SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
[X] Definitive Proxy Statement
DIGITAL COURIER TECHNOLOGIES, INC.
-----------------
(Name of Registrant as Specified in Its Charter)
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1
DIGITAL COURIER TECHNOLOGIES, INC.
348 East 6400 South, Suite 200
Salt Lake City, Utah 84107
INFORMATION STATEMENT
April 17, 2003
INTRODUCTION
This Information Statement is furnished by the Board of Directors of
Digital Courier Technologies, Inc., (the "Company") to the stockholders of
record of the Company's common stock at the close of business on March 13, 2003
(the "Record Date"), and is being sent to you in connection with the action
taken by the holders of at least a majority of the voting power of the Company.
Those stockholders approved, by written consents dated March 10 and 13, 2003,
(i) a reverse split of the Company's issued and outstanding common stock (the
"Reverse Split"), in which all of the shares of the Company's common stock which
are issued and outstanding on the effective date of the Reverse Split (the "Old
Shares") will automatically be converted into a number of new shares of common
stock (the "New Shares") at the rate of 1 New Share for every 100 Old Shares and
(ii) a name change of the Company to TransAxis, Inc. (the "Name Change").
This Information Statement is being mailed on or before the close of
business on April 17, 2003, to every security holder entitled to vote or give an
authorization or consent in regard to any matter to be acted upon. It is
anticipated that the Reverse Split will become effective twenty (20) days after
April 17, 2003, the date this Information Statement is first sent to the
stockholders.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED
NOT TO SEND US A PROXY.
Salt Lake City, Utah
April 17, 2003
2
OUTSTANDING SECURITIES AND VOTING RIGHTS
As of the Record Date, there were 75,000,000 shares of common stock of
the Company issued and outstanding. All holders of shares of common stock as of
the Record Date are entitled to receive this Information Statement. The common
stock is the only security of the Company that was entitled to vote on the
matter presented herein. The stockholders who consented in writing to these
matters (the "Consenting Stockholders") held 39,007,249 shares of common stock,
or approximately 52% of the Company's issued and outstanding common stock. The
Consenting Stockholders include Nautilus Management, Ltd., Amathus Holdings,
Ltd., and Stephen T. Cannon.
The Company is incorporated under the laws of the State of Delaware.
Under Delaware law, each holder of common stock is entitled to one vote in
person or by proxy for each share of common stock in his or her own name on the
books of the Company on any matter submitted to the vote of stockholders at any
meeting of the stockholders. However, Delaware law also provides that any action
that may be taken at any stockholders' meeting may be taken by written consent
of the requisite number of stockholders required to take such action. Approval
of the Reverse Split and the Name Change required the written consent of the
holders of a majority of the Company's outstanding common stock. The Consenting
Stockholders authorized and approved the Reverse Split and Name Change by
signing consent resolutions dated as of March 10 and 13, 2003 in the form
attached as Appendix A.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
To the Company's knowledge, the following sets forth information
regarding ownership of the Company's outstanding securities as of the Record
Date, by: (i) each person known by the Company to beneficially own over 5% of
the outstanding shares of any class of stock, (ii) each director, (iii) each
named executive officer and (iv) all directors and executive officers as a
group. As of the Record Date, there were 75,000,000 shares of common stock
outstanding and 360 shares of Series D Convertible Preferred Stock outstanding,
although the Company received in December 2002 a notice that the holder of the
Series D preferred stock had attempted to convert 36 shares of Series D
preferred stock into 1,200,000 shares of common stock. The stockholders listed
have sole voting and investment power, except as otherwise noted.
