UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-Q

 (Mark One)

X        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 1999
                                       OR

o        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the transition period from                          to

Commission File Number 0-25372

                                COTELLIGENT, INC.
             (Exact name of registrant as specified in its charter)


          Delaware                              94-3173918
(State of other jurisdiction of               (I.R.S. Employer
 incorporation or organization)              Identification No.)

101 California Street, Suite 2050
    San Francisco, California                       94111
(Address of principal executive offices)          (Zip Code)

                                 (415) 439-6400
             (Registrant's telephone number, including area code)



(Former name,  former  address and former  fiscal year,  if changed  since last
report)

        Indicate by  check mark  whether the registrant (1)has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

Yes      X              No
     ---------------      ---------------


         At November 12, 1999 there were  15,126,204  shares of  common  stock
outstanding.









<PAGE>

                               COTELLIGENT, INC.


                                      INDEX

                         Part I - Financial Information
<TABLE>
<CAPTION>

Item 1. Financial Statements                                                                  Page
<S>                                                                                        <C>

Cotelligent, Inc.
         Consolidated Balance Sheets at September 30, 1999 (Unaudited)
            and March 31, 1999                                                                 3
         Consolidated Statements of Operations for the Three and Six Months Ended
            September 30, 1999 and 1998 (Unaudited)                                            4
         Consolidated Statements of Cash Flows for the Six Months Ended
            September 30, 1999 and 1998 (Unaudited)                                            5
         Notes to Consolidated Financial Statements (Unaudited)                                6



Item 2. Management's Discussion and Analysis of
         Financial Condition and Results of Operations                                        10


                           Part II - Other Information


Item 6. Exhibits and Reports on Form 8-K                                                      15

Signatures                                                                                    16
</TABLE>
                                       2
<PAGE>
                                COTELLIGENT, INC.
                           CONSOLIDATED BALANCE SHEETS
                        (In thousands, except share data)

<TABLE>
<CAPTION>



                                                                      September 30, 1999        March 31, 1999
                                                                      -------------------     ------------------
                                                                         (Unaudited)
                             ASSETS
<S>                                                                  <C>                     <C>

Current assets:
   Cash and cash equivalents....................................      $              217      $             972
   Accounts receivable, including unbilled accounts of $23,025..
   and $17,719 and net of allowance for doubtful accounts of....
   $1,825 and $1,449, respectively..............................                  68,997                 62,087
   Deferred income taxes........................................                     960                    960
   Prepaid expenses and other...................................                   6,011                  4,971
                                                                       -----------------     ------------------
     Total current assets.......................................                  76,185                 68,990
Property and equipment, net.....................................                  12,990                 11,405
Goodwill, net of accumulated amortization of $3,121 and $1,861,.
respectively....................................................                  75,343                 95,200
Notes receivable from officers and related party................                   1,340                    191
Deferred income taxes...........................................                   6,447                      -
Other assets....................................................                   1,432                  1,094
                                                                       -----------------     ------------------

     Total assets...............................................       $         173,737      $         176,880
                                                                       =================     ==================

              LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Short-term debt..............................................       $             314      $             236
   Accounts payable.............................................                   9,152                  9,399
   Accrued compensation and related payroll liabilities.........                  15,331                 17,238
   Income taxes payable.........................................                   2,230                  5,702
   Other accrued liabilities....................................                   8,081                  7,460
                                                                       -----------------     ------------------
     Total current liabilities..................................                  35,108                 40,035
Long-term debt..................................................                  48,061                 28,191
Deferred income taxes...........................................                       -                    821
                                                                       -----------------     ------------------
     Total liabilities..........................................                  83,169                 69,047
                                                                       -----------------     ------------------
Stockholders' equity:
    Preferred Stock, $0.01 par value; 500,000 shares authorized,
      no shares issued or outstanding...........................                      -                      -
    Common Stock, $0.01 par value; 100,000,000 shares...........
      authorized, 13,639,362 and 13,656,031 shares issued and...
      outstanding, respectively.................................                     137                    137
   Additional paid-in capital...................................                  81,507                 82,517
   Retained earnings............................................                   8,924                 25,179
                                                                       -----------------    -------------------
     Total stockholders' equity.................................                  90,568                107,833
                                                                       -----------------    -------------------

     Total liabilities and stockholders' equity.................       $         173,737     $          176,880
                                                                       =================    ===================


