8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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):  September 2, 2011

Catasys, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-31932	88-0464853
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

11150 Santa Monica Boulevard, Suite 1500 Los Angeles, California	90025
(Address of principal executive offices)	(Zip Code)
Registrant’s telephone number, including area code   (310) 444-4300
(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 (see General Instructions A.2. below):

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01. Other Events.

On September 2, 2011, Catasys, Inc. (the “Company”) issued a press release announcing that the Board of Directors of the Company (the “Board of Directors”) declared a reverse stock split of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), at a ratio of one-for-forty.  The reverse stock split will be effective on September 6, 2011. The Company’s stockholders approved the reverse stock split on March 4, 2011, and the Board of Directors authorized the implementation of the reverse stock split on August 1, 2011.

As a result of the reverse stock split, every forty shares of the Company’s issued and outstanding Common Stock will be combined into one share of Common Stock. Any fractional shares resulting from the reverse stock split will be paid in cash to the stockholder. The reverse stock split will reduce the number of the Company’s outstanding shares of Common Stock from 847.2 million to approximately 21.2 million.  

A copy of press release announcing the reverse stock split is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d)  Exhibits.

99.1           Press Release dated September 2, 2011.

SIGNATURES

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 hereunto duly authorized.

	Catasys, Inc.
September 2, 2011	By:	/s/ SUSAN E. ETZEL
		Susan E. Etzel
		Chief Financial Officer

EX-99.1

Press Release

Investor Relations:

Patricia Rouhafza

Catasys, Inc.

(310) 444-4333

prouhafza@catasyshealth.com

Daniel Conway

DC Consulting LLC

(407) 792-3333

daniel@dcconsultingllc.com

CATASYS ANNOUNCES REVERSE STOCK SPLIT

LOS ANGELES, CALIFORNIA — September 02, 2011 — Catasys, Inc. (OTCBB: CATS) announced effective September 6, 2011 that its Board of Directors has declared a reverse stock split of its common stock at a 1 for 40 ratio.  Catasys shareholders will receive one new share of Catasys common stock for every forty shares held.  The Company anticipates that the reverse stock split when combined with anticipated future contractual activity and other anticipated Company initiatives over the next quarter, will enable the Company to list on a National Stock Exchange.

The reverse split, which was approved by Catasys shareholders in March 2011, will reduce the number of shares of outstanding common stock to approximately 21 million.  In lieu of fractional shares, shareholders will receive cash.    Additional details and instructions for shareholder stock certificate exchanges will be mailed to shareholders of record as the date of the split.  Catasys’s transfer agent is the American Stock Transfer & Trust Company, LLC, of who can be reached toll-free at 877-248-6417.

Through October 3, 2011, shares of Catasys will trade on the OTCBB under the symbol “CATSD” (with the extra letter “D” to indicate the reverse split).  Thereafter, the shares of Catasys will resume trading under the symbol “CATS.”

About Catasys®

Catasys, Inc. provides specialized behavioral health management services to health plans, employers and unions through a network of licensed and company managed health care providers. The Catasys substance dependence program was designed to address substance dependence as a chronic disease.  The program seeks to lower costs and improve member health through the delivery of integrated medical and psychosocial interventions in combination with long term care coaching, including their proprietary treatment program for alcoholism and stimulant dependence.   For further information, please visit www.catasyshealth.com.

Forward-Looking Statements

Except for statements of historical fact, the matters discussed in this press release are forward looking and made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect numerous assumptions and involve a variety of risks and uncertainties, many of which are beyond the company's control that may cause actual results to differ materially from stated expectations. These risk factors include, among others, changes in regulations or issuance of new regulations or interpretations, limited operating history and lack of outcomes and statistically significant formal research studies, difficulty enrolling members in our programs, the risk that treatment programs might not be effective, difficulty in developing, exploiting and protecting proprietary technologies, intense competition and substantial regulation in the health care industry; and additional risks factors as discussed in the reports filed by the company with the Securities and Exchange Commission, which are available on its website at http://www.sec.gov.

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