UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

|X|   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT TO 1934

For the quarterly period ended March 31, 2003

                                       OR

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the transition period from _____________ to _______________

Commission file number 1-6868

                              SIENA HOLDINGS, INC.

             (Exact name of registrant as specified in its charter)

           Delaware                                         75-1043392
(State or other jurisdiction of                          (I.R.S. employer
incorporation or organization)                          identification no.)

  5068 West Plano Parkway,  Suite 300,  Plano, Texas          75093
       (Address of principal executive offices)            (Zip code)

                                 (972) 381-4255
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                 YES |X|   NO ___

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12-b2 of the Exchange Act).

                                 YES ___   NO |X|

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares outstanding of each of the issuer's classes of common stock
as of May 9, 2003: Common Stock, $.10 par value -- 6,000,000 shares.

<PAGE>

                      SIENA HOLDINGS, INC. AND SUBSIDIARIES

                 FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2003

                                      INDEX

                                                                            Page

                         PART I -- FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited)

         Consolidated Balance Sheets-- March 31, 2003 and June 30, 2002 ....   2
         Statements of Consolidated Operations and Comprehensive Income
              (Loss)--Quarters and Nine Months Ended
              March 31, 2003 and 2002 ......................................   3
         Statements of Consolidated Cash Flows -- Nine Months Ended
              March 31, 2003 and 2002 ......................................   4
         Notes to Consolidated Financial Statements ........................   5

Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations

         Results of Operations..............................................  12
         Liquidity and Capital Resources....................................  15
         Critical Accounting Policies.......................................  15

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.........  15

Item 4.  Controls and Procedures............................................  15

                          PART II -- OTHER INFORMATION

Item 3.  Defaults Upon Senior Securities....................................  16

Item 6.  Exhibits and Reports on Form 8-K...................................  16


                                       1
<PAGE>

                         PART I -- FINANCIAL INFORMATION

Item 1.  Financial Statements.

                           CONSOLIDATED BALANCE SHEETS

                      SIENA HOLDINGS, INC. AND SUBSIDIARIES
                        (in thousands, except par value)

<TABLE>
<CAPTION>
                                                             March 31, 2003    June 30, 2002
                                                             --------------    -------------
                                                                (unaudited)
<S>                                                                <C>               <C>
ASSETS
Current Assets:
    Cash and cash equivalents ..................................   $  5,332          $ 5,711
    Investments in equity securities ...........................        102              197
    Receivables ................................................         94               93
    Prepaid expenses ...........................................         71               28
                                                                   --------          -------
                                                                      5,599            6,029
                                                                   --------          -------
Long Term Assets:
    Investment in real estate ..................................      4,764            4,656
    Deferred tax assets - net ..................................         --            1,908
                                                                      4,764            6,564
                                                                   --------          -------
         Total Assets ..........................................   $ 10,363          $12,593
                                                                   ========          =======

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

   Accounts payable and accrued expenses .......................   $    164          $   160
   Unearned income .............................................         --              125
   Deferred tax liabilities ....................................         --                7
                                                                   --------          -------
                                                                        164              292
                                                                   --------          -------
Long Term Liabilities:
    Accrued medical insurance premiums .........................        352              392
    Deferred compensation and fees .............................        491              444
                                                                   --------          -------
                                                                        843              836
                                                                   --------          -------
                                                                      1,007            1,128
                                                                   --------          -------

Stockholders' Equity:
    Preferred stock-- ($1.00 par value, 1,000 shares authorized,
        0 shares issued and outstanding) .......................         --               --
    Common stock-- ($.10 par value, 15,000 shares authorized,
        6,000 shares issued and outstanding) ...................        600              600
    Additional paid-in capital .................................     10,216           10,188
     Retained earnings (accumulated deficit) ...................     (1,385)             664
    Accumulated other comprehensive income (loss), net of tax ..        (75)              13
                                                                   --------          -------
                                                                      9,356           11,465
                                                                   --------          -------
         Total Liabilities and Stockholders' Equity ............   $ 10,363          $12,593
                                                                   ========          =======
</TABLE>

See notes to consolidated financial statements.


                                       2
<PAGE>


                      STATEMENTS OF CONSOLIDATED OPERATIONS
                   AND COMPREHENSIVE INCOME (LOSS) (Unaudited)

                      SIENA HOLDINGS, INC. AND SUBSIDIARIES
              (in thousands, except net earnings per share amounts)

<TABLE>
<CAPTION>
                                                                    Quarter Ended        Nine Months Ended
                                                                      March 31                March 31
                                                                -------------------     -------------------
                                                                  2003        2002        2003        2002
                                                                -------     -------     -------     -------
<S>                                                             <C>         <C>         <C>         <C>
Revenues:
   Commissions and fees .....................................   $    94     $    60     $   247     $   190
   Interest .................................................        14          21          52          88
   Trust expense reimbursement ..............................        12          11          86          68
   Other real estate income .................................        61          --         186          --
   Gain on sale of real estate ..............................        --          36          --          36
   Other ....................................................        --          --          --           7
                                                                -------     -------     -------     -------
                                                                    181         128         571         389
                                                                -------     -------     -------     -------
Expenses:
   Personnel ................................................       119          92         314         270
   Other operating ..........................................       158          99         398         286
   Other than temporary losses on equity securities .........        --          41          --          41
                                                                -------     -------     -------     -------
                                                                    277         232         712         597
                                                                -------     -------     -------     -------
Loss from operations before federal income tax                      (96)       (104)       (141)       (208)
Federal income tax expense ..................................        --          --       1,908          --
                                                                -------     -------     -------     -------
Net loss ....................................................       (96)       (104)     (2,049)       (208)
                                                                -------     -------     -------     -------

Other comprehensive income (loss), net of tax:
   Unrealized gains (losses) on equity securities:
      Unrealized holding gains (losses) arising during period         6          37         (88)         39
      Add:  reclassification adjustment for other than
                   temporary losses included in net loss ....        --          27          --          27
                                                                -------     -------     -------     -------
   Other comprehensive income (loss), net of tax ............         6          64         (88)         66
                                                                -------     -------     -------     -------
Comprehensive Loss ..........................................  $   (90)    $   (40)    $(2,137)    $  (142)
                                                                =======     =======     =======     =======

Basic loss per share:
   Net loss .................................................     (0.02)    $ (0.02)    $ (0.34)    $ (0.03)
   Average number of shares .................................     6,000       6,000       6,000       6,000

Diluted loss per share:
   Net loss .................................................     (0.02)    $ (0.02)    $ (0.34)    $ (0.03)
   Average number of shares .................................     6,000*      6,000*      6,000*      6,000*
</TABLE>

*     Potentially dilutive common shares are not included in the computation of
      the dilutive per share amount due to the net loss.

See notes to consolidated financial statements.