</TABLE>







The accompanying notes are an integral part of these consolidated financial
statements.
                                        3
<PAGE>
                                COTELLIGENT, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                        (In thousands, except share data)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                           Three Months Ended                      Six Months Ended
                                                              September 30,                          September 30,
                                                    --------------------------------    -------------------------------------
                                                        1999               1998                1999               1998
                                                    --------------     -------------    -----------------    ----------------
<S>                                                 <C>                <C>              <C>                  <C>
Revenues...........................................  $     85,623       $    79,728      $       174,189      $      152,778
Cost of services...................................        61,504            55,917              125,212             108,100
                                                    --------------     -------------    -----------------    ----------------
        Gross profit...............................        24,119            23,811               48,977              44,678
Selling, general and administrative expenses.......        21,643            16,856               44,228              31,612
Depreciation and amortization of goodwill..........         1,614               776                3,118               1,450
Impairment of long-lived assets....................             -                 -               20,000                   -
Restructuring charge...............................             -                 -                4,920                   -
                                                    --------------     -------------    -----------------    ----------------
Operating income (loss) ...........................           862             6,179              (23,289)             11,616
Other income (expense):
   Interest expense................................          (755)               (1)              (1,407)                (26)
   Interest income.................................             8               287                  128                 619
   Other...........................................             4                (3)                 (60)                 (3)
                                                    --------------     -------------    -----------------    ----------------
     Total other income (expense)..................          (743)              283               (1,339)                590
                                                    --------------     -------------    -----------------    ----------------
Income (loss) before provision for income taxes....           119             6,462              (24,628)             12,206
Provision (benefit) for income taxes...............            40             2,617               (8,373)              4,846
                                                    --------------     -------------    -----------------    ----------------
Net income (loss)..................................  $         79       $     3,845      $       (16,255)     $        7,360
                                                    ==============     =============    =================    ================
Earnings (loss) per share
       Basic and diluted ..........................  $       0.01       $      0.27      $         (1.20)     $         0.52
                                                    ==============     =============    =================    ================
Weighted average shares outstanding
       Basic.......................................    13,565,326        14,055,396           13,513,452          14,077,764
                                                    ==============     =============    =================    ================
       Diluted.....................................    13,573,264        14,166,025           13,513,452          14,255,913
                                                    ==============     =============    =================    ================


</TABLE>




























     The accompanying notes are an integral part of these consolidated financial
     statements.
                                       4
<PAGE>
                               COTELLIGENT, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>




                                                                                           Six Months Ended
                                                                                             September 30,
                                                                            -------------------------------------------
                                                                                     1999                   1998
                                                                            --------------------    -------------------
<S>                                                                         <C>                     <C>
Cash flows from operating activities:
     Net income (loss)................................................       $           (16,255)    $            7,360
     Adjustments to reconcile net income (loss) to net cash
         used in operating activities:
                Depreciation and amortization of goodwill ............                     3,118                  1,450
                Impairment of long-lived assets ......................                    20,000                      -
                Deferred income taxes, net............................                    (7,268)                  (532)
                Loss on disposal of property and equipment............                        95                     25
                Provision for doubtful accounts.......................                       202                    155
                Changes in current assets and liabilities:
                      Accounts receivable.............................                    (6,505)               (10,372)
                      Prepaid expenses and other current assets.......                      (848)                  (927)
                      Accounts payable and accrued expenses...........                    (2,439)                 1,227
                      Income taxes payable............................                    (3,472)                  (127)
                      Other accrued liabilities.......................                       622                     (4)
                      Other assets....................................                       (80)                    22
                                                                             --------------------    -------------------
                           Net cash used in operating activities......                   (12,830)                (1,723)
                                                                             --------------------    -------------------
Cash flows from investing activities:
     Proceeds from sale of assets ....................................                        18                    317
     Other investment.................................................                      (253)                     -
     Purchase of businesses, net of cash acquired.....................                    (1,535)               (10,847)
     Purchases of property and equipment..............................                    (3,444)                (2,648)
                                                                             --------------------    -------------------
                          Net cash used in investing activities.......                    (5,214)               (13,178)
                                                                             --------------------    -------------------
Cash flows from financing activities:
     Net proceeds from long-term debt.................................                    20,110                      -
     Payments on capital lease obligations............................                      (162)                     -
     Net borrowings on short-term debt................................                         -                    (23)
     Increase in notes receivable from officers and related party, net                    (1,149)                     -
     Net proceeds from issuance of common stock ......................                       723                  1,457
     Repurchase of common stock ......................................                    (2,233)                (4,690)
                                                                             --------------------    -------------------
                 Net cash provided by (used in) financing activities..                    17,289                 (3,256)
                                                                             --------------------    -------------------
     Net decrease in cash and cash equivalents........................                      (755)               (18,157)
     Cash and cash equivalents at beginning of period.................                       972                 40,528
                                                                             ====================    ===================
     Cash and cash equivalents at end of period.......................        $              217      $          22,371
                                                                             ====================    ===================
Supplemental disclosures of cash flow information:
     Interest paid....................................................        $            1,432      $              26
     Income taxes paid................................................        $            2,637      $           3,008


