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SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, For Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Under Rule 14a-12

SEMOTUS SOLUTIONS, INC.
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[x] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[_] Fee paid previously with preliminary materials:
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2)and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.

(1) Amount previously paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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SEMOTUS SOLUTIONS, INC.
718 UNIVERSITY AVE., SUITE 202
LOS GATOS, CALIFORNIA 95032
(408) 399-6120

NOTICE OF 2006 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 21, 2006

Dear Semotus Solutions, Inc. Stockholder:

You are cordially invited to attend the Annual Meeting of Stockholders of
Semotus Solutions, Inc. ("we", "our" or the "Company"). We will be holding the
Annual Meeting at the Company's offices located at 718 University Ave., Suite
202, Los Gatos, CA 95032, on September 21, 2006, at 2:30 p.m., Pacific Time.

At the 2006 Annual Meeting, we will ask you to:

1. Elect four (4) directors each to serve on our Board of Directors until
the 2007 Annual Meeting of Stockholders or until his successor is duly
elected and qualified;
2. Ratify the appointment of L.L. Bradford & Company, LLC as our
independent accountants for the fiscal year ending March 31, 2007;
3. Approve an amendment of our Amended Articles of Incorporation to
effect a reverse stock split in a ratio ranging from one-for-ten to
one-for-twenty of all our issued, outstanding and authorized shares of
our common stock;
4. Approve an amendment of our Amended Articles of Incorporation to
increase the number of authorized shares of common stock from
50,000,000 to 150,000,000 (on a pre-split basis); and
5. Transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.

Enclosed with this letter is a Proxy Statement, a proxy card and a return
envelope. Also enclosed is our Annual Report on Form 10-KSB for the fiscal year
ended March 31, 2006.

Only holders of common stock of the Company of record at the close of
business on July 24, 2006 are entitled to vote at the Annual Meeting. The Board
of Directors of the Company is soliciting the proxies.

Your vote is very important to us regardless of the number of shares that
you own. All stockholders, whether or not you expect to attend the Annual
Meeting, are urged to sign and date the enclosed Proxy and return it promptly in
the enclosed postage-paid envelope, or follow the instructions provided for
voting by phone or the Internet. The prompt return of proxies or vote by phone
or Internet will ensure a quorum and save the Company the expense of further
solicitation. Each proxy granted may be revoked by the stockholder appointing
such proxy at any time before it is voted. If you receive more than one proxy
card because your shares are registered in different names or addresses, each
such proxy card should be signed and returned to ensure that all of your shares
will be voted. If you elect to vote by phone or the Internet, the last vote you
submit chronologically (by any means) will supersede your prior vote(s). Also,
if you vote by phone or the Internet, and later decide to attend the Annual
Meeting, you may cancel your previous vote and vote in person at the meeting.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ Anthony N. LaPine
Anthony N. LaPine
CHIEF EXECUTIVE OFFICER AND CHAIRMAN OF THE BOARD

Los Gatos, California
July 25, 2006

SEMOTUS SOLUTIONS, INC.
718 UNIVERSITY AVE., SUITE 202
LOS GATOS, CALIFORNIA 95032
(408) 399-6120

PROXY STATEMENT

FOR THE 2006 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 21, 2006

GENERAL INFORMATION

This proxy statement provides information that you should read before you
vote on the proposals that will be presented to you at the 2006 Annual Meeting
of Semotus Solutions, Inc. (the "Company", "we" or "our"). The 2006 Annual
Meeting will be held on September 21, 2006 at the Company's offices located at
718 University Ave., Suite 202, Los Gatos, CA 95032.

This proxy statement provides detailed information about the 2006 Annual
Meeting, the proposals you will be asked to vote on at the Annual Meeting, and
other relevant information. The Board of Directors of Semotus is soliciting
these proxies.

At the Annual Meeting, you will be asked to vote on the following
proposals:

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR ELECTION
OF THE BOARD'S NOMINEES FOR DIRECTOR, FOR RATIFICATION OF THE APPOINTMENT OF
L.L. BRADFORD & COMPANY, LLC AS INDEPENDENT PUBLIC ACCOUNTANTS, FOR THE REVERSE
STOCK SPLIT, FOR THE INCREASE IN AUTHORIZED COMMON SHARES, AND FOR THE APPROVAL
OF EACH OF THE OTHER PROPOSALS.

On August 2, 2006, we will begin mailing this proxy statement to people
who, according to our records, owned shares of our common stock as of the close
of business on July 24, 2006. We have mailed with this proxy statement a copy of
our Annual Report on Form 10-KSB for the fiscal year ended March 31, 2006.

INFORMATION ABOUT THE 2006 ANNUAL MEETING AND VOTING

THE ANNUAL MEETING

The Annual Meeting will be held at our corporate headquarters located at
718 University Ave., Suite 202, Los Gatos, CA 95032, on September 21, 2006, at
2:30 p.m., Pacific Time.

THIS PROXY SOLICITATION

We are sending you this proxy statement because our Board of Directors (the
"Board") is seeking a proxy to vote your shares at the Annual Meeting. This
proxy statement is intended to assist you in deciding how to vote your

shares. On August 2, 2006, we will begin mailing this proxy statement and the
accompanying proxy card and Annual Report on Form 10-KSB to all people who,
according to our stockholder records, owned shares at the close of business on
July 24, 2006. In addition, we have provided brokers, dealers, banks, voting
trustees and their nominees, at our expense, with additional copies of this
proxy statement, proxy card and the Annual Report on Form 10-KSB so that such
record holders could supply these materials to the beneficial owners as of July
24, 2006.

Proxies may also be solicited personally by our officers or directors at
nominal cost. We may also retain, and pay a fee to, one or more other
professional proxy solicitation firms to solicit proxies from our stockholders.
We will bear the entire cost of this proxy solicitation.

VOTING YOUR SHARES

You may vote your shares at the Annual Meeting by completing and returning
the enclosed proxy card, or by voting in person at the Annual Meeting.
Additionally, you may be able to vote by phone or via the internet, as described
below.

Whether or not you plan to attend the Annual Meeting, please take the time
to vote. Votes may be cast:

o by traditional paper proxy card;
o by phone;
o via the Internet; or
o in person at the Annual Meeting.

Please take a moment to read the instructions, choose the way to vote that
you find most convenient and cast your vote as soon as possible.

VOTING BY PROXY CARD. If proxies in the accompanying form are properly
executed and returned, the shares of our common stock represented thereby will
be voted in the manner specified therein. If not otherwise specified, the shares
of our common stock represented by the proxies will be voted (i) FOR the
election of the nominees named below as directors of the Company; (ii) FOR the
ratification of the appointment of L.L. Bradford & Company, LLC as independent
accountants for the year ending March 31, 2007; (iii) FOR the reverse stock
split, (iv) FOR the increase in authorized common stock, and (v) in the
discretion of the persons named in the enclosed form of proxy on any other
proposals which may properly come before the Annual Meeting or any adjournment
or adjournments thereof. Any stockholder who has submitted a proxy may revoke it
at any time before it is voted, by written notice addressed to and received by
the Secretary of the Company, by submitting a duly executed proxy bearing a
later date or by electing to vote in person at the Annual Meeting. The mere
presence at the Annual Meeting of the person appointing a proxy does not,
however, revoke the appointment. IF YOU DECIDE TO VOTE BY PROXY, THE PROXY CARD
WILL BE VALID ONLY IF YOU SIGN, DATE AND RETURN IT BEFORE THE ANNUAL MEETING TO
BE HELD ON SEPTEMBER 21, 2006.

VOTING BY PHONE OR VIA THE INTERNET. If you are a stockholder of record
(that is, if your shares of our stock are registered with us in your own name),
you may vote by phone, or through the Internet, by following the instructions
included with the enclosed proxy card. If your shares are registered in the name
of a broker or other nominee, your nominee may be participating in a program
provided through ADP Investor Communication Services that allows you to vote by
phone or the Internet. If so, the voting form your nominee sent you will provide
phone and Internet voting instructions. The last vote you submit chronologically
(by any means) will supersede your prior vote(s). Also, if you vote by phone or
the Internet, and later decide to attend the Annual Meeting, you may cancel your
previous vote and vote in person at the Annual Meeting.

The deadline for voting by phone or through the Internet as a stockholder
of record is 11:59 p.m., EDT, on September 20, 2006. For stockholders whose
shares of our common stock are registered in the name of a broker or other
nominee, please consult the voting instructions provided by your broker for
information about the deadline for voting by phone or through the Internet.

VOTING IN PERSON. To vote in person, you must attend the Annual Meeting and
obtain and submit a ballot. Ballots for voting in person will be available at
the Annual Meeting. To vote by proxy, you must complete and return the enclosed
proxy card in time to be received by us by the Annual Meeting. By completing and
returning the

proxy card, you will be directing the persons designated on the proxy card to
vote your shares of our common stock at the Annual Meeting in accordance with
the instructions you give on the proxy card.

Attendance at the Annual Meeting will not, by itself, result in the
revocation of a previously submitted proxy. Even if you are planning to attend
the Annual Meeting, we encourage you to submit the proxy card in advance to
ensure the representation of your shares at the Annual Meeting.

