the
Black Scholes pricing model.

On August 2,  2001,  the  Company  approved  the  repricing  of all  outstanding
warrants  issued at $8.75 to $2.25.  The  expiration  date of these warrants was
extended to October 11, 2002. The Company recorded $6,919,692 to the accumulated
deficit  related to the change in warrant value using the Black Scholes  pricing
model.

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

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

                                  2003               2002              2001
                                ---------          ---------        ---------
Risk-free interest rate             2.37%              3.90%            5.30%
Expected life                   3.4 years          4.5 years        4.5 years
Expected volatility                  170%             151.3%            94.3%
Expected dividend rate                 0%                 0%               0%

                                      F-27


                     MULTIBAND CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002 and 2001

NOTE 11 - INCOME TAXES

The  Company  has  generated   federal  and  state  net   operating   losses  of
approximately  $23,469,000 and  $10,382,000,  respectively,  which, if not used,
will begin to expire in 2004. Future changes in the ownership of the Company may
place limitations on the use of these net operating loss carryforwards.

The Company has  recorded a full  valuation  allowance  against its deferred tax
asset due to the  uncertainty of realizing the related  benefits.  The change in
the valuation allowance was $1,722,000,  $402,000,  and $1,757,200 for the years
ended December 31, 2003, 2002 and 2001, respectively.

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

                                                    2003           2002
                                                 -----------    -----------
Deferred income tax assets:

     Net operating loss carryforwards            $ 9,387,000    $ 7,633,000
     Goodwill                                         65,000         90,000
     Asset valuation reserves                        285,000        231,000
     Accrued liabilities                              55,000         69,000
                                                 -----------    -----------
                                                   9,792,000      8,023,000
Less valuation allowance                          (9,674,000)    (7,952,000)
                                                 -----------    -----------
                                                     118,000         71,000
Deferred income tax liabilities - depreciation      (118,000)       (71,000)
                                                 -----------    -----------
Net deferred income tax assets                   $        --    $        --
                                                 ===========    ===========

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

                                       2003     2002     2001
                                       -----    -----    -----

Federal statutory tax rate benefits    (35.0)%  (35.0)%  (35.0)%
State tax, net of federal benefit       (5.0)    (5.0)    (5.0)
Change in valuation allowance           39.6     36.1     33.0
Other                                    0.4      3.9      7.0
                                       -----    -----    -----
Effective tax rate                       0.0%     0.0%     0.0%
                                       =====    =====    =====

                                      F-28


                     MULTIBAND CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002 and 2001

The Company has the following net operating loss  carryforwards  at December 31,
2003, for income tax purposes:


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

2004              $ 1,050,000              $ 1,050,000
2005                  599,000                  599,000
2007                  501,000                  501,000
2008                   59,000                   57,000
2009                   22,000                   22,000
2011                  595,000                  575,000
2012                   25,000                       --
2018                1,122,000                1,096,000
2019                1,585,000                  992,000
2020                4,839,000                1,587,000
2021                4,726,000                1,435,000
2022                4,353,000                1,230,000
2023                3,993,000                1,238,000
                  -----------              -----------
                  $23,469,000              $10,382,000
                  ===========              ===========

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

                                      F-29





                     MULTIBAND CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002 and 2001

NOTE 12 - SUPPLEMENTAL CASH FLOWS INFORMATION

                                                         2003         2002         2001
                                                      ----------   ----------   ----------

                                                                       
Cash paid for interest                                $  436,061   $  512,167   $1,286,155
Noncash investing and financing transactions:
    Repricing of warrants                                     --           --    6,919,692
    Stock options issued below fair market value
                                                              --           --    1,244,250
    Stock options issued for commissions earned
                                                              --       53,745           --
    Stock subscriptions receivable received for
        stock                                                 --           --      610,000
    Issuance of preferred and common stock for
       acquisition of assets                              76,500       18,590      386,000
    Current liabilities converted to stock               192,690       59,755      225,613
    Common stock issued for guarantee of debt
                                                              --       14,750      120,000
    Issuance of stock for intangible asset                    --           --       83,750
    Purchase of customer lists and equipment
       through payable to Florida Cable                  465,000           --           --
    Notes payable and accrued interest converted
       to common and preferred stock
                                                         828,172    1,164,882      227,009
    Capitalized lease equipment purchases                     --      174,986           --
    Conversion of preferred stock to common stock
                                                          40,000      150,000      528,742
    Conversion of preferred stock into note payable
                                                              --      400,000           --
    Reduction of stock subscription receivable
       related to commission earned on equity
       transactions                                       36,977       40,563           --
    Warrants issued related to modifications of
       long-term debt                                    208,447      528,650           --
    Conversion of preferred stock dividends into
       common stock                                      113,209           --           --


NOTE 13 - RETIREMENT SAVINGS PLAN

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


                                      F-30


                     MULTIBAND CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002 and 2001

NOTE 14 - COMMITMENTS AND CONTINGENCIES

      Operating leases

Office  space was leased from an LLC which an officer of the Company was partial
owner of through  August 2003.  In addition to basic  monthly rents ranging from
$16,640 to $17,653,  the Company paid building  maintenance  costs,  real estate
taxes and  assessments.  During 2003, the Company  converted  $72,000 of accrued
rent into 7,200  shares of Class C preferred  stock.  At  December  31, 2003 and
2002,  accrued  rent of $56,560  and  $141,060,  respectively,  was owed to this
related party.  In August 2003, the Company signed a new lease agreement with an
unrelated party disclosed below.

The Company has various other operating  leases for its corporate  office space,
vehicles and various  equipment  with lease terms  expiring in August 2017.  The
monthly base rents range from $69,736 to $83,325,  net of payments received from
subleases.  In July 2003,  the Company  entered  into an agreement to sublease a
portion of their office space through August 2008 for  approximately  $5,000 per
month.The leases contain provisions for payments of real estate taxes, insurance
and common area costs.

Total  rent  expense  for the  years  ended  December  31,  2003,  2002 and 2001
including  common area costs and real estate taxes was  approximately  $578,000,
$566,000 and  $689,000,  respectively.  Rent  expense  with related  parties for
December 31, 2003, 2002, 2001 was approximately $59,000,  $462,000 and $561,000,
respectively.

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

                                             Year             Amount
                                             ----          ------------
                                             2004          $    534,000
                                             2005               512,000
                                             2006               516,000
                                             2007               541,000
                                             2008               587,000
                                          Thereafter          4,509,000
                                                           ------------
                                                           $  7,199,000

      Legal proceedings

The Company is involved in legal actions in the ordinary course of its business.
Although the outcome of any such legal actions  cannot be predicted,  management
believes  that there is no pending  legal  proceedings  against or involving the
Company for which the outcome is likely to have a material  adverse  effect upon
the Company's  consolidated financial position,  results of operations,  or cash
flows.

                                      F-31


                     MULTIBAND CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002 and 2001

NOTE 15 - SIGNIFICANT CUSTOMERS AND SUPPLIERS

One customer  represented  approximately  16%,  13%, and 15% of revenues for the
years ended December 31, 2003, 2002, and 2001, respectively.