</TABLE>









 The accompanying notes are an integral part of these consolidated financial
 statements.
                                       5
<PAGE>
                               COTELLIGENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          (Dollar amounts in thousands)
                                   (Unaudited)




Note 1 - Business Organization and Basis of Presentation

     Cotelligent,  Inc.  ("Cotelligent" or the "Company") was formed in February
1993 to  acquire,  own and  operate  software  professional  service  businesses
specializing  in  providing  information  technology  ("IT")  consultants  on  a
contract  basis and  consulting  and  outsourcing  services to  businesses  with
complex IT operations. The Company commenced operations in February 1996 when it
completed  its initial  public  offering  and started  acquiring  and  operating
businesses. Since that date, the Company has acquired 26 IT professional service
businesses.  All of the businesses  acquired have operations  substantially  the
same  as the  Company.  These  financial  statements  include  the  accounts  of
Cotelligent, Inc. and its subsidiaries.

     The Company is currently  organized in two practice  groups  consisting  of
Technology Solutions and Professional  Services, and operates offices across the
United States along with international  consultant  recruiting offices in Brazil
and the Philippines.  At September 30, 1999, the Company had approximately 3,200
employees,  including  technical  staff of  approximately  2,700 IT professional
consultants  providing  services to  approximately  900  clients  across a broad
spectrum of industries.

Note 2 - Summary of Significant Accounting Policies

Interim Financial Statement Presentation

     The  accompanying   interim   financial   statements  do  not  include  all
disclosures  included in the financial  statements as included in  Cotelligent's
Annual Report on Form 10-K for the year ended March 31, 1999 ("Form 10-K"),  and
therefore  these  financial  statements  should be read in conjunction  with the
financial statements included on Form 10-K.

     In the opinion of management,  the interim  financial  statements  filed as
part of this Quarterly Report on Form 10-Q reflect all  adjustments,  consisting
only of normal  recurring  accruals,  necessary for a fair  presentation  of the
financial  position  and the  results  of  operations  and of cash flows for the
interim  periods  presented.  Certain 1998  balances have been  reclassified  to
conform with the current presentation.


Note 3 - Changes in Stockholders' Equity

<TABLE>
<CAPTION>



                                            Common Stock              Additional                          Total
                                      --------------------------       Paid-In         Retained        Stockholders'
                                         Shares         Amount         Capital         Earnings           Equity
                                      ------------    ----------    -------------    ------------    ----------------
<S>                                   <C>             <C>           <C>              <C>             <C>
Balance at March 31, 1999.....         13,656,031      $    137      $    82,517      $   25,179      $      107,833
Repurchase of Common Stock....           (238,400)           (2)          (2,231)              -              (2,233)
Issuance of Common Stock......            221,731             2            1,221               -               1,223
Net loss......................                  -             -                -         (16,255)            (16,255)
                                      ============    ==========    =============    ============    ================
Balance at September 30, 1999.         13,639,362      $    137      $    81,507      $    8,924      $       90,568
                                      ============    ==========    =============    ============    ================

</TABLE>



                                       6
<PAGE>

                                COTELLIGENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          (Dollar amounts in thousands)
                                   (Unaudited)


Note 4 - Business Combinations

     Since  inception,  the Company has  acquired  26 IT  professional  services
firms.  During fiscal 1999,  Cotelligent  acquired five  companies  (acquired on
September 16, 1998,  October 29, 1998,  October 30, 1998,  November 30, 1998 and
January 4, 1999)  accounted for under the purchase  method.  During fiscal 2000,
Cotelligent  acquired  one  company on August 12, 1999  accounted  for under the
purchase  method.  The results of these  acquisitions  have been included in the
Company's  results from their  respective  acquisition  dates. The following pro
forma  consolidated  statements of operations for the three and six months ended
September  30, 1998 and 1999 give effect to the  acquisitions  of the  companies
purchased in fiscal 1999 and 2000 as if these acquisitions were made on April 1,
1998  and  1999.  The  pro  forma  consolidated   financial  statement  reflects
adjustments  for interest  expense on cash  consideration  and  amortization  of
goodwill  for  the  companies   accounted  for  under  the  purchase  method  of
accounting.
<TABLE>
<CAPTION>