3
Amount of
Title Names and Addresses of Common Shares* Percentage
of Class Principal Stockholders of Class*
Series D Preferred Brown Simpson Partners I, Ltd. 360 100%
c/o Walkers Attorneys-at-Law
P.O. Box 265GT, Walker House
Mary Street, George Town
Grand Cayman, Cayman Islands
Common Brown Simpson Partners I, Ltd. 7,492,500 (1) 9.9%
c/o Walkers Attorneys-at-Law
P.O. Box 265GT, Walker House
Mary Street, George Town
Grand Cayman, Cayman Islands
Common Nautilus Management 37,338,249 (2) 49.8%
Don Marshall
#3 Upper Spooners,
Basseterre, St. Christopher & Nevis
Officers and Directors
Common Craig Darling 503,450 (3), (4) **
348 East 6400 South, Suite 220
Salt Lake City, Utah 84107
Common Don Marshall 37,338,249 (2) 49.8%
Nautilus Management
#3 Upper Spooners,
Basseterre, St. Christopher & Nevis
Common Lee Britton 500,000 (3), (5) **
348 East 6400 South, Suite 220
Salt Lake City, Utah 84107
Common Lynn J. Langford 31,200 (3), (6) **
348 East 6400 South, Suite 220
Salt Lake City, Utah 84107
Common All Directors and Executive Officers 38,372,899 (3),(7) 50.5%
As a Group
(4 persons)
4
* In the case of each security holder listed, assumes exercise of all options
and warrants held by such security holder which can be exercised within 60
days from September 30, 2002.
** Less than 1%.
(1) Assumes conversion of a portion of 12,000,000 shares issuable upon
conversion of Series D Convertible Preferred Stock ("Series D"), provided
that the Series D is not convertible if as a result of such conversion, the
aggregate number of shares of common stock beneficially owned by the holder
and its affiliates would exceed 9.99% of the outstanding shares of the
Company's common stock following such exercise. The Series D is presently
convertible by its terms, although the Company does not presently have
available a sufficient number of authorized but unissued shares of common
stock to allow for such conversion. In December 2002, the holder of the
Series D attempted to convert 36 shares of Series D into 1,200,000 shares
of common stock.
(2) All shares beneficially owned by Don Marshall, the controlling person of
Nautilus Management, Ltd. Also includes 1,800,000 shares as to which Don
Marshall exercises voting control pursuant to a revocable proxy. Excludes
48,421,000 shares issuable upon conversion of $290,526 of convertible debt,
plus interest accrued thereon assuming a hypothetical conversion at an
assumed conversion price of $0.006, but which cannot be converted because
the Company does not presently have available a sufficient number of
authorized but unissued shares of common stock to allow for such
conversion.
(3) Includes shares underlying options that cannot be issued upon exercise of
options until number of authorized shares of common stock of the Company
are increased, of which there can be no assurance.
(4) Includes 500,000 shares of common stock that Mr. Darling may acquire on
exercise of options.
(5) Includes 500,000 shares of common stock that Mr. Britton may acquire on
exercise of options.
(6) Includes 31,200 shares of common stock that Mr. Langford may acquire on
exercise of options.
(7) Includes 1,031,200 shares of common stock that directors and executive
officers may acquire on exercise of options.
THE REVERSE SPLIT
General
As of March 13, 2003, the Company has issued a total of 75,000,000
shares of its common stock. The Company's Amended and Restated Certificate of
Incorporation, as amended to date, authorizes the Company to issue up to
75,000,000 shares of common stock. The Company therefore has issued all of the
common stock that is authorized, and can issue no more common stock unless
either the Company's authorized capital is increased to facilitate the issuance
of more common stock, or, alternatively, the number of issued and outstanding
common shares are combined into a smaller number of shares, thereby reducing the
number of issued and outstanding shares, or both procedures are employed. As a
result of the Reverse Split, approximately 503 stockholders of record will no
longer own common stock in the Company. After the Reverse Split, there will be
approximately 225 stockholders of record because any stockholder owning 99 or
fewer shares will no longer be a stockholder.