                                       3
<PAGE>

                STATEMENTS OF CONSOLIDATED CASH FLOWS (Unaudited)

                      SIENA HOLDINGS, INC. AND SUBSIDIARIES
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                  Nine Months Ended
                                                                                       March 31
                                                                                 -------------------
                                                                                   2003       2002
                                                                                 -------    -------
<S>                                                                              <C>        <C>
Operating activities:
      Net loss ...............................................................   $(2,049)   $  (208)
      Adjustments to reconcile net loss to net cash used by operating
       activities:
         Federal income tax expense charged as a result of the increase in the
            valuation allowance attributable to pre-reorganization net
            operating loss carryforwards .....................................     1,908         --
         Federal income tax refund credited to additional paid-in-capital ....        21         --
         Other than temporary losses on equity securities ....................        --         41
         Gain on sale of real estate .........................................        --        (36)
         Compensation expense for stock options ..............................         7         12
         Decrease (increase) in current receivables and prepaid expenses .....       (44)        70
         Increase (decrease) in current accounts payable and accrued expenses          4        (14)
         Increase (decrease) in unearned income ..............................      (125)       125
         Decrease in long term accrued medical insurance premiums ............       (40)       (41)
         Increase in long term deferred compensation and fees ................        47         32
                                                                                 -------    -------
               Net cash used by operating activities .........................      (271)       (19)
                                                                                 -------    -------

Investing activities:

      Purchases of equity securities .........................................        --         (4)
      Sale of real estate ....................................................        --         36
      Increase in investment in real estate ..................................      (108)       (74)
                                                                                 -------    -------
                 Net cash used by investing activities .......................      (108)       (42)
                                                                                 -------    -------
Net decrease in cash and cash equivalents ....................................      (379)       (61)
Cash and cash equivalents at beginning of period .............................     5,711      5,914
                                                                                 -------    -------
Cash and cash equivalents at end of period ...................................   $ 5,332    $ 5,853
                                                                                 =======    =======

Cash payments for:
      Interest ...............................................................   $    --    $    --
      Federal income tax .....................................................   $    --    $    21

Changes to additional paid-in-capital:
      Compensation expense related to stock options ..........................   $     7    $    12
      Federal income tax refund ..............................................        21         --
      Other ..................................................................        --          8
                                                                                 -------    -------
              Net increase in additional paid-in-capital .....................   $    28    $    20
                                                                                 =======    =======
</TABLE>

See notes to consolidated financial statements.


                                       4
<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

                      SIENA HOLDINGS, INC. AND SUBSIDIARIES

                                 MARCH 31, 2003

NOTE A -- BASIS OF FINANCIAL STATEMENT PRESENTATION

      The accompanying unaudited consolidated financial statements include the
accounts of Siena Holdings, Inc. ("SHI"), formerly Lomas Financial Corporation
("LFC"), and its subsidiaries (collectively, the "Company"). SHI's wholly-owned,
principal subsidiaries are Siena Housing Management Corp. and LLG Lands, Inc.
("LLG"). Prior to October 1, 1996, SHI's wholly-owned principal subsidiary was
Lomas Mortgage USA, Inc. ("LMUSA"), now known as Nomas Corp.("Nomas"). As a
result of the confirmation of LMUSA's Chapter 11 reorganization plan, the
Company's interest in LMUSA was extinguished effective October 1, 1996. LFC's
plan of reorganization was confirmed on October 4, 1996, but not effective until
March 1997.

      In accordance with the American Institute of Certified Public Accountants'
Statement of Position 90-7, "Financial Reporting by Entities in Reorganization
Under the Bankruptcy Code", the Company adopted fresh-start accounting as of
March 31, 1997, after all material conditions required by the Plan were
satisfied. Since April 1, 1997, the Company's financial statements have been
prepared as if it was a new reporting entity. Under fresh-start accounting, all
assets and liabilities were restated to reflect their reorganization value,
which approximated fair value at the date of reorganization. The Company's
management and representatives of the creditors' committee concluded that, based
on the fact that the Company has historically incurred losses from operations
and has projected minimal future operating profits, the reorganization value of
the Company (the fair value of the Company before considering liabilities) was
equivalent to the fair value of the Company's tangible assets and that no other
intrinsic value existed. As a result, all assets and liabilities were stated at
their fair value.

      The financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. They do not include all of the information and footnotes
required by accounting principles generally accepted in the United States of
America for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. 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
amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates. Certain reclassifications have been
made to prior quarters' financial statements to conform to the current
presentation. Operating results for the quarter are not necessarily indicative
of the results that may be expected for the fiscal year. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's annual report on Form 10-K for the year ended
June 30, 2002.

NOTE B -- REORGANIZATION

      On October 10, 1995, LFC, two subsidiaries of LFC and LMUSA (collectively
the "Debtor Corporations") filed separate voluntary petitions for reorganization
under Chapter 11 of the Federal Bankruptcy Code in the District of Delaware. The
petitioning subsidiaries were Lomas Information Systems, Inc. ("LIS") and Lomas
Administrative Services, Inc. ("LAS"). The Debtor Corporations filed two
separate plans of reorganization with the Bankruptcy Court. An order confirming
the second amended joint plan of reorganization filed on October 4, 1996 for
LFC, LIS and LAS (the "Joint Debtors") and a stipulation and order among the
Joint Debtors and the appointed statutory committee of unsecured creditors of
LFC (the "LFC Creditors' Committee") regarding technical modifications to the
plan of reorganization and confirmation order filed on January 27, 1997 together
with the second amended joint plan of reorganization filed on July 3, 1996 are
collectively referred to herein as the "Joint Plan". The Joint Plan was
confirmed on October 4, 1996, but not effective until March 7, 1997, after
certain conditions were either met or waived by the LFC Creditors' Committee.


                                       5
<PAGE>

      The Joint Plan provided for a transfer by the Company of $3 million in
cash to partially fund a litigation trust to pursue third-party claims pursuant
to the LFC/LMUSA joint litigation trust agreement among LFC and its subsidiaries
and LMUSA, dated March 6, 1997 (the "LFC/LMUSA Litigation Trust"). Subject to
certain exceptions, the LFC Creditors' Trust (as defined herein) and the
creditors' trust established pursuant to the LMUSA Plan will receive sixty and
forty percent, respectively, of net proceeds from litigation. In March 2000, the
LFC Creditors' Trust received $7.1 million of net proceeds from the LFC/LMUSA
Litigation Trust resulting from litigation.

      The Class 3 general unsecured creditors were to receive a combination of
cash and new common stock as settlement of their allowed claim, pursuant to the
Joint Plan. On August 30, 2002, the remaining assets of the Creditors' Trust
were liquidated and contingent liabilities were reserved for, resulting in a
final net distribution of $1.7 million. The total of cash distributions through
March 31, 2003 was $34 million. On March 17, 2003, the Company received a signed
order from the Bankruptcy Court ordering the termination of the Creditors'
Trust.

      The Company, as trustee of the Creditors' Trust (the "Trustee"), has
attempted to maximize the value of the Creditors' Trust assets, and the success
of these efforts can be seen by the total of seven cash distributions and two
common stock distributions that the Trustee made over the life of the Creditors'
Trust to the beneficiaries. During the LFC bankruptcy, the various claims were
trading around six to eight cents on the dollar. The Trustee estimates that the
total amount of cash and stock distributions to beneficiaries was more than $40
million, or more than twenty-eight and a half cents per dollar of bond value.

NOTE C -- CREDITORS' TRUST

      The Joint Plan established a creditors' trust (the "Creditors' Trust") in
which the Company serves as trustee. The Creditors' Trust held the
non-reorganized assets of the Company in trust pending their disposition and/or
distribution to the creditors in accordance with the terms of the Joint Plan.
The Creditors' Trust was organized for the sole purpose of liquidating the
non-reorganized assets including proceeds, if any from the LFC/LMUSA Litigation
Trust. On August 30, 2002, the remaining assets of the Creditors' Trust were
liquidated and contingent liabilities were reserved for, resulting in a final
net distribution to trust beneficiaries of $1.7 million. The total of cash
distributions through March 31, 2003 was $34 million. On March 17, 2003, the
Company received a signed order from the Bankruptcy Court ordering the
termination of the Creditors' Trust.

