Cistera Networks (CNWT) 8-K Cistera Networks Reports Financial Results

FOR IMMEDIATE RELEASE

Cistera Networks Reports Financial Results

For Fiscal Year 2009 Second Quarter Ended September 30

Conference Call Scheduled for 3:30PM Central Time, November 10

PLANO, Texas – November 10, 2008 – Cistera Networks® (OTCBB: CNWT) a leading provider of enterprise application communications platforms and engines for Internet Protocol (IP) Communications filed its 10-Q for the fiscal year 2009 second quarter ended September 30.

Q2 Fiscal 2009 Financial Results

Three month data as compared to the prior year period:

·   Revenues for the quarter totaled $1,288,503, an increase of $394,721 or 44%

·   Gross profit for the quarter was $945,043, or 73% of revenues, compared to $644,510 or 72% of revenues

·   Net loss for the quarter was $598,203 compared to $951,525

·   Net loss per share was ($0.03) compared to ($0.11)

Six month data as compared to the prior year six month period:

·   Revenues were $2,089,063, an increase of $ $515,494  or 33%

·   Gross profit for the period was $1,538,887, or 74% of revenues, compared to $1,117,066 or 71% of revenues

·   Net loss for the period was $3,521,466 compared to $1,952,310

·   Net loss per share was ($0.26), compared to ($0.23)

“We are pleased to report the strongest revenues in the company’s history,” said Derek Downs, President and CEO.  “An important metric that indicates the positive impact of our efforts to improve operational controls is that spending to support growth resulted in an increase in operating costs of 24%, while revenues were up 44% quarter over quarter, even as we continued to build out our internal resource foundation. The ability to leverage our sales channel is one of the key strengths of our business model over the long term. “

Q2 2009 Event Highlights

·   Completed delivery of solutions for 92 sites at Midwestern state

·   City of Frisco, Texas completed part two installation of Cistera solutions as part of Public Safety Initiative

·   Launched Collaborative Partner Program CollaborNET™

·   Expanded inside sales team and created Partner Support Team

Conference Call

Management will host a conference call on Monday, November 10, 2008, at 3:30 PM Central / 1:30PM Pacific Time to discuss these results.  To participate, dial 800-762-9058, and provide conference ID 3939923.  A replay of the call will be available from 6:30PM Central Time on November 10 until 10:59 PM Central Time on November 17.  To access the replay, dial 800-406-7325 and enter Conference ID 3939923.

About Cistera Networks, Inc.

Cistera Networks is a leading provider of enterprise application communications platforms and services.  The company blends powerful application infrastructure with industry-specific business processes, to deliver the benefits of voice, video and data convergence to the user.  Cistera’s industry-leading platform delivers the most reliable, scalable and secure application services for IP-based network environments.  Its broad portfolio of application services enables users to improve customer service and satisfaction, increase productivity and collaboration, improve responsiveness to critical incidents and to provide a safer environment.

Based on open standards and a proven server technology foundation, the award-winning Cistera ConvergenceServer™ has a single unified administration which delivers the lowest total cost of ownership in the industry.  It enables customers to create robust and scalable environments that are flexible enough to adapt to their changing needs by scaling up to support from fewer than one hundred to thousands of users, and scaling out to support multiple sites, making it ideal for a broad range of organizations.  For more information, please see www.cistera.com.

This release may be deemed to contain forward-looking statements that are subject to the safe harbor provisions of the Private Litigation Reform Act of 1995. These forward-looking statements include, among other things, statements regarding future events and the future financial performance of Cistera Networks that involve risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results. Readers are referred to the documents filed by Cistera Networks with the SEC, specifically the most recent reports on Form 10-K and 10-Q, each as it may be amended from time to time, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements.

Media and Investor Contact:

Kathy Lane

760-771-2236

klane@cistera.com

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CISTERA NETWORKS, INC. & SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	September 30, 2008			March 31, 2008
Current assets
Cash and cash equivalents	$	154,728		$	125,007
Restricted cash		-			50,000
Accounts receivable		145,851			264,023
Inventory		180,049			187,960
Prepaid expenses		63,617			46,030
Total current assets		544,245			673,020
Property and equipment, net		377,129			355,411
Intangible assets, net		1,887,330			2,023,218
Total long-term assets		2,264,459			2,378,629
TOTAL ASSETS	$	2,808,704		$	3,051,649
Current liabilities
Accounts payable		449,477			550,305
Accrued liquidated damages		177,024			671,442
Accrued liabilities		1,027,316			1,076,360
Deferred revenue		1,055,150			971,474
Current portion of long-term debt, net of discount		776,202			425,707
Total current liabilities		3,485,169			3,695,288
Convertible promissory notes – net of  discount		-			1,666,019
Deferred revenue		95,992			225,917
Other long-term liabilities		61,578			285,470
Total long-term liabilities		157,570			2,177,406
Total liabilities		3,642,739			5,872,694
Stockholders' deficit		(834,035	)		(2,821,045	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	2,808,704		$	3,051,649

CISTERA NETWORKS, INC. & SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three months ended						Six months ended
	September 30,						September 30,
	2008			2007			2008			2007
Revenues
Convergence solutions	$	1,013,075		$	657,207		$	1,535,468		$	1,119,144
Professional services		45,125			90,542			105,833			194,593
Support and maintenance		230,303			146,033			447,762			259,832
Total revenues		1,288,503			893,782			2,089,063			1,573,569
Cost of revenues
Convergence solutions		276,710			192,271			409,742			331,927
Professional services		42,500			36,301			93,000			83,176
Support and maintenance		24,250			20,700			47,434			41,400
Total cost of revenues		343,460			249,272			550,176			456,503
Gross Profit		945,043			644,510			1,538,887			1,117,066
Operating expenses
Sales and marketing		301,043			280,412			580,472			514,298
Software development		226,875			198,646			423,333			350,518
Engineering and support		201,969			129,510			406,400			225,717
General and administrative		422,105			319,291			760,617			544,005
Depreciation and amortization		100,674			83,937			198,830			164,873
Total operating expenses		1,252,666			1,011,796			2,369,652			1,799,411
Loss from operations		(307,623	)		(367,286	)		(830,765	)		(682,345	)
Other income (expense)
Interest expense, net		(50,031	)		(66,402	)		(147,641	)		(130,237	)
Non-cash charges associated with convertible      notes and warrants		(240,549	)		(517,837	)		(2,543,060	)		(1,139,728	)
Total other income (expense)		(290,580	)		(584,239	)		(2,690,701	)		(1,269,965	)
Net loss	$	(598,203	)	$	(951,525	)	$	(3,521,466	)	$	(1,952,310	)
Basic & diluted net loss per share	$	(0.03	)	$	(0.11	)	$	(0.26	)	$	(0.23	)
Weighted average shares outstanding –    basic and diluted		17,274,687			8,594,469			13,369,365			8,594,469

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