Investor can exercise warrants for five years at 21.3% premium
By Angela McDaniels
Tacoma, Wash., Sept. 14 - Cover-All Technologies Inc. subsidiary Cover-All Systems, Inc. entered into a $2.25 million credit facility with Imperium Commercial Finance Master Fund LP on Sept. 11.
The credit facility consists of a $2 million term loan and a $250,000 revolving credit facility. Both have a three-year tenor and an 8% interest rate, according to an 8-K filing with the Securities and Exchange Commission.
Imperium received five-year warrants to purchase 1.4 million shares of Cover-All's common stock. The exercise price is $1.48 per share. This is a 21.3% premium to the company's $1.22 closing share price on Sept. 10.
The warrants are not exercisable until the earliest of the date when the current market value of the company's stock exceeds the exercise price multiplied by two, the date of a change-of-control transaction and the third anniversary of the issuance date. The current market value is defined as the average of the stock's closing share price over 20 consecutive trading days.
The credit facility is guaranteed by Cover-All Technologies. The amount available under the facility may not exceed 80% of eligible accounts.
The company said the proceeds will be used for working capital purposes that will support its expansion and growth initiatives.
Cover-All Technologies is based in Fairfield, N.J. It makes software for the property and casualty insurance marketplace.
| Issuer: | Cover-All Systems, Inc.
|
| Guarantor: | Cover-All Technologies Inc.
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| Issue: | Credit facility
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| Amount: | $2.25 million, including $2 million term loan and $250,000 revolving credit facility
|
| Maturity: | Three years
|
| Coupon: | 8%
|
| Warrants: | For 1.4 million shares
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| Warrant expiration: | Five years
|
| Warrant strike price: | $1.48
|
| Agent: | Non-brokered
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| Investor: | Imperium Commercial Finance Master Fund LP
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| Pricing date: | Sept. 11
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| Stock symbol: | NYSE MKT: COVR
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| Stock price: | $1.22 at close Sept. 10
|
| Market capitalization: | $31.8 million
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