If you hold your shares with a broker and you do not tell your broker how
to vote, your broker has the authority to vote on all routine proposals.

VOTE REQUIRED FOR APPROVAL

SHARES ENTITLED TO VOTE. On July 24, 2006 (the "Record Date"), 35,549,095
shares of our common stock were issued and 34,932,898 shares of our common stock
were outstanding. Each share of our common stock issued and outstanding on the
Record Date will be entitled to one vote on each of the proposals.

QUORUM. The quorum requirement for holding the meeting and transacting
business at the Annual Meeting is that a majority of the issued and outstanding
shares of our common stock on the Record Date be present in person or
represented by proxy and entitled to be voted. Accordingly, 17,466,450 shares of
our common stock must be present in person or by proxy for a quorum to be
present. If a quorum is not present, a vote cannot occur. Both abstentions and
broker non-votes are counted as present for the purposes of determining the
presence of a quorum.

VOTES REQUIRED. In the election of directors, the four persons receiving
the highest number of "FOR" votes will be elected. Proposal 2 requires the
affirmative "FOR" vote of a majority of those shares present and entitled to
vote on such proposal. Proposals 3 and 4 require the affirmative "FOR" vote of a
majority of the votes cast.

ADDITIONAL INFORMATION

We are mailing our Annual Report on Form 10-KSB for the fiscal year ended
March 31, 2006, including consolidated financial statements, to all stockholders
entitled to vote at the Annual Meeting together with this proxy statement. The
Annual Report on Form 10-KSB does not constitute a part of the proxy
solicitation material. The Annual Report on Form 10-KSB tells you how to get
additional information about us.

PROPOSAL 1:

ELECTION OF DIRECTORS

Nominees for election to the Board are:

Anthony N. LaPine
Robert Lanz
Mark Williams
Laurence W. Murray

Each director will be elected to serve for a one-year term, unless he
resigns or is removed before his term expires, or until his replacement is
elected and qualified. All of the four nominees are currently members of the
Board and have consented to serve as directors if re-elected. Anthony N. LaPine
is our President and Chief Executive Officer. More detailed information about
each of the nominees is available in the section of this proxy statement titled
"Directors and Executive Officers".

There are no known arrangements or understandings between any director or
executive officer and any other person pursuant to which any of the above-named
directors was selected as a director of the Company.

If any of the nominees cannot serve for any reason (which is not
anticipated), the Board may designate a substitute nominee or nominees. If a
substitute is nominated, we will vote all valid proxies for the election of the
substitute nominee or nominees. Alternatively, the Board may also decide to
leave the board seat or seats open until a suitable candidate or candidates are
located, or it may decide to reduce the size of the Board.

The Board has established the size of the Board at four members. Proxies
for the Annual Meeting may not be voted for more than four directors.

BOARD RECOMMENDATION

The Board unanimously recommends a vote "FOR" each of the nominees to the
Board.

PROPOSAL 2:

RATIFICATION OF INDEPENDENT AUDITORS

The Board has appointed L.L. Bradford & Company, LLC, an accounting firm of
independent certified public accountants, to act as independent accountants for
our Company and its consolidated subsidiaries for our fiscal year ending March
31, 2007. The Board believes that L.L. Bradford & Company's experience with and
knowledge of our Company are important, and would like to continue this
relationship. L.L. Bradford & Company has advised our Company that the firm does
not have any direct or indirect financial interest in our Company or any of its
subsidiaries, other than its capacity as our independent certified public
accountants providing auditing and accounting services.

In making the recommendation for L.L. Bradford & Company to continue as our
Company's independent accountants for the fiscal year ending March 31, 2007, our
management team and the Audit Committee reviewed past audit results and the
audit and non-audit services, if any, proposed to be performed during fiscal
year 2007. In selecting L.L.Bradford & Company, the Audit Committee and the
Board carefully considered L.L. Bradford & Company's independence.

L.L. Bradford & Company has confirmed to us that it is in compliance with
all rules, standards and policies of the Independence Standards Board and the
Securities and Exchange Commission ("SEC") governing auditor independence.

A representative of L.L. Bradford & Company is expected to attend the
Annual Meeting. This representative will have the opportunity to make a
statement if he or she desires to do so and will be able to respond to
appropriate questions from stockholders.

RECOMMENDATION

The Board unanimously recommends a vote "FOR" ratification of the
appointment of L.L. Bradford & Company, LLC.

PROPOSAL 3:

AMENDMENT OF OUR AMENDED ARTICLES OF INCORPORATION TO EFFECT A REVERSE STOCK
SPLIT IN A RATIO RANGING FROM ONE-FOR-TEN TO ONE-FOR-TWENTY OF ALL OUTSTANDING
AND AUTHORIZED SHARES OF OUR COMMON STOCK

INTRODUCTION

We propose to amend our Amended Articles of Incorporation (the "Amendment")
to effect a reverse stock split, in a ratio ranging from one-for-ten to one-for
twenty, of all outstanding and authorized shares of our common stock. The Board
of Directors reserves the right, notwithstanding stockholder approval, and
without further action by the stockholders, to abandon or to delay the reverse
stock split, if at any time prior to the filing of the amendment it determines,
in its sole discretion, that the reverse stock split would not be in the best
interests of our stockholders.

The text that will be included in the Articles of Amendment to effect the
reverse stock split in a ratio ranging from one-for-ten to one-for-twenty is as
follows:

"As of the beginning of the first business day (the "Effective Date")
after the filing of this Amendment every [insert number ranging from ten to
twenty] issued and outstanding and authorized shares of the Corporation's
Common Stock automatically shall be combined and reconstituted into one
share of Common Stock, par value $0.01 per share, of the Corporation,
thereby giving effect to a one-for-[insert number ranging from ten to
twenty] reverse stock split without further action of any kind (the
"Reverse Stock Split"). Each holder of a certificate or certificates that
immediately prior to the Effective Date represented outstanding shares of
Common Stock shall be entitled to receive, upon surrender of such
certificates to the Corporation for cancellation, a certificate or
certificates representing the number of whole shares (rounded down to the
nearest whole shares) of Common Stock held by such holder on the Effective
Date after giving effect to the Reverse Stock Split. No fractional shares
of Common Stock shall be issued in the Reverse Stock Split; instead,
stockholders who would otherwise be entitled to fractional shares will
receive a cash payment in lieu of such fraction based upon the reported
closing price of the Corporation's Common Stock on the trading date
immediately before the Effective Date. No other exchange, reclassification
or cancellation of issued shares shall be effected by this Amendment."

Upon this Amendment becoming effective, and if Proposal 4 regarding an
increase in the number of authorized shares of common stock is not approved by
the stockholders, the number of authorized shares of common stock would decrease
from the current 50,000,000 shares to between 2,500,000 and 5,000,000 shares of
common stock, depending on the reverse stock split ratio implemented. If both
this amendment and Proposal 4 become effective, the number of authorized shares
of common stock would be between 7,500,000 and 15,000,000 shares of common
stock. If this Amendment does not become effective and if Proposal 4 does, then
we would have 150,000,000 shares of authorized common stock. See the discussion
under "Proposal 4: To Approve an Amendment to our Amended Articles of
Incorporation to Increase the Number of Authorized Shares from 50,000,000 to
150,000,000 Shares, on a Pre-Split Basis" below.

EXAMPLES. As of the Effective Date of the reverse stock split, all
stockholders will own a proportionally reduced number of shares of common stock,
excluding any fractional shares cancelled in exchange for cash. For example, if
a stockholder owned 1,000 shares of common stock immediately prior to the
effective date, then the stockholder would own 100 shares of common stock as of
the Effective Date if a one-for-ten reverse stock split became effective and 50
shares of common stock as of the Effective Date if a one-for-twenty reverse
stock split became effective, which reflects the same proportional ownership
interest in our shares of common stock because all stockholders would have the
same reduction. As a further example, if a person held a stock option or warrant
for 1,000 shares with an exercise price of $0.15 per share immediately prior to
the effective date, the person would hold an option or warrant for 100 shares
with an exercise price of $1.50 per share as of the Effective Date in the case
of a one-for-ten reverse stock split, and 50 shares with an exercise price of
$3.00 per share as of the Effective Date in the case of a one-for-twenty reverse
stock split; in each case, however, the holder of the option or warrant must
spend $150.00 to exercise the option or warrant in full. See "Principal Effects
of a Reverse Stock Split -- Common Stock" below. As discussed below under
"Reasons For a Reverse Stock Split," we expect the per share market price for
our common stock to increase in approximate proportion to the reverse split,
although there can be no assurance that it would do so.

