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Amalfi Research Group, Ltd.

Reports - Network Installation Corp. (OTCBB: NWKI)

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February 10, 2006

Network Installation Corp. (NIC)
Financial Data (as of 2/10/06)

Stock Price:	$.51
52 Week Range:	$0.41 - $2.10
Market Cap (intraday):	$15.6 Mil
Shares Out (mil):	30.5 Mil

2006 Target:	$1.48
2007 Target:	$2.21
2008 Target:	$3.32

Network Installation Corp. Registered Significant Achievements in 2005. Aggressive Goals and Strategic Initiatives Set For 2006.

Network Installation Corp. recorded its first ever sequential quarters of $1 million in revenues during Q2 and Q3 of 2005 and also saw revenues grow significantly from $1.9 million in 2004 to combined (Network Installation and Kelley Technologies) revenues of an estimated $10 million in 2005. Company officials announced a current project backlog of $11 as of January 9, 2006; a positive indicator for future growth.

The company has developed an aggressive strategy for growth in 2006 which includes deriving top line organic revenue growth of approximately 50% over 2005 revenue figures. Additional goals and initiatives include the doubling of the current direct sales force, increasing the organization’s overall gross profit margin to 35% vs. 25% in 2005, and net margin (EBITDA) to 4.5% from an estimated (-30.5%) in 2005. In addition, company officials plan to aggressively penetrate the multi-billion dollar ‘Multiple Dwelling Units’ (MDU) sector and also significantly expand NIC’s geographic reach through the expansion of the company’s direct sales force and the development of relationships with domestic and international technology distributors/integrators.

Tested and Proven Management Team Adopts Aggressive Strategy for Near-Term Growth.

NIC CEO, Jeffrey Hultman, has an astounding track record for transforming communications organizations from virtual unknowns into industry leaders. Mr. Hultman’s previous endeavors include President and CEO of both Pac Tel Cellular (now Verizon Wireless) and Dial Page, Inc. (merged with Nextel Communications). Mr. Hultman was directly responsible for the development and implementation of superior business plans which led to national expansion, drastically increasing corporate revenues, and shareholder value. As CEO of Pac Tel Cellular, he took them from a virtual unknown to an organization which grew into an international powerhouse. During his tenure, revenues increased from $100 million to over $1 billion within a three year span. Mr. Hultman’s success at Dial Page was equally impressive, transforming a number of limited partnerships into a corporation valued at approximately $1 billion. He later structured agreements to sell the company’s fast growing pager business and merge the organization’s Dial Call subsidiary with Nextel Communications. Network Installation Corp. has plans to reunite their CEO with key marketing and financial executives from Pac Tel and Dial Page, thus recreating his past successes through proven business plans and policies as well as the potential for enormous future growth.

Strategic Acquisition Resulting in Significantly Increased Revenues.

The acquisition of Kelley Technologies has exponentially expanded the company’s technological expertise in the deployment of communications solutions and has facilitated penetration into the multi-billion dollar ‘Multiple Dwelling Units’ (MDU) sector, as well as high growth markets such as hospitality/gaming, home automation, and video conferencing. Management has stated plans to make another strategic acquisition in the second half of 2006 in order to further accelerate growth.

Recent Rescission of Spectrum Communications Acquisition Illustrates Management’s Dedication to Aggressive Growth Strategy that Will Facilitate Near-Term Growth.

NIC’s decision to rescind the recent agreement to acquire Spectrum Communications will allow the company to place strict focus on immediate opportunities within the booming, multi-billion dollar gaming industry and the fast-growing and Multiple Dwelling Unit (MDU) marketplace.
NIC has recently logged a great deal of contracts within the hospitality/gaming industry and recently decided that the long sales cycles for government and education contracts were not an optimal fit for the company’s aggressive strategy for near-term growth. Company officials have stated that the Spectrum deal would have ultimately become more time and cost intensive than originally planned and have cut their losses early on to prevent future problems. In addition, NIC plans on executing another strategic acquisition in the near-term in compliance with its 2006 strategic initiatives.

Revolutionary Electronic Sports Book System That Will Soon Become the Industry Standard.

NIC has a patent pending on a revolutionary electronic sports book system that provides the operator with enhanced functionality never offered before. The new sports book solution is more visually appealing to the customer and presents information in an innovative, multi-screen format, previously unutilized in the gaming industry. Initially the unit will be beta-tested at Station Casinos’ (NYSE: STN) nine hundred million dollar Redrock Resort and Casino in Las Vegas, scheduled to open in March 2006. Company officials expect the system to be adopted in more than 75 hospitality/gaming organizations within Las Vegas in a relatively short period of time.

