SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[X] Soliciting Material Pursuant to Section 240.14a-12
COTELLIGENT, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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[COTELLIGENT LOGO]
100 THEORY SUITE 200 IRVINE, CA 92612
TEL 949.823.1600 FAX 949.823.3300 WWW.COTELLIGENT.COM
April 10, 2003
DEAR SHAREHOLDER:
Over the past four to six months, many companies with outstanding technology
and strong client relationships, like Cotelligent, have undergone downward
pressure in revenue, profit, cash and stock price. Unlike your Company, however,
many of these firms are running short on cash. The depressed valuations of these
firms and their limited choices have created opportunities for your Company as
investors, merger partners and/or acquirers. With input from investment banks
and M&A firms, we have identified a number of opportunities well suited to
complimenting Cotelligent's business, marketing and operating strategy. We have
previously described our approach to making strategic investments so I need not
repeat that at this point in time. With regard to mergers and acquisitions our
profile is:
Firms with software technology, products and services that
enhance our own
Current revenue exceeding $10 million
Long-term relationships with customers and clients in
markets that align with our expertise
An active backlog and pipeline that reflects the ability to
sustain/grow revenue
The ability to immediately eliminate duplicate sales,
general and administrative expenses
Little to no debt on the balance sheet
Your Company now has an outstanding platform with strong infrastructure,
clean balance sheet, significant operating capital, is market driven, with an
outstanding data center capable of supporting a variety of applications, and
most importantly, the management know-how to build to greater scale in a tough
environment. Our approach will be highly selective and to completely integrate
the businesses we merge or acquire immediately, thereby realizing significant
near-term cost saving. We expect this to help us to reach overall profitability
relatively quickly.
We are contemplating two to three such transactions by year-end 2003. Our
aim is to expand our revenue base to between $50 million and $75 million which
we have determined to be an achievable critical mass. We will spend 2004
entirely focused on refining our business activities and bringing a compelling
growth story to the investor market as well as executing an aggressive
selling/marketing strategy in our competitive market. While we will expect to
see only modest top line growth through 2004 given the current business
environment, we expect to show operating profit and positive cash flow.
The discussions we are having with companies that fit our profile have been
positive. We have found the executives of these companies realize they have
limited choices and believe their investors would rather convey their stock into
another company resulting in a viable future than watch their entire investment
vanish or be liquidated for pennies on the dollar. While there can be no
assurance as to when or whether any such acquisitions or investments will be
consummated, I am encouraged by the response we have received as we have begun
to execute this strategy. Your Company is aggressively working to improve its
current ability to increase shareholder value and build a strong business.
This is a time of considerable uncertainty. During times like these, being
complacent with the status quo is not an option. These times require us to be
creative and seize opportunity. I am confident that the opportunity for your
Company to take advantage of this market environment will enhance our ability to
achieve both top line and bottom line growth in the near term. We are keenly
focused on restoring the value of our shares and positioning Cotelligent for
future growth.
Sincerely,
/s/ JAMES R. LAVELLE
James R. Lavelle
Chairman and CEO
SAFE HARBOR STATEMENT
Except for historical information contained herein, the information
contained in this letter includes forward-looking statements that involve
certain risks and uncertainties that could cause actual results to differ
materially from such statements. All forward-looking statements included
in this letter are based upon information available to Cotelligent as of the
date hereof, and Cotelligent assumes no obligation to update any such forward-
looking statements. Of course, there can be no assurance as to when or whether
any such acquisitions or investments will be consummated. Please refer to the
discussion of risk factors and other factors included in Cotelligent's most
recent Report on Form 10-K for the year ended December 31, 2002, and
other filings made with the Securities and Exchange Commission.
ADDITIONAL INFORMATION
Cotelligent plans to file with the SEC and mail to its shareholders a Proxy
Statement in connection with the election of directors for the 2003 Annual
Meeting, which will contain important information. Investors and security
holders are urged to read the Proxy Statement carefully when it is available.
Investors and security holders will be able to obtain free copies of the
Proxy Statement and other documents filed with the SEC by the Company through
the Web site maintained at the SEC at www.sec.gov. In addition, investors and
security holders will be able to obtain free copies of the Proxy Statement, when
available, from the Company by contacting Investor Relations, c/o Cotelligent,
Inc, 100 Theory, Suite 200, Irvine, California 92612, or 949-823-1600.
Each of the Company's officers and directors is deemed to be a participant
in the Company's solicitation of proxies for the election of directors at the
2003 Annual Meeting. Information regarding the Company's officers and directors
is contained in the Company's proxy statement, dated May 10, 2002, the Company's
definitive additional materials dated May 24, 2002 and its Form 10-K for the
year ended December 31, 2002, which are filed with the SEC. Additional
information regarding participants in the proxy solicitation may be obtained by
reading the Proxy Statement regarding the 2003 Annual Meeting when it becomes
available.