REASONS FOR A REVERSE STOCK SPLIT

As of June 30, 2006, our total market value was approximately $5.6 million
and we had 35,529,098 shares of common stock issued and outstanding. On such
date, the closing price for our common stock on Amex was $0.16 per share. We
believe that a reverse stock split may be desirable because the increased market
price of our common stock expected as a result of implementing a reverse stock
split should encourage investor interest and trading in our common stock and
improve the marketability and liquidity of our common stock. Because of the
trading volatility often associated with low-priced stocks, many brokerage
houses and institutional investors have internal policies and practices that
either prohibit them from investing in low-priced stocks or tend to discourage
individual brokers from recommending low-priced stocks to their customers. Some
of those policies and practices may function to make the processing of trades in
low-priced stocks economically unattractive to brokers. Additionally, because
brokers' commissions on low-priced stocks generally represent a higher
percentage of the stock price than commissions on higher-priced stocks, the
current average price per share of our common stock can result in individual
stockholders paying transaction costs representing a higher percentage of their
total share value than would be the case if the share price were substantially
higher. We recognize that the liquidity of our common stock may be adversely
affected by a reverse stock split given the reduced number of shares that would
be outstanding after the reverse stock split. However, from January 1, 2005,
through June 30, 2006, our daily trading volume, as reported by Amex, has
averaged approximately 50,000 shares, and we believe that there will be
sufficient post-split shares to provide adequate liquidity for our stockholders.
The Board of Directors believes that the anticipated higher market price may
reduce, to some extent, the negative effects on the liquidity and marketability
of the common stock inherent in some of the policies and practices of
institutional investors and brokerage houses described above.

We cannot predict, however, whether a reverse stock split would achieve the
desired results. The price per share of our common stock is also a function of
our financial performance and other factors, some of which may be unrelated to
the number of shares outstanding. Accordingly, there can be no assurance that
the closing bid price of our common stock after a reverse stock split would
increase in an amount proportionate to the decrease in the number of issued and
outstanding shares, or would increase at all, or that any increase can be
sustained for a prolonged period of time.

The proposed reverse stock split is not a first step in a "going-private"
transaction. At the present time, we have no intention of effecting such a
transaction.

PRINCIPAL EFFECTS OF A REVERSE STOCK SPLIT

COMMON STOCK

Our common stock is currently registered under Section 12(g) of the
Exchange Act, and we are subject to the periodic reporting and other
requirements of the Exchange Act. The proposed reverse stock split will not
affect the registration of the common stock under the Exchange Act. If any
proposed reverse stock split is implemented, our common stock will continue to
be reported on the American Stock Exchange under the symbol "DLK," but all open
orders as of the effective date would be canceled by the American Stock
Exchange.

After the effective date of a reverse stock split, each stockholder will
own a proportionally reduced number of shares of our common stock, as set forth
in the examples above. The reverse stock split will affect all of our
stockholders uniformly and will not affect any stockholder's percentage
ownership interests in us, except to the extent that a reverse stock split
results in any of our stockholders owning a fractional share as described below.
Proportionate voting rights and other rights and preferences of the holders of
our common stock will not be affected by a reverse stock split other than as a
result of the payment of cash in lieu of fractional shares. For example,
stockholders are not currently entitled to cumulative voting rights and will not
be entitled to such rights following the reverse stock split. Further, the
number of stockholders of record will not be affected by a reverse stock split
except to the extent that any stockholder holds only a fractional share interest
and receives cash for such interest after a reverse stock split, as discussed
below.

A reverse stock split will result in some stockholders -- those currently
owning fewer than 1,000 to 2,000 shares, depending on the reverse stock split
ratio implemented -- owning "odd-lots" of less than 100 shares of

our common stock. Brokerage commissions and other costs of transactions in
odd-lots are generally somewhat higher than the costs of transactions on
"round-lots" of even multiples of 100 shares.

The proposed reverse stock split would change the number of authorized
shares of common stock, as designated by our Amended Articles of Incorporation,
from 50,000,000 shares to between 2,500,000 and 5,000,000 shares. However, if
Proposal 4 also is approved, then after giving effect to the reverse stock split
the number of authorized shares of common stock would be between 7,500,000 and
15,000,000 shares, depending on the reverse stock split ratio implemented.

For illustrative purposes, the following table, which is based on
34,932,898 shares of common stock outstanding and 46,026,676 shares of common
stock outstanding and reserved for issuance as of July 24, 2006, approximates
the effect on our common stock of the proposed one-for-ten to one-for-twenty
reverse stock split, and taking into consideration whether Proposal 4 to
increase the authorized number of shares of common stock is or is not approved
by the stockholders.

- -------------------------------------------------------------------------- --------------------------------
PRIOR TO REVERSE STOCK SPLIT AFTER REVERSE STOCK SPLIT
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IF PROPOSAL 4 IF PROPOSAL IF PROPOSAL 4 IS IF PROPOSAL 4
CURRENT IS NOT APPROVED 4 IS APPROVED NOT APPROVED (1) IS APPROVED (1)
- ----------------------- --------------- --------------- --------------- --------------- ---------------

Authorized Common Stock 50,000,000 50,000,000 150,000,000 2,500,000 - 7,500,000 -
5,000,000 15,000,000
- ----------------------- --------------- --------------- --------------- --------------- ---------------
Issued and Outstanding 34,932,898 34,932,898 34,932,898 1,746,645 - 1,746,645 -
3,493,290 3,493,290
- ----------------------- --------------- --------------- --------------- --------------- ---------------
Issued, Outstanding and 46,046,673 46,046,673 46,046,673 2,302,334 - 2,302,334 -
Reserved for Issuance 4,604,667 4,604,667
- ----------------------- --------------- --------------- --------------- --------------- ---------------

(1) Does not reflect the cancellation of fractional shares and payment in cash
in lieu thereof.

OPTIONS, WARRANTS, CONVERTIBLE NOTES AND OTHER SECURITIES

In addition, all outstanding options, warrants, convertible notes and other
securities entitling their holders to purchase shares of our common stock would
be adjusted as a result of any reverse stock split, as required by the terms of
these securities. In particular, the exchange ratio for each instrument would be
reduced, and the exercise price per share, if applicable, would be increased, in
accordance with the terms of each instrument and based on the one-for-ten to
one-for-twenty ratio of the reverse stock split, as set forth in the above
example. Also, the number of shares reserved for issuance under the existing
employee stock option plans, warrant and convertible notes would be reduced
proportionally based on the one-for-ten to one-for-twenty ratio of the reverse
stock split.

FRACTIONAL SHARES

No fractional shares of common stock will be issued as a result of the
proposed reverse stock split. Instead, stockholders who otherwise would be
entitled to receive fractional shares because they hold a number of shares not
evenly divisible by the one-for-ten to one-for-twenty ratio, upon surrender to
the exchange agent of such certificates representing such fractional shares,
will be entitled to receive cash 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.

IMPLEMENTATION AND EXCHANGE OF STOCK CERTIFICATES

If our stockholders approve the proposal and our Board of Directors decides
to effectuate a reverse stock split, we will file an amendment to our Amended
Articles of Incorporation with the Secretary of State of Nevada. The reverse
stock split will become effective at the time specified in the amendment -- the
next business day after the filing of the amendment -- which we refer to as the
Effective Date.

As of the Effective Date of the reverse stock split, each certificate
representing shares of our common stock before the reverse stock split would be
deemed, for all corporate purposes, to evidence ownership of the reduced

number of shares of our common stock resulting from the reverse stock split,
except that holders of unexchanged shares would not be entitled to receive any
dividends or other distributions payable by us after the Effective Date until
they surrender their old stock certificates for exchange. All shares underlying
options, warrants, convertible notes and other securities would also be
automatically adjusted on the Effective Date.

Our transfer agent, Computershare Trust Company, Inc., would act as the
exchange agent for purposes of implementing the exchange of stock certificates.
As soon as practicable after the Effective Date, stockholders and holders of
securities convertible into or exercisable for our common stock would be
notified of the effectiveness of the reverse stock split. Stockholders of record
would receive a letter of transmittal requesting them to surrender their old
stock certificates for new stock certificates, which will bear a different CUSIP
number, reflecting the adjusted number of shares as a result of the reverse
stock split. Persons who hold their shares in brokerage accounts or "street
name" would not be required to take any further action to effect the exchange of
their shares. No new certificates would be issued to a stockholder until such
stockholder has surrendered any outstanding certificates together with the
properly completed and executed letter of transmittal to the exchange agent.
Until surrender, each certificate representing shares before the reverse stock
split would continue to be valid and would represent the adjusted number of
shares based on the ratio of the reverse stock split. Stockholders should not
destroy any stock certificate and should not submit any certificates until they
receive a letter of transmittal.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The following is a summary of material United States federal income tax
consequences of a reverse stock split. It does not address any state, local or
foreign income or other tax consequences. It applies to you only if you held
shares of pre-reverse stock split common stock and shares of post-reverse stock
split common stock as capital assets for tax purposes. This section does not
apply to you if you are a member of a class of holders subject to special rules,
such as (i) a dealer in securities or currencies, (ii) a trader in securities
that elects to use a mark-to-market method of accounting for your securities
holdings, (iii) a bank, (iv) a life insurance company, (v) a tax-exempt
organization, (vi) a person who owns shares of common stock that are a hedge or
that are hedged against interest rate risks, (vii) a person who owns shares of
common stock as part of a straddle or conversion transaction for tax purposes,
(viii) a foreign person, or (ix) a person whose functional currency for tax
purposes is not the U.S. dollar. This section is based on the Internal Revenue
Code of 1986, as amended, its legislative history, existing and proposed
regulations under the Internal Revenue Code, published rulings and court
decisions, all as currently in effect, all of which are subject to change,
possibly on a retroactive basis.

