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Contact:
Steven B. Solomon Chairman and CEO CT Holdings, Inc. 214-520-9292
p 214-520-0034
f Sean
Dougherty
The MWW Group
(201) 507-9500 p
CT
Holdings Reports Preliminary Financial Results for Third Quarter; Security
Software Demand From Government
and Military Channels To Fuel Growth Parago
Subsidiary Reports Record Revenues of $7.6 Million, a 37% Increase From Q3
2000 Dallas,
Texas – October 25, 2001-- CT
Holdings, Inc. (OTCBB: CITN) announced its preliminary financial results
for its third fiscal quarter ended September 30, 2001. Revenues for the
quarter were $141,028, an increase of 74.7 percent from software revenues
of $80,711 for the quarter ended June 30, 2001. Revenues do not include
any subsidiary revenue from CT Holdings' ownership interest in Parago or
River Logic. Parago reported record revenues of $7.6 million for the
third quarter of 2001, an increase of 37 percent from revenues for the
third quarter of 2000. CT Holdings reported an operating loss for
the quarter ended September 30, 2001 of $443,671, or ($0.01) per share,
compared to an operating loss of $629,733, or ($0.01) per share, for the
quarter ended September 30, 2000. Damaging
Hacker Attacks, War on Terrorism Put Focus on Security Technology Government, military
and corporate interest in Citadel Technology software rose following
terrorist attacks on the World Trade Center and Pentagon on September 11.
This follows sustained growth in demand for Citadel Technology data
security products from American companies concerned about a wave of severe
virus and worm attacks during the quarter that caused billions of dollars
in damages, as well as legislative initiatives like HIPAA and
Gramm-Leach-Bliley. “Several Federal
and state government agencies and military branches contacted us for
information about Citadel products following the attacks. We already
had a significant client base in government and military accounts, so we
are experienced in meeting the new government and military needs for
computer security. We expect this demand to generate revenue
beginning in the fourth quarter of 2001,” said Steven B. Solomon,
chairman and CEO of CT Holdings. CT Holdings
Launches New Security Products "Our launch of
security initiatives in our CT Holdings’ line of Citadel Technology
network security and privacy software started in June 2001 and led to
several breakthrough events in the third quarter that point to a very
promising fourth quarter and beyond,” said Solomon. “We expect fourth
quarter revenues to exceed the previous three quarters combined, as well
as strong revenue growth for 2002 and to be cash flow positive in the
first quarter of 2002. “We have received
strong initial response for our new Hercules vulnerability remediation
automation software, which is currently in beta testing and expected to be
released for commercial sale by the end of the fourth quarter,” Solomon
continued. Significant
Recent Developments include:
Information
Security Magazine, the leading trade publication of computer security,
reported in its October 2001 annual survey that internal security breaches
– those directly addressed by Citadel Technology products -- continue to
be the most common security problem for network managers. “Corporate
managers were already looking for ways to prevent damage to their
networks, rather than repair it,” Solomon added. “Our new
products are hitting the market just as demand is running highest.” Parago
Records Record Revenues in Third Quarter; Signs Several New Accounts While reporting
record revenues, Parago has also significantly expanded its client base,
with 63 national accounts, increasing from 14 at the start of 2001.
Parago reported an EBITDA loss of $368,000, a 93 percent improvement from
the third quarter of 2000. “Parago continues
to excel in its market, reducing its EBITDA losses for the quarter as it
continues to build its business and brand. The many new accounts
signed in the quarter as well as the growing popularity of its services
and value propositions offered to its customers puts Parago in an
excellent position to capitalize on its successes to date.” CT Holdings
continues to hold 20,000,000 shares of Parago common stock and warrants to
purchase 28,864.15 shares of Series A-3
Preferred Stock, convertible into 2,886,415 shares of Parago common stock
at $0.01 per share, acquired in connection with the guarantee
participation, which will become exercisable only in the event CT fulfills
all of its obligations under the Participation Agreement or Parago repays
the bridge loan. River Logic
Developments River Logic continues
to improve their product offerings, and in August 2001 announced the
release and shipment of its latest upgrades - River Logic Enterprise
Optimizer™ 3.1 and Enterprise Optimizer MTP™ 3.1. These upgrades
enhance what is already a technologically mature and powerful, yet natural
and flexible, solution that addresses “pain-points” relative to
enterprise efficiency analysis and results communication.
In addition, Kevin
Howe was elected Chairman and CEO of River Logic.
