SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934
[Amendment No. _________]
Check the appropriate box:
_X_ Preliminary Information Statement
___ Confidential, for Use of the Commission Only (as permitted by
Rule 14c-5(d)(2))
___ Definitive Information Statement
DATALINK SYSTEMS CORPORATION
(Name of Registrant as Specified in Its Charter)
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DATALINK SYSTEMS CORPORATION
2105 Hamilton Avenue, Suite 240
San Jose, California 95125
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 5, 1997
Notice is hereby given that a Special Meeting of Stockholders of Datalink
Systems Corporation will be held on May 5, 1997, at 10:00 a.m., Pacific
Daylight Time, at the offices of the Company at 2105 Hamilton Avenue, Suite
240, San Jose, California, to consider the following matters:
1. A proposed reverse split of the outstanding shares of the
Company's common stock of up to one for four (1 for 4), subject to the
determination of the Board of Directors, and if implemented by the Board of
Directors, an amendment to the Company's Articles of Incorporation increasing
the par value of common stock up to $.004 per share.
2. The transaction of such other business as may properly come before
the meeting or at any adjournment or adjournments thereof.
Said meeting may be adjourned from time to time without notice other than
by announcement at said meeting, or at any adjournment thereof, and any and
all business for which said meeting is hereby noticed may be transacted at any
such adjournment.
Only holders of the Company's $.001 par value common stock of record at
the close of business on April 24, 1997, will be entitled to notice of and to
vote at the meeting and at any adjournment or adjournments thereof.
You are cordially invited to attend the meeting in person. If you cannot
attend, we are not requesting that you return a proxy to us.
BY ORDER OF THE BOARD OF
DIRECTORS
Anthony N. LaPine, President
San Jose, California
April 24, 1997
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DATALINK SYSTEMS CORPORATION
2105 Hamilton Avenue, Suite 240
San Jose, CA 95125
INFORMATION STATEMENT
Special Meeting of Shareholders
May 5, 1997
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY
INTRODUCTION
The Information Statement will be first sent or given to shareholders on
or about April 25, 1997, in connection with the Special Meeting of
Shareholders to be held at the offices of the Company at 2105 Hamilton Avenue,
Suite 240, San Jose, California, on May 5, 1997, at 10:00 a.m., Pacific
Daylight Time (the "Special Meeting"). The purposes of the Special Meeting
are stated in the Notice of Special Meeting.
The securities entitled to vote at the Special Meeting consist of all of
the issued and outstanding shares of the Company's $.001 par value common
stock (the "Common Stock"). The close of business on April 24, 1997, has been
fixed by the Board of Directors of the Company as the record date. Only
shareholders of record as of the record date may vote at the Special Meeting.
As of the record date, there were 19,260,925 shares of Common Stock issued and
outstanding.
Each shareholder of record as of the record date will be entitled to one
vote for each share of Common Stock held as of the record date. Cumulative
voting is not permitted. The presence at the Special Meeting of the holders
of a majority of the number of shares of the Common Stock outstanding as of
the record date will constitute a quorum for transacting business.
The affirmative vote of the holders of the following number of shares of
Common Stock entitled to vote is required for the following designated
actions:
ACTIONS TO BE TAKEN VOTE REQUIRED
Approval of Reverse Split Majority of Common
Stock Outstanding
The affirmative vote of the majority of the shares represented at the
Special Meeting will be required to approve any other matters that may come
before the Special Meeting. The Officers and Directors of the Company hold
shares of Common Stock representing approximately 22% of the shares entitled
to vote at the Special Meeting, and have indicated that they will vote for the
approval of the reverse split.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of April 11, 1997, as to
the shares of the Common Stock beneficially owned by each person who is the
beneficial owner of more than five percent (5%) of the Company's Common Stock,
each of the Company's Directors and by all of the Company's Directors and
Executive Officers as a group. Each person has sole voting and investment
power with respect to the shares shown except as noted.
<TABLE>
<CAPTION>
AMOUNT OF
NAME AND ADDRESS BENEFICIAL PERCENT
OF BENEFICIAL OWNER OWNERSHIP OF CLASS
<S> <C> <C>
Anthony LaPine 2,950,000<FN1> 14.7%
2105 Hamilton Avenue, Suite 240
San Jose, California 95125
Nicholas Miller 2,933,333<FN2> 14.8%
1590-1500 West Georgia Street
Vancouver, B.C.
Canada V6G 2Z6
Silhouette Investments Ltd. 2,083,333 10.9%
4249 Hobson Road
Kelowna, B.C.
Canada V1W 1Y4
Melanor Ltd. 1,157,833 6.0%
c/o George Davis Law Corp.
1100-100 Park Royal South
West Vancouver, B.C.
Canada V7T 1A2
Medan Ltd. 1,041,667 5.5%
c/o George Davis Law Corp.
1100-100 Park Royal South
West Vancouver, B.C.
Canada V7T 1A2
Peter A. Allard 2,582,500<FN3> 12.4%
Seawatch, The Garden
St. James, Barbados
British West Indies
All Officers and Directors 5,633,333<FN1><FN2> 27.5%
as a Group (2 Persons)
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<FN>
<FN1>
Includes 700,000 shares underlying currently exercisable options held by Mr.
LaPine.
<FN2>
Includes 700,000 shares underlying currently exercisable options held by Mr.