The Company  purchased  materials from major suppliers  approximately as follows
for the years ended December 31:

                                                  Supplier
                                ----------------------------------------------
                                     A                B               C
                                -------------   --------------   -------------
                         2003       61%              4%               8%
                         2002       58%              6%              12%
                         2001       38%              19%             12%

The Company had revenues from companies that are associated with a director, who
was elected to the board of directors during 2003, of approximately  $1,124,000,
$636,000,  and $0 for the  years  ended  December  31,  2003,  2002,  and  2001,
respectively.  In addition, the Company had accounts receivable outstanding from
these  companies of  approximately  $142,000,  $171,000,  and $0 at December 31,
2003, 2002, and 2001, respectively.

NOTE 16 - BUSINESS SEGMENTS

The CTU subsidiary  functions as one segment for integrated  voice,  video, data
networking and computer technologies products and services, under one management
structure,  with one  management  financial  reporting  system,  and  having one
unified marketing name.

With the start up of Multiband in February  2000,  the Company added the segment
providing voice, data, and video services to residential  multi-dwelling  units.
MB USA's business model is similar to Multiband.

Segment disclosures are as follows:



                                                                  Multiband/
                                 Multiband          CTU             MB USA         Total
                                ------------    ------------    ------------    ------------
                                                                    
Year Ended December 31, 2003:
Revenues                        $         --    $ 21,199,303    $  1,441,118    $ 22,640,421
Loss from operations              (1,941,271)       (339,369)     (1,215,667)     (3,496,307)
Identifiable assets                5,691,867       5,254,221       2,956,797      13,902,885
Depreciation and amortization         45,789         432,364         518,226         996,379
Capital expenditures                  13,342         424,047          89,547         526,936


                                      F-32





                     MULTIBAND CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 2003, 2002 and 2001

                                    Multiband          CTU          Multiband          Total
                                   ------------    ------------    ------------    ------------
Year Ended December 31, 2002:
                                                                       
   Revenues                        $         --    $ 23,963,748    $    577,221    $ 24,540,969
   Income (loss) from operations     (1,810,241)        172,689      (1,195,521)     (2,833,073)
   Identifiable assets                3,151,891       5,282,233       1,913,192      10,347,316
   Depreciation and amortization        142,426         482,390         490,641       1,115,457
   Capital expenditures                   2,126         814,464         458,844       1,275,434


                                    Multiband          CTU          Multiband         Total
                                   ------------    ------------    ------------    ------------
Year Ended December 31, 2001:
   Revenues                        $         --    $ 32,011,187    $    249,590    $ 32,260,777
   Loss from operations              (2,079,592)       (299,553)     (1,618,003)     (3,997,148)
   Identifiable assets                3,171,968       5,786,796       3,250,917      12,209,681
   Depreciation and amortization        418,655         550,075         442,034       1,410,764
   Capital expenditures                   6,900         491,532       1,386,513       1,884,945


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

NOTE 17 - SUBSEQUENT EVENTS

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

In January  2004,  the Company  purchased  the remaining 50% ownership of MB USA
from Pace, by issuing 30,000 shares of common stock valued at $39,300 (Note 2).

                                      F-33


               REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
                       FIRM ON SUPPLEMENTARY INFORMATION

To Stockholders, Board of Directors, and Audit Committee
Multiband Corporation and subsidiaries
New Hope, Minnesota

Our  report on our  audits of the basic  consolidated  financial  statements  of
Multiband  Corporation and  subsidiaries  for the years ended December 31, 2003,
2002 and 2001 appears on page 1. The audits were made for the purpose of forming
an opinion on the basic consolidated  financial statements taken as a whole. The
supplementary  information  on page 36 is presented  for purposes of  additional
analysis  and  is  not a  required  part  of the  basic  consolidated  financial
statements.  Such  information  has been  subjected to the  auditing  procedures
applied in the audits of the basic consolidated financial statements and, in our
opinion,  is fairly  stated in all  material  respects  in relation to the basic
consolidated financial statements taken as a whole.

                                              /s/ VIRCHOW, KRAUSE & COMPANY, LLP

Minneapolis, Minnesota
February  16, 2004

                                      F-34





                     MULTIBAND CORPORATION AND SUBSIDIARIES
                        VALUATION AND QUALIFYING ACCOUNTS

                  YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

 COLUMN A                                              COLUMN B          COLUMN C        COLUMN D            COLUMN E
-----------                                       -----------------      --------       ----------          ----------

                                                                      ADDITIONS CHARGED
                                                     BALANCE AT         TO COSTS AND                       LANCE AT END
DESCRIPTION                                       BEGINNING OF YEAR      EXPENSES       DEDUCTION             OF YEAR
-----------                                       -----------------      --------       ----------          ----------

ALLOWANCE DEDUCTED FROM
ASSET TO WHICH IT APPLIES

Allowance for doubtful accounts receivable :
                                                                                              
   2003                                                 $236,000                  -        $13,000   (A)      $223,000
                                                      ----------         ----------     ----------          ----------
   2002                                                  178,000             58,000                  -        $236,000
                                                      ----------         ----------     ----------          ----------
   2001                                                  159,000            141,000        122,000   (A)      $178,000
                                                      ----------         ----------     ----------          ----------
Notes receivable:

   2003                                                   30,000                  -        $30,000   (A)             -
                                                      ----------         ----------     ----------          ----------
   2002                                                        -            $30,000              -             $30,000
                                                      ----------         ----------     ----------          ----------
   2001                                                        -                  -              -                   -
                                                      ----------         ----------     ----------          ----------
Stock subscriptions and interest receivable:

   2003                                                        -            $71,000              -             $71,000
                                                      ----------         ----------     ----------          ----------
   2002                                                        -                  -              -                   -
                                                      ----------         ----------     ----------          ----------
   2001                                                        -                  -              -                   -
                                                      ----------         ----------     ----------          ----------


(A)   Write-off uncollectible receivables


                                      F-35





CONSOLIDATED FINANCIAL STATEMENTS

                     MULTIBAND CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                                              Three Months Ended               Nine Months Ended
                                                          ----------------------------    ----------------------------
                                                          September 30,   September 30,   September 30,   September 30,
                                                          ------------    ------------    ------------    ------------
                                                             2004             2003            2004            2003
                                                          ------------    ------------    ------------    ------------
                                                           (unaudited)     (unaudited)     (unaudited)     (unaudited)

                                                                                              
REVENUES                                                  $  9,068,758    $  6,283,365    $ 22,734,594    $ 17,843,508
                                                          ------------    ------------    ------------    ------------
COSTS AND EXPENSES
     Cost of products and services                           5,796,027       4,493,829      15,580,482      12,718,951
                                                          ------------    ------------    ------------    ------------
     Selling, general and administrative                     3,126,417       2,029,242       7,930,244       6,097,989
                                                          ------------    ------------    ------------    ------------
    Depreciation and amortization                            1,119,566         379,985       2,557,788       1,049,976
                                                          ------------    ------------    ------------    ------------
     Impairment of goodwill                                    527,879               0         527,879               0
                                                          ------------    ------------    ------------    ------------
     Total Costs and Expenses                             $ 10,569,889    $  6,903,056    $ 26,596,393    $ 19,866,916
                                                          ------------    ------------    ------------    ------------

