1410 Market Street, Suite 200 Kirkland, WA 98033 (800) 641-2676. August 1, 2011
Dear Shareholders:
As you all know, during the past several years, CoroWare, Inc. (the “Company”) has undergone remarkable changes. We expanded the breadth of information technology consulting, grew its mobile robotics product line, and launched a range of enterprise collaboration products, solutions and subscription services. As well, we deliver custom engineering services, hardware and software products, and subscription services to customers in North America, Europe, Asia and the Middle East. Moreover, our customers now span multiple industry sectors and comprise universities, software and hardware product development companies, and non-profit organizations.
In essence, we have transformed what had been a consulting services and mobile robotics company into a software technology company expanding into broad based business and consumer applications in a wide range of software technologies including its growing subscription based conferencing and collaboration business.
In addition, the Company has been reducing its considerable outstanding legacy convertible debenture debt that continues to burden the Company’s balance sheet and our organization, and is actively discussing potential forbearance and workout plans with related parties.
In order to achieve our plan for sustainable growth in the coming two years, the Company shall further:
? Grow its IT Consulting Services business by focusing on Operational Business Intelligence (OBI) consulting services, which help organizations, manage and optimize their daily business processes ? Expand its mobile robotics business by focusing on Rescue Robotics with university, government and commercial customers. ? Develop the breadth of its enterprise collaboration products and services in order to address the needs of social networking industry players, multi-level marketing organizations, small and medium sized businesses, and enterprise customers
We are delivering you this proxy statement with regard to our upcoming Special Meeting of Stockholders, which is scheduled to be held on August 19, 2011. At this meeting, we will be asking shareholders to vote on a proposal for a reverse stock split of the issued and outstanding shares of our common stock at a ratio of up to 1-for-twenty. The ratio shall be determined by a majority vote of the Board of Directors of CoroWare, Inc. upon receiving majority approval from the shareholders of CoroWare, Inc.
For example, a reverse split of 1-for-twenty – if adopted by the Board of Directors - would mean that for every twenty shares you own, those shares will be converted into one equivalent share. In theory, the value of that one share should be worth twenty times what it was before the reverse split. As illustrated in this example, if you own 3,000,000 shares of COWI.OB at a market price of $.0002 per share with a total value of $1,500.00 before the reverse split, you will receive 150,000 shares of COWI.OB at a market price of $.004 per share with a total value of $1,500.00.
CoroWare’s Board of Directors, the senior management team and I believe a reverse split will create a more stable capital structure and will enable CoroWare to achieve continued growth by:
? bringing the number of shares outstanding to a more realistic, manageable and attractive level, which should help generate investor interest in CoroWare, and will help CoroWare attract and retain employees;
? using available shares to raise the growth capital necessary to fund future growth through acquisitions and joint ventures, and to finance further product development necessary to achieve higher levels of sales and profits; and
? building a stronger capital base with institutional and other large scale investors that can help the Company pursue additional strategic alliances.
Although we can provide no assurance that the reverse split will indeed lead directly to our goals, the Board of Directors and senior management team believe that it is a necessary step.
All of these activities will require capital — growth capital — and we see the reverse split as a key step in realigning the shares outstanding to be at a more balanced and reasonable level which may attract more investors to appreciate the value proposition of our Company as a long term investment.
In closing, I strongly believe we need to reduce the number of outstanding shares to continue our growth plan and increase our stockholders’ value. Therefore, I kindly ask for your support as we move towards continuation of our growth strategy.
Kindest regards,
/s/ Lloyd T. Spencer, Chief Executive Officer
Courage is being scared to death, but saddling up anyway. -- John Wayne (1907-1979).
AI