      The Company, as trustee of the Creditors' Trust (the "Trustee"), has
attempted to maximize the value of the Creditors' Trust assets, and the success
of these efforts can be seen by the total of seven cash distributions and two
common stock distributions that the Trustee made over the life of the Creditors'
Trust to the beneficiaries. During the LFC bankruptcy, the various claims were
trading around six to eight cents on the dollar. The Trustee estimates that the
total amount of cash and stock distributions to beneficiaries was more than $40
million, or more than twenty-eight and a half cents per dollar of bond value.

      The assets and liabilities of the Creditors' Trust have not been reflected
in the accompanying Consolidated Balance Sheets as the Company is not the
beneficiary of the Trust. Accordingly, revenues and expenses related to the
Creditors' Trust assets and liabilities from April 1, 1997, through liquidation
of the trust have not been reflected in the accompanying Statements of
Consolidated Operations and Comprehensive Income (Loss). The allocation of costs
between the Creditors' Trust and the Company was based on management's estimate
of each entity's proportional share of costs. Gains and losses from the
Creditors' Trust were solely for the former creditors' benefit and the Company
had no risk of loss on the assets or liabilities. The amounts ultimately
distributed to the former creditors were solely dependent on the success of the
Company, the amounts realized from the collection of assets and settlement of
liabilities for both the Creditors' Trust and the LFC/LMUSA Litigation Trust.
Stockholders who were not former creditors of the Joint Debtors were not
beneficiaries of the Creditors' Trust.

      The Company charged to the Creditors' Trust expenses of $12,000 and
$86,000 for the quarter and nine months ended March 31, 2003, respectively, and
$11,000 and $68,000 for the quarter and nine months ended March 31, 2002,
respectively, reported as trust expense reimbursement on the Company's
Statements of Consolidated Operations and Comprehensive Income (Loss). The
expenses consisted of an overhead allocation from the Company, based upon
management's estimate of resources used by the Creditors' Trust. The allocation
of overhead to the Creditors' Trust was slightly higher for the periods ended
March 31, 2003, as a result of the additional work related to the final
distribution and the liquidation of the Trust. There will be no additional trust
expense reimbursement income for the remainder of the fiscal year or thereafter.


                                       6
<PAGE>

NOTE D -- INVESTMENT IN REAL ESTATE

      The Company's investment in real estate, owned by LLG, consists of 162.1
acres (approximately 138.0 acres net of flood plain) of unimproved land in
Allen, Texas (the "Allen property") as of March 31, 2003. The southern boundary
of the Allen property is the Exchange Parkway, which provides access to the
property from Central Expressway on the west and from Highway 5 on the east. As
of March 31, 2003, the Allen property included five tracts of land: one tract of
approximately 31.9 net acres zoned multi-family, one tract of approximately 77.2
net acres zoned light industrial, two tracts of approximately 24.2 net acres
zoned commercial and one tract of 4.6 net acres zoned residential. With a
continuing view towards maximizing shareholder value, management is attempting
to have the one residential tract re-zoned as commercial.

      The Company's strategy for its real estate holdings has been to attempt to
increase the value of the property through the re-zoning of certain tracts. As
previously reported, several of the re-zoning proposals were approved,
specifically relocating the multifamily tract to a more accessible location in
1999, and changing the single family zoning to light industrial. In the fourth
quarter of fiscal year 2001, five acres of the multi-family property were
successfully re-zoned as light industrial.

      On February 23, 2001, the Company completed the sale of approximately 17.3
acres of property zoned light industrial to Crow Family Holdings Industrial
Texas, LP ("Crow Family Holdings"), an unaffiliated partnership. Net cash
proceeds from the sale totaled $1.251 million and the Company recorded a gain on
sale of real estate of $945,000 in the quarter ended March 31, 2001, as
previously reported in the Company's Consolidated Financial Statements. In
addition, Crow Family Holdings acquired outstanding options, which expired 18
months from the original sale date, to purchase substantially all the remaining
light industrial property (approximately 77.2 net acres). On January 16, 2002,
the Company received additional cash proceeds of $36,000 from the real estate
sale in February 2001, representing the final settlement and proration of
rollback taxes, reported as additional gain on the sale of real estate in the
Company's Consolidated Financial Statements.

      On February 22, 2002, the Company and Crow Family Holdings agreed to the
First Amendment to Sale Contract (the "First Amendment") which extended the
closing date on the sale of 14.25 acres of property zoned light industrial to on
or before August 22, 2002. In addition, the First Amendment extended the option
period to August 22, 2002, on all outstanding options. The Company received a
$125,000 non-refundable deposit, which was included in unearned income on the
Company's Consolidated Balance Sheets as of June 30, 2002. On August 23, 2002,
the Company was informed that Crow Family Holdings would not close on the
transaction or exercise their options. Therefore, the Company recognized the
$125,000 as other real estate income reported in the Company's Statements of
Consolidated Operations and Comprehensive Income (Loss) for the quarter ended
September 30, 2002. In the second quarter of fiscal year 2003, Crow Family
Holdings indicated that they no longer had an interest in entering into an
agreement with the Company.

      On February 10, 2003, the Company completed the sale of an easement over a
portion of the light industrial property for a sewer line to the city of
Fairview. The Company received proceeds of $59,500 included in other real estate
income in the Company's Statements of Consolidated Operations and Comprehensive
Income (Loss) for the quarter ended March 31, 2003. The Company shall have the
right to fully use the premises covered by the easement; however, it may not
erect buildings over the easement tract.

      The Company is currently marketing the property zoned for multifamily use,
and continues to market the light industrial and commercial properties. During
the past year, management has been disappointed in being unsuccessful in
completing the sale of some of the properties; most notably, the agreement with
Crow Family Holdings for the light industrial property. The Company is
continuing to market the properties, even though the near-term outlook for
commercial real estate is rather uncertain, due to the increasingly soft
economic conditions, various customer project delays, and especially the
suddenly depressed real estate market in the nearby Dallas telecom corridor.
Management has also been considering the amount of time available to the Company
to hold and maintain the various real estate assets given the new cost and
operating environments that the Company finds itself in today. Management
expects increased costs related to new legislation in the areas of public
reporting and shareholder administration, legal, audit and liability insurance.
These higher costs and lower revenue expectations directly affect the ability of
the Company to carry the real estate assets for an extended period of time.


                                       7
<PAGE>

      Due to these various changes discussed above, management believes that it
is no longer "more likely than not" that the Company will be able to realize any
benefit related to the deferred tax assets, net of the existing valuation
allowance as of March 31, 2003 and December 31, 2002. In the quarter ended
December 31, 2002, the Company reestablished the valuation allowance for
pre-reorganization deferred tax assets by charging deferred federal income tax
expense in the amount of $1.908 million, which eliminated the net deferred tax
asset balance included in the Company's Consolidated Balance Sheet. As of March
31, 2003 and June 30, 2002, the Company reported a net deferred tax asset
balance of $0 and $1.908 million, respectively, included in long term assets on
the Company's Consolidated Balance Sheets.

