Covol Technologies Inc. Arranges Financing.

LEHI, Utah--(BUSINESS WIRE)--Sept. 24, 1999--

Covol Technologies Inc. (NASDAQ:CVOL), Friday announced that the company has entered into an agreement with Aspen Capital Resources to provide financing of up to $4 million in the form of convertible secured debt.

The proceeds from the transaction will be used to provide Covol with additional working capital, if needed.

The agreement provides for Covol to make draws as needed. The company received $850,000 at the time of closing, less a placement fee of 10%. The debt is convertible at $3.00 per share or market, whichever is less. The debt is convertible at the rate of 25% every 30 days beginning 30 days from Sept. 17, 1999, subject to certain restrictions.

Borrowing under this agreement requires issuance of warrants to purchase Covol shares equal to 40% of the shares issuable under the debenture. The warrants will have a three year exercise period and a strike price equal to 120% of the closing conversion price, or $3.60. The number of warrants issued will be based on the actual funded amounts.

Steven G. Stewart, Covol's chief financial officer, stated, "This financial arrangement will be used to provide working capital, if needed, as Covol completes the sale of its remaining synthetic fuel facilities. The Company continues to be focused on selling the remaining facilities it owns, which should provide sufficient funds to retire Covol's current debt."

The company can redeem all outstanding debentures at a rate of 125% of face value by providing a 30-day notice of intent to redeem. Borrowings under this arrangement are due March 17, 2001, if not converted or redeemed earlier. Covol has assigned the royalties to be received from a licensed synthetic fuel facility as collateral for the financing.

Covol is a technology company which engineers industrial waste and other by-products into value-added fuels and resources.

Statements in this news release that relate to future plans, possible transactions, or projected valuations are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including any statement with respect to anticipated products to be produced using Covol's technology and Covol's strategy.

Such statements are subject to risks and uncertainties that could cause actual results to differ materially. There are a number of business factors which singularly or combined may affect Covol's future operating results.

In addition to matters affecting Covol's industry or the coal industry or the economy generally, factors which could cause actual results to differ from expectations set forth in above identified forward-looking statements include but are not limited to Covol's ability to successfully negotiate terms and consummate proposed transactions, ability to sell company-owned synthetic fuel facilities on favorable terms, ability to obtain necessary capital or financing, ability to comply with covenants in financing agreements, including financial performance criteria, ability to conserve capital through cost reductions until operating revenues exceed expenses, ability of licensees to market synthetic fuel produced, generating royalties for Covol, ability of licensees to achieve expected production levels at the synthetic fuel facilities, favorable IRS tax treatment, availability of natural resources and suitable raw materials, ability to locate appropriate sites for facilities, ability of Covol to complete specific research and development projects, market penetration from competing technologies and the commercial viability of technologies.