                                                           Three Months Ended
                                                             September 30,
                                                  -----------------------------------
                                                        1999                1998
                                                  ----------------     --------------
<S>                                               <C>                  <C>
Revenues.......................................    $       86,618       $     96,185
Cost of services...............................            62,479             65,068
                                                  ----------------     --------------
       Gross profit............................            24,139             31,117
Selling, general and administrative expenses...            23,830             23,151
                                                  ----------------     --------------
Operating income ..............................               309              7,966
Other expense..................................              (770)            (1,147)
                                                  ----------------     --------------
Income (loss) before provision for income taxes              (461)             6,819
Provision (benefit) for income taxes...........              (156)             2,767
                                                  ----------------     --------------
Net income (loss)..............................    $         (305)      $      4,052
                                                  ================     ==============
Earnings (loss) per share -
     Basic.....................................    $        (0.02)      $       0.26
                                                  ================     ==============
     Diluted...................................    $        (0.02)      $       0.26
                                                  ================     ==============
Weighted average shares outstanding -
     Basic.....................................        13,627,752         15,356,535
                                                  ================     ==============
     Diluted...................................        13,627,752         15,467,164
                                                  ================     ==============
</TABLE>

<TABLE>
<CAPTION>


                                                              Six Months Ended
                                                                September 30,
                                                    -----------------------------------
                                                          1999                1998
                                                    ----------------     --------------
<S>                                                 <C>                  <C>
Revenues.......................................      $      177,233       $    184,797
Cost of services...............................             127,369            125,821
                                                    ----------------     --------------
       Gross profit............................              49,864             58,976
Selling, general and administrative expenses...              73,480             44,459
                                                    ----------------     --------------
Operating income ..............................             (23,616)            14,517
Other expense..................................              (1,413)            (1,915)
                                                    ----------------     --------------
Income (loss) before provision for income taxes             (25,029)            12,602
Provision (benefit) for income taxes...........              (8,374)             5,105
                                                    ----------------     --------------
Net income (loss)..............................      $      (16,655)      $      7,497
                                                    ================     ==============
Earnings (loss) per share -
     Basic.....................................      $        (1.23)      $       0.49
                                                    ================     ==============
     Diluted...................................      $        (1.23)      $       0.48
                                                    ================     ==============
Weighted average shares outstanding -
     Basic.....................................          13,594,388         15,378,903
                                                    ================     ==============
     Diluted...................................          13,594,388         15,557,052
                                                    ================     ==============
</TABLE>

                                       7
<PAGE>

                                COTELLIGENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        (In thousands, except share data)
                                   (Unaudited)

Note 5 - Earnings Per Share

Earnings per share were as follows:
<TABLE>
<CAPTION>

                                                               For the Three Months Ended September 30, 1999
                                                          -------------------------------------------------------
                                                                                                      Per Share
                                                                Income               Shares             Amount
                                                          ------------------     --------------     -------------
<S>                                                       <C>                    <C>                <C>
Basic earnings per share-
Net income available to common stockholders ...........    $             79         13,565,326       $      0.01
Options issued to directors and employees .............                                  7,938
                                                                                 --------------

Diluted earnings per share-
Income available to common stockholders
    plus assumed conversions ..........................    $             79         13,573,264       $      0.01
                                                                                 ==============


                                                                 For the Three Months Ended September 30, 1998
                                                          -------------------------------------------------------
                                                                                                      Per Share
                                                                Income               Shares             Amount
                                                          ------------------     --------------     -------------
Basic earnings per share-
Net income available to common stockholders ...........    $          3,845         14,055,396       $      0.27
Options issued to directors and employees .............                                110,629
                                                                                 --------------

Diluted earnings per share-
Income available to common stockholders
    plus assumed conversions ..........................    $          3,845         14,166,025       $      0.27
                                                                                 ==============


                                                                  For the Six Months Ended September 30, 1999
                                                          -------------------------------------------------------
                                                                                                      Per Share
                                                                Income               Shares             Amount
                                                          ------------------     --------------     -------------
Basic and diluted earnings per share-
Net loss available to common stockholders .............    $        (16,255)        13,513,452       $     (1.20)


                                                                  For the Six Months Ended September 30, 1998
                                                          -------------------------------------------------------
                                                                                                      Per Share
                                                                Income               Shares             Amount
                                                          ------------------     --------------     -------------
Basic earnings per share-
Net income available to common stockholders ...........    $          7,360         14,077,764       $      0.52
Options issued to directors and employees .............                                178,149
                                                                                 --------------