      Real estate is carried at the fresh-start reporting value as of March 31,
1997, adjusted for improvements capitalized in accordance with the Company's
capitalization policy. The Company's investment in real estate was reported as
$4.764 million and $4.656 million as of March 31, 2003, and June 30, 2002,
respectively, on the Company's Consolidated Balance Sheets. Even though there
has been a decline in the market values as described above, the real estate
investment amounts carried on the Company's Consolidated Balance Sheets are not
deemed to be impaired as of March 31, 2003.

NOTE E -- ASSISTED CARE FACILITY MANAGEMENT

      Siena Housing Management, Inc. ("SHM") manages and maintains an assisted
care facility in Houston, Texas under a management agreement into which it
entered on June 27, 1977 (the "Management Agreement") with Treemont, Inc.
("Treemont"). Under this agreement, SHM receives a fee based on gross revenues
and net income of Treemont. Refer to the Company's annual report on Form 10-K
for the fiscal year ended June 30, 2002, for more information on the Company's
assisted care business and management contract.

      On January 4, 2001, the Company agreed to the First Amendment to
Management Agreement (the "First Amendment") with Treemont which specifies the
terms for a potential sale of the Treemont facility. SHM consented that the
owners of Treemont may sell the facility with absolute discretion and terminate
the Management Agreement in exchange for a graduated percentage of the net
proceeds (as defined) from the sale of the facility. If a sale transaction is
ultimately concluded, SHM shall not be obligated to terminate the Management
Agreement if SHM does not receive at least $2 million as its share of the
proceeds. The owners of Treemont agreed to provide written notice of the
commencement of any negotiations. During the second quarter of fiscal year 2002,
SHM was notified of the commencement of negotiations by the Treemont owners with
a prospective buyer. In the first quarter of fiscal year 2003, SHM was informed
that the owners of Treemont had signed an agreement to sell the property. In
February 2003, the sale terminated on its own terms, however, the owners of
Treemont renegotiated the contract with the same buyer in May 2003. The sales
agreement has certain due diligence, financing and insurance requirements. As a
result of these requirements, there can be no assurance that the sale
transaction will, in fact, close.

NOTE F -- INVESTMENTS IN EQUITY SECURITIES

      Investments in equity securities are classified as available-for-sale and
are held by the Company's real estate subsidiary, LLG. The fair value of the
securities based on quoted market prices was $102,000 and $197,000 as of March
31, 2003 and June 30, 2002, respectively. The cost basis of the securities as of
March 31, 2003 and June 30, 2002, was reported as $176,000 and $176,000,
respectively. The cost basis was reduced by $41,000 during fiscal year 2002 for
realized losses from other than a temporary decline in the value of the
securities. Unrealized gains and losses are included, net of tax, in accumulated
other comprehensive income (loss), a component of stockholders' equity as
reported on the Company's Consolidated Balance Sheets. Realized gains and losses
are reported in revenue on the Company's Statements of Consolidated Operations
and Comprehensive Income (Loss). Realized losses from other than temporary
decline in value of the securities are reported as expense on the Company's
Statements of Consolidated Operations and Comprehensive Income (Loss).

NOTE G -- STOCKHOLDERS' EQUITY

      As of March 31, 2003 and June 30, 2002, the Company had 15,000,000 shares
of $.10 par value common stock authorized, with 6,000,000 shares issued and
outstanding. The common stock has no preemptive or other subscription rights and
there are no conversion rights, redemption or sinking fund provisions with
respect to such shares.


                                       8
<PAGE>

      For the nine months ended March 31, 2003, the Company recorded $7,000 in
compensation expense related to stock options which increased additional
paid-in-capital by $7,000. The Company also received a tax refund of $21,000
that increased additional paid-in-capital by $21,000, for a total increase to
additional paid-in-capital of $28,000. The Company recorded $12,000 in
compensation expense in the nine months ended March 31, 2002, related to stock
options which increased additional paid-in-capital by $12,000. Other changes
increased additional paid-in-capital $8,000, resulting in a total increase to
additional paid-in-capital of $20,000 for the nine months ended March 31, 2002.

      The Company, as of March 31, 2003 and June 30, 2002, had 1,000,000 shares
of $1.00 par value preferred stock authorized, with 0 shares issued and
outstanding.

      On February 13, 2003, the Company's Board of Directors approved the
formation of a special committee of independent directors to explore a going
private transaction by means of a reverse stock split. The contemplated
transaction is subject to a number of conditions, including the approval of the
transaction by the special committee, which will consist solely of independent
members of the Board, the receipt of a fairness opinion from the financial
advisor to the special committee that the proposed transaction is fair from a
financial point of view to the Company's stockholders, and approval by the
Company's stockholders. There is no assurance that the contemplated transaction
will be completed.

NOTE H -- FEDERAL INCOME TAXES

      For the quarter and nine months ended March 31, 2003, SHI and its
subsidiaries reported federal income tax expense of $0 and $1.908 million,
respectively, and $0 and $0 for the quarter and nine months ended March 31,
2002, respectively. The federal income tax expense for the nine months ended
March 31, 2003, included $1.908 million of deferred tax expense resulting from
the reestablishment of the valuation allowance for pre-reorganization deferred
tax assets, as discussed below.

      Due to the various changes in the commercial real estate market and the
Company's higher cost and lower revenue expectations discussed in "Note D -
Investment in Real Estate", management now believes that it is not more likely
than not that the Company will be able to realize the benefit of these deferred
tax assets, net of the existing valuation allowance as of March 31, 2003 and
December 31, 2002. In the quarter ended December 31, 2002, the Company
reestablished the valuation allowance for pre-reorganization deferred tax assets
by charging deferred federal income tax expense in the amount of $1.908 million,
which eliminated the net deferred tax asset balance included in the Company's
Consolidated Balance Sheet. As of March 31, 2003 and June 30, 2002, the Company
reported a net deferred tax asset balance of $0 and $1.908 million,
respectively, included in long term assets on the Company's Consolidated Balance
Sheets.

      SHI and its subsidiaries had $95 million in gross deferred tax assets as
of March 31, 2003 and June 30, 2002, subject to an offsetting valuation
allowance of $95 million and $93.0 million as of March 31, 2003 and June 30,
2002, respectively. Essentially all of this valuation allowance is considered to
be attributable to pre-reorganization tax attributes. Accordingly, future
utilization of these pre-reorganization tax attributes on a consolidated basis
will result in a federal income tax benefit to the extent of the net deferred
tax assets that had been previously recognized. Future utilization of these
pre-reorganization tax attributes in an amount greater than the net deferred tax
assets that had been previously recognized will result in direct increases to
additional paid-in-capital. The Company reported gross deferred tax liabilities
of $0 and $7,000 as of March 31, 2003 and June 30, 2002, respectively. Refer to
the "Federal Income Taxes" footnote as reported in the annual report on Form
10-K for the year ended June 30, 2002, for more information.

      In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion or all of the
deferred tax assets will not be realized. The ultimate realization of deferred
tax assets is dependent upon the generation of future taxable income during the
periods in which these temporary differences become deductible. Management
considers the reversal of any deferred tax liabilities, projected future taxable
income and tax planning strategies in making this assessment.