Mr. Howe brings a wealth of financial and technology experience and
is also the managing partner of Mercury Ventures, which manages three
funds that invest in emerging technology companies that focus on Internet
applications. Mr. Howe serves on the boards of four publicly traded
technology firms that are listed on the NASDAQ and London exchanges. Mr.
Howe also sits on the boards of five privately held technology firms. He
has extensive experience as an entrepreneur and as a corporate executive. About Citadel
Technology CT Holdings’
Citadel Technology develops and markets computer security and privacy
software for one of the fastest growing segments today – security
“inside the firewall.” These products enable companies to
enforce security policies from a single point of control across all
Windows and NetWare platforms. Citadel Technology software secures
confidential information, applications, and systems from unauthorized
access, worms, and other security vulnerabilities. The products
specifically enforce policies recently mandated by HIPAA and
Gramm-Leach-Bliley legislation for the health care and financial
industries. Citadel’s clients include IBM Global
Services, Merrill Lynch, the U.S. Navy and several large health care
companies. About CT Holdings
CT Holdings, Inc. (OTCBB:
CITN) develops and markets its Citadel Technology line of desktop and
network security software, and also acts as a developer of early stage
companies, including Parago and River Logic.
About
Parago Parago's
patent-pending technology platform and processes represent an innovative
approach designed to improve the promotional marketing industry.
Parago provides a range of Internet-based customer relationship
management products, PromoCenterSM, ValueRewardsSM
and KnowledgeCenterSM, which are created to increase sales,
reduce costs, enhance customer retention for its clients, and improve
loyalty. These products comprise Parago's Continuous Customer InteractionSM
model, which helps retailers, manufacturers and service organizations
reduce the cost of conducting promotions and drive incremental revenue by
cross-selling and upselling new products and services.
During the relationship management process, Parago captures fresh,
accurate, and usable transaction and buyer demographic data that can be
used by its clients to improve their promotional marketing programs.
Parago maintains a web site at www.parago.com. About
River Logic River Logic develops
decision-support applications for industry. Using our open and
rapid-application development (ORAD) system, developers at River Logic
create applications that enable industry professionals to model complex
enterprises and explore financial relationships on a desktop computer or
laptop. Embedded analytics allow end-users to understand the financial
implications of critical business decisions easily by manipulating
graphical icons that model their enterprise. Headquartered in
Beverly, Massachusetts, with offices in Austin, Dallas, and Portland,
River Logic is a privately held corporation receiving venture capital
support from Cardinal Investment, Inc., CT Holdings (NASDAQ:CITN), EBSCO
CASIAS, eMed Ventures, the Intel 64 Fund, and Mercury Ventures. The
company's solution incorporates several patented technologies and
leverages research originally conducted at University of Massachusetts and
the Russian Academy of Sciences. To learn more about
River Logic, visit www.riverlogic.com
or call David Parnell, Chief Operating Officer, at (512) 479-6918. For more information
on CT Holdings, its Internet subsidiaries, and its Citadel Technology line
of security software products, please visit our Web site at http://www.ct-holdings.com.
For information on purchasing products, contact us directly by writing or
calling: CT Holdings, 3811 Turtle Creek Blvd., Suite 770, Dallas, Texas
75219; phone: 214/520.9292; fax: 214/520.9293. Forward-Looking Statements: This news release contains forward-looking statements, which involve risks and uncertainties. Accordingly, no assurances can be given that the actual events and results will not be materially different than the anticipated results described in the forward-looking statements. Investors are also directed to consider carefully the other risk factors and uncertainties discussed in documents we file with the Securities and Exchange Commission, including our Quarterly Report on Form 10-QSB for the quarter ended June 30, 2001 and our Annual Report on Form 10-KSB for the year ended December 31, 2000. There are a number of important factors that could cause actual results to differ materially from those expressed in any forward-looking statement made by us. These factors include the availability of capital to CT Holdings; Parago and River Logic; substantial dilution in the event CT Holdings determines not to fully participate in the Parago bridge loan participation in the event the additional payments are required; risks related to our software business line; the activities of new or existing competitors; the development of new forms of computer viruses or worms that circumvent our software; the ability to attract and retain employees and strategic partners; general economic conditions; and litigation costs. The Company
undertakes no obligation to publicly release the result of any revisions
to these forward-looking statements, which may be made to reflect events
or circumstances after the date hereof or to reflect the occurrence of
unanticipated events. #
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