Diluted earnings per share-
Income available to common stockholders
    plus assumed conversions ..........................    $          7,360         14,255,913       $      0.52
                                                                                 ==============
</TABLE>

                                       8

<PAGE>
                                COTELLIGENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          (Dollar amounts in thousands)
                                   (Unaudited)




Note 6 - Capital Stock

     In  September  1998,   Cotelligent's  Board  of  Directors  authorized  the
repurchase of up to 2.0 million shares of the Company's  Common Stock, or 14% of
the then outstanding shares. During the six months ended September 30, 1999, the
Company  completed the share  repurchase  program with the repurchase of 238,400
shares for a total cost of $2,233.

Note 7 - Goodwill Impairment Charge

     In accordance with Statement of Financial  Accounting  Standards (SFAS) No.
121, the Company  considers,  among other  factors,  deterioration  of operating
performance  or  significant  loss of client base to be  indicators of potential
impairment of long-lived assets.  The Company  experienced a reduction in demand
for its  services,  which it believes to be  principally  related to  strategies
being  employed  by  the  Company's  customers  of  reducing  investment  in  IT
infrastructures  while their "Year 2000"  compliance  is being  ascertained.  In
particular,  one of the Company's operating locations  experienced a significant
reduction in demand.  As a result of the  reduction in demand for its  services,
the Company  recognized an  impairment  of goodwill  during the six months ended
September  30,  1999 as the  future  undiscounted  cash  flows of certain of its
long-lived  assets were estimated to be less than the asset's  related  carrying
value. The pre-tax  non-cash charge was $20,000,  which represents the excess of
the assets' carrying value over the Company's estimate of its fair value.


Note 8 - Restructuring of Operations

     As part of the  Company's  reorganization  into two  practice  groups,  the
Company  identified  opportunities  to align its operating  structure by closing
certain of its redundant  facilities and  rationalizing  headcount to conform to
the  Company's  new  operating  structure.  Accordingly,  the Company  adopted a
restructuring plan, which resulted in a pre-tax  restructuring  charge of $4,920
during the six months ended September 30, 1999. The charge  includes  provisions
for severance of  approximately  60 management  and operating  staff ($3,510) as
well as closure  costs  related  to a plan of  consolidating  certain  operating
locations ($1,410). As the Company's reorganization plan proceeds, the amount of
the  restructuring  charge  could  change.  At  September  30,  1999,  $3,204 of
restructuring charges remained in accrued liabilities.

                                       9
<PAGE>
ITEM 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations


     Cotelligent,  Inc.  ("Cotelligent" or the "Company") was formed in February
1993 to  acquire,  own and  operate  software  professional  service  businesses
specializing  in  providing   information   technology  ("IT")   consultants  to
businesses with complex IT operations.  Cotelligent's  consulting  practices are
divided  into two  groups:  Professional  Services - IT staff  augmentation  and
Technology  Solutions,  which encompass all of the Company's consulting services
including custom  application  software  development and outsourcing  solutions,
solutions in  conjunction  with national  partnerships  with leading  enterprise
application   software   companies,   network  design,   intranet  and  internet
application design and development and IT Education.

     During  fiscal 1999 and fiscal 2000,  Cotelligent  acquired  six  companies
(acquired on September 16, 1998,  October 29, 1998,  October 30, 1998,  November
30, 1998,  January 4, 1999 and August 12, 1999) accounted for under the purchase
method.  The results of these  acquisitions  have been included in the Company's
results from their respective acquisition dates.

     The Company  derives  substantially  all of its revenues from IT consulting
and  outsourcing  service  activities.  The  majority  of these  activities  are
provided under ''time and  materials''  billing  arrangements,  and revenues are
recorded as work is performed. Revenues are directly related to the total number
of hours  billed to clients and the  associated  hourly  billing  rates.  Hourly
billing rates are  established  for each service  provided and are a function of
the type of work  performed and the related skill level of the  consultant.  The
Company's principal costs are professional  compensation directly related to the
performance  of services and related  expenses.  Gross profits  (revenues  after
professional  compensation  and related  expenses)  are  primarily a function of
hours billed to clients per professional employee or consultant,  hourly billing
rates of those employees or consultants and employee or consultant  compensation
relative to those  billing  rates.  Gross  profits can be adversely  impacted if
services  provided cannot be billed, if the Company is not effective in managing
its service  activities,  if fixed-fee  engagements (which historically have not
constituted a significant portion of total revenues) are not properly priced, if
consultant cost increases exceed bill rate increases or if there are high levels
of unutilized  time (work  activities  not chargeable to clients or unrelated to
client services) of full-time salaried service professional employees. Operating
income  (gross  profit  less  selling,   general  and  administrative  expenses,
depreciation and amortization of goodwill,  impairment of long-lived  assets and
restructuring  charge) can be  adversely  impacted by  increased  administrative
staff  compensation  and expenses related to growing and expanding the Company's
business,  which may be  incurred  before  revenues  or  economies  of scale are
generated from such investment.  In addition,  the Company's  solutions oriented
practices  require  a  higher  level  of  selling,  general  and  administrative
infrastructure  in order to  generate  revenue.  If the  Company  is  unable  to
generate  sufficient  revenue  from these  activities,  operating  income may be
adversely affected.