NOTE I -- LOSS PER SHARE

      Losses per common share were determined using the weighted average shares
issued. The effects of outstanding options are not included in the calculation
of diluted loss per common share as they are anti-dilutive. Therefore, the
effect of the 6,106,000 and 6,131,000 options for the quarter and nine months
ended March 31, 2003, respectively, and 6,144,000 and 6,132,000 options for the
quarter and nine months ended March 31, 2002, respectively, are not included in
the calculation of diluted loss per common share.


                                       9
<PAGE>

NOTE J -- RECENT ACCOUNTING PRONOUNCEMENTS

      In December 2002, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 148, Accounting for
Stock-Based Compensation - Transition and Disclosure, an amendment of FASB
Statement No. 123. SFAS No. 148 provides alternative methods of transition for a
voluntary change to the fair value-based method of accounting for stock-based
employee compensation. In addition, SFAS No. 148 amends the disclosure
requirements of SFAS No. 123, Accounting for Stock-Based Compensation to require
prominent disclosure in both annual and interim financial statements about the
method of accounting for stock-based employee compensation arrangements in each
period presented, and provides for a specific tabular format of the pro forma
disclosures required by SFAS No. 123. The Company adopted SFAS No. 148 in the
third quarter of fiscal year ended June 30, 2003. The Company accounts for its
stock-based compensation using the intrinsic value method as prescribed by APB
Opinion No. 25 "Accounting for Stock Issued to Employees" and related
interpretation as allowed by SFAS No. 123 and SFAS No. 148. There is no impact
on the quarter ended March 31, 2003, because there were no new options granted
during the quarter and the existing options were fully vested by December 31,
2002. The following table illustrates the effect on net loss as if the
fair-value-based method had been applied to all outstanding and unvested awards
in each period presented (in thousands):

<TABLE>
<CAPTION>
                                                             Quarter Ended             Nine Months Ended
                                                                March 31                    March 31
                                                         -------------------        ----------------------
                                                          2003         2002            2003          2002
                                                         ------       ------        --------        ------
<S>                                                      <C>          <C>           <C>             <C>
Net loss, as reported .............................      $   (96)     $  (104)      $(2,049)        $  (208)
Deduct stock-based employee compensation expense
    included in reported net loss, net of tax .....           --            4             7              12
Add total stock-based employee compensation
    expense  determined  under fair-value-based
    method for all rewards, net of tax ............           --          (27)          (45)            (81)
                                                         -------      -------       -------         -------
Pro forma net loss ................................      $   (96)     $  (127)      $(2,087)        $  (277)
                                                         =======      =======       =======         =======
Loss, Per Share
Basic loss, per share as reported .................      $(0.02)      $ (0.02)      $ (0.34)        $ (0.03)
                                                         -------      -------       -------         -------
Basic loss, per share pro forma ...................      $(0.02)      $ (0.02)      $ (0.35)        $ (0.05)
                                                         -------      -------       -------         -------
Diluted loss, per share as reported ...............      $(0.02)      $ (0.02)      $ (0.34)        $ (0.03)
                                                         -------      -------       -------         -------
Diluted loss, per share pro forma .................      $(0.02)      $ (0.02)      $ (0.35)        $ (0.05)
                                                         =======      =======       =======         =======
</TABLE>

      SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets, addresses the financial accounting and reporting for the impairment of
long-lived assets and for long-lived assets to be disposed of. This statement
supersedes SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed of. SFAS No. 144 requires, among other
things, that impairment losses resulting from the initial application of its
provision for long-lived assets to be held and used be reported in the period in
which the recognition criteria are initially applied and met based on the facts
and circumstances existing at that date. This statement, like SFAS No. 121,
requires consideration of the continuing effect of events or changes in
circumstances that occurred prior to initial application of SFAS No. 144. The
Company adopted SFAS No. 144 on July 1, 2002, and there was no impact on its
consolidated financial statements.

NOTE K -- INDUSTRY SEGMENT DATA OF OPERATIONS

      The Company has two reportable segments: (1) assisted care management,
which receives a fee for managing and maintaining an assisted care facility in
Houston, Texas, and (2) real estate investment and development. The accounting
policies of the segments are the same as those of the Company. Refer to the
"Significant Accounting Policies" footnote as reported in the annual report on
Form 10-K for the year ended June 30, 2002, for more information. The Company's
management evaluates performance of each segment based on profit and loss from
operations excluding allocation of corporate overhead expenses and interest
income.

      The following table summarizes the Company's identifiable assets by
segment as of March 31, 2003 and June 30, 2002 (in thousands):

                            (table on following page)


                                       10
<PAGE>

<TABLE>
<CAPTION>
                                                                      March 31, 2003     June 30, 2002
                                                                      --------------     -------------
<S>                                                                         <C>               <C>
Identifiable assets:
     Assisted care facility management (including receivable from .         $    562          $    449
         Parent company eliminated in consolidation)
     Real estate ..................................................            6,772             6,798
                                                                            --------          --------
                                                                               7,334             7,247
                                                                            --------          --------
     Reconciling items:
        Corporate cash, receivables and prepaid expenses (including            3,412             3,768
            receivable from subsidiary eliminated in consolidation)
       Deferred tax assets--net ...................................               --             1,908
        Elimination of intercompany receivables ...................             (383)             (330)
                                                                            --------          --------
Total assets per Consolidated Balance Sheet .......................         $ 10,363          $ 12,593
                                                                            ========          ========
</TABLE>

The following table summarizes the Company's segment data of operations for the
quarters and nine months ended March 31, 2003 and 2002 (in thousands):

<TABLE>
<CAPTION>
                                                     Quarter Ended         Nine Months Ended
                                                        March 31                March 31
                                                   -----------------       -----------------
                                                    2003        2002        2003       2002
<S>                                                <C>         <C>          <C>       <C>
Revenues:
   Assisted care management .................      $  94       $  60        247       $ 190
   Real estate ..............................         65          43        203          65
                                                   -----       -----       ----       -----
                                                     159         103        450         255
                                                   -----       -----       ----       -----

   Reconciling items:
      Corporate interest income .............         10          14         35          59
      Trust expense reimbursement ...........         12          11         86          68
      Other corporate revenue ...............         --          --         --           7
                                                   -----       -----       ----       -----
                                                      22          25        121         134
                                                   -----       -----       ----       -----
Total revenues per Statements of Consolidated

                                                   -----       -----       ----       -----
   Operations and Comprehensive Income (Loss)      $ 181       $ 128        571       $ 389
                                                   =====       =====       ====       =====

Operating income:
   Assisted care management .................      $  60       $  34        164       $ 112
   Real estate ..............................         63           1        197          20
                                                   -----       -----       ----       -----
                                                     123          35        361         132
                                                   -----       -----       ----       -----

   Reconciling items:
       Corporate interest income ............         10          14         35          59
       Trust expense reimbursement ..........         12          11         86          68
      Unallocated corporate expenses ........       (241)       (164)      (623)       (474)
      Other .................................         --          --         --           7
                                                   -----       -----       ----       -----
                                                    (219)       (139)      (502)       (340)
                                                   -----       -----       ----       -----

Loss from operations before federal income
   tax expense per Statements of Consolidated
   Operations and Comprehensive Income (Loss)      $ (96)      $(104)      (141)      $(208)
                                                   =====       =====       ====       =====
</TABLE>


                                       11
<PAGE>

Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations.