PLEASE CONSULT YOUR OWN TAX ADVISOR CONCERNING THE CONSEQUENCES OF A REVERSE
STOCK SPLIT IN YOUR PARTICULAR CIRCUMSTANCES UNDER THE INTERNAL REVENUE CODE AND
THE LAWS OF ANY OTHER TAXING JURISDICTION.

TAX CONSEQUENCES TO COMMON STOCKHOLDERS

This discussion applies only to United States holders. A United States
holder, as used herein, is a stockholder that is: (i) a citizen or resident of
the United States, (ii) a domestic corporation, (iii) an estate whose income is
subject to United States federal income tax regardless of its source, or (iv) a
trust if a United States court can exercise primary supervision over the trust's
administration and one or more United States persons are authorized to control
all substantial decisions of the trust.

Other than with respect to any cash payments received in lieu of fractional
shares discussed below, no gain or loss should be recognized by a stockholder
upon such stockholder's exchange of pre-reverse stock split shares for
post-reverse stock split shares pursuant to a reverse stock split. The aggregate
tax basis of the post-reverse stock split shares received in the reverse stock
split (including any fraction of a new share deemed to have been received) will
be the same as the stockholder's aggregate tax basis in the pre-reverse stock
split shares exchanged therefore. In general, stockholders who receive cash in
exchange for their fractional share interests in the post-reverse stock split
shares as a result of a reverse stock split will be deemed for federal income
tax purposes to have first received the fractional share interests and then to
have had those fractional share interests redeemed for cash. The stockholder's
holding period for the post-reverse stock split shares will include the period
during which the stockholder held the pre-reverse stock split shares surrendered
in the reverse stock split.

The receipt of cash instead of a fractional share of our common stock by a
United States holder of our common stock will generally result in a taxable gain
or loss equal to the difference between the amount of cash received and the
holder's adjusted federal income tax basis in the fractional share. Gain or loss
generally will be a capital gain or loss. Capital gain of a non-corporate United
States holder, upon disposition of property held for more than one year
generally is taxed at a maximum rate of 15%. Deductibility of capital loss is
subject to limitations.

A non-corporate stockholder that receives cash in lieu of a fractional
share may be subject to backup withholding at 28% unless the stockholder
provides its taxpayer identification number ("TIN") and certifies that the TIN
is correct, or certifies that it is awaiting a TIN, unless an exemption applies.
Backup withholding is not an additional tax. The amount of backup withholding
can be credited against the United States federal income tax liability of the
person subject to backup withholding, including for purposes of obtaining a
refund, provided that the required information is provided to the Internal
Revenue Service.

TAX CONSEQUENCES TO THE COMPANY

We should not recognize any gain or loss as a result of the proposed
reverse stock split.

ACCOUNTING CONSEQUENCES

The par value per share of our common stock would remain unchanged at $0.01
per share after any reverse stock split. As a result, on the Effective Date of a
reverse stock split, the stated capital on the Company's balance sheet
attributable to the common stock will be reduced proportionally, based on the
ratio of the reverse stock split, from its present amount, and the additional
paid-in capital account will be credited with the amount by which the stated
capital is reduced. The net income or loss per share of common stock and net
book value will be increased because there will be fewer shares of the common
stock outstanding. We do not anticipate that any other accounting consequences
would arise as a result of a reverse stock split.

DISSENTERS' RIGHTS

Chapter 92A.300 - 92A.500, inclusive, of the Nevada Revised Statutes
provides for dissenters' rights for any amendment to the articles of
incorporation that reduces the total number of shares owned by the stockholder
to a fraction of a share, if the fractional share created by the amendment is to
be acquired by us for cash. These provisions only apply to holders who, before
the reverse split becomes effective, hold 1% or more of the outstanding shares
of the affected class or series, and, who would otherwise be entitled to receive
fractions of shares in exchange for the cancellation of all their outstanding
shares. In our case, these provisions only apply to holders of approximately
355,290 shares pre-reverse split, and who end up with odd lots of between 9 to
19 shares, depending on the reverse split ratio implemented, or fewer shares of
our common stock.

Any such stockholder who otherwise would have been entitled to receive only
a fractional share in the reverse stock split may be entitled to a judicial
appraisal of the fair value of his or her fractional share. Merely voting
against the reverse stock split is not sufficient to preserve a stockholder's
dissenters' rights. In order to be entitled to appraisal rights under Chapter
92A, a stockholder must:

o be within the class of stockholders who may be entitled to appraisal
rights (i.e., those stockholders who would have been entitled to
receive only a fractional share as they own fewer than ten to twenty
shares of our common stock);

o deliver to us, before the vote on the reverse stock split is taken,
notice of the stockholder's intention to demand appraisal of his or
her fractional share if the reverse stock split is effected; and

o not vote in favor of the reverse stock split (a stockholder does not
have to vote against the reverse stock split to preserve dissenters'
rights).

A stockholder's failure to vote in favor of the proposed reverse stock
split will not be sufficient to satisfy the notice requirements of the statute;
the stockholder must also deliver the required notice before the vote occurs.

The foregoing summary of Chapter 92A of the Nevada Revised Statutes does
not purport to be complete and is qualified in its entirety by reference to the
full text of Chapter 92A.300 - 92A.500, which is set forth as Appendix A
attached to this proxy statement. Stockholders who wish to exercise their
statutory right of appraisal are urged to consult legal counsel for assistance
in exercising their rights. Any stockholder entitled to appraisal rights who
fails to comply completely and on a timely basis with all requirements of
Chapter 92A for perfecting appraisal rights will lose those rights.

BOARD RECOMMENDATION: The Board of Directors recommends a vote "FOR"
approval of Proposal 3 to amend our Amended Articles of Incorporation to effect
a reverse stock split, in a ratio ranging from one-for-ten to one-for-twenty, of
all outstanding and authorized shares of our common stock.

PROPOSAL 4:

AMENDMENT OF OUR AMENDED ARTICLES OF INCORPORATION TO INCREASE THE NUMBER
OF AUTHORIZED SHARES OF COMMON STOCK FROM 50,000,000 TO 150,000,000 (ON A PRE-
SPLIT BASIS)

We propose to amend Article IV of our Amended Articles of Incorporation to
increase the number of authorized shares of common stock from 50,000,000 to
150,000,000, on a pre-split basis. As amended, Article IV of our Restated
Articles of Incorporation would read as set forth below:

"Capital Stock. The aggregate number of shares which this Corporation shall
have authority to issue is: One Hundred and Fifty Million (150,000,000)
shares of $0.01 par value each, which shares shall be designated "Common
Stock"; and Five Million (5,000,000) shares of $0.001 par value each, which
shares shall be designated "Preferred Stock", and which may be issued in
one or more series at the discretion of the Board of Directors. The Board
of Directors is hereby vested with authority to fix by resolution or
resolutions the designations and the power, preferences and relative,
participating, optional or other special rights, and qualifications,
limitations or restrictions thereof, including without limitation, the
dividend rate, conversion or exchange rights, redemption price and
liquidation preference, of any series of shares of Preferred Stock and to
fix the number of shares constituting any such series, and to increase or
decrease the number of shares of any such series (but not below the number
of shares thereof then outstanding). In case the number of shares of any
such series shall be so decreased, the shares constituting such decrease
shall resume the status which they had prior to the adoption of the
resolution or resolutions originally fixing the number of shares of such
series. All shares of any one series shall be alike in every particular
except as otherwise provided by these Articles of Incorporation or the
Nevada Business Corporation Act."

If both Proposal 3 regarding the one-for-ten to one-for-twenty reverse
stock split and Proposal 4 become effective, then as amended, Article IV of our
Restated Articles of Incorporation would read as set forth below:

"Capital Stock. The aggregate number of shares which this Corporation shall
have authority to issue is: [insert number from seven million five hundred
thousand to fifteen million (7,500,000 to 15,000,000)] shares of $0.01 par
value each, which shares shall be designated "Common Stock"; and Five
Million (5,000,000) shares of $0.001 par value each, which shares shall be
designated "Preferred Stock", and which may be issued in one or more series
at the discretion of the Board of Directors. The Board of Directors is
hereby vested with authority to fix by resolution or resolutions the
designations and the power, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, including without limitation, the dividend rate,
conversion or exchange rights, redemption price and liquidation preference,
of any series of shares of Preferred Stock and to fix the number of shares
constituting any such series, and to increase or decrease the number of
shares of any such series (but not below the number of shares thereof then
outstanding). In case the number of shares of any such series shall be so
decreased, the shares constituting such decrease shall resume the status
which they had prior to the adoption of the resolution or resolutions
originally fixing the number of shares of such series. All shares of any
one series shall be alike in every particular except as otherwise provided
by these Articles of Incorporation or the Nevada Business Corporation Act."

As of July 24, 2006, we had no shares of preferred stock issued and
outstanding, and 34,932,898 shares of common stock issued and outstanding and
had reserved approximately 46,046,673 shares of common stock for issuance under
existing warrants and stock options.