LOSS FROM OPERATIONS                                        (1,501,131)       (619,691)     (3,861,799)     (2,023,408)
                                                          ------------    ------------    ------------    ------------
OTHER EXPENSE

     Interest expense                                         (347,647)       (202,958)       (949,129)       (648,368)
                                                          ------------    ------------    ------------    ------------
     Other Income (expense)                                     (2,815)         (6,513)         (9,003)        (56,777)
                                                          ------------    ------------    ------------    ------------
     Total Other Expense                                      (350,462)       (209,471)       (958,132)       (705,145)
                                                          ------------    ------------    ------------    ------------
MINORITY INTEREST IN JOINT VENTURE                                   0          (3,460)              0          (4,853)
                                                          ------------    ------------    ------------    ------------

LOSS BEFORE INCOME TAXES                                    (1,851,593)       (832,622)     (4,819,931)     (2,733,406)
                                                          ------------    ------------    ------------    ------------

PROVISION FOR INCOME TAXES                                           0               0               0               0
                                                          ------------    ------------    ------------    ------------

NET LOSS                                                    (1,851,593)       (832,622)     (4,819,931)     (2,733,406)
                                                          ------------    ------------    ------------    ------------
Preferred Stock Dividends                                      (83,714)        (43,301)       (541,640)       (135,353)
                                                          ------------    ------------    ------------    ------------

LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS                  $ (1,935,307)   $   (875,923)   $ (5,361,571)   $ (2,868,759)
                                                          ============    ============    ============    ============

LOSS PER SHARE - BASIC AND DILUTED                        $       (.07)   $       (.05)   $       (.21)   $       (.18)
                                                          ------------    ------------    ------------    ------------

WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED
                                                            25,480,007      16,981,266      22,494,250      15,168,069
                                                          ------------    ------------    ------------    ------------


            See notes to condensed consolidated financial statements

                                      F-36





                     MULTIBAND CORPORATION AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                    SEPTEMBER 30, 2004 AND DECEMBER 31, 2003

                                                                                       September 30, 2004    December 31, 2003
                                                                                            (unaudited)          (audited)
                                                                                           ------------         ------------
                                       ASSETS
CURRENT ASSETS
                                                                                                          
   Cash and cash equivalents                                                               $    465,885         $  2,945,960
   Certificate of deposit                                                                       250,000              250,000
   Accounts receivable, net                                                                   3,752,302            1,658,114
   Inventories, net                                                                           1,363,698            1,973,817
   Other Current Assets                                                                          78,563               96,550
                                                                                           ------------         ------------

      TOTAL CURRENT ASSETS                                                                    5,910,448            6,924,441
                                                                                           ------------         ------------

PROPERTY AND EQUIPMENT, NET                                                                   4,269,736            3,589,704
                                                                                           ------------         ------------

OTHER ASSETS
   Goodwill                                                                                   2,233,366            2,748,879
   Intangible assets, net                                                                    17,270,536              503,625
   Other                                                                                        330,032              136,236
                                                                                           ------------         ------------

       TOTAL OTHER ASSETS                                                                    19,833,934            3,388,740
                                                                                           ------------         ------------
TOTAL ASSETS                                                                               $ 30,014,118         $ 13,902,885

                        LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
   Checks issued in excess of cash in bank                                                 $     32,969         $    147,398
   Wholesale line of credit                                                                   1,069,359              976,314
   Short term debt                                                                            5,849,906                    0
   Current portion of long term debt                                                            637,254              998,813
   Current portion of note payable, stockholder                                                  94,794               81,554
   Current portion of capital lease obligations                                                 102,362               54,939
   Accounts payable                                                                           2,575,675            1,771,699
   Accrued liabilities                                                                        3,700,035            1,459,705
   Deferred service obligations and revenue                                                     413,360              315,227
                                                                                           ------------         ------------

      TOTAL CURRENT LIABILITIES                                                              14,475,714            5,805,649

LONG TERM DEBT, NET                                                                           2,519,530            2,087,156

OTHER LONG TERM DEBT                                                                            222,700                    0
                                                                                                                ------------
NOTE PAYABLE, STOCKHOLDER, NET OF CURRENT PORTION                                                     0               32,837
                                                                                                                ------------
CAPITAL LEASE OBLIGATIONS, NET OF CURRENT PORTION                                               636,499              142,898
                                                                                           ------------         ------------
TOTAL LIABILITIES                                                                            17,854,443            8,068,540
                                                                                           ------------         ------------
MINORITY INTEREST IN JOINT VENTURE                                                                    0               26,634
STOCKHOLDERS' EQUITY
Cumulative convertible preferred stock, no par value:

   8% Class A (27,931 shares issued and outstanding, $293,276 liquidation
preference)                                                                                     419,752              419,752
  10% Class B (8,700 shares issued and outstanding, $91,350 liquidation preference)              62,000               62,000
  10% Class C (125,400 shares issued and outstanding, $1,254,000 liquidation preference)      1,611,105            1,611,105
  15% Class E (0 and 77,650 shares issued and outstanding,)                                           0              438,964
  10% Class F (200,000 and 0 shares issued and outstanding, $2,000,000 liquidation
preference)                                                                                   2,000,000                    0
  10% Class G (7,500 and 0 shares issued and outstanding, $75,000 liquidation
preference)                                                                                      70,672                    0
  Common stock, no par value (25,621,084 and 19,036,805 shares issued;
  25,617,745 and 19,819,786 shares outstanding)                                              16,678,538            7,726,505
  Stock subscriptions receivable                                                               (368,243)            (418,085)
   Options and warrants                                                                      31,379,338           30,514,872
   Unamortized compensation                                                                      (1,724)            (217,210)
   Accumulated deficit                                                                      (39,691,763)         (34,330,192)
                                                                                           ------------         ------------
TOTAL STOCKHOLDERS' EQUITY                                                                   12,159,675            5,807,711
                                                                                           ------------         ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                 $ 30,014,118         $ 13,902,885



            See notes to condensed consolidated financial statements.

