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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
NOVEMBER 11, 2005 (SEPTEMBER 1, 2005)
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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)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions.
( ) Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
( ) Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
( ) Pre-commencement communications pursuant to Rule 14d-2(b), under the
Exchange Act (17 CFR 240.14d-2(b))
( ) Pre-commencement communications pursuant to Rule 13e-4(c), under the
Exchange Act (17 CFR 240.13e-4(c))
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On September 7, 2005, Catuity, Inc. ("Catuity") filed a Current Report on Form
8-K to report the completion of its acquisition of Loyalty Magic Pty. Ltd. This
Amendment is filed to provide the required financial information.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
The following financial statements are filed as a part of this
Amendment, incorporated by reference to the proxy filed June 13, 2005.
Audited Financial Statements of Loyalty Magic Pty. Ltd. for the twelve
month period ended June 30, 2004.
Balance Sheets
Statements of Operations
Notes to Consolidated Financial Statements
Statement of Cash Flows
(b) Pro Forma Financial Information.
The following pro forma financial information is filed as a part of
this Amendment:
Pro Forma Unaudited Consolidated Statement of Operations for the
year ending December 31, 2004 and the six month period ending June
30, 2005.
The purchase price (in US Dollars) has been tentatively allocated as follows:
Current Assets $ 840,795
Long Term Assets 164,330
Intangible Assets 2,139,200
Goodwill 2,786,090
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Total Assets 5,930,415
Liabilities (680,835)
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Purchase Price $ 5,249,580
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UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma consolidated financial statement has been
derived from historical financial statements of Catuity, Inc, ("Catuity") and
Loyalty Magic Pty. Ltd. ("Loyalty Magic"), adjusted to give pro forma effect to
the acquisition of Loyalty Magic by Catuity (the "Transaction"). Catuity
completed its acquisition of Loyalty Magic on September 1, 2005 and has
previously filed a Current Report on Form 8-K concerning such transaction on
September 7, 2005
The unaudited pro forma consolidated statement of operations gives pro forma
effect to the Transaction as if it had occurred on January 1, 2004 and
consolidates the operations of Catuity for the year ended December 31, 2004 with
the operations of Loyalty Magic for the same period.
The unaudited pro forma consolidated financial statement is presented for
informational purposes only and does not purport to represent what our results
of operations would actually have been had the Transaction occurred at such time
or to project our results of operations for any future period or date.
The pro forma adjustments are based upon available information and various
assumptions that we believe are reasonable. The pro forma adjustments and
certain assumptions are described in the accompanying notes. The acquisition of
Loyalty Magic has been accounted for using the purchase method of accounting.
Allocations of the purchase prices have been determined based upon information
presently available and are subject to change. The final allocations of the
purchase price and the amounts included in the unaudited pro forma financial
statement could differ significantly.
CATUITY AND LOYALTY MAGIC LOYALTY MAGIC CATUITY COMBINED
PRO FORMA BALANCE SHEET IN USD IN USD PRO-FORMA NOTES IN USD
DECEMBER 31, 2004 12/31/04 12/31/04 ADJUSTMENTS 12/31/04
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CURRENT ASSETS
Cash and cash equivalents 97,760 2,560,683 3,492,006 1 6,150,449
Accounts Receivable less allowance 542,861 36,211 579,072
Restricted Cash -- 116,012 116,012
Investments 322 -- 322
Prepaid expenses and other 24,312 127,429 151,741
TOTAL CURRENT ASSETS 665,254 2,840,335 3,492,006 6,997,596
NON-CURRENT ASSETS
Property and equipment, net 135,209 162,780 297,989
Capital Leasing, net 70,197 -- 70,197
Web Development 83,993 -- (83,993) 2 --
New Platform 80,343 -- (80,343) 3 --
Goodwill -- -- 2,705,338 4 2,705,338
Other Intangibles, Net 1,885,076 5 1,885,076
TOTAL NON-CURRENT ASSETS 369,742 162,780 4,426,078 4,958,601
TOTAL ASSETS 1,034,997 3,003,115 7,918,084 11,956,196
CURRENT LIABILITIES
Accounts Payable 127,036 150,584 277,620
Accrued compensation 163,990 317,433 481,423
Other accrued expenses 109,433 87,474 196,907
Trust liability -- 91,722 91,722
TOTAL CURRENT LIABILITIES 400,459 647,213 -- 1,047,672
NON-CURRENT LIABILITIES
Capital Leasing Liability 65,160 -- 65,160
TOTAL NON-CURRENT LIABILITIES 65,160 -- -- 65,160
TOTAL LIABILITIES 465,619 647,213 -- 1,112,832