Results of Operations

      Statements contained herein that are not purely historical are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including
but not limited to statements regarding the Company's expectations, hopes,
beliefs, intentions or strategies regarding the future. Actual results could
differ materially from those projected in any forward-looking statements as a
result of a number of factors, including those detailed in this Management's
Discussion and Analysis of Financial Condition and Results of Operations, as
well as those set forth elsewhere herein. The forward-looking statements are
made as of the date of these financial statements and the Company undertakes no
obligation to update or revise the forward-looking statements, or to update the
reasons why actual results could differ materially from those projected in the
forward-looking statements.

      The operating results of the Company during the quarters and nine months
ended March 31, 2003 and 2002, were as follows (in thousands):

<TABLE>
<CAPTION>
                                                      Quarter Ended          Nine Months Ended
                                                         March 31                 March 31
                                                    -----------------       -------------------
                                                     2003        2002         2003        2002
                                                    -----       -----       -------      ------
<S>                                                 <C>         <C>         <C>           <C>
Operating income:
   Assisted care management ..................      $  60       $  34       $   164       $ 112
   Real estate ...............................         63           1           197          20
                                                    -----       -----       -------       -----
                                                      123          35           361         132
                                                    -----       -----       -------       -----

Other income and expenses:
    Interest income ..........................         10          14            35          59
    Trust expense reimbursement income .......         12          11            86          68
   Unallocated corporate expenses ............       (241)       (164)         (623)       (474)
   Other .....................................         --          --            --           7
                                                    -----       -----       -------       -----
                                                     (219)       (139)         (502)       (340)
                                                    -----       -----       -------       -----

Loss from operations before federal income tax        (96)       (104)         (141)       (208)
Federal income tax expense ...................         --          --         1,908          --
                                                    -----       -----       -------       -----
      Net loss ...............................      $ (96)      $(104)      $(2,049)      $(208)
                                                    =====       =====       =======       =====
</TABLE>

      Assisted Care Management. The Company's operating income of the assisted
care management operations for the quarter and nine months ended March 31, 2003
was approximately $26,000 and $52,000, respectively, higher than the same
periods in the prior year. SHM manages and maintains an assisted care facility
in Houston, Texas under a management agreement into which it entered on June 27,
1977 with Treemont, Inc. ("Treemont"). Under this agreement, SHM receives a fee
based on gross revenues and a defined net income of Treemont. Refer to the
Company's annual report on Form 10-K for the fiscal year ended June 30, 2002,
for more information on the Company's assisted care business and management
contract. The management fee received by Siena Housing Management, Inc. ("SHM"),
a wholly-owned subsidiary of the Company, was higher in the quarter and nine
months ended March 31, 2003, than in the same periods in the prior year by
approximately $34,000 and $57,000, respectively, primarily as a result of lower
debt payments (which are included in the defined net income calculation) offset
by higher insurance expense reported by Treemont.

      On January 4, 2001, the Company agreed to the First Amendment to
Management Agreement (the "First Amendment") with Treemont which specifies the
terms for a potential sale of the Treemont facility. SHM consented that the
owners of Treemont may sell the facility with absolute discretion and terminate
the Management Agreement in exchange for a graduated percentage of the net
proceeds (as defined) from the sale of the facility. If a sale transaction is
ultimately concluded, SHM shall not be obligated to terminate the Management
Agreement if SHM does not receive at least $2 million as its share of the
proceeds. The owners of Treemont agreed to provide written notice of the
commencement of any negotiations. During the second quarter of fiscal year 2002,
SHM was notified of the commencement of negotiations by the Treemont owners with
a prospective buyer. In the first quarter of fiscal year 2002, SHM was informed
that the owners of Treemont had signed an agreement to sell the property. In
February 2003, the sale terminated on its own terms, however, the owners of
Treemont renegotiated the contract with the same buyer in May 2003. The sales
agreement has certain due diligence, financing and insurance requirements. As a
result of these requirements, there can be no assurance that the sale
transaction will, in fact, close.


                                       12
<PAGE>

      Real Estate. The Company's investment in real estate, owned by LLG,
consists of 162.1 acres (approximately 138.0 acres net of flood plain) of
unimproved land in Allen, Texas (the "Allen property") as of March 31, 2003. The
southern boundary of the Allen property is the Exchange Parkway, which provides
access to the property from Central Expressway on the west and from Highway 5 on
the east. As of March 31, 2003, the Allen property included five tracts of land:
one tract of approximately 31.9 net acres zoned multi-family, one tract of
approximately 77.2 net acres zoned light industrial (formerly single-family),
two tracts of approximately 24.2 net acres zoned commercial and one tract of 4.6
net acres zoned residential. With a continuing view towards maximizing
shareholder value, management is attempting to have the one residential tract
re-zoned as commercial.

      The Company's strategy for its real estate holdings has been to attempt to
increase the value of the property through the re-zoning of certain tracts. As
previously reported, several of the re-zoning proposals were approved,
specifically relocating the multifamily tract to a more accessible location in
1999, and changing the single family zoning to light industrial. In the fourth
quarter of fiscal year 2001, five acres of the multi-family property were
successfully re-zoned as light industrial.

      On February 23, 2001, the Company completed the sale of approximately 17.3
acres of property zoned light industrial to Crow Family Holdings Industrial
Texas, LP ("Crow Family Holdings"), an unaffiliated partnership. Net cash
proceeds from the sale totaled $1.251 million and the Company recorded a gain on
sale of real estate of $945,000 in the quarter ended March 31, 2001, as
previously reported in the Company's Consolidated Financial Statements. In
addition, Crow Family Holdings acquired outstanding options, which expired 18
months from the original sale date, to purchase substantially all the remaining
light industrial property (approximately 77.2 acres). On January 16, 2002, the
Company received additional cash proceeds of $36,000 from the real estate sale
in February 2001, representing the final settlement and proration of rollback
taxes, reported as additional gain on the sale of real estate in the Company's
Consolidated Financial Statements.

      On February 22, 2002, the Company and Crow Family Holdings agreed to the
First Amendment to Sale Contract (the "First Amendment") which extended the
closing date on the sale of 14.25 acres of property zoned light industrial to on
or before August 22, 2002. In addition, the First Amendment extended the option
period to August 22, 2002, on all outstanding options. The Company received a
$125,000 non-refundable deposit, which was included in unearned income on the
Company's Consolidated Balance Sheets as of June 30, 2002. On August 23, 2002,
the Company was informed that Crow Family Holdings would not close on the
transaction or exercise their options. Therefore, the Company recognized the
$125,000 as other real estate income reported in the Company's Statements of
Consolidated Operations and Comprehensive Income (Loss) for the quarter ended
September 30, 2002. In the second quarter of fiscal year 2003, Crow Family
Holdings indicated that they no longer had an interest in entering into an
agreement with the Company.

      On February 10, 2003, the Company completed the sale of an easement over a
portion of the light industrial property for a sewer line to the City of
Fairview. The Company received proceeds of $59,500 included in other real estate
income in the Company's Statements of Consolidated Operations and Comprehensive
Income (Loss) for the quarter ended March 31, 2003. The Company shall have the
right to fully use the premises covered by the easement; however, it may not
erect buildings over the easement tract.