     As part of its  strategic  plan,  the Company  intends to acquire  other IT
consulting  services  businesses.  Should the Company be successful in acquiring
such businesses, periods subsequent to the completion of an acquisition could be
adversely impacted by costs and activities  associated with the assimilation and
integration of the acquired company. In addition, there can be no assurance that
the acquired company will meet its revenue or profit expectations  following the
acquisition.  If the Company is  unsuccessful in its  acquisition  program,  the
period in which  costs  associated  with the pursuit of such  opportunities  are
written off could be adversely impacted.

     As a professional  services  organization,  the Company responds to service
demands from its clients.  Accordingly, the Company has limited control over the
timing and circumstances under which its services are provided.  Therefore,  the
Company can  experience  volatility  in its  operating  results  from quarter to
quarter. The operating results for any quarter are not necessarily indicative of
the results for any future period.

     The Company has conducted a comprehensive  review of its internal  computer
systems to identify  the systems that could be affected by the "Year 2000" issue
and has  concluded  that the "Year  2000"  issue  will not pose any  significant
operational   problems  for  the  Company.  The  Company  does  not  expect  the
expenditures  related to the "Year 2000" issue to have a material  effect on its
financial position or results of operations in any year.

     Except  for  historical   information  contained  herein,  the  information
contained  in this  report  includes  forward-looking  statements  that  involve
certain  risks  and  uncertainties  that  could  cause  actual  results  to vary
materially from such statements. All forward-looking statements included in this
report  are based  upon  information  available  to  Cotelligent  as of the date
thereof,   and   Cotelligent   assumes   no   obligation   to  update  any  such
forward-looking  statement.  Please refer to the  discussion of risk factors and
other  factors  included  in  Cotelligent's  Annual  Report on Form 10-K for the
fiscal year ended March 31, 1999 and other filings made with the  Securities and
Exchange Commission.
                                       10
<PAGE>
                      CONSOLIDATED RESULTS OF OPERATIONS

Three Months Ended September 30, 1999 Compared to Three Months Ended
September 30, 1998

Revenues

     Revenues  increased  $5.9  million,  or 7.4% to $85.6  million in the three
months  ended  September  30, 1999 from $79.7  million in the three months ended
September 30, 1998.  The increase was primarily due to the inclusion of revenues
in the  second  quarter of fiscal  2000 from the  companies  acquired  under the
purchase method of accounting during fiscal 1999 ("Fiscal Year 1999 Purchases"),
partially offset by a general reduction in demand for the Company's services.


Gross Profit

     Gross profit increased $0.3 million, or 1.3%, to $24.1 million in the three
months  ended  September  30, 1999 from $23.8  million in the three months ended
September  30,  1998 as a  result  of the  inclusion  of the  Fiscal  Year  1999
Purchases.  Gross profit as a percentage  of revenues  decreased to 28.2%,  from
29.9%,  primarily due to a drop in utilization of salaried employees caused by a
general reduction in demand for IT consulting services.


Selling, General and Administrative Expenses

     Selling,  general and administrative  expenses  increased $4.8 million,  or
28.4%,  to $21.6 million in the three months ended September 30, 1999 from $16.9
million in three months ended September 30, 1998. The increase was primarily due
to the inclusion of selling,  general and administrative expenses related to the
Fiscal Year 1999 Purchases,  increased compensation to existing staff, new staff
added in advance of anticipated continued growth, additional occupancy costs and
increased  marketing and sales  activities  during the second  quarter of fiscal
2000.

     Selling,  general and administrative  expenses as a percent of revenue were
25.3% in the three  months  ended  September  30, 1999  compared to 21.1% in the
three months  ended  September  30,  1998.  The majority of the Fiscal Year 1999
Purchases  offer  solutions  oriented  services  which require a higher level of
selling, general and administrative infrastructure in order to generate revenue.
In addition, the increased staffing,  occupancy,  marketing and sales activities
occurred in advance of anticipated  revenue and were in place in the period when
the Company experienced a reduction in demand for its services.


