SOURCE: Citadel Security Software

July 27, 2005 11:14 ET

Citadel Security Software Announces Results of Shareholder Vote at Annual Meeting of Shareholders

DALLAS, TX -- (MARKET WIRE) -- July 27, 2005 -- Citadel Security Software Inc. (NASDAQ: CDSS) today reconvened its 2005 Annual Meeting of Shareholders at 9:00 a.m. on July 27, 2005 at its corporate offices at 5420 LBJ Freeway, Suite 1600, Dallas, TX 75240 and announces that the shareholders have approved the following proposals presented to the shareholders for a vote at the meeting.

1.  Elected Chris A. Economou to the Board of Directors as a class 1
    director for a term expiring at its 2008 annual shareholders
    meeting;

2.  Approved an amendment to the Company's Amended and Restated
    Certificate of Incorporation to increase the number of authorized
    shares of common stock from 50,000,000 to 100,000,000;

3.  Approved amendments to the Company's Certificate of Designations,
    Preferences and Rights of Series A Convertible Preferred Stock to:
      a.  reduce the conversion price of the Series A Convertible
          Preferred Stock from $5.00 to $3.00; and
      b.  remove the 5% dividend preference of the Series A
          Convertible Preferred Stock;

4.  Approved the Company's private placement and the issuance of the
    Series B Convertible Preferred Stock, the Warrants to Purchase
    Common Stock and the shares of common stock issuable upon conversion
    of the Series B Convertible Preferred Stock and Warrants to Purchase
    Common Stock in an amount that, due to anti-dilution provisions, could
    potentially be 20% or more of its common stock outstanding as of the
    date of issuance, May 9 2005, in order to satisfy Nasdaq SmallCap
    listing requirements;

5.  Approved the issuance of the Common Stock issuable upon conversion
    of the Series A Convertible Preferred Stock, the warrants to purchase
    common stock issued in connection with the Series A Convertible
    Preferred Stock (and the warrants issued in exchange for such
    warrants) in an amount that could potentially be 20% or more of its
    common stock outstanding as of the date of their issuance,
    February 10, 2004, in order to satisfy Nasdaq SmallCap listing
    requirements; and

6.  Ratified the appointment of KBA Group LLP as its independent
    registered public accounting firm for the fiscal year ending
    December 31, 2005.

About Citadel

Citadel Security Software (NASDAQ: CDSS) delivers security solutions that enable organizations to manage risk, reduce threats and enforce compliance with security policies and regulations. Citadel's proven architecture provides a business process to manage the increasing volume, frequency and complexity of cyber security attacks. Citadel combines the world's largest active library of remediations spanning all classes of vulnerabilities with a proven delivery methodology to dramatically streamline vulnerability management and security compliance and provide ROI from the first use. Citadel solutions are used across the Department of Defense, at the Veterans Administration, and within other government and commercial organizations. For more information on Citadel, visit www.citadel.com, or call 888-8CITADEL.

Safe Harbor/Forward-looking Statements:

This press release may contain forward-looking statements that are intended to be subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or future financial performance and involve known and unknown risks and uncertainties that may cause actual results or performance to be materially different from those indicated by any forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "forecast," "may," "will," "could," "should," "anticipate," "expect," "plan," "believe," "potential" or other similar words indicating future events or contingencies. Some of the things that could cause actual results to differ from expectations are: the economic and geopolitical environment; changes in the information technology spending trends; the uncertainty of funding of government and corporate information technology security projects; the variability of the product sales cycle, including longer sales cycles for government and large commercial contracts; the uncertainty that the company's prospective deals will result in final contracts; the potential changes in the buying decision makers during a customer purchasing cycle; the complexities in scope and timing for finalization of contracts; the fluctuations in product delivery schedules; a lack of Citadel operating history; uncertainty of product development and acceptance; uncertainty of ability to compete effectively in a new market; the uncertainty of profitability and cash flow of Citadel; intellectual property rights and dependence on key personnel; economic conditions; the continued impact of terrorist attacks, global instability and potential U.S. military involvement; the competitive environment and other trends in the company's industry; the effects of inflation; changes in laws and regulations; changes in the company's business plans, including shifts to new pricing models that may cause delays in licenses; interest rates and the availability of financing; liability, legal and other claims asserted against the company; labor disputes; the company's ability to attract and retain qualified personnel; and adjustments to the amounts presented in the unaudited financial tables as a result of the completion of the audit process. For a discussion of these and other risk factors, see the company's Annual Report on Form 10-KSB for the year ended December 31, 2004 and the company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2005. All of the forward-looking statements are qualified in their entirety by reference to the risk factors discussed therein. These risk factors may not be exhaustive. The company operates in a continually changing business environment, and new risk factors emerge from time to time. Management cannot predict such new risk factors, nor can it assess the impact, if any, of such new risk factors on the company's business or events described in any forward-looking statements. The company disclaims any obligation to publicly update or revise any forward-looking statements after the date of this report to conform them to actual results.

Editors Note: Citadel is a trademark and Hercules® is a registered trademark of Citadel Security Software.

Contact Information

  • Contact:
    Steve Solomon
    Citadel Security Software Inc.
    (214) 750-2454
    Email Contact