                                      F-37





                     MULTIBAND CORPORATION AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
   FOR NINE MONTHS ENDED SEPTEMBER 30, 2004 AND SEPTEMBER 30, 2003 (Unaudited)

                                                                                                  NINE MONTHS ENDED
                                                                                              SEPTEMBER 30, (UNAUDITED)
                                                                                                 2004           2003
                                                                                              -----------    -----------
OPERATING ACTIVITIES
                                                                                                       
   Net loss                                                                                   $(4,819,931)   $(2,733,406)
   Adjustments to reconcile net loss to net cash flows from operating activities
      Depreciation and amortization                                                             2,344,853        709,404
      Amortization of deferred compensation                                                       212,935        340,572
      Amortization of original issue discount                                                     541,873        285,345
      Common stock issued for services                                                            291,220        321,920
      Impairment of goodwill                                                                      527,879              0
      Loss on sales of property and equipment                                                      26,217         76,269
      Reduction of note payable in connection with reimbursement of seller expenses              (273,900)             0
      Interest receivable on stock subscription receivable                                              0         13,452
      Minority interest in joint venture                                                                0          4,853
      Changes in operating assets and liabilities:

        Accounts receivable, net                                                               (2,134,902)      (329,189)
        Inventories, net                                                                          610,119       (411,092)
        Other current assets                                                                       17,987         (6,026)
        Other assets                                                                              (87,135)       (21,531)
        Wholesale line of credit                                                                   93,045         33,384
        Accounts payable and accrued liabilities                                                  620,817       (388,208)
        Deferred service obligations and revenue                                                   98,133         26,246
                                                                                              -----------    -----------
           Net cash flows from operating activities                                            (1,930,790)    (2,078,007)
                                                                                              -----------    -----------
INVESTING ACTIVITIES
   Purchases of property and equipment                                                           (483,810)      (356,291)
   Purchase of Satellite Broadcasting Corporation                                                (187,424)             0
   Purchase of Minnesota Digital Universe, Inc.                                                (1,100,000)             0
   Purchase of Rainbow Satellite Group, LLC                                                    (1,000,000)             0
   Purchase of 21st Century Satellite Communications Inc                                         (250,000)             0
   Payment for investment in joint venture                                                              0        (64,878)
   Proceeds from sale of property and equipment                                                       649          6,145
   Collections on notes receivable                                                                  3,172          5,806
                                                                                              -----------    -----------
           Net cash flows from investing activities                                            (3,017,413)      (409,218)
                                                                                              -----------    -----------
FINANCING ACTIVITIES
   Checks issued in excess of cash in bank                                                        (74,068)             0
   Payments on long term debt                                                                  (1,215,788)      (183,936)
   Payments on capital lease obligations                                                          (63,066)       (69,252)
   Proceeds from issuance of long term debt                                                       750,021        133,726
   Payments on note payable to stockholder                                                        (19,598)             0
   Proceeds from issuance of stock and warrants                                                 2,888,836      3,654,388
   Redemption of common stock                                                                     (62,975)             0
   Exercise of warrants                                                                           390,279        312,030
   Redemption of preferred stock                                                                        0         (2,100)
   Preferred stock dividends                                                                     (125,513)       (51,263)
                                                                                              -----------    -----------
           Net cash flows from financing activities                                            (2,468,128)     3,793,593
                                                                                              -----------    -----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                               (2,480,075)     1,306,368
CASH AND CASH EQUIVALENTS
   Beginning of period                                                                          2,945,960        540,375
                                                                                              -----------    -----------
   End of period                                                                                  465,885    $ 1,846,743
                                                                                              ===========    ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
   Cash paid for interest, net of amortization of original issue discount                         447,548        280,148
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES
   Issuance of preferred stock for acquisition of assets                                                0         76,500
   Issuance of common stock for acquisition of assets, MBUSA and URON                             274,800              0
   Warrants issued with debt                                                                            0        208,447
   Conversion of preferred stock and accrued dividends into common stock                          776,500         40,000
   Current liabilities converted to stock                                                         136,581        248,623
   Conversion of notes payable into common stock                                                  510,908        642,000
   Conversion of dividend into common stock                                                        78,591         84,090
   Reduction of stock subscription receivable                                                           0         26,602
   Issuance of common stock for acquisition of 21st Century                                       364,583              0
   Issuance of preferred stock and notes payable for acquisition of assets, Rainbow             6,519,999              0
   Purchase of property and equipment as a reduction of accounts receivable                        40,714              0
   Capitalized construction costs in accrued expenses                                              20,000              0
   Issuance of common stock of $3,850,00 and notes payable of $2,750,000 for acquisition of
      assets, MDU                                                                               6,600,000              0
   Stock subscription receivable for issuance of common stock                                           0         40,000
     Capital lease assumed in acquisition of equipment from 21st Century                          416,666              0



            See notes to condensed consolidated financial statements


                                      F-38


                     MULTIBAND CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

                           SEPTEMBER 30, 2004 and 2003

NOTE 1 - UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The  information  furnished  in  this  report  is  unaudited  and  reflects  all
adjustments which are normal recurring  adjustments and, which in the opinion of
management,  are  necessary  to fairly  present  the  operating  results for the
interim periods. The operating results for the interim periods presented are not
necessarily  indicative  of the  operating  results to be expected  for the full
fiscal year.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenues and Cost Recognition

Multiband  Corporation  and  subsidiaries  (the Company)  earns  revenues from 6
sources:  1) Video  and  computer  technology  products  which  are sold but not
installed,  2) Voice, video and data  communication  products which are sold and
installed,  3) Service revenues related to communication products which are sold
and both  installed  and not  installed,  4) Multiband  user charges to multiple
dwelling units, 5) MB USA user charges to timeshares, 6) DirecTV fees.

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

Customer  contracts  for both the  purchase and  installation  of voice and data
networking  technology  products and certain video technologies  products on one
sales   agreement,   as   installation  of  the  product  is  essential  to  the
functionality  of the  product.  Revenues are  recognized  when the products are
delivered  and  installed,  and the  customer has accepted the terms and has the
ability to fulfill the terms.

Service revenues related to technology products including  consulting,  training
and support are recognized when the services are provided.  Service revenues are
expected to account for  approximately 20% of total revenues for the year ending
December 31, 2004. Service revenues were less than 10% of total revenues for the
year ended December 31, 2003. The Company,  if the customer elects,  enters into
equipment   maintenance   agreements   for  products   sold  once  the  original
manufacturer's  warranty has expired.  Revenues from all  equipment  maintenance
agreements  are  recognized  on a  straight-line  basis  over the  terms of each
contract. Costs for services are expensed as incurred.

MultiBand  and MBUSA user charges are  recognized  as revenues in the period the
related services are provided.

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

Intangible Assets

The Company  amortizes a domain name acquired during the year ended December 31,
2001 over its  estimated  useful  life of five  years  using  the  straight-line
method.  The Company  amortizes access contracts and customer cable lists, on an
average,  over their useful  estimated lives which usually range from two to six
years.  The Company is also  amortizing the value of its DirecTV agent agreement
obtained  via MDU over a 73 month  period  beginning  April  2004.  The  Rainbow
Satellite  amortization of cable lists is over a period of 73 months,  beginning
June, 2004.

Amortization of intangible  assets was $810,097 and $19,188 for the three months
ended September 30, 2004 and 2003, respectively. For the nine month period ended
September 30, 2004 and 2003,  amortization  of intangible  assets was $1,489,242
and $36,652  respectively.  Estimated  amortization expense on intangible assets
for the quarter ending  December 31, 2004 and the years ended December 31, 2005,
2006,  2007 and 2008 is  $1,554,749,  $3,335,904,  $3,086,818,  $3,028,678,  and
$3,013,672 respectively.