Depreciation and Amortization of Goodwill

     Depreciation and amortization of goodwill increased $0.8 million,  or 108%,
to $1.6 million in the three months ended  September  30, 1999 from $0.8 million
in three months ended  September 30, 1998. The increase was primarily due to the
inclusion of amortization of goodwill related to the Fiscal Year 1999 Purchases.


Other Income (Expense)

     Other  income  (expense)  primarily  consists of interest  expense,  net of
interest income.  Interest  expense,  net of interest income was $0.7 million in
the three months ended September 30, 1999 as compared to interest income, net of
interest  expense of $0.3 million in the three months ended  September 30, 1998.
The increase is primarily  due to interest  expense  recognized on the Company's
credit  facility  during the second  quarter of fiscal  2000.  The net  interest
income in the second  quarter of fiscal 1999 was the result of  interest  income
earned on cash proceeds from the common stock offering completed in March 1998.


Provision for Income Taxes

     Provision  for  income  taxes was a tax  expense  of $0.04  million,  or an
effective tax rate of 34% of pre-tax income in the three months ended  September
30, 1999,  compared to income tax expense of $2.6 million,  or an effective rate
of 40.5% of pre-tax  income for the three months ended  September 30, 1998.  The
decrease in the  effective  tax rate in the second  quarter of fiscal  2000,  as
compared  to the same  period of fiscal year 1999,  reflects  the  impact,  in a
year-to-date  pre-tax loss situation,  of non-deductible  items to the effective
tax rate.
                                       11
<PAGE>
                      CONSOLIDATED RESULTS OF OPERATIONS



Six Months Ended September 30, 1999 Compared to Six Months Ended
September 30, 1998


Revenues

     In the first half of fiscal 2000 revenues increased $21.4 million,  or 14%,
to $174.2  million  from $152.8  million in the first half of fiscal  1999.  The
increase was primarily due to the inclusion of revenues in the second quarter of
fiscal 2000 from the companies  acquired under the purchase method of accounting
during fiscal 1999.


Gross Profit

     Gross profit increased $4.3 million, or 9.6%, to $49.0 million in the first
half of 2000 from $44.7  million  in the first half of 1999,  as a result of the
inclusion of the Fiscal Year 1999  Purchases.  Gross  profit as a percentage  of
revenues decreased to 28.1%, from 29.2%,  primarily due to a drop in utilization
of salaried  employees caused by a general reduction in demand for IT consulting
services.


Selling, General and Administrative Expenses

     Selling,  general and administrative  expenses increased $12.6 million,  or
39.9%,  to $44.2  million in the first  half of 2000 from  $31.6  million in the
first half of 1999.  The increase was primarily due to the inclusion of selling,
general and  administrative  expenses related to the Fiscal Year 1999 Purchases,
increased  compensation  to  existing  staff,  new  staff  added in  advance  of
anticipated   continued  revenue,   additional  occupancy  costs  and  increased
marketing and sales activities during the first six months of fiscal 2000.

     Selling,  general and administrative  expenses as a percent of revenue were
25.4% in the six months ended  September  30, 1999  compared to 20.7% in the six
months ended  September 30, 1998. The majority of the Fiscal Year 1999 Purchases
offer  solutions  oriented  services  which  require a higher  level of selling,
general  and  administrative  infrastructure  in order to generate  revenue.  In
addition,  the increased  staffing,  occupancy,  marketing and sales  activities
occurred in advance of anticipated  revenue and were in place in the period when
the Company experienced a reduction in demand for its services.


Depreciation and Amortization of Goodwill

     Depreciation and amortization of goodwill increased $1.6 million,  or 115%,
to $3.1 million in the six months ended  September 30, 1999 from $1.5 million in
the six months ended  September 30, 1998.  The increase was primarily due to the
inclusion of amortization of goodwill related to the Fiscal Year 1999 Purchases.


Impairment of Long-Lived Assets

     In accordance with Statement of Financial  Accounting  Standards (SFAS) No.
121, the Company  considers,  among other  factors,  deterioration  of operating
performance  or  significant  loss of client base to be  indicators of potential
impairment of long-lived assets.  The Company  experienced a reduction in demand
for its  services,  which it believes to be  principally  related to  strategies
being  employed  by  the  Company's  customers  of  reducing  investment  in  IT
infrastructures  while their "Year 2000"  compliance  is being  ascertained.  In
particular,  one of the Company's operating locations  experienced a significant
reduction in demand.  As a result of the  reduction in demand for its  services,
the Company  recognized an  impairment  of goodwill  during the six months ended
September  30,  1999 as the  future  undiscounted  cash  flows of certain of its
long-lived  assets were estimated to be less than the asset's  related  carrying
value.  The pre-tax  non-cash  charge was $20.0  million,  which  represents the
excess of the asset's  carrying  value over the  Company's  estimate of its fair
value.


