SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934
[Amendment No. _________]
Check the appropriate box:
___ Preliminary Information Statement
___ Confidential, for Use of the Commission Only (as permitted by
Rule 14c-5(d)(2))
_X_ Definitive Information Statement
DATALINK SYSTEMS CORPORATION
(Name of Registrant as Specified in Its Charter)
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DATALINK SYSTEMS CORPORATION
1735 Technology Way, Suite 790
San Jose, California 95110
(408) 367-1700
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INFORMATION STATEMENT
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ACTION TAKEN BY WRITTEN CONSENT IN LIEU OF
SPECIAL MEETING OF SHAREHOLDERS
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY
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This Information Statement will be first sent or given to shareholders
of Datalink Systems Corporation (the "Company") on or about November 24, 1997,
in connection with the action which will be taken pursuant to the consent of
shareholders of approximately 50.26% of the Company's outstanding stock by
written consent in lieu of holding a special meeting of shareholders on
November 3, 1997.
On November 3, 1997, shareholders holding 9,640,500 shares of the
Company's $.001 par value common stock (the "Common Stock"), signed written
consents approving an amendment to the Company's Certificate of Incorporation
to increase the number of authorized shares of Common Stock from 50,000,000
shares to 80,000,000 shares. On November 3, 1997, there were 19,182,925
shares of Common Stock issued and outstanding.
Pursuant to the provisions of the Delaware General Business Corporation
Law, any action which can be taken at a meeting of shareholders may be taken
without a meeting if written consents thereto are signed by shareholders
holding at least a majority of the voting power. Such consents have been
executed by shareholders holding 50.26% of the voting power of the Company's
shareholders.
Rule 14c-2 promulgated by the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended, requires that the
Company prepare an Information Statement containing certain information
related to the action approved by written consent of a majority of the voting
power, and to mail the information statement to the Company's shareholders at
least 20 calendar days prior to the date on which the corporate action is
taken.
The affirmative vote of the holders of a majority of the shares of
Common Stock outstanding, considered as a single class, is required for the
approval of the amendment to the Company's Certificate of Incorporation.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of November 3, 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. Except as noted, each person has sole voting
and investment power with respect to the shares shown.
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Amount and
Name and Address Nature of Bene-
Of Beneficial Owner ficial Ownership Percent of Class
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Anthony LaPine 2,950,000(1) 14.7%
2105 Hamilton Avenue, Suite 240
San Jose, California 95125
Nicholas Miller 2,933,333(2) 14.8%
1590-1500 West Georgia Street
Vancouver, B.C.
Canada V6G 2Z6
Melanor Ltd. 1,057,833 5.5%
c/o George Davis Law Corp.
1100-100 Park Royal South
West Vancouver, B.C.
Canada V7T 1A2
Medan Ltd. 1,041,667 5.4%
c/o George Davis Law Corp.
1100-100 Park Royal South
West Vancouver, B.C.
Canada V7T 1A2
Peter A. Allard 2,249,167(3) 16.1%
Seawatch, The Garden
St. James, Barbados
British West Indies
Commonwealth Associates 1,000,000 5.2%
830 Third Avenue
New York, NY 10022
All Officers and Directors 5,883,333(1)(2) 28.2%
as a Group (3 Persons)
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(1) Includes 700,000 shares underlying currently exercisable options held by
Mr. LaPine and 250,000 shares underlying currently exercisable options held by
Mr. LaPine's wife, Pamela LaPine.
(2) 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.
(3) Includes 1,000,000 shares underlying warrants held by Mr. Allard, and
100,000 shares held by Euphemia Trust.
AMENDMENT TO THE CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED COMMON STOCK
In October 1997, the Board of Directors unanimously approved and
proposed for stockholder approval an amendment to the Company's Certificate of
Incorporation to increase the Company's authorized Common Stock from
50,000,000 to 80,000,000 shares. On November 3, 1997, shareholders holding
9,640,500 shares of the Company's Common Stock, or 50.26% of the shares then
outstanding, signed shareholder consent minutes which approved the increase in
authorized Common Stock from 50,000,000 to 80,000,000 shares. This approval
was a condition to
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closing the recent public offering. The Company's Certificate of
Incorporation currently authorizes the issuance of 50,000,000 shares of Common
Stock and 5,000,000 shares of Preferred Stock. As of November 5, 1997,
20,182,925 shares of the Company's Common Stock were issued and outstanding,
3,000,000 shares of Common Stock were reserved for issuance under the
Company's Stock Option Plan, and 1,000,000 shares were reserved for issuance
upon the exercise of outstanding warrants held by Peter Allard.