      The Company is currently marketing the property zoned for multifamily use,
and continues to market the light industrial and commercial properties. During
the past year, management has been disappointed in being unsuccessful in
completing the sale of some of the properties; most notably, the agreement with
Crow Family Holdings for the light industrial property. The Company is
continuing to market the properties, even though the near-term outlook for
commercial real estate is rather uncertain, due to the increasingly soft
economic conditions, various customer project delays, and especially the
suddenly depressed real estate market in the nearby Dallas telecom corridor.
Management has also been considering the amount of time available to the Company
to hold and maintain the various real estate assets given the new cost and
operating environments that the Company finds itself in today. Management
expects increased costs related to new legislation in the areas of public
reporting and shareholder administration, legal, audit and liability insurance.
These higher costs and lower revenue expectations directly affect the ability of
the Company to carry the real estate assets for an extended period of time.


                                       13
<PAGE>

      Due to these various changes discussed above, management believes that it
is no longer "more likely than not" that the Company will be able to realize any
benefit related to the deferred tax assets, net of the existing valuation
allowance as of March 31, 2003 and December 31, 2002. In the quarter ended
December 31, 2002, the Company reestablished the valuation allowance for
pre-reorganization deferred tax assets by charging deferred federal income tax
expense in the amount of $1.908 million, which eliminated the net deferred tax
asset balance included in the Company's Consolidated Balance Sheet. As of March
31, 2003 and June 30, 2002, the Company reported a net deferred tax asset
balance of $0 and $1.908 million, respectively, included in long term assets on
the Company's Consolidated Balance Sheets.

      Real estate is carried at the fresh-start reporting value as of March 31,
1997, adjusted for improvements capitalized in accordance with the Company's
capitalization policy. The Company's investment in real estate was reported as
$4.764 million and $4.656 million as of March 31, 2003, and June 30, 2002,
respectively, on the Company's Consolidated Balance Sheets. Even though there
has been a decline in the market values as described above, the real estate
investment amounts carried on the Company's Consolidated Balance Sheets are not
deemed to be impaired as of March 31, 2003.

      The real estate operating results for the third quarter in fiscal year
2003 were higher than the same quarter in fiscal year 2002 as a result of other
real estate income recognized from the easement sale. The operating results for
the nine months ended March 31, 2003, were higher than the nine months ended
March 31, 2002, due to the recognition of $125,000 as other real estate income
in August 2002 and the easement sale in February 2003. In the nine months ended
March 31, 2003, improvement costs of $108,000 related to developing the
property, primarily property taxes, were capitalized in accordance with the
Company's capitalization policy, as compared to $74,000 of costs that were
capitalized during the nine months ended March 31, 2002. Costs related to the
re-zoning, marketing and developing the property will continue, some of which
may be capitalized.

      Other Income. The Company reported trust expense reimbursement income of
$12,000 and $86,000 for the quarter and nine months ended March 31, 2003,
respectively, as compared to $11,000 and $68,000 for the quarter and nine months
ended March 31, 2002, respectively, for an overhead allocation based upon
management's estimate of resources used by the Creditors' Trust. The allocation
of overhead to the Creditors' Trust was slightly higher for the periods ended
March 31, 2003, as a result of the additional work related to the final
distribution and the liquidation of the trust. There will be no additional trust
expense reimbursement income for the remainder of the fiscal year or thereafter.
Interest income is slightly lower for the periods ended March 31, 2003, due to
lower interest rates and a decrease in cash balances.

      Other Expenses. Unallocated corporate expenses were higher at $241,000 and
$623,000 for the quarter and nine months ended March 31, 2003, respectively, as
compared to $164,000 and $474,000 for the quarter and nine months ended March
31, 2002, respectively. Specifically, this increase in unallocated corporate
expenses was primarily attributable to: (1) higher consulting and legal fees of
$66,000 for the quarter primarily related to the proposed going private
transaction by means of a reverse stock split; (2) officer's contracts were
extended in December 2002 with increased compensation of $23,000 year to date;
(3) insurance premiums renewed in October 2002 have increased quarterly
insurance expense by $11,000 over the prior year; (4) incentive bonuses totaling
$18,000 paid in the first and third quarters of fiscal 2003 to directors and
officers pursuant to existing compensation plans; and (5) directors' fees were
$10,000 higher due to two additional meetings held this fiscal year.
Additionally, shareholder and public reporting expenses, other consulting and
accounting fees were slightly higher, offset by reduced franchise tax expense.
Unfortunately, a major factor in this increase of unallocated corporate expenses
is directly related to the newly mandated Securities and Exchange Commission
(the "SEC") requirements for public corporations, which will have a significant
and noticeable unintended impact on smaller companies such as SHI. As reported,
the Company has experienced and expects that it will continue to experience
increased premiums for liability insurance and increased expenses for
shareholder and public reporting , legal and auditing matters.

      Federal Income Tax Expense. For the quarter and nine months ended March
31, 2003, SHI and its subsidiaries reported federal income tax expense of $0 and
$1.908 million, respectively, and $0 and $0 for the quarter and nine months
ended March 31, 2002, respectively. The federal income tax expense for the nine
months ended March 31, 2003, included $1.908 million of deferred tax expense
resulting from the reestablishment of the valuation allowance for
pre-reorganization deferred tax assets. See "Note H - Federal Income Taxes" for
further information.


                                       14
<PAGE>

      Accrued Medical Insurance Premiums. In connection with the reorganization
in March 1997, the Company agreed to assume the pre-petition liability to
provide certain employees of a former subsidiary and their spouses with medical
insurance. The total amount of the liability was estimated using a life
expectancy age of 90, an annual health care cost increase rate of approximately
5% and a discount rate of approximately 6.5%. As of March 31, 2003 and June 30,
2002, the Company had an accrued liability established for payments to be made
to 27 people to be used toward the payment of insurance. As of March 31, 2003
and June 30, 2002, the current portion of the accrual for medical insurance
premiums is $120,000 and $81,000, respectively, and the long term liability
amount, included in long term liabilities on the Company's Consolidated Balance
Sheets, is $352,000 and $392,000, respectively. Most of the medical insurance
premium payments have not been made since December 2001, but are included in
current liabilities on the Company's Consolidated Balance Sheets, while the
Company obtains and reviews the terms of the prepetition liabilities.

      Proposed Reverse Stock Split. On February 13, 2003, the Company's Board of
Directors approved the formation of a special committee of independent directors
to explore a going private transaction by means of a reverse stock split. The
contemplated transaction is subject to a number of conditions, including the
approval of the transaction by the special committee, which will consist solely
of independent members of the Board, the receipt of a fairness opinion from the
financial advisor to the special committee that the proposed transaction is fair
from a financial point of view to the Company's stockholders, and approval by
the Company's stockholders. There is no assurance that the contemplated
transaction will be completed.

Liquidity and Capital Resources

      As of March 31, 2003, the only liabilities of the Company were accounts
payable and accrued expenses which will be paid from current operating cash
available as of March 31, 2003.

Critical Accounting Policies

      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. Some of the assets and liabilities by
their nature are more subject to estimates and assumptions. For the Company, the
amount of the net deferred tax asset balance reported on the Company's
Consolidated Balance Sheets is based on management's most recent estimated value
of the investment in real estate in excess of the related tax basis. Such
estimate changed in the quarter ended December 31, 2002, and could change again
in the future based on the occurrence of one or more future events. See "Note H
- Federal Income Taxes" for further information as to the change.