                                       12
<PAGE>
Restructuring Charge

     As part of the  Company's  reorganization  into two  practice  groups,  the
Company  identified  opportunities  to align its operating  structure by closing
certain of its redundant  facilities and  rationalizing  headcount to conform to
the  Company's  new  operating  structure.  Accordingly,  the Company  adopted a
restructuring  plan,  which resulted in a pre-tax  restructuring  charge of $4.9
million  during the six months ended  September  30, 1999.  The charge  includes
provisions  for severance of  approximately  60 management  and operating  staff
($3.5  million)  as well as closure  costs  related  to a plan of  consolidating
certain operating locations ($1.4 million). As the Company's reorganization plan
proceeds, the amount of the restructuring charge could change.


Other Income (Expense)

     Other  income  (expense)  primarily  consists of interest  expense,  net of
interest income.  Interest  expense,  net of interest income was $1.3 million in
the six months ended September 30, 1999 as compared to interest  income,  net of
interest expense of $0.6 million in the six months ended September 30, 1998. The
increase is primarily due to interest  expense  recognized on the Company's line
of credit during the first six months of fiscal 2000. The net interest income in
the first six months of fiscal 1999 was the result of interest  income earned on
cash proceeds from the common stock offering completed in March 1998.


Provision for Income Taxes

     Provision for income taxes was a benefit of $8.4  million,  or an effective
tax rate of 34% of pre-tax  loss in the six months  ended  September  30,  1999,
compared to income tax expense of $4.8 million,  or an effective  rate of 40% of
pre-tax income for the six months ended  September 30, 1998. The decrease in the
effective  tax rate in the first six months of fiscal  2000,  as compared to the
same  period of  fiscal  year  1999,  reflects  the  impact,  in a pre-tax  loss
situation, of non-deductible items to the effective tax rate.

                                       13
<PAGE>
                        LIQUIDITY AND CAPITAL RESOURCES



     The Company has  financed  its growth  principally  through cash flows from
operations,  periodic  borrowing under its credit  facilities and the use of the
net proceeds from its public  offerings.  On March 12, 1999, the Company entered
into a $100 million  revolving line of credit facility (the "Credit Line") which
was  amended on June 28, 1999 and  November  15,  1999.  Interest  rate  options
include base borrowings at the lead lender's prime rate plus  one-quarter of one
percent and term loans at LIBOR plus an applicable margin which fluctuates based
upon certain  leverage  ratios.  The Company  believes  the existing  sources of
liquidity and funds generated from operations will provide adequate cash to fund
its anticipated cash working capital needs at least through the next year.

     The Company's  primary  sources of liquidity are cash balances,  the Credit
Line  and  the  collection  of  its  accounts  receivable.  Accounts  receivable
increased as the Company's  operations have grown. Total receivables were 72 and
61 days of revenue at September  30, 1999 and March 31, 1999  respectively.  The
increase was primarily the result of certain customers lengthening the timing of
their payments to Cotelligent.  Should the Company be unable to bill and collect
for its services on a timely basis,  the Company could draw upon  available cash
or existing credit facilities to finance its operations.

     Cash used in  operating  activities  was $12.8  million  for the six months
ended September 30, 1999. The Company used borrowings on its Credit Line to fund
cash needs for its  operations.  At  September  30,  1999,  the  Company  had an
outstanding balance of $48.1 million under the Credit Line.

                                       14
<PAGE>
                           PART II - OTHER INFORMATION



Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits

         None.

(b)      Reports  on Form 8-K

         The following report on Form 8-K was filed during the quarter ended
         September 30, 1999.

         Cotelligent,  Inc. filed with the Securities and Exchange Commission a
         copy of the press release dated August 26, 1999  announcing the resig-
         nation of its President and Chief Operating Officer.
                                       15
<PAGE>
                                  SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                                      COTELLIGENT, INC.




Date: November 15, 1999                               /s/ Daniel E. Jackson
                                                     --------------------------
                                                     Daniel E. Jackson
                                                     Executive Vice President,
                                                     Chief Financial Officer and
                                                     Treasurer


                                       16