On November 5, 1997, the Company completed a private offering of 68.5
Units, where each Unit consisted of 40,000 shares of Series A Convertible
Preferred Stock ("Preferred Stock") and warrants to purchase 200,000 shares of
Common Stock at $.50 per share. Each share of Preferred Stock is convertible
into 10 shares of Common Stock. Therefore, there are 27,400,000 shares
issuable upon conversion of the Preferred Stock and 13,700,000 shares issuable
upon exercise of warrants sold in the private offering. In addition, the
Placement Agent for the private offering was issued warrants to purchase
8,243,826 shares of Common Stock.
On the closing of the private offering, the Company also issued to
Anthony LaPine and Nicholas Miller warrants to purchase 2,000,000 shares each
at a price of $.375 per share.
The sum of the 20,182,925 shares outstanding and the 27,400,000 shares
issuable upon conversion of the Preferred Stock and 29,943,826 shares issuable
upon exercise of outstanding options and warrants exceeds the 50,000,000
shares of Common Stock currently authorized by 27,536,751 shares. The
Certificate of Incorporation must be amended to increase the authorized Common
Stock sufficiently to allow for the reservation of all 27,536,751 shares
before such shares can be issued. After giving effect to the increase, the
Company will have 2,463,249 shares of unissued and unreserved shares of
Common Stock available of issuance in the future.
The Board believes that the additional shares of Common Stock resulting
from the amendment to the Certificate of Incorporation should be available for
issuance from time to time as may be required for various purposes, including
the issuance of Common Stock in connection with financing or acquisition
transactions and the issuance or reservation of Common Stock for employee
stock options. The Company anticipates that in the future it will consider a
number of possible financing and acquisition transactions that may involve the
issuance of additional equity, debt or convertible securities. The Board will
be able to authorize the issuance of shares for these purposes without the
necessity, and related costs and delays, of either calling a special
stockholders' meeting or of waiting for the regularly scheduled annual meeting
of stockholders in order to increase the authorized capital. If in a
particular instance stockholder approval were required by law, or otherwise
deemed advisable by the Board, then the matter would be referred to the
stockholders for their approval regardless of whether a sufficient number of
shares previously had been authorized. The stockholders of the Company are
not entitled to preemptive rights with respect to the issuance of any
authorized but unissued shares.
The change in capital is not intended to have any anti-takeover effect
and is not part of any series of anti-takeover measures contained in any debt
instruments or the Certificate of Incorporation or the Bylaws of the Company
in effect on the date of this Proxy Statement. However, stockholders should
note that the availability of additional authorized and unissued shares of
Common Stock could make any attempt to gain control of the Company or the
Board more difficult or time consuming and that the availability of additional
authorized and unissued shares might make it more difficult to remove current
management. Although the Board currently has no intention of doing so, shares
of Common Stock
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could be issued by the Board to dilute the percentage of Common Stock owned by
a significant stockholder and increase the cost of, or the number of, voting
shares necessary to acquire control of the Board or to meet the voting
requirements imposed by Delaware law with respect to a merger or other
business combination involving the Company. The Company is not aware of any
proposed attempt to take over the Company or of any attempt to acquire a large
block of the Company's Common Stock. The Company has no present intention to
use the increased authorized Common Stock for anti-takeover purposes.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
FOR THE ANNUAL MEETING TO BE HELD IN SEPTEMBER 1998
Any proposal by a shareholder intended to be presented at the Company's
Annual Meeting of Shareholders to be held in September 1998 must be received
at the offices of the Company, Datalink Systems Corporation, 1735 Technology
Way, Suite 790, San Jose, California 95110, on or before April 8, 1998, in
order to be included in the Company's proxy statement and proxy relating to
that meeting.
ANTHONY N. LAPINE, PRESIDENT
San Jose, California
November 24, 1997
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