5
The Company's inability to issue additional shares of its common stock
poses several challenges for the Company, including at least the following:
o The Company has essentially oversubscribed its limited authorized
common stock by entering into arrangements with employees,
preferred stock holders, holders of convertible debt obligations,
and holders of other securities and instruments convertible into
or exercisable for common stock. At present, and although such
parties have contract rights to cause the Company to issue common
stock to them upon the exercise or conversion of their various
rights and agreements, the Company cannot honor those commitments
because it does not have sufficient authorized capital. To date,
and because of its lack of authorized common stock, the Company
has failed to honor two attempted conversions, including (i) an
attempted conversion by Don Marshall of a convertible debt
obligation, and (ii) an attempted conversion of 36 shares of the
Company's Series D Convertible Preferred Stock into 1,200,000
shares of common stock. Other than these two incidences, the
Company has not refused to honor any conversion or exercise of any
convertible instrument for common stock. In February 2003, Brown
Simpson Partners I, Ltd., the holder of all of the Company's
Series D Convertible Preferred Stock filed a lawsuit in federal
court in Delaware seeking money damages, in part, because of the
Company's failure to honor a conversion notice by that holder. The
complaint in that matter seeks, among other things, liquidated
damages in an amount equal to $5,000 per day for each day the
conversion notice is not honored, which amounts to in excess of
$250,000 as of the date of this Information Statement. If the
market price of the Company's common stock were to increase, the
Company believes that other holders of convertible instruments
would likely demand conversion, which could lead to further
exposure to liability on the part of the Company if it is unable
to honor such conversions or exercises absent an increase in
authorized capital or a decrease in the number of issued and
outstanding common shares.
o The Company's ability to raise outside capital through sales of
its equity securities or securities convertible into or
exercisable for common stock is limited. While there can be no
assurance that, if the Company had sufficient authorized capital,
it would be able to successfully complete public or private
capital raising transactions, at present, the Company cannot even
enter into negotiations for such financing. Additionally, the
Company's ability to implement any acquisition strategy that would
require the issuance of securities to finance such acquisitions is
effectively precluded by the current situation.
In addition, as of March 13, 2003, the Company's aggregate market
capitalization was approximately $225,000. As of that date, 75,000,000 shares of
the Company's common stock were outstanding, and the market price per share was
only $0.003. The Board of Directors believes that a reduction in the number of
common shares outstanding would have the dual benefit of helping to resolve the
challenges facing the Company because of a lack of authorized and unissued
common stock, and would increase the per share price of the Company's common
stock, which may assist the Company in connection with its capital raising
efforts.
To effect the Reverse Split, the Company will file an amendment to its
Amended and Restated Certificate of Incorporation with the Secretary of State of
Delaware (as described below) or take other appropriate action which will effect
the Reverse Split. The Reverse Split, if implemented, would not change the
number of authorized shares of common stock or preferred stock or the par value
of the Company's common stock or preferred stock. Except for any changes as a
result of the treatment of fractional shares, each stockholder will hold the
same percentage of common stock outstanding immediately prior to the Reverse
Split as such stockholder did immediately prior to the Reverse Split.
6
Purpose
The Board of Directors believes that a reduction in the number of
shares of the Company's common stock outstanding as effected by the Reverse
Split, and the attendant increase in authorized but unissued common stock and
proportional increase in the per share price of the Company's common stock is in
the best interests of the Company's stockholders. The Reverse Split will allow
the Company to take steps to allow for future sales of equity securities or
acquisition transactions, and to enable the Company to honor future conversions
or exercises of presently outstanding instruments. Additionally, the Board of
Directors believes that a higher per share stock price may help generate
investor interest in the Company and help the Company attract and retain
employees, customers and other service providers. Nevertheless, there can be no
assurance that the market price of the Company's common stock will trade at a
significantly higher price, or that any higher price will be maintained. Other
than allowing the Company to provide for future sales of equity securities or to
honor future conversions or exercises of presently outstanding instruments, the
Company has no plans, proposals or arrangements with respect to the additional
authorized but unissued common stock of the Company that will result from the
Reverse Split.
