CoverAll Technologies (COVR)

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COVR shareholders approve merger. See PR.

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Another new customer....see PR. By my count the Majesco/COVR combo have recently added 8 new customers so as far as licensing revenue they are off to a great start.

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Additional purchases by Manish Shah, President & CEO:


5/28 1500 @ 1.04

5/28 100 @ 1.05

6/1 3700 @ 1.04


He now owns 963,900 shares.

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Insider purchase:

Manish Shah, President & CEO

5/22 3500 @ 1.05
5/26 200 @ 1.05

now owns 958,680 shares

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Majesco's largest customer is State Farm.

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If all goes well the merger will close on 6/26 and MJCO will begin trading on 6/29.

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COVR stockholders meeting to vote on the merger will be on 6/22. Majesco expects the merger to be consummated shortly thereafter.

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If all goes well the merger will be completed in July. Majesco just announced that it has added 4 new customers.

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Signed 3 new contracts. See PR.

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Seeking Alpha article: The Merger Makes Sense For COVR and Shareholders

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Director Steven R. Isaac has made a number of recent purchases. Pretty much all of them are 400-600 shares so by no means a large block though.

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Have been a number of recent PR's. The merger appears to be on track and hopefully will be completed in either June or July.

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Very informative CC which included top management from Majesco. One of the presentation slides is pro-forma financials. A transcript of the CC can be found on Seeking Alpha.

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Majesco UK....see PR. Definitely a positive as they are making progress on the merger.

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4th quarter & full year results on 2-19-15....see PR.

CC and webcast will include joint presentation on the merger with the management of Cover-All and Majesco.

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There is a Majesco Investor & Analyst Presentation (dated 12-15-2014) that can be accessed on the Mastek website. Click on "Investors" and you will see it.

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12-15-2014

SC 13D

Reporting Persons: Majesco

7,634,400 shares

28.5%

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Deal has many moving parts. Think the easiest way to view it is that as a COVR shareholder would you rather have 16.5% of a company with $100+ million in revenue AND decent growth prospects or have 100% of a company with just over $20 million in revenue and extremely slow growth (struggling to win new customers)?

As far as valuation one can speculate as to what the P/S ratio of the new company will be. If the multiple is four (i.e. valuation of $400 million) then COVR shareholders will be at approx. $2.50 per share. GWRE has a P/S multiple of 9+..........

For what it's worth Wall St. loves a pure play story that is highly acquisitive. From what I gather that seems to be the plan.

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Merger announced. See press release.

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New Shareholder. Reporting as of 9/30/14:

FCG Advisors, LLC. owns 1,505,724 shares (5.65%).

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Going forward I see 2 possible scenarios:

1) "transformative" deal is agreed to. My guess is that this would involve COVR being acquired by a bigger company in an all stock transaction.

2) continue as an independent company and hopefully will have some new licensing contracts to announce soon. It was mentioned on the CC that there are 5 potential deals where customers are close to making a decision as to what vendor they will use.


Personally I'm rooting for #1 as I think that it would be helpful if COVR were part of a bigger company. Manish mentioned that the deal would allow COVR to offer a number of additional products, etc.

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Without mentioning any details Manish said that a decision in regards to the "transformative" M & A transaction should be made before year end. We have absolutely no idea as to who the other company is.

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Q3: Despite having only $34,000 in licensing revenue the company still had a PROFITABLE quarter. Indicative that costs/expenses are being well managed. Future licensing revenue should pretty much flow right to the bottom line.

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Q3 Earnings & CC will be on 11/13. After the close.

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The transcript from the CC is available on Seeking Alpha. Sounds as if an acquisition/merger will be announced sometime this year.

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2Q earnings & CC.

Tuesday, 8/12

Both after the market closes.

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BUSINESS UPDATE: PR was issued this morning. Very positive.

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Unusually high volume today.

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CC:

- Increased Professional & Support Services revenue guidance by $1 million. Not counting licensing fees revenue in 2014 should be at least $18 million.

- the amortization schedule for capitalized software is now based on 5 years....previously was 3.

- hired SM Berger & Co. as the new IR firm

- upgraded the corporate web site....it does look much better.

- there were not any audience questions

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From the earnings PR some insight into what management is thinking in regards to possible acquisitions.

