Citadel Technology Files 10-QSB For 1st Quarter of Fiscal 2000; Company Reports Net Sales Of $1,592,000, For a 54% Increase in Sales Over Previous Year.

DALLAS--(BUSINESS WIRE)--Sept. 24, 1999--

Citadel Technology, Inc. (OTCBB: CITN, CITNE) today announced financial results for the first quarter ended May 31, 1999.

Net sales for the first quarter ended May 31, 1999 were up 54% to approximately $1,592,000 from $1,034,000 reported for the period ending May 31, 1998. The Company reported a net loss for the quarter of $1,883,000 or $.05 per share compared to a gain of $155,998 or $.01 per share for the same period last year. The gain in the first quarter ended May 31, 1998 reflected an extraordinary item of $.02 per share for the settlement of certain debts. In calculating the basic earnings (loss) per share information, there were 40,490,633 and 21,989,756 weighted shares outstanding for the 1999 and 1998 quarters, respectively.

"We are pleased with our results for the first quarter of fiscal 2000 and the progress we continue to make for our shareholders this year," commented Steven B. Solomon, President and Chief Executive Officer of Citadel Technology. "Included in our results for the first quarter were the results of How2HQ, which completed three acquisitions in the first half of fiscal 2000. While Citadel will not include consolidated results from How2HQ for future periods, Citadel will continue to own 17 million shares of How2HQ, after distribution of the previously announced spinoff dividend. Citadel has continued to establish its presence in the software security and management markets. In addition to participating in several trade shows, Citadel was also selected for a Winning on Windows award in April 1999 by Microsoft Corp."

Citadel Technology, Inc. is a developer and marketer of computer software products including security and management utilities for networks and personal computers. The Company's products are designed to secure and manage personal computers (PCs) and local area networks (LANs) and enable network administrators to more efficiently manage the networks. Company products are designed to reduce client costs, improve the accuracy of client information, maintain the operation of the network, secure the network from fraud or unauthorized use, and generally enable the administrator to devote more time to improving service to the network rather than focusing on operational details.

For more information on Citadel Technology and its products, please visit the Company's homepage at http://www.citadel.com. For information on purchasing products, contact the Company directly by writing or calling: Citadel Technology, 3811 Turtle Creek Blvd., Suite 600, 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; timing and delays related to distribution of an information statement based on compliance with SEC requirements; implementation of Internet strategies; 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.