      The Company's liability for accrued medical insurance premiums was
estimated using a life expectancy age of 90, an annual health cost care increase
rate of approximately 5% and a discount rate of approximately 6.5%. Such
estimate could change in the future based on the occurrence of one or more
future events.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

      The Company is subject to potential fluctuations in operations and the
fair value of certain of its assets, as well as variations in expected cash
flows due to changes in market interest rates and equity prices. On December 15,
2000, the Company's board of directors authorized the use of up to 20% of the
Company's cash for the investment in equity securities, with no more than 50%
invested in any one company. The investment in equity securities exposes the
Company to general market risks. The investments had a fair market value of
$102,000 and $197,000 as of March 31, 2003 and June 30, 2002, respectively, with
an adjusted cost basis of $176,000 for both periods. The securities are
classified as available-for-sale and reported on the Company's Consolidated
Balance Sheets at fair market value with the unrealized holding (gain) loss
included, net of tax, in accumulated other comprehensive (income) loss, a
component of stockholders' equity. Realized gains (losses) are reported as
revenue in the Company's Consolidated Statements of Consolidated Operations and
Comprehensive Income (Loss). Realized losses for other than temporary decline in
value are reported in the Company's Statements of Consolidated Operations and
Comprehensive Income (Loss).


                                       15
<PAGE>

Item 4.  Controls and Procedures

      Evaluation of Disclosure Controls and Procedures. The Company's Chief
Executive Officer and Chief Financial Officer have reviewed and evaluated the
effectiveness of the Company's disclosure controls and procedures (as defined in
Exchange Act Rules 240.13a - 14(c) and 15d - 14(c)) as of a date within 90 days
before the filing date of this quarterly report. Based on that evaluation, the
Chief Executive Officer and Chief Financial Officer have concluded that the
Company's current disclosure controls and procedures are effective and timely,
providing them with material information relating to us required to be disclosed
in the reports we file or submit under the Exchange Act.

      Changes in Internal Controls. There have not been any significant changes
in our internal controls or in other factors that could significantly affect
these controls subsequent to the date of their evaluation. We are not aware of
any significant deficiencies or material weaknesses, therefore no corrective
actions were taken.

PART II -- OTHER INFORMATION

Item 3.  Defaults Upon Senior Securities.

      Refer to the Company's annual report on Form 10-K for the year ended June
30, 2002, for information regarding defaults by the Company relating to the debt
obligations of the Predecessor Company.

Item 6.  Exhibits and Reports on Form 8-K.

      (a) Exhibits:

          Exhibit
          Number
          ------
          (99.1)    Certification of Chief Executive Officer Pursuant to Section
                    906 of the Sarbanes-Oxley Act of 2002

          (99.2)    Certification of Chief Financial Officer Pursuant to Section
                    906 of the Sarbanes-Oxley Act of 2002

      (b) Reports on Form 8-K:

            On February 11, 2003, the Company filed with the SEC a current
      report on Form 8-K relating to the termination of a sale agreement of the
      assisted care facility in Houston, Texas that is managed by Siena Housing
      Management Corp., which is discussed in further detail in the "Note E -
      Assisted Care Facility Management" footnote in this report.

            On February 11, 2003, the Company filed with the SEC a current
      report on Form 8-K relating to the sale of an easement, which is discussed
      in further detail in the "Note D - Investment in Real Estate" footnote in
      this report.

            On February 13, 2003, the Company filed with the SEC a current
      report on Form 8-K indicating the formation of a special committee of
      independent directors to explore a going private transaction by means of a
      reverse stock split, which is discussed in further detail in the "Note G -
      Stockholders' Equity" footnote in this report.

            On March 17, 2003, the Company filed with the SEC a current report
      on Form 8-K relating to the termination of the LFC Creditors' Trust, which
      is discussed in further detail in the "Note C - Creditors' Trust" footnote
      in this report.


                                       16
<PAGE>

SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                                        SIENA HOLDINGS, INC.
                                                             (Registrant)


Date: May 12, 2003                                By:   /S/ W. JOSEPH DRYER
                                                               President


Date: May 12, 2003                                By:   /S/ W. JOSEPH DRYER
                                                   Principal Accounting Officer


                                       17
<PAGE>

                            CERTIFICATION PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
                         BY THE CHIEF EXECUTIVE OFFICER

I,  John P. Kneafsey, certify that:

      1.    I have reviewed this quarterly report on Form 10-Q of Siena
            Holdings, Inc.;

      2.    Based on my knowledge, this quarterly report does not contain any
            untrue statement of a material fact or omit to state a material
            fact, necessary to make the statements made, in light of the
            circumstances under which such statements were made, not misleading
            with respect to the period covered by this quarterly report;

      3.    Based on my knowledge, the financial statements, and other financial
            information included in this quarterly report, fairly present, in
            all material respects, the financial condition, results of
            operations and cash flows of the registrant as of and for the
            periods presented in this quarterly report;

      4.    The registrant's other certifying officer and I are responsible for
            establishing and maintaining disclosure controls and procedures (as
            defined in Exchange Act Rules 13a - 14 and 15d - 14) for the
            registrant and we have:

            a.    Designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this quarterly report is being prepared;
            b.    Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the "Evaluation
                  Date"); and
            c.    Presented in this quarterly report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

      5.    The registrant's other certifying officer and I have disclosed,
            based on our most recent evaluation, to the registrant's auditors
            and the audit committee of the registrant's board of directors (or
            persons performing the equivalent function):

            a.    all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and
            b.    any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

      6.    The registrant's other certifying officer and I have indicated in
            this quarterly report whether or not there were significant changes
            in internal controls or in other factors that could significantly
            affect internal controls subsequent to the date of our most recent
            evaluation, including any corrective actions with regard to
            significant deficiencies and material weaknesses.


May 12, 2003                                  By    /S/  JOHN P.  KNEAFSEY
                                                          John P. Kneafsey
                                                       Chief Executive Officer

<PAGE>

                            CERTIFICATION PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
                         BY THE CHIEF FINANCIAL OFFICER

I,  W. Joseph Dryer, certify that:

      1.    I have reviewed this quarterly report on Form 10-Q of Siena
            Holdings, Inc.;

      2.    Based on my knowledge, this quarterly report does not contain any
            untrue statement of a material fact or omit to state a material
            fact, necessary to make the statements made, in light of the
            circumstances under which such statements were made, not misleading
            with respect to the period covered by this quarterly report;

      3.    Based on my knowledge, the financial statements, and other financial
            information included in this quarterly report, fairly present, in
            all material respects, the financial condition, results of
            operations and cash flows of the registrant as of and for the
            periods presented in this quarterly report;

      4.    The registrant's other certifying officer and I are responsible for
            establishing and maintaining disclosure controls and procedures (as
            defined in Exchange Act Rules 13a - 14 and 15d - 14) for the
            registrant and we have:

            a.    Designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this quarterly report is being prepared;
            b.    Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the "Evaluation
                  Date"); and
            c.    Presented in this quarterly report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

      5.    The registrant's other certifying officer and I have disclosed,
            based on our most recent evaluation, to the registrant's auditors
            and the audit committee of the registrant's board of directors (or
            persons performing the equivalent function):

            a.    all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and
            b.    any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

      6.    The registrant's other certifying officer and I have indicated in
            this quarterly report whether or not there were significant changes
            in internal controls or in other factors that could significantly
            affect internal controls subsequent to the date of our most recent
            evaluation, including any corrective actions with regard to
            significant deficiencies and material weaknesses.


May 12, 2003                                   By  /S/    W. JOSEPH DRYER
                                                           W. Joseph Dryer
                                                       Chief Financial Officer