                                      F-39





AMORTIZATION -INTANGIBLE ASSETS

                                                    SEPTEMBER 30, 2004              DECEMBER 31, 2003

                                               Gross Carrying  Accumulated    Gross Carrying    Accumulated
                                                  Amount       Amortization      Amount        Amortization
                                                ----------      ----------      ----------      ----------
                                                                                             
Intangible assets subject to amortization

Florida Cable                                      300,000          45,000         300,000               0
URON                                               453,930         170,225               0               0
Satellite Broadcasting                             457,576          38,131               0               0
Minnesota Digital Universe                       9,551,831         785,082               0               0
Rainbow Satellite                                7,043,641         391,313               0               0
Multiband Domain Name                               83,750          51,645          83,750          39,083
MDU Subscriber Rights                               60,042          10,008               0               0
Access Contracts                                    60,000          28,333          60,000          13,334
21st Century                                       708,334          19,675               0               0
Debt Issuance Costs                                130,333          39,489         115,500           3,208
                                                ----------      ----------      ----------      ----------
Total                                           18,849,437       1,578,901         559,250          55,625
                                                ==========      ==========      ==========      ==========

Intangible assets not subject to amortization

                                                ----------      ----------      ----------      ----------
Goodwill                                         3,543,523       1,310,157       3,531,157         782,278
                                                ==========      ==========      ==========      ==========


GOODWILL

Goodwill  represents  the  excess of  acquisition  costs  over the fair value of
identifiable  net  assets  acquired  and  was  originally  amortized  using  the
straight-line method over ten years. Due to changes in accounting standards, the
carrying value of goodwill is now reviewed at least annually to see if the facts
and circumstances  suggest that it may be impaired. If the review indicates that
goodwill will not be recoverable,  as determined based on the undiscounted  cash
flows  of the  assets  acquired  over the  remaining  amortization  period,  the
Company's  carrying  value of goodwill is reduced by the estimated  shortfall of
cash flows.  During the three  months  ended  September  30,  2004,  the Company
completed its review of goodwill and determined it was partially  impaired.  The
Company  recorded  impairment  charges to goodwill  of  $527,879  related to the
Corporate  Technologies  acquisition  during  the  three and nine  months  ended
September,  2004 and $0 during the three and nine  months  ended  September  30,
2003.

Stock-Based Compensation

In accordance with Accounting  Principles Board (APB) Opinion No. 25 and related
interpretations, the Company uses the intrinsic value-based method for measuring
stock-based compensation cost which measures compensation cost as the excess, if
any, of the quoted market price of the Company's  common stock at the grant date
over the  amount the  employee  must pay for the stock.  The  Company's  general
policy is to grant stock options at fair value at the date of grant.

Pursuant to APB No. 25 and  related  interpretations,  $15,448  and  $100,191 of
compensation   cost  has  been  recognized  in  the  accompanying   consolidated
statements of operations for the three months ended September 30, 2004 and 2003,
respectively.  For the nine months ended  September 30, 2004 and 2003,  $212,935
and $340,572 of compensation  cost has been recognized.  Had  compensation  cost
been  recognized  based  on the  fair  values  of  options  at the  grant  dates
consistent with the provisions of Statements of Financial  Accounting  Standards
(SFAS) No. 123 "Accounting for Stock-Based Compensation", the Company's net loss
and loss  attributable  to common  stockholders  and basic and diluted  loss per
common share would have been increased to the pro forma amounts:

                                      F-40





                                                     Three Months Ended              Nine Months Ended
                                                        September 30                   September 30
                                                  --------------------------    --------------------------
                                                     2004            2003           2004           2003
                                                  -----------    -----------    -----------    -----------

                                                                                   
Loss attributable to common stockholders          $(1,935,307)   $  (875,923)   $(5,361,571)   $(2,868,759)
Pro forma loss attributable to common shares      $(1,965,795)   $(1,013,109)   $(5,887,093)   $(3,582,520)

Basic and diluted net loss per share:

   As reported                                    $      (.08)   $     (0.05)   $      (.24)   $     (0.19)

   Pro forma loss attributable to common shares   $      (.08)   $     (0.06)   $      (.26)   $     (0.24)

Stock-based compensation:

   As reported                                    $    15,448    $   100,191    $   212,935    $   340,572


   Proforma                                       $    30,488    $   137,186    $   525,522    $   713,761


In determining  the  compensation  cost of the options  granted during the three
months ended September 30, 2004 and 2003, as specified by SFAS No. 123, the fair
value of each  option  grant has been  estimated  on the date of grant using the
Black-Scholes  option pricing model and the weighted average assumptions used in
these calculations are summarized as follows for September 30:



                                     Three Months Ended           Nine Months Ended
                                        September 30                 September 30
                                     ---------------------       --------------------
                                       2004         2003           2004        2003
                                     --------     --------       --------    --------
                                                                    
Risk-free interest rate                 3.50%        3.62%          3.50%       3.41%
Expected life of options granted     10 years     10 years       10 years    10 years
Expected volatility range                184%         170%           184%        170%

Expected dividend yield                    0%           0%             0%          0%



NET LOSS PER SHARE

Basic net loss per common share is computed by dividing the loss attributable to
common  stockholders by the weighted average number of common shares outstanding
for the  reporting  period.  Diluted  net loss per common  share is  computed by
dividing loss  attributable  to common  stockholders  by the sum of the weighted
average number of common shares  outstanding  plus all  additional  common stock
that would have been  outstanding if potentially  dilutive common shares related
to  common  share  equivalents  (stock  options,  stock  warrants,   convertible
preferred  shares,  and issued but not  outstanding  restricted  stock) had been
issued. All options, warrants,  convertible preferred shares, and issued but not
outstanding  restricted  stock during the three and nine months ended  September
30, 2004 and 2003 were anti-dilutive.

Reclassifications

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

NOTE 3 - LIQUIDITY

The accompanying  consolidated  financial statements have been prepared assuming
the Company will continue as a going concern that  contemplates  the realization
of assets and satisfaction of liabilities in the normal course of business.  For
the nine months  ended  September  30, 2004 and 2003,  the Company  incurred net
losses of $4,819,931 and  $2,733,406,  respectively.  At September 30, 2004, the
Company had an  accumulated  deficit of  $39,691,763.  The Company's  ability to
continue  as  a  going   concern  is  dependent  on  it   ultimately   achieving
profitability  and/or raising additional  capital.  Management intends to obtain
additional  debt or equity capital to meet all of its existing cash  obligations
and fund  commitments on planned  MultiBand  projects  however,  there can be no
assurance that the sources will be available or available on terms  favorable to
the Company. Management anticipates that the impact of the actions listed below,
will generate sufficient cash flows to pay current  liabilities,  long-term debt
and capital lease obligations and fund the Company's future operations:


                                      F-41


1.  Continued   reduction  of  operating   expenses  by   controlling   payroll,
professional  fees and other  general and  administrative  expenses.
2. Solicit additional debt or equity investment in the Company by either issuing
notes  payable or preferred  or common  stock ( on November  12, 2004  Multiband
obtained a secured debt financing of approximately  $2.1 million and on November
16, 2004  Multiband  finalized a private  placement  of the  Company's  Series H
Preferred stock of  approximately  $1 million.)
3. Continue to market MultiBand services and acquire  additional  multi-dwelling
unit customers.
4. Control capital expenditures by contracting  MultiBand services and equipment
through a landlord-owned equipment program.
5. Establish market for wireless internet services.

