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Contact: Steven B. Solomon Chairman and CEO CT Holdings, Inc. 214-520-9292 p 214-520-0034 f ssolomon@citadel.com www.ct-holdings.com
CT Holdings, Inc. Announces Plan to Spin-Off its Citadel Security Software Business Special Dividend Designed to Unlock Shareholder Value
DALLAS, TEXAS -- November 7, 2001 -- CT Holdings, Inc. (OTC Bulletin Board: CITN) today announced that its Board of Directors has approved the spin-off of its wholly owned Citadel Security Software Inc. subsidiary as a special dividend to shareholders of CT Holdings.
Upon effectiveness of the required Form 10 SEC filing, CT Holdings will distribute all of its shares of Citadel Software to CT Holdings shareholders of record on the record date, currently anticipated to be on or about December 20, 2001. The record date for shareholders will be set within three weeks and CT Holdings is currently working with market makers to create a market in the shares of Citadel Software. Immediately after the planned distribution, CT Holdings will no longer own shares of Citadel Software but will retain its interest in Parago and River Logic, and shareholders of CT Holdings will own shares of the new Citadel Software entity and their shares of CT Holdings.
CT Holdings currently expects to distribute one share of Citadel Software common stock for each four shares of CT Holdings common stock held by CT Holdings shareholders. The final ratio will be based on the actual number of CT Holdings shares outstanding on the record date. CT Holdings shareholders entitled to the dividend will receive stock certificates for whole shares of Citadel Software common stock, rounded up to account for fractional shares.
"Companies in the computer security sector are seeing significant increases in value as investors focus on the many opportunities available as a result of heightened global security concerns,” said Steve Solomon, CEO of CT Holdings. "We believe that this plan will enable our shareholders to benefit from the appreciation in value that has occurred in the industry and to attract a new group of investors that find the sector attractive.”
Mr. Solomon continued, "We remain excited about the prospects for Parago and River Logic. The next steps are to file the Information Statement with the SEC and have broker/dealers file the appropriate forms for approval to begin trading on the OTC Bulletin Board. The Company intends to update the timing information when it is available."
CT Holdings shareholders will not be required to take any action in order to receive the Citadel Software common stock. Citadel Software stock certificates will be delivered to the record addresses of the CT Holdings shareholders.
Citadel Software plans to file with the U.S. Securities and Exchange Commission a preliminary information statement on Form 10 containing details of the distribution and information about Citadel Software within one month. On the distribution date, CT Holdings will mail the definitive information statement to CT Holdings shareholders entitled to receive the dividend, together with stock certificates representing the distributed shares. The distribution is conditioned upon the Securities and Exchange Commission declaring effective the Registration Statement on Form 10 to be filed by Citadel Software with respect to its shares of common stock, as well as the occurrence of certain other events. The CT Holdings Board has reserved the right to withdraw its declaration of the dividend at any time prior to the distribution.
CT Holdings has not received a ruling from the Internal Revenue Service that the dividend of Citadel Software shares will qualify as a tax-free distribution for U.S. federal income tax purposes, though CT Holdings anticipates that the dividend will qualify as a tax-free distribution.
The distribution of the Citadel Software shares shall be made as described in the Information Statement relating to these securities which will be filed with the Securities and Exchange Commission (SEC) and which has not yet become effective. These securities may not be sold, nor may offers to buy be accepted prior to the time the Information Statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
Mr. Solomon will conduct an interview with CEOcast, Inc. at 10:30 am EST, where he will discuss the spin-off in greater detail. Investors may e-mail questions in advance of the interview to mhenderson@ceocast.com.
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.
Safe Harbor/Forward-looking Statements
Except for the historical information contained herein, this news release contains forward-looking statements that are subject to risks and uncertainties, including risks associated with the events required to occur before the consummation of the distribution, lack of Citadel Software operating history, and the uncertainty of future profitability of Citadel Software. These and other risks are detailed from time to time in CT Holdings' SEC reports, including the report on Form 10-KSB for the year ended December 31, 2000 and its most recent Form 10-QSBs, as well as in the Registration Statement on Form 10-SB, to be filed by Citadel Software in connection with the proposed distribution.
For further information, contact : Steven B. Solomon Chairman and CEO CT Holdings, Inc. 214-520-9292 p 214-520-0034 f ssolomon@citadel.com http://www.ct-holdings.com or Mathew Henderson, CEOcast, Inc. for CT Holdings at 212-732-4300x225.
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