After the Reverse Split, the Company will have approximately 225
holders of record of its common stock. One of those record holders, however,
will be a commercial depository that currently holds shares of the Company's
common stock for the benefit of approximately 93 separate participating accounts
that in turn hold such securities for the benefit of approximately 2,100
beneficial owners. The Company believes that the Reverse Split will not
significantly reduce the number of accounts at such commercial depository. The
Company therefore believes that under applicable rules and regulations of the
Securities and Exchange Commission, it will be deemed to have more than 300
holders of record of its common stock, and does not intend to effect by the
Reverse Split and does not believe that the Reverse Split will effect a "going
private" transaction pursuant to which the Company will cease to be subject to
the reporting requirements of the Securities Exchange Act of 1934, as amended.
Certain Risks Associated With the Reverse Split
There can be no assurance that the total market capitalization of the Company's
common stock after the Reverse Split will be equal to or greater than the total
market capitalization before the Reverse Split or that the per share market
price of the Company 's common stock following the Reverse Split will either
exceed or remain higher than the current per share market price.
There can be no assurance that the market price per New Share after the
Reverse Split will rise or remain constant in proportion to the reduction in the
number of Old Shares outstanding before the Reverse Split. For example, based on
the market price of the Company's common stock on March 13, 2003 of $0.003 per
share, there can be no assurance that the post-split market price of the
Company's common stock would be $.30 per share or greater.
Accordingly, the total market capitalization of the Company's common
stock after the Reverse Split may be lower than the total market capitalization
before the Reverse Split and, in the future, the market price of the Company's
common stock following the Reverse Split may not exceed or remain higher than
the market price prior to the Reverse Split. In many cases, the total market
capitalization of a company following a reverse stock split is lower than the
total market capitalization before the reverse stock split.
There can be no assurance that the Reverse Split will result in a per share
price that will attract or enhance investor interest.
While the Board of Directors believes that a higher stock price may
help generate investor interest, there can be no assurance that the Reverse
Split will result in a per share price that will attract new investors or
provide additional interest to existing investors and brokers.
7
There can be no assurance that the Reverse Split will result in a per share
price that will increase the Company's ability to attract and retain employees
and other service providers.
While the Board of Directors believes that a higher stock price may
help the Company attract and retain employees, clients and other service
providers who are less likely to work for a company with a very low stock price,
there can be no assurance that the Reverse Split will result in a per share
price that will increase the Company's ability to attract and retain employees,
clients and other service providers.
A decline in the market price for the Company's common stock after the Reverse
Split may result in a greater percentage decline than would occur in the absence
of a Reverse Split, and the liquidity of the Company's common stock could be
adversely affected following a Reverse Split.
The market price of the Company's common stock will also be based on
the Company's results of operations and financial condition and other factors,
most of which are unrelated to the number of shares outstanding. If the Reverse
Split is effected and the market price of the Company's common stock declines,
the percentage decline as an absolute number and as a percentage of the
Company's overall market capitalization may be greater than would have occurred
had the Reverse Split not been effected. In many cases, both the total market
capitalization of a company and the market price of a share of such company's
common stock following a reverse stock split are lower than they were before the
reverse stock split. Furthermore, the liquidity of the Company's common stock
could be adversely affected by the reduced number of shares that would be
outstanding after the Reverse Split.
Holders of the Company's common stock are subject to the risk of additional and
substantial dilution.
The following table sets forth the approximate number of shares that
will be authorized for issuance, issued and outstanding, authorized and reserved
for issuance, and authorized but unissued as a result of the Reverse Split.