Our authorized preferred stock of 5,000,000 shares would not be changed by
this proposed amendment. Our preferred stock is undesignated. The Board of
Directors, without stockholder approval, may issue the preferred stock with
voting and conversion rights that could materially and adversely affect the
voting power of the holders of common stock, and could also decrease the amount
of earnings and assets available for distribution to the holders of common
stock.

The rights of additional authorized shares of common stock would be
identical to shares now authorized.

The authorization of common stock will not, in itself, have any effect on
your rights as a stockholder. If the Board were to issue additional shares of
common stock for other than a stock split or dividend, however, it could have a
dilutive effect on our earnings per share and on your voting power in the
Company, perhaps significantly.

We believe that the proposed increase in the number of authorized shares of
common stock is in the best interests of our stockholders. It is important for
the Board to have the flexibility to act promptly to meet future business needs
as they arise. The Company requires sufficient shares, on a readily available
basis, to maintain our financing and capital raising flexibility, fund
acquisitions and mergers, enable the use of employee benefit plans such as the
2005 Stock Option Plan, provide for potential stock splits and dividends and for
other proper business purposes. Having a limited number of shares available
severely limits our flexibility and hinders our ability to raise capital, move
quickly with respect to acquisition opportunities and attract and retain
employees.

By having additional shares readily available for issuance, we will be able
to act expeditiously without spending the time and incurring the expense of
soliciting proxies and holding special meetings of stockholders. We have no
present plans, agreements, commitments or understandings for the issuance or use
of these proposed additional shares of common stock.

The Board may issue additional shares of common stock without action on
your part only if the action is permissible under Nevada corporate law and the
rules of Amex, on which our common stock is listed. For example, approval by the
stockholders would be required by Amex rules if the issuance of shares of common
stock, or securities convertible into common stock, such as the preferred stock,
would result in a change of control of the Company. Amex also requires
stockholder approval before the issuance of shares in private transactions equal
to 20% or more of the common stock or voting power outstanding before the
issuance for less than the greater of the book value or market value of the
common stock and before the issuance of shares in an acquisition equal to 20% or
more of the common stock or voting power outstanding before the acquisition.
Exceptions to these rules may be made upon application to Amex.

The future issuance of additional shares of common stock also could be used
to block an unsolicited acquisition through the issuance of large blocks of
stock to persons or entities considered by our officers and directors to be
opposed to such acquisition, which might be deemed to have an anti-takeover
effect (i.e., might impede the completion of a merger, tender offer or other
takeover attempt). Our management and Board could use the additional shares to
resist or frustrate a third-party transaction providing an above-market premium
that is favored by a majority of our independent stockholders. In fact, the mere
existence of such a block of authorized but unissued shares, and the Board's
ability to issue such shares without stockholder approval, might deter a bidder
from seeking to acquire our shares on an unfriendly basis. We have other
provisions in our Amended Articles of Incorporation, Bylaws and credit
agreements that could make it more difficult for a third party to acquire us.
For example, our Amended Articles of Incorporation and Bylaws provide
limitations on removing a director, the ability of the Board to issue preferred
stock with such voting, dividend, liquidation and other terms as the Board
determines, no cumulative voting for directors, special voting requirements for
certain mergers and other business combinations and special procedures for
calling special meetings of the stockholders, proposing matters for stockholder
approval and nominating directors.

While the authorization of additional shares of common stock alone or
together with the preceding provisions may have an anti-takeover effect, the
Board does not intend or view the proposed increase in authorized common stock
as an anti-takeover measure, nor are we aware of any proposed transactions of
this type. We have no present plans or proposals to adopt any other provisions
or enter into any other arrangements that may have material anti-takeover
consequences.

BOARD RECOMMENDATION: The Board of Directors recommends that you vote "FOR"
approval of Proposal 4 to amend our Amended Articles of Incorporation to
increase the number of authorized shares of common stock to 150,000,000, on a
pre-split basis.

OTHER BUSINESS

As of the date of this proxy statement, our management was not aware of any
other matter to be presented at the Annual Meeting other than as set forth
herein. However, if any other matters are properly brought before the Annual
Meeting, the shares of our common stock represented by valid proxies will be
voted with respect to such matters in accordance with the judgment of the
persons voting them. A majority vote of the shares of our common stock
represented at the meeting is necessary to approve any such matters.

INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON

Except as otherwise disclosed herein, none of our directors or executive
officers, no nominee for election as a director of our Company and no associate
or affiliate of any of the foregoing persons has any substantial interest,
direct or indirect, by way of beneficial ownership of shares or otherwise, in
any matter to be acted upon at the Annual Meeting.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table shows certain information regarding the common stock
beneficially owned on July 24, 2006 (the record date) for the following persons:
(i) each stockholder we know to be the beneficial owner of 5% or more of our
common stock, (ii) our directors and our executive offers named in the Summary
Compensation Table (see below), and (iii) all executive officers and directors
as a group. As of July 24, 2006, there were 34,932,898 shares of our common
stock issued and outstanding.

BENEFICIAL OWNERSHIP OF SHARES
NAME AND ADDRESS OF BENEFICIAL OWNERS* (1) NUMBER OF SHARES PERCENT

5% STOCKHOLDERS
Southridge Partners LP 2,800,000(2) 8%

NAMED EXECUTIVES
Anthony LaPine 2,844,000(3) 8%
Pamela LaPine 2,844,000(4) 8%
Umair Khan 84,333(5) **
Vladimir Soskov 80,000(6) **
Christine Odero 183,000(7) **

INDEPENDENT DIRECTORS
Mark Williams 29,167(8) **
Laurence W. Murray 44,033(9) **
Robert Lanz 59,167(8) **

All Officers and Directors as a Group (10 Persons) 4,086,967(10) 12%

* Unless otherwise indicated, all addresses are c/o Semotus Solutions, Inc.,
718 University Ave., Suite 202, Los Gatos, CA 95032.
** Less than 1%
(1) This table is based upon information supplied by the named executive
officers, directors and 5% stockholders, including filings with the
Securities and Exchange Commission (the "SEC"). Unless otherwise indicated
in these notes and subject to the community property laws where applicable,
each of the listed stockholders has sole and investment power with respect
to the shares shown as beneficially owned by such stockholder. The number
of shares and percentage of beneficial ownership includes shares of common
stock issuable pursuant to stock options and warrants held by the person or
group in question, which may be exercised or converted on July 24, 2006 or
within 60 days thereafter.
(2) This information is based on a Schedule 13G filed with the SEC on June 12,
2006, regarding ownership as of June 7, 2006. In addition, Southridge
Partners LP owns 2,388,500 warrants to purchase shares of our common stock
at

$0.30 per share; however, these warrants are not exercisable until November
16, 2006, which is not within 60 days of July 24, 2006, and therefore these
warrants are not included in the table above.
(3) Includes 1,025,000 shares of common stock and exercisable options to
purchase 1,391,000 of common stock owned directly by Mr. LaPine. Also
includes 3,000 shares of common stock and exercisable options to purchase
425,000 shares of common stock owned by Mr. LaPine's wife, Pamela LaPine,
the Company's Executive Vice President and President of Financial Services,
as set forth below.
(4) Includes 3,000 shares of common stock and exercisable options to purchase
425,000 shares of common stock owned directly by Pamela LaPine. Also
includes 1,025,000 shares of common stock and exercisable options to
purchase 1,391,000 shares of common stock owned directly by Mrs. LaPine's
husband, Anthony LaPine, President and Chief Executive Officer of the
Company, as set forth above.
(5) Includes exercisable options to purchase 3,333 shares of common stock and
81,000 shares of restricted common stock.
(6) Includes exercisable warrants to purchase 70,000 shares of common stock and
10,000 shares of restricted common stock.
(7) Includes exercisable warrants to purchase 150,000 shares of common stock
and 33,000 shares of restricted common stock.
(8) Comprised of exercisable options to purchase shares of common stock.
(9) Includes exercisable options to purchase 40,833 shares of common stock and
3,200 shares of common stock owned directly by Mr. Murray.
(10) Includes the shares listed above as beneficially owned by the above listed
Named Executive Officers and Independent Directors, and 763,267 shares of
common stock underlying currently exercisable options held by other
executive officers of the Company.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended requires
the Company's officers (as defined in regulations issued by the SEC) and
directors, and persons who own more than ten percent of a registered class of
our equity securities, to file reports of ownership and changes in ownership
with the SEC. Officers, directors and greater than ten percent stockholders are
required by SEC regulation to furnish us with copies of all Section 16(a) forms
they file.

Based solely on a review of copies of such reports of ownership furnished
to us and certifications from executive officers and directors, we believe that
during the past fiscal year all filing requirements applicable to our directors,
officers and beneficial owners of more than 10% of a registered class of our
equity securities were complied with, except that a Form 5 disclosing the
purchase of 3,000 shares of common stock in April of 2004 for Laurence W. Murray
has not yet been filed.

