SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): FEBRUARY 19, 2003
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CATUITY INC.
(Exact name of registrant as specified in its charter)
DELAWARE 000-30045 38-3518829
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
2711 E. JEFFERSON AVE.
DETROIT, MICHIGAN 48207 (313)-567-4348
(Address of principal (Registrant's telephone number,
executive offices) including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report.)
ITEM 9. REGULATION FD DISCLOSURE.
On December 23, 2002, the Nasdaq staff (the "Staff") notified Catuity Inc. (the
"Company") that it had been granted an extension of time to regain compliance
with Nasdaq Marketplace Rule 4310(c)(2)(B) (the "Nasdaq Rule") for continued
listing on the Nasdaq SmallCap Market. The Nasdaq Rule requires Nasdaq SmallCap
Market companies to maintain a minimum of $2,500,000 of stockholders' equity, or
a minimum market value of listed securities of $35,000,000, or to have a minimum
of $500,000 of net income from continuing operations for the most recently
completed fiscal year or two of the three most recently completed fiscal years
in order to maintain the listing of their securities on the Nasdaq SmallCap
Market. The Staff based its determination to grant the extension upon, among
other things, the Company's representations contained in materials submitted to
the Staff on December 12, 2002, which materials, the Staff indicated, evidenced
the Company's ability to achieve and sustain compliance with the Rule.
The terms of the extension granted by the Staff require the Company to file with
the Securities and Exchange Commission and Nasdaq, on or before February 20,
2003, a public document containing an unaudited balance sheet and unaudited
income statement as of and for the one-month period ended January 31, 2003, that
demonstrates the Company is in compliance with the Nasdaq Rule. The following
unaudited balance sheet and unaudited income statement as of and for the
one-month period ended January 31, 2003 demonstrate the Company's compliance
with the $2,500,000 minimum stockholders' equity standard prescribed under the
Nasdaq Rule for continued listing on the Nasdaq SmallCap Market. The Company
also believes that it will sustain compliance with the Nasdaq Rule for
continuous listing.
The enclosed unaudited financial statements should be read in conjunction with
the Company's audited financial statements, notes and risk factors disclosed in
the Company's Annual Report on Form 10-K filed with the Securities and Exchange
Commission for the fiscal year ended December 31, 2001, and the Company's
unaudited financial statements and accompanying materials disclosed in the
Company's Quarterly Reports on Form 10Q filed with the Securities and Exchange
Commission for the quarters ended March 31, June 30 and September 30, 2002. The
financial statements contained herein have not been prepared in accordance with
generally accepted accounting principles, as there are no footnotes, Statement
of Cash Flows, comparative Balance Sheet or Statements of Operations, nor have
they been prepared in accordance with the rules and regulations of the
Securities and Exchange Commission governing financial statements to be
contained in quarterly, annual or other reports filed under the Securities
Exchange Act of 1934.
In January 2003 the Company was able to record its first significant license
revenue. This had previously been recorded in deferred revenue on the balance
sheet. As a result, January's financial results, as set forth herein, are not
indicative of future monthly results, results for the quarter that will end on
March 31, 2003, or results for the annual periods ending on December 31, 2002 or
2003, which will be set forth in the Company's Annual Reports on Form 10-K to be
filed for the fiscal years ended December 31, 2002 and 2003 pursuant to the
rules and regulations of the Securities and Exchange Commission.
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CATUITY INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
ASSETS JANUARY 31, 2003
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Current Assets:
Cash and cash equivalents $ 3,487,589
Accounts receivable (less Allowance of $56,000) 105,731
Restricted cash 111,106
Work in process 38,461
Prepaid expenses and other 264,433
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Total current assets 4,007,320
Property and equipment, net 196,270
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TOTAL ASSETS $ 4,203,590
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable 183,535
Deferred revenue 716,255
Accrued compensation 133,617
Trust liability 89,133
Accrued expenses 205,300
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Total current liabilities 1,327,840
Accrued compensation 83,656
SHAREHOLDERS' EQUITY:
Common Stock - $.001 par value; 100 million shares authorized, 8,532,155 issued and
outstanding as of January 31, 2003 8,532
Additional paid-in capital 33,135,182
Shareholder loans (757,733)
Foreign currency translation adjustment (290,172)
Accumulated deficit (29,303,715)
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TOTAL SHAREHOLDERS' EQUITY 2,792,094
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,203,590
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CATUITY INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE ONE MONTH PERIOD ENDING JANUARY 31, 2003
(UNAUDITED)
JANUARY 2003
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REVENUE:
Software development revenue $ 29,246
Service revenue 51,256
License revenue 1,079,600
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Total Revenue 1,160,102
OPERATING COSTS AND EXPENSES:
Product development 99,762
Custom implementation and support 80,948
Sales and marketing 117,550
General and administration 109,370
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Total operating costs and expenses 407,630
Variable Stock Compensation 0
Operating Profit 752,472
Other Income 6,158
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Income before Tax 758,630
Provision for Income Taxes 0
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Net Income $ 758,630
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CATUITY INC.
(Registrant)
By: /s/ John H. Lowry
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John H. Lowry
Senior Vice President,
Chief Financial Officer & Secretary
Date: February 19, 2003
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