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
Shares Authorized Shares Issued and Shares Reserved or Shares Authorized
for Issuance Outstanding Committed for but Unissued and
Issuance Unreserved
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
Before Reverse Stock 75,000,000 75,000,000 70,834,972 (1) 0
Split
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
After 1 for 100 75,000,000 750,000 708,350 73,541,650
Reverse Split
- ------------------------ ---------------------- ---------------------- ---------------------- ----------------------
(1) Includes (i) 5,923,972 shares issuable upon exercise of
outstanding stock options as of the Record Date, (ii) 2,490,000
shares issuable upon exercise of outstanding warrants as of the
Record Date, (iii) 12,000,000 shares issuable upon conversion of
outstanding convertible preferred stock, (iv) 2,000,000 shares
issuable upon exercise of stock options that have been agreed to
but are not issued as of the date of the Record Date pending the
availability of additional authorized capital, and (v) 48,421,000
shares that would be required were a stockholder to convert a
$290,526 payable into common stock, assuming a hypothetical
conversion at $0.006.
8
The Reverse Split will not reduce the number of shares authorized for
issuance. As such, issuance by the Company of additional shares which remain
authorized for issuance will have a dilutive effect on the ownership of current
stockholders.
Our issuances of shares following the Reverse Split likely will result in
overall dilution to market value and relative voting power of previously issued
common stock, which could result in substantial dilution to the value of shares
held by stockholders prior to the Reverse Split.
The issuance by the Company of common stock following the Reverse Split
in any capital raising transactions may result in substantial dilution to the
equity interests of holders of the Company's common stock. Specifically, the
issuance of a significant amount of additional common stock will result in a
decrease of the relative voting control of our common stock issued and
outstanding prior to the issuance of common stock following the Reverse Split.
Additionally, existing stockholders likely will experience increased dilution
with decreases in market value of common stock in relation to our issuances of
shares following the Reverse Split, which could have a material adverse impact
on the value of their shares.
Principal Effects of the Reverse Split
Corporate Matters. The Reverse Split will have the following effects:
o one hundred (100) Old Shares owned by a stockholder will be
exchanged for one (1) New Share;
o the number of shares of the Company's common stock issued and
outstanding will be reduced proportionately;
o proportionate adjustments will be made to the per share exercise
price and the number of shares issuable upon the exercise of all
outstanding options and warrants entitling the holders thereof to
purchase shares of the Company's common stock, and all outstanding
shares of convertible preferred stock, which will result in
approximately the same aggregate price being required to be paid
upon exercise of such options or warrants or conversion of such
convertible preferred stock as immediately preceding the Reverse
Split; and
o the number of shares reserved for issuance under the Company's
existing stock option plans and employee stock purchase plans will
be reduced proportionately.
The Reverse Split will be effected simultaneously for all of the
Company's common stock and the ratio will be the same for all of the Company's
common stock. The Reverse Split will affect all of the Company's stockholders
uniformly and will not affect any stockholder's percentage ownership interests
in the Company, except to the extent that the Reverse Split results in any of
the Company's stockholders owning a fractional share. As described below,
stockholders holding fractional shares will be entitled to cash payments in lieu
of such fractional shares. Such cash payments will reduce the number of
post-split stockholders to the extent there are stockholders presently holding
fewer than one hundred shares.
9
Fractional Shares. No scrip or fractional certificates will be issued
in connection with the Reverse Split. Stockholders who otherwise would be
entitled to receive fractional shares because they hold a number of Old Shares
not evenly divisible by the Reverse Split ratio will be entitled, upon surrender
of certificates representing such shares, to a cash payment in lieu thereof. The
cash payment will equal the product obtained by multiplying (a) the fraction to
which the stockholder would otherwise be entitled by (b) the per share closing
sales price of the Company's common stock on the day immediately prior to the
effective time of the Reverse Split, as reported on the over the counter market.
The ownership of a fractional interest will not give the holder thereof any
voting, dividend or other rights except to receive payment therefor as described
herein.
Stockholders should be aware that, under the escheat laws of the various
jurisdictions where stockholders reside, where the Company is domiciled and
where the funds will be deposited, sums due for fractional interests that are
not timely claimed after the effective time may be required to be paid to the
designated agent for each such jurisdiction. Thereafter, stockholders otherwise
entitled to receive such funds may have to seek to obtain them directly from the
state to which they were paid.