NOTE 4 - STOCK WARRANTS

Stock  warrants  activity is as follows for the nine months ended  September 30,
2004.

                                             NUMBER OF         WEIGHTED AVERAGE
                                             WARRANTS           EXERCISE PRICE
                                             --------           --------------

Warrants outstanding - December 31, 2003     7,421,874                 1.87
  Granted                                      814,799                 1.98
  Canceled or expired                                0                    0
  Exercised                                   (475,503)                1.52
Warrants outstanding - SEPTEMBER 30, 2004    7,761,170                 1.86

The  warrants  granted  during the nine  months  ended  September  30, 2004 were
awarded with common stock and for services rendered.

NOTE 5 - BUSINESS SEGMENTS

Following is Company  business  segment  information  for the three months ended
September 30, 2004 and 2003:




                                                          Multiband       Multiband
                                                          Business        Consumer
                                           Multiband      Services        Services         Total
                                         ------------    ------------   ------------    ------------
                                                                            
Quarter ended September 30, 2004
         Revenues                        $          0    $  5,203,269   $  3,865,489    $  9,068,758
         Income (Loss) from operations       (936,075)         62,682       (627,738)     (1,501,131)
         Identifiable assets                2,402,401       4,946,792     22,664,925      30,014,118
         Depreciation and amortization          7,636          71,537      1,040,393       1,119,566
         Capital expenditures                   3,083          37,201        203,113         243,397

Quarter ended September 30, 2003

         Revenues                        $          0    $  5,864,468   $    418,897    $  6,283,365
         Income (Loss) from operations       (370,645)         72,428       (321,474)       (619,691)
         Identifiable assets                4,543,772       5,601,468      2,803,524      12,948,764
         Depreciation and amortization        129,950         100,173        149,862         379,985
         Capital expenditures                       0          41,698          6,611          48,309



                                      F-42


Following  is Company  business  segment  information  for the nine months ended
September 30, 2004 and 2003:



                                                          Multiband      Multiband
                                                           Business       Consumer
                                          Multiband        Services       Services         Total
                                         ------------    ------------    ------------    ------------

                                                                             
Nine months ended September 30, 2004
         Revenues                        $          0    $ 15,345,871    $  7,388,723    $ 22,734,594
         Loss from operations              (2,068,241)       (401,172)     (1,392,366)     (3,861,799)
         Identifiable assets                2,402,401       4,946,792      22,664,925      30,014,118
         Depreciation and amortization        236,882         278,405       2,042,501       2,557,788
         Capital expenditures                   9,773         135,842         338,195         483,810

Nine months ended September 30, 2003

         Revenues                        $          0    $ 16,831,531    $  1,011,977    $ 17,843,508
         Loss from operations              (1,279,925)         45,997        (789,480)     (2,023,408)

         Identifiable assets                4,543,772       5,601,468       2,803,524      12,948,764
         Depreciation and amortization        373,662         318,839         357,475       1,049,976
         Capital expenditures                       0         272,466          83,825         356,291


NOTE 6 - RELATED PARTIES

      The  Company  had  revenues  from  companies  that are  associated  with a
director,   who  was  elected  to  the  board  of  directors   during  2003,  of
approximately  $0 and $17,000 for the nine months ended  September  30, 2004 and
2003, respectively. In addition, the Company had accounts receivable outstanding
from these  companies of  approximately  $140,000 and $142,000 at September  30,
2004 and 2003, respectively.

NOTE 7- ACQUISITIONS

On July 9, 2004, Multiband (the Company) completed its acquisition, which had an
acquisition  date of June 1, 2004, of the  outstanding  membership  interests of
Rainbow  Satellite  Group,  LLC  (Rainbow),  a provider of satellite  television
services to multi-dwelling  units, for  approximately  6.9 million dollars,  two
million of which was paid for in Multiband  Preferred Stock, valued at $2.00 per
share on a conversion  formula to Multiband common stock, one million dollars of
which was paid for in cash and the  balance in  promissory  notes due by January
2005. These notes are secured by Rainbow company assets and bear interest at the
prime rate. The stock value was a negotiated price between Buyer and Seller.  In
the event Multiband defaults in the payment of said promissory notes, the former
owners  of  Rainbow  have  certain  rights  to  repurchase  the   aforementioned
membership  interests for 20% less than any sums Multiband has paid prior to the
date of default.  The consideration  paid was based on the Company's analysis of
likely future net incomes to be generated over a six year period by the acquired
Company.  The cash was provided by funds  Multiband had  previously  raised in a
private placement.  The  aforementioned  purchase price is subject to adjustment
pursuant to the parties agreement if the number of Rainbow subscribers increases
or  decreases  as of an  adjustment  date.  The assets  were  acquired  from the
members/owners  of  Rainbow.  Prior to the  transaction,  there was no  material
relationship  between  the  owners  of  sellers  and  the  Company.   With  this
acquisition,  the Company  acquired  over  16,000  video  subscribers  which are
primarily  located in California,  Colorado,  Texas,  Florida,  Illinois and New
York.  In  connection  with the  acquisition,  the  Company  incurred a $300,000
finder's fee.


                                      F-43


      On August 9, 2004,  Multiband  Corporation  (the  Company)  completed  its
acquisition of certain  assets of 21st Century  Satellite  Communications,  Inc.
(21st  Century)  for one  million  dollars,  $333,333  of which  was paid for in
Company stock, valued at $1.60 per share, $250,000 of which was paid for in cash
and  the  balance  in  equipment   lease   payments  due  by  August  2007.  The
consideration  paid was  based on the  Company's  analysis  of the  value of the
acquired video equipment and related video  subscribers  totaling  approximately
5,000.  The cash was provided by funds Vicom had previously  raised in a private
placement.  In connection with the acquisition,  the Company incurred a $125,000
finder's  fee which was paid for in Company  stock , valued at $1.42 for a total
of $31,250,  and the  remaining  $93,750 is included in accrued  liabilities  at
September 30, 2004.

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

ALLOCATION OF PURCHASE PRICE
                               -21ST CENTURY    RAINBOW
                                 ----------    ----------

Total cash/stock consideration    1,000,000     7,219,999
Add: Transaction costs              125,000       300,000
Add: Liabilities assumed                  0             0
                                 ----------    ----------
Total Consideration               1,125,000     7,519,999
Less Tangible assets               (416,666)     (476,358)
                                 ----------    ----------
Intangible assets, net              708,334     7,043,641
                                 ----------    ----------

      The following  unaudited pro forma condensed results of operations for the
three and nine  months  ended  September  30,  2004 and 2003 give  effect to the
acquisition of URON, MDU, Rainbow,  and 21st Century as if such transactions had
occurred on January 1, 2003.