Miller, 150,000 shares held by Arundel Holdings, a company owned by Mr. Miller
and his wife, and 937,500 shares held by Mr. Miller's wife, Linda Fraser.
<FN3>
Includes 1,000,000 shares underlying warrants held by Mr. Allard, and 100,000
shares held by Euphemia Trust.
</FN>
</TABLE>
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REVERSE STOCK SPLIT
MECHANICS OF REVERSE STOCK SPLIT
The Board of Directors of the Company proposes to undertake a reverse
split of the outstanding shares of Common Stock and outstanding options,
warrants and other rights convertible into shares of Common Stock of the
Company of up to one-for-four (1 for 4). The Board of Directors requests the
approval of the Shareholders to effect a reverse split of the Company's
securities at such time in the future and by such a factor as the Board may
determine in its sole discretion to be in the best interests of the Company
and its Shareholders. Once implemented, the reverse split would result in
each holder of the Company's Common Stock on the Record Date owning a number
of shares of Common Stock reduced by the factor of the reverse split, and
outstanding options, warrants, other convertible rights will become
exercisable to purchase a number of shares of Common Stock reduced by the same
factor at an exercise price per share increased by the same factor.
Fractional shares, options and warrants will be rounded to the nearest whole.
If the reverse split as currently described is approved by the Company's
Shareholders, the Company's Board of Directors will be authorized to implement
the reverse split within the foregoing parameters at any time and until such
time as such authorization is revoked by a majority vote of the Company's
shareholders at a future regular or special meeting of the Company's
Shareholders. If and when implemented, the Company's Board of Directors will
cause the Company's stock transfer agent to provide each Shareholder of record
written notice of such implementation together with a description of the
effect thereof.
In order to effectuate the reverse stock split, it will be necessary to
amend the Articles of Incorporation of the Company to increase the par value
of the outstanding shares of Common Stock by the same factor as the reverse
split. This change is required in order to avoid an inadvertent change in the
stated capital of the Company. However, while the par value of the Company's
outstanding shares of Common Stock will be changed, the total number of
authorized shares of Common Stock as set forth in the Company's Articles of
Incorporation will remain unchanged. Thus, the reverse stock split and
corresponding amendment to the Articles of Incorporation will result in the
number of the Company's authorized capital stock remaining unchanged,
consisting of 50,000,000 shares of Common Stock and 5,000,000 shares of
Preferred Stock.
The reverse stock split will not affect in any manner the relative rights
and preferences of holders of the Company's Common Stock. There will be no
change in the voting rights, right to participate in stock or cash dividends,
or rights upon the liquidation or dissolution of the Company of holders of
Common Stock to sell under Rule 144 or otherwise engage in market transactions
in accordance with federal and state securities laws.
The reverse stock split will also result in an automatic adjustment of
any and all outstanding options, warrants and other rights exercisable or
convertible into shares of the Company's Common Stock. The adjustment will
consist of an increase in the exercise price or conversion value per share by
the factor of the reverse split and a corresponding decrease in the number of
shares issuable upon exercise or conversion by the factor of the reverse
split. All other relative rights and preferences of holders of outstanding
options, warrants or other rights convertible or exercisable into shares of
the Company's common stock will remain unchanged.
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A reverse stock split has no federal income tax consequences. A
shareholder's basis in each four shares before the reverse split will become
the basis in one share after the reverse split.
REASONS FOR REVERSE STOCK SPLIT
The reverse split is being proposed because the Company intends to apply
to list its common stock on the Nasdaq Small Cap Market as soon as the Company
meets the initial listing requirements. One of these requirements is that the
stock trades at or above $4.00 per share. The proposed reverse split is
intended to result in a market price in excess of $4.00, however, there is no
assurance that the price will be four times the market price before the
reverse split.
Additionally, management is of the belief that a reverse stock split,
which will result in a higher per share trading price of the Company's Common
Stock, will enable the Company to attract additional interest in the Company's
Common Stock from the investment community, and particularly market makers.
Numerous broker-dealers and investment bankers require that a company's common
stock have a minimum public trading price before those broker-dealers or
investment bankers will agree to make a market in that security. As a result,
management of the Company believes that the reverse stock split has the
potential of improving the liquidity of the public market for the Company's
Common Stock.
VOTES REQUIRED
The approval of the adoption of the reverse stock split and amendment to
the Articles of Incorporation will require the affirmative vote of a majority
of the shares outstanding.
MANAGEMENT RECOMMENDATION
The Board of Directors has concluded that the proposed reverse stock
split and amendment to the Company's Articles of Incorporation are in the best
interests of the Company's Shareholders and unanimously recommend that the
Shareholders approve this proposal at the Meeting.
SHAREHOLDER PROPOSALS
The Board of Directors has not yet determined the date on which the next
annual meeting of the shareholders will be held. Any proposal by a
shareholder intended to be presented at the Company's next annual meeting of
shareholders must be received at the offices of the Company a reasonable
amount of time prior to the date on which the information or proxy statement
for that meeting are mailed to shareholders in order to be included in the
Company's information or proxy statement relating to that meeting.
OTHER BUSINESS
As of the date of this Information Statement, management of the Company
was not aware of any other matter to be presented at the Meeting other than as
set forth herein. A majority vote of the shares represented at the Meeting is
necessary to approve any such matters.
BY ORDER OF THE BOARD OF DIRECTORS
San Jose, California Anthony N. LaPine, President
April 24, 1997