EQUITY & RESERVES
Common Stock 2,105,825 778 (2,104,520) 6 2,083
Additional Paid in Capital -- 36,603,127 8,956,429 7 45,559,556
Shareholder Loans -- (79,533) (79,533)
Foreign Currency Translation -- 96,656 96,656
Retained Earnings (1,536,447) (34,265,126) 1,066,175 (34,735,398)
OWNERS EQUITY 569,378 2,355,902 7,918,084 10,843,364
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TOTAL LIABILITIES & OWNERS EQUITY 1,034,997 3,003,115 7,918,084 11,956,196
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LOYALTY
CATUITY AND LOYALTY MAGIC MAGIC CATUITY PRO FORMA COMBINED
PRO FORMA STATEMENT OF OPERATIONS IN USD IN USD ADJ. IN USD
YEAR ENDED DECEMBER 31, 2004 2004 2004 (USD) NOTES 2004
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Revenue:
Project revenue 240,481 248,379 488,860
Service revenue 1,770,607 467,533 2,238,140
License revenue 63,115 43,200 106,315
Total Revenue 2,074,203 759,112 2,833,315
Cost of Revenue and Other Operating Expenses:
Cost of Projects 549,460 103,151 652,611
Cost of Service revenue 883,481 297,075 1,180,556
Cost of License revenue -- -- --
Research and Development 163,951 1,282,753 205,900 8 1,652,604
Sales and Marketing 80,582 867,362 947,944
General & Administration 555,926 1,912,999 264,372 9 2,733,297
Total Costs and Expenses 2,233,399 4,463,340 470,272 7,167,011
Operating income/(loss) (159,197) (3,704,228) (470,272) (4,333,697)
Interest Income 8,929 96,777 105,706
Income tax (expense)/benefit 85,750 85,750
NET INCOME/(LOSS) (64,518) (3,607,451) (470,272) (4,142,241)
Net loss per share-basic & diluted N/A ($4.64) ($1.99)
Weighted avg. shares outstanding-basic
& diluted 777,226 2,082,226
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LOYALTY
CATUITY AND LOYALTY MAGIC MAGIC CATUITY PRO FORMA COMBINED
PRO FORMA STATEMENT OF OPERATIONS IN USD IN USD ADJ. IN USD
YTD JUNE YTD (USD) NOTES YTD
YTD JUNE 30, 2005 2005 JUNE 2005 JUNE 2005
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Revenue:
Project revenue 208,115 -- 208,115
Service revenue 882,662 23,020 905,682
License revenue 22,913 23,400 46,313
Total Revenue 1,113,689 46,420 -- 1,160,109
Cost of Revenue and Other Operating Expenses:
Cost of Projects 310,571 -- 310,571
Cost of Service revenue 332,412 86,881 419,293
Cost of License revenue -- 2,754 2,754
Research and Development -- 252,329 252,329
Sales and Marketing 114,066 287,068 401,134
General & Administration 395,167 726,593 132,186 10 1,253,946
Total Costs and Expenses 1,152,216 1,355,625 132,186 2,640,027
Operating income/(loss) (38,527) (1,309,205) (132,186) (1,479,918)
Interest Income 1,041 42,125 43,166
Income tax (expense)/benefit 52,822 -- 52,822
NET INCOME/(LOSS) 15,336 (1,267,080) (132,186) (1,383,930)
Net loss per share-basic & diluted N/A $ (1.63) $ (0.66)
Weighted avg. shares outstanding-basic
& diluted 778,184 2,083,184
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NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
The unaudited pro forma consolidated statement of operations includes
adjustments necessary to reflect the estimated effect of the Transaction as if
it had occurred on January 31, 2004.
Notes:
1. The adjustment to cash to reflect the additional cash remaining due to the
capital raises after the purchase of Loyalty Magic.
2. The elimination of the Loyalty Magic intangible item Web development.
3. The elimination of the Loyalty Magic intangible item New platform.
4. The amount of goodwill resulting from the Loyalty Magic acquisition.
5. The amount of identifiable intangibles resulting from the Loyalty Magic
acquisition.
6. The elimination of the Loyalty Magic common stock and the addition of the
Catuity common stock issued in the capital raise and acquisition.
(1,305,000 shares.)
7. The additional paid in capital resulting from the Loyalty Magic
acquisition.
8. The adjustment for the In Process Research and Development acquired from
Loyalty Magic that was expensed to comply with US GAAP.
9. The additional intangibles amortization at $22,031 per month for the
twelve month period ending December 31, 2004 resulting from the Loyalty
Magic acquisition at $22,031 per month.
10. The additional intangibles amortization at $22,031 per month for the six
month period ending June 30, 2005 resulting from the Loyalty Magic
acquisition.
(d) Exhibits
13.1 Audited Financial Statements of Loyalty Magic Pty. Ltd. For the
twelve month period ending June 30, 2004 (Incorporated by reference to
proxy filed June 13. 2005).
13.2 Amendment to Share Sale Agreement with Loyalty Magic dated
August 5, 2005.
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: November 11, 2005
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
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13.1 Audited Financial Statements of Loyalty Magic Pty. Ltd. For
the twelve month period ending June 30, 2004 (Incorporated
by reference to proxy filed June 13, 2005).
13.2 Amendment to Share Sale Agreement with Loyalty Magic
dated August 5, 2005.