PROSPECTUS SUPPLEMENT Filed pursuant to Rule 424(b)(3)
To Prospectus dated January 6, 1999 Registration No. 333-68899
2,500,000 SHARES OF COMMON STOCK
COVER-ALL TECHNOLOGIES INC.
_____________________
This prospectus supplement relates to the resale by Care Corporation
Limited ("Care") of up to 2,500,000 shares of our common stock. This
prospectus supplement supplements and amends information contained under the
captions "Selling Shareholder" and "Plan of Distribution" in the prospectus
dated January 6, 1999.
On September 30, 1998, Care borrowed a total of $560,000 from eight
persons and entities. Pursuant to Convertible Promissory Notes issued by
Care to each of these persons and entities, the holders of the notes had the
right to convert the principal and accrued and unpaid interest thereunder
into shares of our common stock, which would be transferred by Care or an
affiliate of Care to the holder. The right to convert was available any time
beginning December 14, 1998, and continuing through September 30, 2000. The
notes each bear interest at 9% per year, require quarterly payments of
accrued and unpaid interest, and require payment of the principal balance on
September 30, 2000, if not earlier converted. Because each holder had this
right to convert its note into shares of our common stock, we stated in the
"Selling Shareholder" section of the prospectus that each of the eight
persons and entities may become a selling shareholder under the prospectus
upon the exercise of the conversion right.
On December 13, 1999, each of the holders of the notes exercised its
right to convert all outstanding principal and accrued interest, a total of
$622,161.00, into shares of our common stock. Because all shares of our
common stock owned by Care are currently pledged to us, Software Investments
Limited ("SIL"), an affiliate of Care, elected, on behalf of Care, to
transfer shares it owns of our common stock to the converting noteholders.
Accordingly, the converting noteholders will no longer be eligible to receive
and thus resell shares of our common stock under this prospectus, as the
shares they received were provided by SIL.
To reflect these transfers and to update the prospectus, this
prospectus supplement amends and supplements (1) the Selling Shareholder
table under the caption "Selling Shareholder" to reflect these transfers by
deleting references to the converting noteholders, and (2) the information
contained under the caption "Plan of Distribution" by deleting certain
information relating to the converting noteholders.
This prospectus supplement does not contain complete information about
the resale of our common stock by Care. Additional information is contained
in the prospectus. We urge investors to read both this prospectus supplement
and the prospectus in full.
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CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 9 IN THIS
PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus supplement is February 2, 2000.
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SELLING SHAREHOLDER
The following table and related disclosure, which sets forth
information about Care, amends and supplements the information contained in
the prospectus by (i) deleting references to the converting noteholders, and
(ii) updating and amending the information contained in the prospectus with
respect to Care.
COMMON COMMON
NAME OF STOCK OWNED SHARES STOCK OWNED
SELLING SHAREHOLDER PRIOR TO OFFERING OFFERED AFTER OFFERING
Care Corporation Limited 2,500,000 2,500,000 0
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The Mirror Trust, a Jersey Discretionary Settlement, owns a majority
interest in the issued capital of both SIL and Care. The ultimate
beneficiaries of the Mirror Trust are the Johnston family interests, one of
whom, Mark D. Johnston, is the chairman of the board of directors of the
Company. Mr. Johnston is an executive director of Care and SIL. In March
1997, Mark D. Johnston was appointed Chief Financial Officer of the Company
on an interim basis and served in such a capacity until January 22, 1998. In
November 1999, Mr. Johnston was appointed Chairman of the board of directors
and Interim Chief Executive Officer of the Company. Mr. Johnston remained
the Chief Executive Officer until December 21, 1999. Mr. Johnston was paid
approximately $58,000 for services and expenses in 1999.
Ian J. Meredith, a director of the Company, is also a director of Care.
A company owned by a trust for the benefit of Mr. Meredith's children owns a
minority interest in the issued capital of Care. Mr. Meredith has no
ownership and exercises no control with respect to such company.
Earl Gallegos, a director of the Company, is also a principal
shareholder of Earl Gallegos Management, LLC, which provides management
consulting services to businesses. Earl Gallegos Management, LLC has been a
consultant for Care Systems Corporation, a Delaware corporation and a Care
affiliate ("CSC"), for the last two years with regard to project management
in connection with CSC's contract for technology services to the Bureau of
Workers' Compensation for the State of Ohio. Additionally, effective August
1, 1998, Earl Gallegos Management, LLC was requested to provide consulting
services for the overall management of CARE Information Services, a division
of Care. This engagement ended on February 10, 1999. Separately, pursuant to
the Consulting Agreement, dated as of April 29, 1997, between the Company and
Earl Gallegos Management, LLC, the Company engaged Mr. Gallegos as a
consultant for the 10-month period of March 1997 to January 1998. Under this
Consulting Agreement, in March 1997, the Company granted Mr. Gallegos' firm
250,000 options to purchase the Company's common stock at $1.25 per share and
granted Mr. Gallegos' firm a bonus of 250,000 options to purchase the
Company's common stock at $1.25 per share in March 1997. The Company did not
grant Mr. Gallegos' firm any options to purchase the Company's common stock
in the 1998 fiscal year. Pursuant to a Consulting Agreement, dated as of
October 26, 1998, between the Company and Earl Gallegos Management, LLC, the
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Company engaged Earl Gallegos Management, LLC for a one year period to
provide project management services for one of the Company's TAS 2000
customers. Pursuant to this Consulting Agreement, the Company paid Mr.
Gallegos' firm $1,100 per day plus expenses.
PLAN OF DISTRIBUTION
The following information updates and replaces in its entirety the
information contained under the caption "Plan of Distribution" of the
prospectus:
"A selling shareholder may from time to time sell the shares directly
or offer the shares through underwriters, dealers or agents. The distribution
of securities by a selling shareholder may be effected in one or more
transactions that may take place on the over-the-counter market, including
ordinary brokers' transactions, privately-negotiated transactions or through
sales to one or more broker-dealers for resale of such shares as principals,
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. Usual and customary or
specifically negotiated brokerage fees or commissions may be paid by the
selling shareholder in connection with such sales of shares. Sales of the
shares may be made pursuant to this prospectus or pursuant to Rule 144 under
the Securities Act.
At the time a particular offer of shares is made by or on behalf of a
selling shareholder, to the extent required, a prospectus will be distributed
which will set forth the number of shares being offered and the terms of the
offering, including the name or names of any underwriters, dealers or agents,
if any, the purchase price paid by any underwriter for shares purchased from
a selling shareholder and any discounts, commissions or concessions allowed
or reallowed or paid to dealers, and the proposed selling price to the
public."
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