CT Holdings Announces Third Quarter Results.

Business Editors

DALLAS--(BUSINESS WIRE)--Jan. 18, 2000

CT Holdings, Inc (formerly Citadel Technology, Inc.) (OTCBB: CITN) today announced financial results for the third quarter ended November 30, 1999.

Net sales for the third quarter ended November 30, 1999 totaled $311,057, a decrease of $1,626,397, or 83.9%, over net sales of $1,937,454 for the three months ended November 30,1998. For the nine months ended November 30, 1999, the Company had net sales of $1,413,449, a decrease of $2,635,516, or 65.1% over net sales of $4,048,965 for the nine months ended November 30, 1998.

The decrease is attributed to the shift in focus from software products to the Company's activities as an Internet business incubator. The Company reported a net loss for the quarter ended November 30, 1999 of $9,445,485 (including $8,655,820 related to its Internet subsidiary How2.com) and a net loss for the nine months ended November 30, 1999 of $14,141,689 (including $11,253,865 related to the Internet subsidiary), compared to net losses of $752,575 and $1,301,710 for the three and nine months ended November 30, 1998, respectively. For the three months ended November 30, 1999, the net losses were $0.02 per share attributable to CT Holdings and an additional $0.20 per share related to the loss in the unconsolidated Internet affiliate, for a total of $0.22.

"Our third quarter results reflected an expected decrease in software revenues due to our focus on our business model as an incubator of B2B Internet companies. However, we believe that this model will create greater value over the long term for our shareholders," commented Steven B. Solomon, President and Chief Executive Officer of CT Holdings. "Our Internet activities began with the formation of How2.com, which provides online outsourced post-purchase customer care B2B services for its clients. During the quarter, How2.com filed for an initial public offering for shares of its common stock. CT Holdings owns approximately 46% of How2.com's outstanding shares pre-dividend and pre-IPO."

Mr. Solomon continued, "As our core focus for the future is on our B2B incubation services, we are currently analyzing various strategic alternatives for our software business, including new strategic alliances with third parties, including new applications of the technology, licensing or joint venture arrangements and possibly the sale of the business. We have also recently announced that we have applied for a listing on the Nasdaq SmallCap Market."

CT Holdings will provide early stage business-to-business dot com ventures with a single source of financial and management capital, as well as consulting on operations, marketing and strategic planning, that will enable these start-up companies to establish a clear path for growth so that they may become online market leaders. CT Holdings is currently exploring a number of potential targets for its incubation portfolio.

About CT Holdings, Inc. - CT Holdings is an incubator for early stage B2B companies and the developer and marketer of Citadel Technology computer software products. How2.com is a subsidiary of CT Holdings. How2's suite of outsourced services includes manufacturer rebate processing, extended warranties, product information, customer data asset management and other services that are marketed across multiple industry lines. How2's approximately 150 clients include Staples, eMachines, and Southwestern Bell.

For more information on Citadel Technology products, visit the Company's homepage at http://www.citadel.com. For information on purchasing products, contact the Company directly by writing or calling: CT Holdings, Inc., 3811 Turtle Creek Blvd., Suite 770, Dallas, Texas 75219; phone [phone]; fax [phone]. For media or investor relations contact: The Investor Relations Group at 212.736.2650.

Forward-Looking Statements: This news release contains forward-looking statements, which involve risks and uncertainties. Accordingly, no assurance can be given that the actual events and results will not be materially different than the anticipated results described in the forward-looking statement. There are a number of important factors that could cause actual results to differ materially from those expressed in any forward-looking statements made by the Company. These factors include the Company's and its subsidiary's success in integrating the business and operations of acquired companies; no assurances of completion of an initial public offering based on regulatory reviews, market conditions and other factors; uncertainty relating to Nasdaq SmallCap Market listing; implementation of Internet strategies; availability of suitable incubator companies; possible application of the Investment Company Act of 1940; the activities of new or existing competitors; the ability to attract and retain employees and strategic partners; adoption of the Internet as a medium of commerce, communications and education; application of state unclaimed property or escheat laws; transition of selling and distribution methods, the availability of capital on terms acceptable to the Company; general economic conditions; the market for the network software products; software development costs and litigation costs. Investors are also directed to consider other risks and uncertainties discussed in documents filed by the Company with the Securities and Exchange Commission.

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.