SOURCE: Siena Technologies, Inc.

April 04, 2007 08:00 ET

Siena Technologies Files Extension for Annual Report

LAS VEGAS, NV -- (MARKET WIRE) -- April 4, 2007 -- Siena Technologies, Inc. (OTCBB: SIEN) ("Siena" or the "Company") announced today that the Company has filed for an extension with the Securities and Exchange Commission (the "SEC") to file its Annual Report on Form 10-KSB for the year ended December 31, 2006. The Company will make every effort to file its form 10-KSB within the 15-day extension period permitted under Rule 12b-25.

The Company noted that the delay in filing its Form 10-KSB is due primarily to unresolved comments received from the SEC with regard to its Form 10-KSB at and for the Year ended December 31, 2005, its Forms 10-QSB for the three quarters ended September 30, 2006 (the "Prior Financial Statements") and its Form 8-K filed on November 17, 2006. The Company has already addressed certain comments with regard to the accounting for warrants issued in exchange for common stock and the related fair market value adjustments to the associated derivative liability, and the accounting for stock options issued to employees and as a result, expects to restate its unaudited financial statements filed on Forms 10-QSB for the three quarters ended September 30, 2006. However, comments relating to the Company's accounting for (i) the Company's issuance of convertible debentures, (ii) goodwill and other assets resulting from the acquisitions of Kelley Communication Company, Inc. ("Kelley") in September of 2005 and Com Services, Inc. in January of 2005 and (iii) the rescission of a prior issuance of the Company's common stock for services rendered in 2005, are still being researched by the Company and are as of this date still unresolved. Since the accounting for these transactions is still being researched, the Company was not able to complete and file its Form 10-KSB at and for the year ended December 31, 2006 by the filing due date of April 2, 2007. None of the restatements are expected to impact revenues or gross margins as previously reported.

In the Company's Notification of Late Filing as filed on Form 12b-25, the Company also disclosed the following expected financial results for the year ended December 31, 2006 as compared to the year ended December 31, 2005:

Revenues for the year ended December 31, 2006 are expected to be $18.8 million as compared to $2.8 million for the year ended December 31, 2005. The expected increase in revenues was attributed to a full year inclusion of revenues from the Company's wholly owned subsidiary, Kelley, which was acquired on September 22, 2005. Kelley's unaudited revenues for the full year ended December 31, 2005 were $7.5 million, including the $2.8 million from September 22, 2005 through December 31, 2005. The increase in Kelley revenues from 2005 to 2006 is primarily attributable to the launch of its new patent pending Race and Sports Book product, which accounted for approximately $11.5 million in revenues for the year ended December 31, 2006 as compared to approximately $2.5 million for the year ended December 31, 2005 attributed to this product.

Gross profit for the year ended December 31, 2006 is expected to be $4.1 million or 21.7%, compared to $332,000 or 13.3% for the year ended December 31, 2006. The increase in gross margin percentages are the result of the successful turnaround efforts of the Company's new management team which resulted in improved contract pricing, longer lead times for purchasing materials, improved vendor and supplier terms and efficiencies achieved in customer delivery.

Selling, general and administrative expenses ("SG & A") are expected to decrease by approximately 36% from $7.9 million for the year ended December 31, 2005 to $5.0 million for the year ended December 31, 2006. The SG & A estimate includes approximately $251,000 of non cash employee stock option expense, of which approximately $162,000 was previously unreported and related to the nine months ended September 30, 2006. The decrease of was primarily due to approximately $6.5 million in non cash officer compensation expense in 2005 incurred as a result of warrants issued to the Company's new CEO and CFO (the CFO has since left the Company), offset by an increase in operating expenses of $3.7 million predominately attributable to the inclusion of a full year's worth of salaries and other SG & A expenses incurred at Kelley, which was acquired in September of 2005.

"We have made significant strides over the past year restructuring our company such that upon raising additional financing, we will then be in a position from which we can strengthen our balance sheet and launch our growth strategy and meet our goals of positive operating results," commented Jeff Hultman, CEO of Siena Technologies. "During 2006 we discontinued operations of two non core subsidiaries which were labor intensive, not scalable, offering no unique advantages and reallocated our resources toward consolidating newly acquired Kelley Technologies. 2006 witnessed a reduction in operating expenses at Kelley as we continued our turnaround plan for our business and stabilized our finances by successfully restructuring our debt, retiring all convertible debentures and related warrants, extending maturity dates and reducing overall debt service requirements in the short term and raising private equity capital. We achieved improved pricing and improved vendor terms which have positively impacted our gross margins. Additionally, we have expanded our addressable market beyond Kelley's gaming focus. It is our vision to build Siena Technologies into a highly profitable significant business utilizing the blueprint from this management team's earlier successes."

Cash and equivalents on December 31, 2006 are expected to be $7,800, which was approximately $400,000 less than the balances at December 31, 2005. The Company's revenues have decreased for the last three quarters and it expects a similar trend during the first and second quarter of 2007, while it reestablishes its business development, sales and marketing efforts and services and finalizes other ongoing projects. This downturn in sales has continued to present the Company with cash flow shortages on an ongoing basis. Should the cash flow shortfalls continue, and should the Company be unsuccessful in raising additional capital, it will have an adverse impact on the relationships with its vendors and may impact the Company's ability to service its clients and deliver projects on time and on budget, which will have an adverse impact on the Company's financial condition and results of operations.

Additionally, if the Company's fundraising efforts are unsuccessful, it may be in default under the terms of all of its loan agreements. If the Company defaults under the terms of its loan agreements it could cause substantial dilution to the Company's other shareholders. See the Company's Forms 8-K filed with the SEC on August 7, 2006 and August 11, 2006 for more information regarding the debt restructurings with Dutchess and Preston. See the Company's Form 12b-25 filed with the SEC on April 3, 2007 for more information.

About Siena Technologies

Siena Technologies (formerly known as Network Installation Corp.), through its wholly owned subsidiary Kelley Technologies, is a technology company which specializes in the design, development and integration of communication technology and system networks for the resort and gaming industry as well as luxury high-rise condo developments (MDUs).

Kelley Technologies has also developed a patent-pending, proprietary next generation Race & Sports Book platform designed for the gaming industry and remains committed to developing the most advanced technology solutions to meet the desires of its clients.

To find out more about Siena Technologies (OTCBB: SIEN) or Kelley Technologies, please visit www.kelleytechnologies.com and www.enhanceht.com. The Company's public financial information and filings can be viewed at www.sec.gov.

Forward-Looking Statements

This release contains forward-looking statements, including, without limitation, statements concerning our business and possible or assumed future results of operations. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons including: our ability to continue as a going concern, adverse economic changes affecting markets we serve; competition in our markets and industry segments; our timing and the profitability of entering new markets; greater than expected costs, customer acceptance of wireless networks or difficulties related to our integration of the businesses we may acquire; and other risks and uncertainties as may be detailed from time to time in our public announcements and SEC filings. Although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made, and our future results, levels of activity, performance or achievements may not meet these expectations. We do not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in our expectations, except as required by law.

Contact Information