"To support our organic growth strategies, we believe there are opportunities for accretive acquisitions. We are seeking acquisitions that create enterprise-wide solutions, develop cloud, mobile, and analytic products, and complement our business processing services."

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GWRE: new 52 week low and a closing price of $34.85

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GWRE closed @ $36.40. Is near its 52 week low.

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Q1 results will be released after the close on Thursday, May 15th.

CC will be at 4:30 p.m. (ET)

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Annual Shareholder Meeting

6/5/2014

9:30 a.m. (ET)

Hilton Parsippany at One Hilton Court

Parsippany, NJ

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5-2-14: 8K

"....the Company announced that it has established, effective 5-1-2014, an Acquisitions Committee of the Board, which Committee will be responsible for identifying, evaluating and acquiring suitable targets to help the Company accelerate the execution of its strategic plans. The Acquisitions Committee consists of Manish D. Shah, Earl Gallegos and Steve Isaac."

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Added Steve Isaac to the Board of Directors.

Manish Shah: "Steve's vast experience in P/C insurance technology and managing several acquisitions will prove a valuable asset as we continue to explore ways for accelerating the growth of the company to improve shareholders' value through means other than organic growth."

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Look at GWRE's P/E and P/S ratios!! Unbelievable!!

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Seeking Alpha article. Author did a good job. Hopefully will bring attention to the stock.

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CC: Definitely worth a listen. Some highlights were:

- 2014 sales are starting with a base of approximately $17 million

$8.5 million in support revenue
$7.5 million in client services revenue
$775,000 in deferred licensing revenue which will be recognized in Q1

- the company reorganization will result in annualized cost savings of $1.5 million in 2014

- before starting the Q & A session Manish Shah said:

" I continue to work with the Board of Directors to explore ways for facilitating the growth of the company to improve shareholder value through means other than organic growth."

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Q4 and full year results will be released on Thursday, 2/20 after the close of trading. The CC will start at 4:30 p.m. (ET).

Interestingly last year the reporting date was a full month later (3/20/13).

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PR from 1-7-2014: Promotion of Aaron Herrmann to Senior VP of Sales and Marketing. My take is that COVR is going to increase the size of its sales force. This possibility was mentioned on the most recent CC.

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PR on 12-19-13. Dev Studio officially released. 4 current customers have already licensed it. Could be wrong but my recollection is that on one of the CC's it was mentioned that at that time 2 licenses had been pre-sold.

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RANDOM THOUGHTS. My guesstimate is that 2013 revenue will be right around $21 million. Continue to be surprised that the stock price is not at least 2X revenue which would be $1.60 per share. My thinking is that if COVR can increase the 2014 top line to at least $23 million AND the cost savings measures that were discussed in the recent CC are in fact successfully implemented then we should hopefully see a P/S multiple of 2.5 to 3.0. That would be a stock price ranging between $2.18-2.62.

Of course the potential catalysts are the announcement of new sales contracts and hopefully more licensing agreements.

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CC #5: During the Q&A Bill Chapman (Morgan Stanley) asked about valuation and management's position on being acquired, etc.

CEO Manish Shah replied:

- the company is open to legitimate offers

- strongly believes that the stock is undervalued

- COVR products getting "rave reviews" from industry analysts

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CC #4: 2014 Partial Revenue Guidance.

- will be starting with a base of approximately $15 million.

- $8.5-9.0 million of recurring revenue

- $6.0-6.5 million in professional services

- do not give forward guidance on licensing revenue.

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CC #3: Alliance with MXS

- first of hopefully many alliances to come

- opens up completely different market space

- will take some ramping up to build significant revenue

- for COVR the sales will be annual subscriptions (i.e. recurring revenue)

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CC #2: Starting in 2014 the previously announced reorganization will result in annualized cost savings of $1.5 million. Savings have already begun in 2013 Q4. There was a charge in the recent quarter but no additional reorganization charges are expected.

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CC #1: Have 3 completed deals that will be recognized in Q4...approximately $1 million in licensing revenue.

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Q3 results and CC on Thursday, 10/31. After the close. Hoping that we will hear some additional info about the recent licensing agreement.

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Price/Sales. Assuming revenue of $20 million COVR is selling at approximately 1.6 X sales. The P/S for GWRE is 9+. My hope is that COVR can increase sales to $25 million while at the same time expanding the P/S multiple to at least 3. If so the stock would be right around $3 per share.