Strict Focus on a Small Number of Diverse Markets Provides an Excellent Opportunity For Future Growth.

By capitalizing on the core capabilities of its subsidiary, Kelley Technologies, NIC is able to aggressively pursue high profile customers gaming, construction, and multi-billion dollar hospitality organizations. This will shift NIC’s past focus of small to mid-sized businesses towards the acquiring of multi-million dollar contracts from Fortune 100 and Tier-One organizations.

Corporate Overview

Network Installation Corp. (NIC) is a leading provider of data and voice communications solutions in a wide variety of markets. These markets include the multibillion dollar hospitality/gaming industry, the fast-growing Multiple Dwelling Unit (MDU) marketplace, and the U.S. Military.

The company provides customers with a diverse selection of wireless and specialty communication systems incorporating technologies such as Wi-Fi, WiMAX, WLAN and VOIP, along with traditional wire-line communication protocols and computer networking infrastructure. NIC is becoming a leading solution provider in markets served due to its unique ability to act as a one stop shop for video/audio, voice/data, surveillance/security, and special effects/entertainment systems.

NIC has established a dominant foothold within the booming city of Las Vegas. Its subsidiary, Kelley Technologies has developed over 40 years of business relationships and brand recognition in the Las Vegas region, currently one of the nation’s fastest-growing major metropolitan areas, the nation’s top convention city, and a hotbed for high volume residential construction. The Las Vegas Metro Region boasts a population growth rate of 4.6% annually. Expanding over 20% from 1999-2004 and nearly doubling from 1985-1995 (97.6%).

NIC effectively differentiates itself from competitors by offering a complete solution through expert design, implementation and integration of services using industry leading hardware products. Through its deep expertise in implementing data and voice communications solutions and vast knowledge and experience within key strategic market segments, NIC is uniquely positioned to design and implement highly customized solutions that meet the communications needs of customers in a diverse selection of high growth markets.

Key Markets/Industries Served

Multiple Dwelling Units (MDU) Marketplace

The global community is currently witnessing a fundamental shift in the way it lives, and where it lives. New communities are being developed in which residents are able to work, shop, and live all within a short walking distance. The concept behind this type of construction, sometimes characterized as “New Urbanism” or “Vertical Living” focuses on the development of walkable communities which consist of a diverse range of housing choices, job options, and amenities typically located in an average town or city.

Las Vegas, Nevada is a perfect example of the ongoing shift in population density. At this point in time there are nearly 100 high rise construction projects within the city that have either commenced or are in the design/development stage. Many new living communities in the city will consist of an optimal mix of condominium units, hotel rooms, time-share units, convention centers, gaming organizations, and retail organizations.

The MDU space consists of, a high percentage of new residential units will be relatively upscale compared to traditional suburban living. Many will be equipped with “Smart Home” capabilities which require specialty systems that interface with surveillance/security, video/audio, voice/data, and special effects/entertainment systems. With its solid reputation within the segment and innovative capabilities surrounding the design of related communications solutions, NIC is uniquely positioned to provide total solutions for the MDU marketplace.

NIC has recently announced that its wholly owned subsidiary Kelley Technologies has acquired the exclusive distribution rights for techcierge(TM) smart software from Simplikate Systems within the hotel/casino market and the Multi-Dwelling Unit (MDU) market in Arizona, Nevada and California. Simplicate systems, a subsidiary of leading residential property management firm FirstService Corporation (NASDAQ:FSRV) is a leading provider of software for high-end residential communities. NIC officials expect the agreement with Simplicate Systems to provide a significant improvement to the company’s total communication solution and to aid in facilitating further penetration of the MDU sector. NIC has previously announced its initial penetration of the MDU market, and expects this trend to continue in 2006.

In addition to the United States market, NIC executives expect growth within the international MDU marketplace to provide significant opportunities for future growth and will increasingly focus sales and marketing efforts abroad during late 2006/early 2007.

Hospitality / Gaming

Recent acquisition of Kelly Technologies has greatly expanded NIC’s presence in the hospitality/gaming industry, particularly in the casino and hotel/lodging environments.

