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| Subject: Breaking News:Catuity Lands Mastercard | |
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Author: It is in the 10-K filed overnight.Extract below: |
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Date Posted: Monday, March 31, 05:32:46pm In reply to: and to go with Visa--at the time of writng this appears correct 's message, "The Catuity Common business model has always been with an American focus" on Saturday, February 15, 06:47:28pm pourquoi5 (ID#: 224751) Breaking News:Catuity Lands Mastercard 1/4/03 10:49:49 AM 6180243 « Previous Message Next Message » CATUITY INC (CTTY) It is in the 10-K filed overnight.Extract below: Annual Report (SEC form 10-K) ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is a summary of the consolidated operating results of Catuity, Inc. and contains forward looking statements based upon current expectations that involve risks and uncertainties. The Company's actual results and the timing of certain events could differ materially from those anticipated in these forward looking statements. Refer to the section entitled Forward Looking Statements at the beginning of this Form 10-K for a full discussion of the risks and uncertainties associated with forward looking statements. RESULTS OF OPERATIONS Overview 2002 was another year of progress and growth in the U.S. market for Catuity's loyalty software products. In addition, the U.S. market for smart cards continued to emerge as the issuance of cards and the investment necessary for their adoption continued to accelerate over prior years levels. In 2002, Visa expanded its efforts and MasterCard announced its "One Smart" initiative that will further the expansion of smart card use in the U.S. One Smart is designed to provide card issuers with a flexible, customizable approach to packaging applications to differentiate their smart card from all others, and to provide retailers and cardholders unique benefits from using the card. During the fourth quarter of 2002 Catuity underwent the extensive due diligence process required by MasterCard and recently became a participant in the MasterCard One Smart program. In the summer of 2002 Visa began using our loyalty software in test markets, and in the latter part of the year, Target began a roll out of their new POS equipment and use of our loyalty software in selected stores. The Company also completed the installation of its software at two new customers that will expand its use in 2003 and beyond. During 2002 Catuity received a notice of allowance from the U.S. Patent and Trademark Office on two of our patent applications. The first of the two patents was issued in September 2002. We received the Notice of Allowance for the second patent in December 2002 and it was formally issued in March 2003 The Company was also granted a patent in Australia in 2002 and has patents pending in the U.S., Canada, Europe, Australia, Japan, Brazil, and New Zealand. The most recent patent granted in the U.S. is particularly valuable because of its scope involving our unique methods of data storage on smart cards. We believe our patents help us meet our strategy of protecting our intellectual property, protecting our customers interests, and staying on the cutting edge of technology in our markets. In March 2002 Catuity resolved the Welcome Real Time (WRT) legal matter. The settlement brought the Australian lawsuit that had been active in 2001 and early 2002 to closure. As part of the settlement, WRT and Catuity agreed to end all legal actions in Australia with no material future financial consequences for either party and to prohibit the initiation of any future lawsuits over patents on a global basis by agreeing to compulsory mediation and binding arbitration in the event of any future patent disputes. In November 2002, Catuity completed the private placement of 453,666 shares to two accredited institutional investors and 90,000 shares to Boom Australia Pty. Ltd., the family trust of Mr. Duncan P.F. Mount, a non-executive director of Catuity. Boom Australia's participation is subject to shareholder approval and is being sought at a special meeting of shareholders to be held on March 26, 2003 in Sydney, Australia. The placement resulted in net proceeds of $925,000, excluding Mr. Mount's, that will be used for general operating purposes, including furthering Catuity's investigation into the data analytics and predictive modeling aspects of Customer Relationship Management. In addition to the private placement, during 2002, a San Francisco based fund acquired approximately 180,000 shares in Catuity through open market purchases. As a result of these efforts, Catuity was able to strengthen its' capital structure, and increase the holdings of institutional investors in the Company. During 2002 Catuity established an Executive Stock Purchase Plan (ESPP) and an Executive Director Stock Purchase Plan (EDSPP) as a way of increasing our executives' holdings in the Company and aligning their interests with those of our shareholders. The EDSPP is subject to shareholder approval, which is also being sought in the March 2003 special meeting of shareholders. The plans do not provide the executives any discount to our share price in the open market. Rather, they allow the executives to increase their holdings via a routine month-end purchase of shares from the cash compensation that each executive deferred during that month. All of the executives eligible to participate have thus far chosen to use 10% of their cash compensation to purchase shares in the Company each month. There are a number of factors that impacted the smart card market in the U.S. in 2002. The positive factors include the strong commitment by Visa USA to the introduction of smart cards. The integration of payment and loyalty, which began in 2001 and increased in 2002, is expected to continue in 2003. Catuity has been actively involved in developing interoperability standards to integrate loyalty transactions with payment transactions. The pace with which card-issuing banks issued smart cards and merchants began installing POS devices that are smart card compatible accelerated in 2002. The negative factors that affected the market included the sluggishness of the U.S. economy in 2002, the relative slowness of POS device suppliers to deliver multi-application devices and the slowness of merchants to adopt POS devices that are smart card compatible. These factors have resulted in a delay in the long anticipated, growth of smart cards in the U.S. Although the smart card market in general, and the smart Visa Rewards program are very important to us, we also continued to pursue contracts with customers using our software with magnetic stripe cards. We expect that 2003 will be the first year that the Company earns a significant percentage of its total revenue from license fees. The speed with which our customers progress with their plans and the success they achieve in their product launches could have an impact on these estimates. [ Next Thread | Previous Thread | Next Message | Previous Message ] |
| Subject | Author | Date |
| Large contract for smart terminals.Fleet issues Visa smart with Catuity preloaded: | Five U.S. Visa credit card issuers offer smart cards.as at( 2003-03-14 )--Fleet Boston Financial Corp | Thursday, April 03, 04:09:08pm |