The Reverse Split will result in some stockholders owning "odd lots" of
less than 100 shares of the Company's common stock. Brokerage commissions and
other costs of transactions in odd lots are generally somewhat higher than the
costs of transactions in "round lots" of even multiples of 100 shares.
Authorized Shares. Upon the effectiveness of the Reverse Split, the
number of authorized shares of common stock that are not issued or outstanding
would increase due to the reduction in the number of shares of the Company's
common stock issued and outstanding. As of the Record Date the Company had
75,000,000 shares of common stock authorized and 75,000,000 shares of common
stock issued and outstanding. As a result of the Reverse Split, authorized but
unissued shares will be available for issuance, and the Company may issue such
shares in financings or otherwise. If the Company issues additional shares, the
ownership interest of holders of the Company's common stock may also be diluted.
Also, the issued shares may have rights, preferences or privileges senior to
those of the Company's common stock.
Accounting Matters. The Reverse Split will not affect the par value of
the Company's common stock. As a result, as of the effective time of the Reverse
Split, the stated capital on the Company's balance sheet attributable to the
Company's common stock will be reduced proportionately based on the Reverse
Split ratio, and the additional paid-in capital account will be credited with
the amount by which the stated capital is reduced. The per share net income or
loss and net book value of the Company's common stock will be restated because
there will be fewer shares of the Company's common stock outstanding.
10
Potential Anti-Takeover Effect. Although the increased proportion of
unissued authorized shares to issued shares could, under certain circumstances,
have an anti-takeover effect (for example, by permitting issuances that would
dilute the stock ownership of a person seeking to effect a change in the
composition of the Company's Board of Directors or contemplating a tender offer
or other transaction for the combination of the Company with another entity),
the Reverse Split is not part of a plan of additional stock issuances, except to
the extent that any presently outstanding options, warrants, preferred stock and
convertible debt instruments may be exercised or converted as a result of the
increase in authorized but unissued common stock. Nevertheless, management could
use the additional shares that will be available following the Reverse Split to
resist or frustrate a third-party transaction. The Company has no current plans
or proposals to adopt any provisions of its certificate of incorporation or
bylaws, or enter into other arrangements, that may have material anti-takeover
consequences.
Procedure for Effecting Reverse Split and Exchange of Stock
Certificates. The Company will file an amendment to its Amended and Restated
Certificate of Incorporation (the "Amended Certificate") with the Secretary of
State of Delaware to amend its existing Amended and Restated Certificate of
Incorporation or take other appropriate action to effect the Reverse Split. The
Reverse Split will become effective at the time specified in the Amended
Certificate or at the effective time of any other action taken, which is
referred to below as the "effective time." Beginning at the effective time, each
certificate representing Old Shares will be deemed for all corporate purposes to
evidence ownership of New Shares. The text of the Amended Certificate to effect
the Reverse Split, will be in substantially the form attached hereto as Appendix
B; provided, however, that the text of the form of Amended Certificate attached
hereto is subject to modification to include such changes as may be required by
the office of the Secretary of State of Delaware and as the Board of Directors
deems necessary and advisable to effect the Reverse Split, including the
insertion of the effective date and time.
As soon as practicable after the effective time, stockholders will be
notified that the Reverse Split has been effected. The Company expects that its
transfer agent, Computershare Trust Company, Lakewood, Colorado, will act as
exchange agent for purposes of implementing the exchange of stock certificates.
Holders of Old Shares will be asked to surrender to the exchange agent
certificates representing Old Shares in exchange for certificates representing
New Shares in accordance with the procedures to be set forth in the letter of
transmittal the Company sends to its stockholders. No new certificates will be
issued to a stockholder until such stockholder has surrendered such
stockholder's outstanding certificate(s), together with the properly completed
and executed letter of transmittal, to the exchange agent. Any Old Shares
submitted for transfer, whether pursuant to a sale, other disposition or
otherwise, will automatically be exchanged for New Shares. STOCKHOLDERS SHOULD
NOT DESTROY ANY STOCK CERTIFICATES AND SHOULD NOT SUBMIT ANY CERTIFICATES UNTIL
REQUESTED TO DO SO.