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



                                                     2004                             2003
                                        -----------------------------    ----------------------------
                                         CONSOLIDATED                     CONSOLIDATED
                                          AS REPORTED      PRO FORMA      AS REPORTED     PRO FORMA
                                           PER I/S         DISCLOSED       PER I/S        DISCLOSED
                                         ------------    ------------    ------------    ------------
                                                                             
THREE MONTHS - JULY TO SEPTEMBER

Revenues                                 $  9,068,758    $  9,134,591    $  6,283,365    $  9,297,729

Loss from operations                     $ (1,501,131)   $ (1,501,425)   $   (619,691)   $   (404,990)

Net loss                                 $ (1,851,593)   $ (1,851,887)   $   (832,622)   $   (750,189)

Net loss per share - basic and diluted   $       (.07)   $       (.07)   $       (.05)   $       (.04)

Weighted average shares
 outstanding - basic and diluted           25,480,007      25,480,007      16,981,266      16,981,266


                                                     2004                             2003
                                        -----------------------------    ----------------------------
                                         CONSOLIDATED                     CONSOLIDATED
                                          AS REPORTED      PRO FORMA      AS REPORTED     PRO FORMA
                                           PER I/S         DISCLOSED       PER I/S        DISCLOSED
                                         ------------    ------------    ------------    ------------
NINE MONTHS - JANUARY TO SEPTEMBER
Revenues                                 $ 22,734,594    $ 26,229,743    $ 17,843,508    $ 26,320,653



Loss from operations                     $ (3,861,799)   $ (3,827,946)   $ (2,023,408)   $ (1,136,437)

Net loss                                 $ (4,819,931)   $ (4,821,889)   $ (2,733,406)   $ (2,233,074)

Net loss per share - basic and diluted   $       (.21)   $       (.21)   $       (.19)   $       (.14)

Weighted average shares
 outstanding - basic and diluted           22,494,250      22,494,250      15,168,069      15,168,069



                                      F-44


The  unaudited  pro forma  results of  operations  for the three and nine months
ended  September 30, 2004 and 2003 as a result of the SBC  acquisition  of video
subscribers  and video  equipment  is not material to the  historical  financial
statements.

NOTE 8 - LEGAL PROCEEDINGS

      In the third  quarter of 2004,  the Company was named as a defendant in an
action brought by Private  Investor's Equity Group (PIEG) who is seeking damages
in excess of $75,000 over an alleged  financing fee owed. The Company has raised
numerous defenses to said action including a release executed by PIEG related to
said financing fee.

NOTE 9 - SUBSEQUENT EVENTS

      a) On  November  12,  2004,  Multiband  Corporation  finalized  a  secured
convertible debt financing.

The offering was funded by a group of  institutional  and accredited  investors.
Multiband  intends on utilizing the new long-term  debt facility to  restructure
existing  short-term  debt  obtained  through the firm's  extensive  acquisition
activities and for general working capital purposes.

Under the terms of the debt  offering,  the Company  will issue  junior  secured
thirty-six  month term convertible  promissory notes in the aggregate  principal
amount of  approximately  $2,100,000.  The Company  assets  secure the notes via
junior lien. The convertible  notes accrue interest at the rate of 6% per annum,
are payable  semi-annually at the option of the Company in cash or shares of the
Company's  common stock,  and are convertible into shares of common stock at the
rate of $1.00 per share.  The Company  also is  required to file a  registration
statement providing for the resale of the shares issuable upon the conversion of
the notes.

      b) On  November  16,  2004,  Multiband  Corporation  finalized  a  private
placement of the company's  Series H Convertible  Preferred  Stock. The Series H
Preferred Stock offering was funded by a group of  institutional  and accredited
investors.  Multiband  intends  on  utilizing  the  proceeds  received  from the
offering to retire short-term debt and for general working capital purposes.

Under the terms of the preferred stock  offering,  the Company will issue shares
of its Series H Convertible  Preferred Stock in the aggregate offering amount of
approximately  $1,050,000.  The shares of Series H Convertible  Preferred  Stock
accrue dividends at the rate of 6% per annum,  are payable  semi-annually at the
option of the Company in cash or shares of the Company's  common stock,  and are
convertible  into  shares  of common  stock at the rate of $1.00 per share  (one
million fifty  thousand  shares).  In addition,  the investors will also receive
five-year warrants to purchase an aggregate of approximately 3,150,000 shares of
Common  Stock at an  exercise  price of $1.25 per  share.  The  Company  also is
required to file a registration statement providing for the resale of the shares
issuable upon the  conversion of the Series H  Convertible  Preferred  Stock and
upon exercise of the warrants.

                                      F-45


                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13.   OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

      The  following  table  sets  forth  expenses  and  costs  payable  by  the
Registrant  expected  to  be  incurred  in  connection  with  the  issuance  and
distribution of the securities  described in this  registration  statement.  All
amounts  are  estimated  except for the  Securities  and  Exchange  Commission's
registration fee.

                                                           AMOUNT
                                                           ------

Registration fee under Securities Act                  $    1,504.00
Selling Agent's commissions                            $        0.00
Legal fees and expenses                                $   12,216.00
Accounting fees and expenses                           $    4,410.00
Printing expenses                                      $    1,870.00
Registrar and transfer agent fees                      $        0.00
Miscellaneous expenses                                 $    10.00.00

   Total                                               $   20,000.00

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

      Section   302A.521  of  the  Minnesota   Statutes   empowers  a  Minnesota
corporation to indemnify its officers and directors and certain other persons to
the extent and under the circumstances set forth therein.

      Article VII of the Registrant's  Articles of Incorporation  eliminates the
liability of directors of the Registrant to the  Registrant or its  shareholders
for  monetary  damages for breach of  fiduciary  duty except for any breach of a
director's  duty of loyalty to the Registrant or its  shareholders,  for acts or
omissions not in good faith or that involve intentional  misconduct or a knowing
violation of law, under Sections 302A.559 of the Minnesota Statutes (relating to
illegal  distributions) or Section 80A.23 of the Minnesota Statutes (relating to
securities law violations),  for any transaction from which the director derived
an improper personal benefit;  or for any act or omission occurring prior to May
22, 1987,  which is the date that this  provision in the  Registrant's  Articles
became effective.

      The above discussion of Section 302A.521 and of the Registrant's  Articles
of Incorporation is not intended to be exhaustive and is respectively  qualified
in its  entirety  by  such  statute  and  the  Articles  of  Incorporation.  The
Registrant has insurance in the amount of $1,000,000 per occurrence insuring its
directors and officers and those of its subsidiaries against certain liabilities
they may incur in their capacity as directors and officers.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

      During the last three years the registrant has issued various  securities,
described in more detail in the  Company's  forms 10Q and 10K filed during those
periods that were not registered  under the Securities  Act. The Securities were
offered and sold by us in reliance upon the  exemptions  provided  under Section
4(2)  under the  Securities  Act  relating  to sales not  involving  any  public
offering,  and/or  Rule  506 of  Regulation  D under  the  Securities  Act.  The
certificates  representing  the Securities  sold bear a restrictive  legend that
prohibits  transfer  without  registration  or  an  applicable  exemption.   All
purchasers  signed  agreements  stating that they were purchasing for investment
purposes only in which contain  restrictions  on the transfer of the  Securities
sold.