Kelly Technologies has established itself as the leading network provider for the Casino/gaming industry. The company offers a wide variety of communications solutions that meet the needs of customers in hotel/casino, race & sports book, entertainment venue, board and meeting room, hi-rise condominium construction, and home automation environments. Kelley Technologies has been conducting business within Las Vegas for more than 40 years, and maintains a dominant foothold in the regions hospitality/gaming industry due to the its reputation as the top communication solution provider in the region and the area’s notoriety for keeping business amongst locals if at all possible.

Mike Kelly, founder of Kelly Technologies, is directly responsible for the design and implementation of the first electronic sports book which debuted in Caesar’s Palace in Las Vegas. The company’s clientele include gaming industry leaders MGM Mirage, Mandalay Bay Resort Group, Harrah’s Entertainment Group, Palm Resorts-N9ine Group, and Venetian Resorts and Casino. Kelley Technologies has a patent pending on a revolutionary electronic sports book system that provides the operator with enhanced functionality never offered before. The unit will be first installed in the Station Casinos in Las Vegas and is expected to revolutionize the way that electronic sport books are constructed.

Through its core capabilities surrounding the design and deployment of network solutions for the gaming industry, NIC is well positioned to capitalize on the rapid growth of the Las Vegas gaming/hospitality marketplace. Recent announcements regarding the development of large-scale Las Vegas gaming/hospitality and residential facilities will create an enormous opportunity for providers of voice and data communications products such as those offered by NIC.

Potential future large-scale contracts include:

- In August 2004, Las Vegas Sands began construction of the Palazzo Casino Resort, which is expected to include an all-suites hotel tower with about 3,025 rooms, a gaming facility of about 105,000 square feet, an enclosed shopping, dining, and entertainment complex, and meeting and conference space. The project is expected to open in the second quarter of 2007.

- In November 2004, MGM Mirage announced a plan to create a multibillion-dollar, multiuse development, known as Project CityCenter, on a 66-acre Las Vegas Strip site. The first phase of the project, anticipated for opening in 2010, would include the development of 18 million square feet of space, including a 4,000-room casino/hotel, three 400-room boutique hotels, about 550,000 square feet of retail shops, dining and entertainment venues, and 1,650 units of luxury condominium, hotel/condominium, and private residence clubs.

Although Las Vegas represents the largest opportunity for hospitality/gaming growth with the majority of the world’s largest hotels and casinos, over 130,000 hotel
rooms, NIC is also very well-positioned to serve the growing amount of hospitality/gaming
organizations across the country. At this point in time, NIC has implemented hospitality/gaming solutions in the Bahamas, and has been asked on a least one occasion to join a design team for an international customer, a positive indicator for future global growth.

Conclusion and Investment Thesis

Network Installation Corp.’s aggressive, near-term growth strategy, management strict focus, the highly successful Kelley Technologies acquisition, solid technological capabilities, and a time tested and proven industry-leading executive team we see no reason why NIC’s stock price will not outperform the market over the next 12 to 36 month period.

With 30.5 million shares issued and outstanding, revenue growth rate of 50% annually and a multiple of three times revenues, we are forecasting target share prices of $1.48 in 2006, $2.21 in 2007 and $3.32 in 2008.

*Our price estimates do not take into account any further acquisitions, which management has previously stated publicly it plans to aggressively pursue another acquisition.

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We encourage readers to consult with independent financial advisors with respect to any investment in the securities mentioned herein. Any opinions, projections and predictions expressed in this research note are statements of judgment as of the date of publication, are subject to change without further notice, and may not necessarily be updated or reprinted in future publications or elsewhere. Opinions, projections and predictions contained herein are those of the author(s), and are not an assurance or guarantee of actual results. Neither Amalfi Research, nor its members, managers, officers, employees, or consultants accept any liability whatsoever for any direct or consequential loss arising from any use of this newsletter or its contents. Amalfi Research has been paid a fee of $5,000.00 in cash for coverage of the Company. Amalfi Research aslo expects to receive 25,000 shares of Network Installation restricted common stock. Amalfi Research and its members, managers, writers and employees have not accepted compensation from any other of the companies discussed in this report. From time to time, Amalfi Research allows public issuers or third parties acting on their behalf to redistribute content published by Amalfi Research relating to that issuer. Under these circumstances, the issuer or third party may spend a significant amount of money to redistribute an Amalfi Research Group report on the company. Amalfi Research and its members may from time to time establish positions in the securities of the companies discussed in within Amalfi Research reports. Copyright © 2006 Amalfi Research Group, Ltd. All rights reserved.