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Item 1. Legal Proceedings

2003-02-13 compared with 2002-11-14 · 47 added, 42 removed, 18 unchanged (83% of the section changed)

1 unchanged sentence

The Brown Simpson lawsuit previously reported in Registrant's Form 10K for the

year ended March 31, 2002 has been stayed until November 18, 2002 pending

settlement negotiations between the parties.

The Earthlink lawsuit previously

reported in Registrant's Form 10K for the year ended March 31, 2002 is

proceeding on schedule.

year ended March 31, 2002 was settled on December 31, 2002.

Please see Note 6,

"Repurchase of Preferred Stock", Item 2, "Changes in Securities and Use of

Proceeds" and Registrant's Form 8-K filed on January 13, 2003 for more details

of the settlement transaction.

The Earthlink lawsuit previously reported in Registrant's Form 10K for the year

ended March 31, 2002 is proceeding on schedule.

A mediation date has been

scheduled for March 27, 2003;

however, the litigation will not be suspended

pending any mediation.

Additionally, Semotus and WizShop have been named as two of seventeen corporate

defendants, ten individual defendants and one accountant defendant in a class

action lawsuit brought by the California Teachers' Retirement System.

lawsuit was filed on November 15, 2002 in the United States District Court for

the Central District of California, Western Division.

The suit alleges two

causes of action for violating Section 10(b), 15 U.S.C.

78j(b) and SEC

Rule 10b-5, 17 C.F.R.

240.10b-5, and for violating Section 20(a), 15

The California Teachers' Retirement System seeks general

and compensatory damages according to proof, special damages according to proof,

reasonable attorney's fees, cost and expenses of the proceedings, prejudgment

interest at the maximum legal rate, and such other and further relief as the

Court deems proper.

We believe the suit is without merit as to WizShop and

Semotus, and are in the process of getting dismissed from this lawsuit.

are not dismissed, we will contest the lawsuit vigorously.

We are also a party to other legal proceedings in the normal course of business.

5 unchanged sentences

Act of 1933, as amended, as follows:

During the Quarter ended September 30, 2002, the Company did not issue any

shares of its common stock to suppliers of services to the Company.

Company did issue 613,403 shares of common stock to Wizshop Shareholders, in

accordance with the first year stock price guarantee provision as set forth in

the Merger Agreement by and among Wizshop.com, Inc., Wiz Acquisition, Inc.

Additionally, the Company issued 14,368 shares to a company as part of

a settlement arrangement.

During the Quarter ended December 31, 2002, the Company did not issue any shares

of its common stock to suppliers of services to the Company.

Company did issue 14,368 shares of common stock to a supplier of services as

part of a settlement arrangement.

On December 31, 2002, as part of the Preferred Stock Buy Back and Mutual Release

Agreement with Brown Simpson Partners I, Ltd, Semotus repurchased from Brown

Simpson all of the outstanding shares of the Company's Series B Convertible

Preferred Stock.

In consideration of the aforesaid purchase of the Shares,

Semotus paid one hundred thousand dollars ($100,000.00) and issued to Brown

Simpson 846,154 warrants to purchase shares of Common Stock of Semotus,

exercisable at $0.01 per share.

In addition, in consideration for Brown Simpson

agreeing to enter into a settlement and mutual release related to its

anti-dilution claim, the Company revised Brown Simpson's existing 1,153,846

(post-split) Warrants to provide for an exercise price of $0.01 per share.

January 24, 2003, Brown Simpson exercised 1,153,846 warrants by remitting

$11,538.46 to Semotus, and Brown Simpson was issued 1,153,846 shares of common

With respect to these transactions, the Company relied on Section 4(2) of the

7 unchanged sentences

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

We held our Annual Meeting of Stockholders on September 17, 2002, for the

purpose of (1) electing five directors, (2) ratifying the appointment of Burr,

Pilger & Mayer LLP as the Company's independent accountants for the fiscal year

ending March 31, 2003, and (3) approving an amendment to the Company's employee

stock option plan to increase the number of shares of common stock issuable upon

the exercise of options granted under the plan from 4,345,000 shares to

The following summarizes the voting results:

Stockholders elected Anthony N.

LaPine, Frederick M.

Pavona, Robert Lanz and Mark Williams each until the next Annual Meeting of

Stockholders or until their successors have been duly elected and qualified.

vote for each director was as follows:

Director Votes For % of Vote Votes Withheld

----------------- ---------- --------- --------------

LaPine 13,374,735 97.6% 330,613

Hoar 13,423,077 97.9% 282,271

Jason Pavona 13,400,407 97.8% 304,941

Robert Lanz 13,423,807 97.9% 281,541

Mark Williams 13,423,907 97.9% 281,441

The appointment of Burr, Pilger & Mayer LLP as the Company's

independent accountants for the fiscal year ending March 31, 2003 was approved.

Votes For % of shares represented Votes Against Votes Abstained

---------- ----------------------- ------------- ---------------

13,560,769 77.46% 88,052 56,527

The amendment to the Company's employee stock option plan to increase

the number of shares of common stock issuable upon the exercise of options

granted under the Plan from 4,345,000 to 5,200,000 shares was approved.

Votes For % of shares represented Votes Against Votes Abstained

---------- ----------------------- ------------- ---------------

12,890,168 73.63% 720,161 95,018

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Legal Proceedings