                                       43


ITEM 16. EXHIBITS

      The  following  documents  are  filed  as  exhibits  to this  registration
statement:




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)
3.1          Amended and Restated Articles of Incorporation of Multiband Corporation(1)
3.2          Restated Bylaws of Multiband Corporation(1)
3.3          Articles of Incorporation of Corporate Technologies, USA, Inc.(1)
3.4          Bylaws of Corporate Technologies, USA, Inc.(1)
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(6)
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)
5.1          Opinion of Steven M. Bell, Esq.(12)
10.1         Multiband 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         Multiband 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 with Minnesota Digital Universe (8)
10.17        Acquisition Agreement with Rainbow Satellite Group (9)
10.18        Note Purchase Agreement (10)
10.19        Securities Purchase Agreement (11)
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(12)
24.1         Power of Attorney (included on signature page of original registration statement)
31           Section 906 of Sarbanes-Oxley Act of 2002 - James Mandel
32           Section 906 of Sarbanes-Oxley Act of 2002 - Steven Bell



                                       44





      
(1)      Previously filed as the same exhibit to the Registrant's Registration Statement on Form 10, as amended.
(2)      Previously filed as the same exhibit to the original Registration  Statement on Form S-1 filed on August 11,  2000
         and declared effective on August 18, 2000.
(3)      Previously filed as the same exhibit to Registrant's Proxy Statement on Form 14A, filed on July 31, 2000.
(4)      Previously filed as the same exhibit to the original  Registration  Statement on Form S-1 filed on August 15, 2001
         and declared effective on August 20, 2001.
(5)      Previously filed as the same exhibit to Registrant's Form 10-Q, filed May 15, 2002.
(6)      Previously filed as the same exhibit to registrant's Form 8-K filed September 24, 2003.
(7)      Previously filed as the same exhibit to Registrant's Form 8-K filed December 16, 2003.
(8)      Previously filed as the same exhibit to Registrant's Form 8-K filed April 2, 2004.
(9)      Previously filed as the same exhibit to Registrant's Form 8-K filed July 9, 2004.
(10)     Previously filed as the same exhibit to Registrant's Form 8-K filed November 19, 2004.
(11)     Previously filed as the same exhibit to Registrant's Form 8-K filed November 24, 2004.
(12)     Filed herewith.



                                       45


ITEM 17. UNDERTAKINGS.

      The undersigned registrant hereby undertakes:

      (1)   To file,  during any period in which offers or sales are being made,
            a post-effective amendment to this registration statement:

            (i)   To include any prospectus  required by section 10(a)(3) of the
                  Securities Act of 1933;

            (ii)  To reflect in the prospectus any facts or events arising after
                  the effective date of the registration  statement (or the most
                  recent post-effective  amendment thereof) which,  individually
                  or in the  aggregate,  represent a  fundamental  change in the
                  information   set   forth  in  the   registration   statement.
                  Notwithstanding  the  foregoing,  any  increase or decrease in
                  volume of  securities  offered (if the total  dollar  value of
                  securities offered would not exceed that which was registered)
                  and any  deviation  from the low or high end of the  estimated
                  maximum  offering  range  may  be  reflected  in the  form  of
                  prospectus  filed with the Commission  pursuant to Rule 424(b)
                  if,  in  the  aggregate,  the  changes  in  volume  and  price
                  represent  no more than 20%  change in the  maximum  aggregate
                  offering price set forth in the  "Calculation  of Registration
                  Fee" table in the effective registration statement.

            (iii) To include any material  information  with respect to the plan
                  of distribution  not previously  disclosed in the registration
                  statement or any material  change to such  information  in the
                  registration statement;

      (2)   That,  for the  purpose  of  determining  any  liability  under  the
            Securities Act of 1933, each such post-effective  amendment shall be
            deemed to be a new registration statement relating to the securities
            offered  therein,  and the offering of such  securities at that time
            shall be deemed to be the initial bona fide offering thereof.

      (3)   To remove from  registration by means of a post-effective  amendment
            any of the securities  being  registered  which remain unsold at the
            termination of the offering.

      The  undersigned  registrant  hereby  undertakes  that,  for  purposes  of
determining  any  liability  under  the  Securities  Act,  each  filing  of  the
registrant's  annual  reports  pursuant to section 13(a) or section 15(d) of the
Securities  Exchange  Act of 1934  (and,  where  applicable,  each  filing of an
employee  benefit  plan's  annual  report  pursuant  to  section  15(d)  of  the
Securities  Exchange  Act of 1934)  that is  incorporated  by  reference  in the
registration  statement  shall  be  deemed  to be a new  registration  statement
relating to the securities offered therein,  and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

      Insofar as  indemnification  for liabilities  arising under the Securities
Act may be  permitted to  directors,  officers  and  controlling  persons of the
registrant pursuant to the foregoing  provisions,  or otherwise,  the registrant
has been advised that in the opinion of the Securities  and Exchange  Commission
such  indemnification  is against  public policy as expressed in the Act and is,
therefore,  unenforceable. In the event that a claim for indemnification against
such liabilities  (other than payment by the registrant of expenses  incurred or
paid by a  director,  officer or  controlling  person of the  registrant  in the
successful  defense of any  action,  suit or  proceeding)  is  asserted  by such
director,  officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been  settled by  controlling  precedent,  submit to a court of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

      The undersigned registrant hereby undertakes that:

      (1)   For purposes of determining  any liability  under the Securities Act
            of 1993, the information  omitted from the form of prospectus  filed
            as part of this  registration  statement in reliance  upon Rule 430A
            and  contained  in a form  of  prospectus  filed  by the  registrant
            pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
            shall be deemed to be part of this registration  statement as of the
            time it was declared effective.

      (2)   For purposes of determining  any liability  under the Securities Act
            of 1993,  each  post-effective  amendment  that  contains  a form of
            prospectus  shall  be  deemed  to  be a new  registration  statement
            relating to the securities offered therein, and the offering of such
            securities  at that time shall be deemed to be the initial bona fide
            offering thereof.


                                       46


                                   SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly  caused  this  registration  statement  on Form S-1 to be signed on its
behalf by the undersigned,  thereunto duly authorized,  in the City of New Hope,
State of Minnesota, on December 30, 2004.

                                           MULTIBAND CORPORATION

                                           By: /s/ Steven M. Bell
                                           President and Chief Financial Officer

      Pursuant to the  requirements  of the  Securities  Act, this  registration
statement  on Form  S-1 has  been  signed  by the  following  persons  in  their
capacities indicated as of December 30, 2004

SIGNATURE                       TITLE
---------                       -----

Steven. M. Bell                 President, Chief Financial Officer and Director
-----------------------         (Principal Financial and Accounting Officer)
/s/ Steven M. Bell

Frank Bennett                    Director
-----------------------
/s/  Frank Bennett

Jonathan Dodge                  Director
-----------------------
/s/  Jonathan Dodge

David Ekman                     Director
-----------------------
/s/  David Ekman

Eugene Harris                   Director
-----------------------
/s/  Eugene Harris

James L. Mandel                 Chief Executive Officer and Director (Principal
-----------------------         Executive Officer)
/s/  James L. Mandel


Donald Miller                   Director and Chairman
-----------------------
/s/  Donald Miller

David Weiss                     Director
-----------------------
/s/  David Weiss

*By:

     Steven M. Bell
     Attorney-in-Fact

                                       47