No Appraisal or Dissenters' Rights
Under the Delaware General Corporation Law, the Company's stockholders
are not entitled to appraisal or dissenters' rights with respect to the Reverse
Split, and the Company will not independently provide stockholders with any such
right.
Vote Required
Approval of the Reverse Split required the written consent of the
holders of at least a majority of the outstanding shares of common stock
entitled to vote on the proposal. Stockholders owning at least a majority of the
outstanding shares of common stock approved the Reverse Split by written
consents dated March 10 and 13, 2003.
11
THE NAME CHANGE
General
The Board of Directors of the Company unanimously passed a resolution
approving an amendment to the Company's Amended and Restated Certificate of
Incorporation to change the name of the Company to TransAxis, Inc and this was
approved by a majority of the stockholders through written consents. The form of
the amendment is attached to this Information Statement as Appendix C. The
purpose of changing the name is to assist the Company in its marketing efforts
and improving customer relationships. The name change will take effect only if
the stockholders approve this proposal.
Vote Required
Approval of the Name Change required the written consent of the
holders of at least a majority of the outstanding shares of common stock
entitled to vote on the proposal. Stockholders owning at least a majority of the
outstanding shares of common stock approved the Name Change by written consents
dated March 10 and 13, 2003.
OTHER ACTION
No further business will be transacted by written consent to corporate
action in lieu of a meeting of stockholders regarding matters to which this
Information Statement pertains.
COSTS OF INFORMATION STATEMENT
This Information Statement has been prepared by the Company and its
Board of Directors. The Company will bear the costs of distributing this
Information Statement to stockholders, including the expense of preparing,
assembling, printing and mailing the Information Statement. Although there is no
formal agreement to do so, the Company may reimburse banks, brokerage houses and
other custodians, nominees and fiduciaries for their reasonable expenses in
forwarding this Information Statement and related materials to stockholders. The
Company may pay for and use the services of other individuals or companies not
regularly employed by the Company in connection with the distribution of this
Information Statement if the Board of Directors of the Company determines that
this is advisable.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Lynn J. Langford
-------------------------------------
Lynn J. Langford
Chief Financial Officer and Secretary
Dated: April 17, 2003
12
APPENDIX A
WRITTEN CONSENT OF STOCKHOLDERS OF DIGITAL COURIER TECHNOLOGIES, INC.
IN LIEU OF MEETING
The undersigned stockholders of Digital Courier Technologies, Inc. (the
"Company") do hereby take the following actions and adopt the following
resolutions in accordance with Sections 228 and 242 of the Delaware General
Corporate Law.
WHEREAS, the directors of the Company have authorized and approved
amendments to the Articles of Incorporation of the Company (the "Amendments") to
(i) effect a reverse stock split (the "Reverse Split") of the issued and
outstanding shares of Common Stock of the Company, par value $.0001 per share
and (ii) to change the name of the Company to TransAxis, Inc. (the "Name
Change");
WHEREAS, upon effectiveness of the Reverse Split, each stockholder of
the Company shall receive one new share of Common Stock, par value $.0001 per
share, for every one hundred issued and outstanding shares of Common Stock
currently held of record or beneficially by the stockholder; and
WHEREAS, upon effectiveness of the Reverse Split, no fractional shares
of Common Stock shall be issued in connection with the Reverse Split and each
holder of a fractional share will receive a cash payment in an amount equal to
the fraction to which the stockholder would otherwise be entitled multiplied by
the per share closing sales price of the Common Stock on the day immediately
prior to the effective date of the Reverse Split as reported on the over the
counter market (or if such price is not available, then such other price as
determined by the Board of Directors).
WHEREAS, upon the effectiveness of the Name Change the name of the
Company shall be TransAxis, Inc.