DIRECTORS AND EXECUTIVE OFFICERS

Set forth below is certain information relating to our directors and
executive officers who will continue to serve after the Annual Meeting:

NAME AGE POSITION
- ---- --- --------
Anthony N. LaPine 64 Chairman of the Board and Chief Executive Officer
Pamela B. LaPine 48 President
Charles K. Dargan, II 51 Chief Financial and Accounting Officer
Taliesin Durant 35 Corporate Secretary and General Counsel
Vladimir Soskov 33 Chief Technical Officer
Christine Odero 36 VP of Engineering
Robert Lanz (1) 64 Director
Mark Williams (2) 48 Director
Laurence W. Murray (3) 66 Director

(1) Chairman of the Audit Committee; Member of the Compensation Committee and
the Nominating and Corporate Governance Committee.
(2) Chairman of the Nominating and Corporate Governance Committee; Member of
the Audit Committee and the Compensation Committee.
(3) Chairman of the Compensation Committee; Member of the Audit Committee and
the Nominating and Corporate Governance Committee.

There is no family relationship between any director or executive officer
except that Anthony N. LaPine and Pamela B. LaPine are husband and wife. There
are no known arrangements or understandings between any director or executive
officer and any other person pursuant to which any of the above-named executive
officers or directors was selected as an officer or director.

Anthony N. LaPine began with the Company as President and one of our
directors since June of 1996. In June of 1997 Mr. LaPine was elected Chief
Executive Officer, and in August of 1997, Mr. LaPine was elected Chairman of the
Board. In December of 2005 Mr. LaPine resigned from his position as President,
but currently remains our Chief Executive Officer and Chairman of the Board. Mr.
LaPine's career began at IBM where he served as a member of the engineering team
that developed the modern disc drive. In 1969 he was recruited as one of the
founders of Memorex's Equipment Group where he was instrumental in developing
the floppy disc drive. After the sale of Memorex to Unisys, Mr. LaPine was
recruited to re-engineer the Irwin/Olivetti Company, where he orchestrated the
invention of the first removable cartridge tape backup in personal computers.
Subsequently, he formed LaPine Technology, raised thirty million dollars and
launched the 31/2-inch Winchester disk drive technology that is now the industry
standard. Mr. LaPine then sold LaPine Technology, and formed the LaPine Group, a
private investment and management-consulting firm. Mr. LaPine received a BSEE
Cum Laude, from San Jose State University, an MSEE from the University of Santa
Clara and an MBA from the University of San Francisco. He later became an
alumnus of Stanford's Graduate School of Business through its Executive Program.

Pamela LaPine began with the Company in 1996 and currently serves as our
President. She is responsible for the sales, marketing, account management and
strategic direction of the Company. Mrs. LaPine began as the Company's Director
of Administration in 1996 and then moved to Vice President of Operations in
1997. In October of 1998 she moved into the position of Vice President of
Marketing, and in 2000 was promoted to Executive Vice President of Sales and
Marketing, and President of Financial Services. Pamela LaPine is a seasoned
business professional with over 20 years of management experience in Silicon
Valley high tech companies. She has extensive experience in corporate
operations, finance, marketing and business development. Mrs. LaPine started her
management career as Marketing Director at Digital Recording Corporation, and
then transitioned to LaPine Technologies, where she was responsible for
strategic planning. She has also held executive positions with Partners
Petroleum and Olympiad Corporation. Mrs. LaPine did her undergraduate studies at
the University of Utah.

Charles K. Dargan, II is our Chief Financial and Accounting Officer. Mr.
Dargan was on the Board from March 1999 to July 2002; he resigned as a member of
the Board effective as of July 31, 2002. Mr. Dargan was the Executive Vice
President of Operations and Administration for the Company from April 2000 to
January 2001, at which time Mr. Dargan became our Chief Financial and Accounting
Officer. Mr. Dargan is also currently the principal / owner of CFO911, an
accounting and finance company. Prior to joining Semotus, Mr. Dargan served as a
Managing Director of Corporate Finance for The Seidler Companies Incorporated, a
private brokerage, investment banking and public finance firm. In addition, he
was a partner and Chief Financial Officer of the investment banking firm of
Ambient Capital, was a Managing Director of Corporate Finance at L.H. Friend,
Weinress, Frankson & Presson, Inc., and a First Vice President at Drexel Burnham
Lambert, Incorporated. His accounting and financial industry experience has made
him an expert in public and private debt and equity finance, mergers and
acquisitions and financial management of and planning for emerging growth
companies. Mr. Dargan graduated from the University of Southern California with
an MBA and an MS in Finance, and possesses an A.B. in Government and Economics
from Dartmouth College. He also holds accounting and finance industry
certifications of Chartered Financial Analyst (CFA) and Certified Public
Accountant (CPA).

Taliesin (Tali) Durant joined the Company in August 1999 and has been our
Corporate Secretary and in-house counsel since January 2000. Ms. Durant provides
legal counsel for all of our corporate, financial and business matters. She also
plays a crucial role in the Company's business development and merger and
acquisition strategy.

Ms. Durant possesses expertise in a number of business and legal disciplines,
including those related to mergers and acquisitions, technology licensing, and
software development and service contracts. Further, she is experienced in
providing legal counsel in the areas of small business development, securities
law matters and intellectual property safeguards. Ms. Durant is a member of the
California State Bar Association, having earned a Juris Doctor degree at
Northwestern School of Law at Lewis and Clark College. While completing her
final year of law school at Santa Clara University School of Law, Ms. Durant
received the Cali Excellence for the Future Award for excellent achievement in
the study of technology licensing. Ms. Durant also earned a Bachelor of Arts in
Economics from Connecticut College.

Vladimir Soskov is the Chief Technical Officer at Semotus. Prior to his
appointment to CTO of Semotus Solutions, Mr. Soskov served as Chief Software
Architect at Clickmarks, where he architected and developed the Clickmarks
Dynamic Content & State Recognition Engine. Previously, he was a Senior Software
Engineer at Wordwalla, where he developed groundbreaking bitmap font compression
algorithms (patent pending), and developed a full featured multilingual input &
display engine for over 60 languages. Prior to Wordwalla, Mr. Soskov was a
Principal Software Engineer for the team that wrote the Strawberry Prolog
compiler at Dobrev Ltd. He received his BS and MS in Mathematics from the
University of Sofia, Bulgaria where he went on to do academic work towards his
PhD in Higher Recursion Theory.

Ms. Odero, who formerly served as the VP on Engineering for Clickmarks, has
over ten years of experience as an engineering executive with focused expertise
in both hardware and software development. Prior to joining Clickmarks in 1999,
Ms. Odero worked on a team that developed the first ASIC router produced by the
Nokia IPRG division, and also co-founded and served on leadership team of a
technology start-up company. She possesses extensive knowledge of several
programming languages, including Java and C, as well as scripting, operating
systems, web design and many other software applications. Ms. Odero received
both a BS and MS in Electrical Engineering from Massachusetts Institute of
Technology

Robert Lanz has served on our Board and as Chairman of our Audit Committee
since November of 2001. Mr. Lanz has over 35 years of accounting and management
experience. Mr. Lanz is Managing Director of the Silicon Valley office of The
Financial Valuation Group, a business valuation consulting and litigation
services firm, Managing Partner of RAMP Partners, LLC, an accounting and
financial management consulting firm, and Senior Advisor to CBIZ Northern
California, an accounting and consulting firm. Mr. Lanz is a certified public
accountant and a graduate of UCLA. From 1998 to 2000, he was an audit and
business advisory partner with BDO Seidman, LLP, an international accounting and
consulting firm, and Meredith, Cardozo, Lanz & Chiu, LLP. Mr. Lanz previously
retired from KPMG LLP, after a 27-year career with that firm, where he was an
audit and SEC reviewing partner. He has also served as chief financial officer
of public and private companies, including a successful IPO.

Mark Williams joined our Board on August 1, 2002. Mr. Williams has over 20
years of accounting and management experience. Mr. Williams is currently a self
employed certified public accountant in the area of income tax. From 2000 to
2002 Mr. Williams was CFO and a General Partner of University Technology
Ventures. Previously, from 1990 to 2000, he was a Partner at Ruzzo, Scholl and
Murphy Accountancy Corporation. For eight years before that, Mr. Williams was a
tax manager at Price Waterhouse. Mr. Williams is a member of the American
Institute of Certified Public Accountants. Mr. Williams filed a Chapter 7
petition under the federal bankruptcy laws on September 29, 2004, which was
discharged on December 29, 2004.

Laurence W. Murray joined our Board on November 19, 2002. Mr. Murray has
over 30 years of experience in finance, accounting and management. Currently,
Mr. Murray is a professor of finance and international business at the
University of San Francisco, as well as a consultant, specializing in corporate
planning and financial strategy. Mr. Murray is also an adjunct professor of
international business at the University of California, Berkeley. Mr. Murray
holds a Ph.D. in economics and finance from Clark University, a M.S. in
economics from the University of Missouri, and a B.A. in business from the
University of Northern Iowa.

MEETINGS OF THE BOARD OF DIRECTORS AND BOARD COMMITTEES.

