LOS GATOS, July 10, 2007 (PRIME NEWSWIRE) -- Semotus Solutions, Inc. (AMEX:DLK), an innovative leader of software solutions for enterprise mobility, today announced that its Board of Directors has approved a one-for-twenty reverse split of its common stock. The reverse split will become effective as of 5:00 p.m. Eastern Time on July 20, 2007.
At Semotus' annual meeting on September 21, 2006, shareholders approved a proposal to authorize the Board, in its discretion, to effect a reverse split of Semotus' issued, outstanding and authorized common stock at a ratio ranging from one-for-ten to one-for-twenty, at any time prior to the fiscal 2007 annual meeting, without further action by shareholders.
The purpose of the reverse split is to increase the per share trading price of Semotus' common stock, thereby appealing to a broader range of investors; to the extent that the reverse split does succeed in attracting more investor interest in the stock, shareholders may also benefit from improved marketability and trading liquidity of the stock. Additionally, the American Stock Exchange (Amex) determined that it will require us to effect a reverse stock split of our common stock as part of our compliance plan, to address our low selling price and to work towards meeting the continued Amex listing standards.
Upon the effectiveness of the reverse stock split, Semotus shareholders will receive one new share of Semotus common stock for every twenty shares they hold. Semotus' common stock will begin trading on a split-adjusted basis when the market opens on July 23, 2007.
In connection with the reverse split, the total number of common shares authorized under Semotus' Amended Articles of Incorporation will be reduced from 150 million to 7.5 million shares. As of the end of Semotus' fiscal year 2007, there were approximately 35.5 million shares of Semotus' common stock outstanding. Effecting the 1-for-20 reverse split will reduce that total to approximately 1.8 million shares. The reverse split will not change the number of shares of Semotus preferred stock authorized, which will remain at 5 million.
Treatment of Stock Options, Warrants and Convertible Notes
The number of common shares into which Semotus' outstanding stock options, warrants and both issues of convertible notes are convertible, as well as the relevant exercise or conversion price per share, will be proportionately adjusted to reflect the reverse split. The number of shares authorized for issuance under Semotus' equity compensation plans will also be reduced to reflect the reverse split.
Fractional Shares
Semotus will not issue any fractional shares of its common stock as a result of the reverse split. Instead, in lieu of the fractional share, shareholders will receive a cash payment in an amount equal to the product obtained by multiplying (i) the closing sales price of our common stock on the trading date immediately preceding the effective date of the reverse stock split as reported on Amex by (ii) the number of shares of our common stock held by such stockholder that would otherwise have been exchanged for such fractional share interest. Shareholders will not be entitled to receive interest for the period of time between the effective date of the reverse split and the date the shareholder receives his or her cash payment.
Shareholders holding fewer than twenty shares of Semotus common stock will receive only cash in lieu of fractional shares and will no longer hold any shares of Semotus common stock as of the effective time of the split.
Obtaining New Stock Certificates
Semotus will adopt a new stock certificate in connection with the implementation of the reverse split.
Computershare Shareholder Services has been retained to manage the exchange of stock certificates. Shareholders of record will receive a letter of transmittal providing instructions for the exchange of their certificates as soon as practicable following the effectiveness of the reverse split. Shareholders who hold their shares in "street name," will be contacted by their banks or brokers with any instructions. For further information, shareholders and securities brokers should contact Computershare at 1-303-262-0600.
About Semotus Solutions, Inc.
Founded in 1993, Semotus Solutions (AMEX:DLK) is a provider of software for the mobile enterprise, connecting people to critical business systems, information and processes. Semotus has a Fortune 1000 customer base including Lockheed Martin, Blue Cross Blue Shield, Coca-Cola, Hewlett Packard, Nextel Communications, JP Morgan Chase and The United Nations. Semotus Solutions' software provides mobility, convenience, efficiency and profitability in the areas of workforce automation, finance, health care and m-commerce. For more information, please visit the following web sites: www.semotus.com; www.hiplinkwireless.com; www.clickmarks.com.
This press release may be deemed to be solicitation material in respect of the proposed merger with Citytalk, Inc. In connection with the proposed transaction, Semotus plans to file a definitive proxy statement with the SEC. Investors and security holders of Semotus are advised to read the DEFINITIVE proxy statement and any other relevant documents filed with the SEC when they become available because those documents will contain important information about the proposed transaction. The final, definitive proxy statement will be mailed to shareholders of Semotus. The preliminary proxy statement is, and the definitive proxy statement and other relevant documents will be, available for free at the SEC's web site at http://www.sec.gov. Free copies of the preliminary proxy statement, the definitive proxy statement, when it becomes available, and Semotus' other filings with the SEC may also be obtained from Semotus. Free copies of Semotus' filings may be obtained by directing a request to Semotus Solutions, Inc., 718 University Ave., Suite 202, Los Gatos, CA 95032 Attention: Secretary.
Semotus and its respective directors, executive officers and other members of its management and employees may be deemed to be soliciting proxies from Semotus' shareholders in favor of the proposed transaction. Information regarding Semotus' directors and executive officers is available in Semotus' proxy statement for its 2006 annual meeting of stockholders, which was filed with the SEC on July 26, 2006. Additional information regarding the interests of such potential participants is included in the preliminary proxy statement filed with the SEC on March 19, 2007 and will be included in the definitive proxy statement, when it becomes available.
This press release contains forward-looking statements, which are made pursuant to the Safe-Harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "intends," "believes," and similar expressions reflecting something other than historical fact are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements involve a number of risks and uncertainties, including the timely development and market acceptance of products and technologies, the ability to secure additional sources of finance, the ability to reduce operating expenses, and other factors described in the Company's filings with the Securities and Exchange Commission. The actual results that the Company achieves may differ materially from any forward-looking statement due to such risks and uncertainties. The Company undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.