NOW THEREFORE, BE IT RESOLVED, that the Company's Articles of
Incorporation be amended and restated to authorize and provide for the Reverse
Split and Name Change as more fully set forth herein.
FURTHER RESOLVED, the Amendments attached hereto as Exhibit A and
Exhibit B are hereby adopted and approved. Pursuant to the Amendments, Article I
of the Company's Articles of Incorporation will be amended to effect the Name
Change and Article IV of the Company's Articles of Incorporation will be amended
to effect the Reverse Split.
FURTHER RESOLVED, that the stockholders of the Company hereby ratify
and approve the actions of the Board of Directors of the Company in connection
with the Reverse Split, Name Change and the Amendments.
FURTHER RESOLVED, that the executive officers of the Company, or any
of them, be, and they hereby are, authorized and directed to take any such
action as may be deemed necessary and advisable in order to carry out the
purpose and intent of the foregoing resolutions.
IN WITNESS WHEREOF, the undersigned stockholders have signed this
Consent as of the __th day of April 2003.
The undersigned understands and agrees that the foregoing consent
resolutions shall not become effective until 20 days after the Company mails to
all stockholders of the Company an Information Statement pursuant to the rules
and regulations of the Securities and Exchange Commission.
[No signatures required. This
document previously executed by
stockholders holding in excess of
50% of all voting shares of Common
Stock of Digital Courier
Technologies, Inc.]
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APPENDIX B
The text of the amendment to the Company's Amended and Restated Certificate of
Incorporation relating to the Reverse Split is as follows:
"ARTICLE IV
-----------
CAPITALIZATION
A. The total number of shares of stock of all classes which the
Company shall have authority to issue is Seventy Seven Million
Five Hundred Thousand (77,500,000), of which Seventy Five Million
(75,000,000) shares shall have the par value of One Hundredth of
One Cent ($.0001) each and shall be shares of common stock (the
"Common Stock") and Two Million Five Hundred Thousand (2,500,000)
shares shall have the par value of One Hundredth of One Cent
($.0001) each and shall be shares of preferred stock.
B. Effective 12:01 am on ________, 2003 (the "Effective Time") each
one (1) share of the Common Stock of the Company issued and
outstanding immediately prior to the Effective Time ("Old Common
Stock") shall automatically be combined, without any action on the
part of the holder thereof, into one-one hundredth (1/100) of one
(1) share of fully paid and nonassessable Common Stock of the
Company ("New Common Stock"), subject to the treatment of
fractional shares interests described below.
C. Following the Effective Time, each holder of Old Common Stock
shall be entitled to receive upon surrender of such holder's
certificate(s) representing Old Common Stock (whether one or more,
"Old Certificates") for cancellation pursuant to procedures
adopted by the Company, a certificate(s) representing the number
of whole shares of New Common Stock (whether one or more, "New
Certificates") into which and for which the shares of Old Common
Stock formerly represented by such Old Certificates so surrendered
are reclassified under the terms hereof. From and after the
Effective Time, Old Certificates shall represent only the right to
receive New Certificates and, where applicable, cash in lieu of
fractional shares, as provided below.
D. No fractional shares of Common Stock of the Company shall be
issued. No stockholder of the Company shall transfer any
fractional shares of Common Stock of the Company. The Company
shall not recognize on its stock record books any purported
transfer of any fractional share of Common Stock of the Company. A
holder of Old Certificates at the Effective Time who would
otherwise be entitled to a fraction of a share of New Common Stock
shall, in lieu thereof, be entitled to receive a cash payment in
an amount equal to the fraction to which the stockholder would
otherwise be entitled multiplied by the per share closing sales
price of the Common Stock on the day immediately prior to the
Effective Time, as reported on the over the counter market (or if
such price is not available, then such other price as determined
by the Board of Directors).
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APPENDIX C
The text of the amendment to the Company's Amended and Restated Certificate
of Incorporation relating to the Name Change is as follows:
"ARTICLE I
NAME
The name of the corporation is TransAxis, Inc.
15