The Board currently consists of four members. The Board held four (4)
meetings during fiscal year 2006, and executed 20 unanimous consents in lieu of
holding directors' meetings. Each of the directors appointed at that time
attended all meetings of the Board, except Mr. Murray, who missed one meeting.
During fiscal year 2006, the non-

management directors have met in executive sessions without the presence of
management as required from time to time.

Our Board has not adopted a formal policy regarding directors' attendance
at our annual meeting of the stockholders. However, our directors are strongly
encouraged to attend the Annual Meeting. All of our directors attended our 2005
Annual Meeting.

The standing committees of the Board include an Audit Committee, a
Compensation Committee and a Nominating and Corporate Governance Committee. The
Nominating and Corporate Governance Committee was formed in November of 2003.
All members of the Audit Committee, Compensation Committee and Nominating and
Corporate Governance Committee are independent directors as such term is defined
in the applicable listing standards imposed by the American Stock Exchange.

AUDIT COMMITTEE. The Audit Committee currently consists of Messrs. Lanz,
Williams and Murray, with Mr. Lanz as its chairman. Mr. Lanz was elected to the
Board and to the Audit Committee in November of 2001. The Board has considered
whether the members of the Audit Committee satisfy the additional "independence"
and "financial literacy" requirements for Audit Committee members as set forth
in the Item 7(d)(3)(iv) of Schedule 14A and as adopted in the applicable listing
standards imposed by the American Stock Exchange. The Board has concluded that
all current members of the Audit Committee satisfy these heightened independence
requirements. The Board has also determined that Mr. Lanz is an audit committee
financial expert and is independent of management, as required under Section 407
of the Sarbanes-Oxley Act of 2002. The Board believes that Mr. Lanz is qualified
to be an "audit committee financial expert".

The Audit Committee's responsibilities are described in a written charter
adopted by the Board of Directors. The Audit Committee Charter was amended in
fiscal year 2005. The Audit Committee serves as the representative of the Board
for the general oversight of our affairs in the area of financial accounting and
reporting, and its underlying internal controls. The Audit Committee makes
recommendations to the Board concerning the engagement of independent
accountants; reviews with the independent accountants the plans, scope and
results of the audit engagement; approves professional services provided by the
independent accountants; considers the range of audit and non-audit fees;
verifies that auditors are independent of management and are objective in their
findings; reviews the annual CPA audit and recommendations of internal controls
and related management responses; reviews the audit reports with management and
the auditor; oversees the internal audit function and the accounting and
financial reporting processes of our company; and monitors management's efforts
to correct deficiencies described in any audit examination.

The Audit Committee has also established procedures for (i) the receipt,
retention and treatment of complaints received by our company regarding
accounting, internal accounting controls, or auditing matters, and (ii) the
confidential, anonymous submission by employees of our company concerns
regarding questionable accounting or auditing matters.

The Audit Committee held a total of five meetings during fiscal year 2006,
which were attended by all of the Audit Committee members appointed at that
time, except Laurence Murray who missed two audit committee meetings. A report
of the Audit Committee which discusses the activities of the Audit Committee in
more detail can be found on page __ of this proxy statement. The Audit Committee
Charter, as amended, is available on our website at www.semotus.com, the content
of which website is not incorporated by reference into, or considered a part of,
this document.

COMPENSATION COMMITTEE. The Compensation Committee currently consists of
Messrs. Lanz, Williams and Murray, with Mr. Murray as its chairman. All members
of the Compensation Committee are independent directors, as defined under the
applicable listing standards imposed by the American Stock Exchange. The
Compensation Committee determines the compensation of senior executive officers
(such as the Chief Executive Officer and Chief Financial Officer), subject, if
the Board so directs, to the Board's further ratification of the compensation;
determines the compensation for other officers or delegates such determinations
to the chief executive officer; grants options, stock or other equity interests
under our stock option or other equity-based incentive plans; and administers
those plans and, where such plans specify, our other employee benefit plans.

The Compensation Committee held one meeting during fiscal year 2006 and
executed one unanimous consent in lieu of holding a committee meeting. A copy of
the Charter of the Compensation Committee, which became effective in February of
2003, is available on our website at www.semotus.com, the content of which
website is not incorporated by reference into, or considered a part of, this
document.

NOMINATING AND CORPORATE GOVERNANCE COMMITTEE. The Nominating and Corporate
Governance Committee was formed in November of 2003. The Nominating and
Corporate Governance Committee currently consists of Messrs. Lanz, Williams and
Murray, with Mr. Williams as its chairman. All members of the Nominating and
Corporate Governance Committee are independent directors, as defined under the
applicable listing standards imposed by the American Stock Exchange.

The Nominating and Corporate Governance Committee assists the Board in
identifying qualified individuals to become board members, in determining the
composition of the board of directors and its committees, in monitoring a
process to assess board effectiveness and in developing and implementing the
Company's corporate governance guidelines.

The Nominating and Corporate Governance Committee held one meeting during
fiscal year 2006. A copy of the Charter of the Nominating and Corporate
Governance Committee, which became effective in November of 2003, is available
on our website at www.semotus.com, the content of which website is not
incorporated by reference into, or considered a part of, this document.

DIRECTOR NOMINEE CRITERIA AND PROCESS

The Nominating and Corporate Governance Committee is responsible for
reviewing and recommending nominees to the Board, which is responsible for
approving director candidates for nomination by the Board. The Nominating and
Corporate Governance Committee unanimously recommended the nominees for election
to the Board for the 2006 Annual Meeting. The Committee's objective, pursuant to
its charter, is to assist the Board in identifying qualified individuals to
become Board members, in determining the composition of the Board and its
committees, in monitoring a process to assess Board effectiveness and in
developing and implementing our corporate governance guidelines.

In considering director candidates, the Committee will consider, among
other things, those individuals who have the highest personal and professional
integrity, who shall have demonstrated exceptional ability and judgment and who
shall be most effective, in conjunction with the other nominees to the Board, in
collectively serving the long-term interests of the stockholders. Our Nominating
and Corporate Governance Committee did not pay a third party to identify or
evaluate potential nominees in fiscal 2005 or with respect to the current slate.
However, the Committee will take suggestions from many sources, including, but
not limited to, stockholders or third-party search firms.

STOCKHOLDER NOMINATIONS FOR DIRECTORS

Our stockholders may submit candidates for consideration as director
nominees. All candidate submissions must comply with the requirements of our
certificate of incorporation and bylaws, as well as the requirements of the
Securities Exchange Act of 1934. Our Bylaws contain certain time limitations and
procedures for stockholder nominations of directors. Any stockholder who intends
to bring before an annual meeting of stockholders any nomination for director
shall deliver a written notice to the Secretary of our company setting forth
specified information with respect to the stockholder and additional information
as would be required under Regulation 14A under the Exchange Act and Rule 14a-8
for a proxy statement used to solicit proxies for such nominee. In general, the
notice must be delivered not less than one hundred and twenty (120) days prior
to the first anniversary of the preceding year's mailing date of the annual
meeting's proxy statement.

DIRECTOR COMPENSATION

Except for reimbursement for reasonable travel expenses relating to
attendance at Board meetings and discretionary grants of stock options, our
directors are not compensated for their services as directors. Directors who are
employees are eligible to participate in our equity incentive plan. In fiscal
year 2006, we did not grant any additional options to any directors.

The following table identifies all stock options that we have granted to
our current non-employee directors since June 1996.

NUMBER OF
NON-EMPLOYEE SHARES UNDERLYING EXERCISE GRANT DATE /
DIRECTOR OPTIONS (#) PRICE ($) EXPIRATION DATE

Robert Lanz 10,000 (1) $ 0.15 11/5/2001 / 11/5/2006
10,000 (2) $ 0.15 6/3/2002 / 6/3/2007
30,000 (3) $ 0.14 2/24/2003 / 2/24/2008
10,000 (3) $ 0.24 11/5/2004 / 11/5/2008
Mark Williams 10,000 (4) $ 0.15 8/1/2002 / 8/1/2007
10,000 (3) $ 0.12 4/1/2003 / 4/1/2008
10,000 (3) $ 0.24 11/5/2004 / 11/5/2008
Laurence Murray 10,000 (5) $ 0.17 11/19/2002 / 11/19/2007
10,000 (3) $ 0.14 2/24/2003 / 2/24/2008
10,000 (3) $ 0.24 11/5/2004 / 11/5/2008

(1) These options were repriced on November 6, 2001, May 16, 2002 and again on
October 23, 2002, and are all exercisable as of March 31, 2003.
(2) These options were repriced on October 23, 2002, and vest as to 50% one
year from the date of grant, or on June 3, 2003, and the remaining 50% vest
one year thereafter, or on June 3, 2004.
(3) These options vest monthly as to 1/24th for two years and have an exercise
price equal to the closing market price on the date of grant.
(4) These options are all immediately exercisable as of the grant date, and
were repriced on October 23, 2002.
(5) These options are all immediately exercisable as of the grant date, and
have an exercise price equal to the closing market price on the date of
grant, November 19, 2002.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION. The following table sets forth the compensation for
the fiscal years ended March 31 2004, 2005 and 2006 awarded to, earned by or
paid to our chief executive officer and the four other most highly paid
executive officers, as applicable. We refer to these officers as the "Named
Executive Officers."

