The following is a summary of operating highlights for the three months and nine months ended September 30, 2012 and 2011, respectively, the consolidated balance sheets as of September 30, 2012 and December 31, 2011, respectively, and EBITDA reconciliation to net income for the three and nine months ended September 30, 2012 and 2011, respectively:

             

Cover-All Technologies Inc. and Subsidiaries Consolidated Statement of Operations (Unaudited)
 

Three months ended September 30,

Nine months ended September 30,
  2012       2011   2012       2011
Revenues:

Licenses
$ 237,995 $ 1,197 $ 2,663,993 $ 3,846,791
Support Services 2,167,994 2,051,942 6,449,353 6,271,877
Professional Services   863,734   1,330,810   3,146,817   3,458,316
Total Revenues   3,269,723   3,383,949   12,260,163   13,576,984
Cost of Revenues:
Licenses 1,028,347 780,971 3,203,881 2,167,696
Support Services 1,341,269 1,193,347 4,388,977 3,518,517
Professional Services   1,115,018   987,922   3,681,185   3,397,417
Total Cost of Revenues   3,484,634   2,962,240   11,274,043   9,083,630
Direct Margin   (214,911)   421,709   986,120   4,493,354
Operating Expenses:
Sales and Marketing 703,132 452,258 2,051,716 1,324,315
General and Administrative 391,652 519,495 1,262,775 1,493,591
Acquisition Costs

136,957
Research and Development   177,772   151,233   537,278   465,470
Total Operating Expenses   1,272,556   1,122,986   3,988,726   3,283,376
Operating (Loss) Income   (1,487,467)   (701,277)   (3,002,606)   1,209,978
Other (Income) Expense:
Interest Expense 27,925 10,397 27,925 14,147
Interest Income

(60) (37) (3,139)
Other Income  

  (1,152)   (14,539)   (14,682)
Total Other (Income) Expense   27,925   9,185   13,349   (3,674)
(Loss) Income Before Income Taxes   (1,515,392)   (710,462)   (3,015,955)   1,213,652
Income Taxes  

 

 

  37,385
Net (Loss) Income $ (1,515,392) $ (710,462) $ (3,015,955) $ 1,176,267
Basic (Loss) Earnings Per Common Share $ (0.06) $ (0.03) $ (0.12) $ 0.05
Diluted (Loss) Earnings Per Common Share $ (0.06) $ (0.03) $ (0.12) $ 0.05
Weighted Average Number of Common
Shares Outstanding for Basic Earnings
Per Common Share   25,863,000   25,389,000   25,860,000   25,220,000
Weighted Average Number of Common
Shares Outstanding for Diluted
Earnings Per Common Share   25,863,000   25,389,000   25,860,000   26,117,000
 
             

Cover-All Technologies Inc. and Subsidiaries Consolidated Balance Sheet
 

September 30, 2012

December 31, 2011
(unaudited)
Assets:
Current Assets:
Cash and Cash Equivalents $ 1,799,729 $ 3,281,965

Accounts Receivable (Less Allowance for Doubtful Accounts
of $25,000) 2,241,612 1,817,793
Prepaid Expenses 890,942 576,522
Deferred Tax Asset   1,099,000   1,099,000
Total Current Assets   6,031,283   6,775,280
Property and Equipment – At Cost:
Furniture, Fixtures and Equipment 1,717,754 912,527
Less: Accumulated Depreciation   648,577   633,356
Property and Equipment – Net   1,069,177   279,171
Goodwill   1,039,114   1,039,114

Capitalized Software (Less Accumulated Amortization of $16,657,789
and $14,134,024, Respectively)   10,891,758   8,799,711

Customer Lists/Relationships (Less Accumulated Amortization of$226,593 and $126,093, Respectively)
  175,407   93,907

Non-Compete Agreements (Less Accumulated Amortization of$158,044 and $110,044, Respectively)
  1,956   49,956
Deferred Tax Asset   2,168,500   2,168,500
Business Acquisition     1,035,821
Deferred Financing Costs (Net of Amortization of $2,361 and $0,

Respectively)
  125,139  
Other Assets   362,761   216,971
Total Assets $ 21,865,095 $ 20,458,431
 
Liabilities and Stockholders’ Equity:
Current Liabilities:
Accounts Payable $ 1,636,832 $ 440,635
Accrued Expenses Payable 595,139 753,888
Note Payable – Related Party 400,000
Deferred Charges 4,379 43,788
Current Portion of Capital Lease 108,719
Unearned Revenue   2,203,003   2,298,985
Total Current Liabilities   4,948,072   3,537,296
Long-Term Liabilities:
Long-Term Debt 2,000,000
Long-Term Portion of Capital Lease   504,572  
Total Long Term Liabilities   2,504,572  
Total Liabilities   7,452,644   3,537,296
Commitments and Contingencies  

Stockholders’ Equity:

Common Stock, $.01 Par Value, Authorized 75,000,000 Shares;

25,882,730 and 25,782,730 Shares Issued and Outstanding in
2012 and 2011, Respectively 258,827 257,827
Paid-In Capital 31,318,330 30,812,059
Accumulated Deficit   (17,164,706)   (14,148,751)
Total Stockholders’ Equity   14,412,451   16,921,135
Total Liabilities and Stockholders’ Equity $ 21,865,095 $ 20,458,431
 
             

Cover-All Technologies Inc. and Subsidiaries EBITDA Reconciliation to U.S. GAAP Net Income (unaudited)
 
Three months ended September 30, Nine months ended September 30,
  2012       2011   2012       2011
 
Net (Loss) Income $ (1,515,392) $ (710,462) $ (3,015,955) $ 1,176,267
 
Interest Income (Expense), Net 27,924 10,337 27,888 11,008
Income Tax Expense 37,385
Depreciation 40,096 34,986 123,200 116,004
Amortization   1,054,735   497,197   2,674,627   1,147,989
 
EBITDA $ (392,637) $ (167,942) $ (190,240) $

2,488,653
 
EBITDA per Common Share:
Basic $ (0.02) $ (0.01) $ (0.01) $ 0.10
Diluted $ (0.02) $ (0.01) $ (0.01) $ 0.10
 

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