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION LONG TERM COMPENSATION

SECURITIES
OTHER ANNUAL RESTRICTED UNDERLYING
FISCAL COMPENSATION STOCK OPTIONS/ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($) (1) AWARDS (2) WARRANTS (#) COMPENSATION ($)
- ---------------------------------- ------ ---------- --------- ------------ ---------- ------------ ----------------

Anthony LaPine 2006 $ 234,000 -- $ 12,000 -- -- $ 3,392(6)
Chairman and Chief 2005 $ 216,000 -- $ 11,949 -- -- $ 3,392(6)
Executive Officer 2004 $ 216,000 -- $ 9,022 -- 500,000(5) $ 81,175(6)(7)

- ---------------------------------- ------ ---------- --------- ------------ ---------- ------------ ----------------
Pamela LaPine 2006 $ 120,800 -- $ 12,000 -- -- --
President (3) 2005 $ 112,050 -- $ 11,969 -- -- --
2004 $ 108,000 -- $ 13,995 -- 40,000(5) --

- ---------------------------------- ------ ---------- --------- ------------ ---------- ------------ ----------------
Vladimir Soskov 2006 $ 117,509 -- -- -- 70,000 --
Chief Technical Officer

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

- ---------------------------------- ------ ---------- --------- ------------ ---------- ------------ ----------------
Christine Odero 2006 $ 108,087 -- -- $ 3,492 150,000 --
Vice President of
Engineering

- ---------------------------------- ------ ---------- --------- ------------ ---------- ------------ ----------------
Umair Khan 2006 $ 143,905 -- -- $ 14,278 380,000 --
Chief Operating Officer (4)
- ---------------------------------- ------ ---------- --------- ------------ ---------- ------------ ----------------

(1) Represents automobile allowances and / or mileage reimbursements.

(2) On June 23, 2005 we granted shares of restricted common stock to certain
named executive officers as follows: Ms. Odero - 8,953 shares and Mr. Khan
- 36,609 shares. All such shares vested immediately. If we were to pay
dividends on our common stock, the holders of the restricted shares would
be eligible to receive such dividends. The values shown in the above table
are based on the closing price of $0.39 per share for our common stock on
the date of grant, June 23, 2005, as reported by Amex. As of March 31,
2006, these shares had the following values, based on the closing price of
our common stock of $0.21 per share on March 31, 2006, the last trading day
of the year, as reported by Amex: Mr. Khan - $7,688; Ms. Odero - $1,880.

Subsequently, on June 23, 2006, we granted additional shares of restricted
common stock to certain named executive officers as follows: Mr. Khan -
44,391; Ms. Odero - 24,047 shares and Mr. Soskov - 10,000 shares. On June
23, 2006, these shares had the following values, based on the closing price
of our common stock of $0.18 per share on the date of grant, as reported by
Amex: Mr. Khan - $7,990; Ms. Odero - $4,328 and Mr. Soskov - $1,800.

The restricted shares as listed above in this Footnote and Mr. LaPine's
shares, as listed in the Beneficial Ownership Table on page ___ of this
proxy statement are the only restricted shares currently owned by the Named
Executive Officers.

(3) Ms. LaPine was Executive Vice President of Sales and Marketing during our
fiscal years 2004, 2005 and part of FY2006. On December 14, 2005 she was
appointed President.

(4) Mr. Khan was President of Clickmarks, Inc., one of our wholly owned
subsidiary companies, from the date we acquired Clickmarks, June 23, 2005.
On December 14, 2005, Mr. Khan also became our Chief Operating Officer. On
May 5, 2006 Mr. Khan resigned from both of these positions and was
appointed to our Advisory Board. As of June 5, 2006, one month after his
resignation, his warrant to purchase 380,000 shares of our common stock at
$0.39 per share terminated because it was not exercised. On June 23, 2006,
Mr. Khan was issued additional shares of restricted common stock as part of
his severance arrangement and certain transition assistance - see Footnote
2 above for details.

(5) Represents new options granted to purchase shares of common stock under the
Company's 1996 Stock Option Plan during fiscal year 2004, 400,000 of which
were granted on May 16, 2003 to Anthony LaPine, 100,000 of which were
granted on July 27, 2003 to Anthony LaPine, and 40,000 of which were
granted to Pamela LaPine on July 24, 2003.

(6) RRepresents premiums paid for a life insurance policy taken out by the
Company on Mr. LaPine.

(7) $77,783 of this total amount represents the Company's forgiveness of
certain loans to Anthony LaPine for the purchase of stock; these promissory
notes did not result in the Company lending cash to Mr. LaPine.

STOCK OPTION/WARRANT GRANTS. No stock options were granted in fiscal year
2006 to any of the Named Executive Officers. The following table provides
information on warrants granted in fiscal year 2006 to each of the Named
Executive Officers. All warrants were granted at fair market value of our common
stock on the date of grant.

NUMBER OF % OF TOTAL
SECURITIES OPTIONS/WARRANTS
UNDERLYING GRANTED TO EXERCISE
OPTIONS/WARRANTS EMPLOYEES IN PRICE PER EXPIRATION
NAME GRANTED FISCAL YEAR SHARE DATE
- ---------------- ---------------- ---------------- -------------- ----------
Umair Khan 380,000 22% $0.39 6/05/2006
- ---------------- ---------------- ---------------- -------------- ----------
Christine Odero 150,000 (1) 9% $0.39 6/23/2015
- ---------------- ---------------- ---------------- -------------- ----------
Vladimir Soskov 70,000 (1) 4% $0.39 6/23/2015
- ---------------- ---------------- ---------------- -------------- ----------

(1) These warrants became vested in full on June 23, 2006, and will expire ten
years from the date of grant, or, one month after employment terminates,
whichever is earlier.

AGGREGATE STOCK OPTION EXERCISES. The following table sets forth certain
information concerning individual exercises of stock options during the fiscal
year ended March 31, 2006, of which there were none, and the shares represented
by outstanding options held by each of the Named Executive Officers as of March
31, 2006.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES

SHARES VALUE NUMBER OF SHARES VALUE OF
ACQUIRED REALIZED UNDERLYING UNEXERCISED
ON UNEXERCISED OPTIONS IN-THE-MONEY
EXERCISE AT MARCH 31, 2005 OPTIONS
EXERCISABLE/ AT MARCH 31, 2005
UNEXERCISABLE EXERCISABLE/
UNEXERCISABLE (1)
NAME (#) ($) (#) ($)
Anthony N. LaPine -0- -0- 1,391,000 / -0- 35,640 / -0-
Pamela LaPine -0- -0- 425,000 / -0- 15,400 / -0-
Umair Kahn -0- -0- 332,500 / 47,500 -0-/-0-
Christine Odero -0- -0- 75,000 / 75,000 -0-/-0-
Vladimir Soskov -0- -0- 35,000 / 35,000 -0-/-0-

(1) Options are "in the money" to the extent the closing price of our common
stock on March 31, 2006 exceeded the exercise price of the options. The
value of unexercised options represents the difference between the exercise
price of net options and $0.21, which was the closing price of our common
stock on March 31, 2006.

STOCK OPTION PLANS

We currently have two authorized stock option plans, the 1996 Stock Option
Plan, as amended, which terminated in June of 2006, and the 2005 Stock Option
Plan, which will terminate in July of 2015. Descriptions of the two Stock Option
Plans are located under FootNote 10 of our Annual Report on Form 10-KSB, a copy
of which is included with this proxy statement.

SUMMARY INFORMATION CONCERNING STOCK OPTION PLANS

The following table sets forth certain information relating to our stock
option plans as of March 31, 2006:

EQUITY COMPENSATION PLAN INFORMATION

NUMBER OF
SECURITIES
REMAINING
AVAILABLE FOR
FUTURE ISSUANCE
UNDER EQUITY
WEIGHTED- COMPENSATION
NUMBER OF SECURITIES AVERAGE PLANS (EXCLUDING
TO BE ISSUED UPON EXERCISE PRICE SECURITIES
EXERCISE OF OF OUTSTANDING REFLECTED IN
OUTSTANDING OPTIONS OPTIONS COLUMN (a))
PLAN CATEGORY PLAN NAME (a) (b) (c)
- ------------------------- ----------------- ----------------- ----------------- -----------------

Equity Compensation The 1996 Stock 3,570,134 $ 0.28 371,166
plans approved by Option Plan
security holders
- ------------------------- ----------------- ----------------- ----------------- -----------------
The 2005 Stock
Option Plan -- -- 3,000,000
- ------------------------- ----------------- ----------------- ----------------- -----------------
Clickmarks Warrants (1) -- 1,000,000 $ 0.39 --
- ------------------------- ----------------- ----------------- ----------------- -----------------
- ------------------------- ----------------- ----------------- ----------------- -----------------
TOTAL 4,570,134 $ 0.30 3,371,166
- ------------------------- ----------------- ----------------- ----------------- -----------------

(1) As part of the acquisition of Clickmarks, Inc., various Clickmarks employees
were retained by our Company. As a hiring and retention incentive, in lieu of
issuing stock options under the Company's stock option plan, we issued warrants
to this group of employees to purchase up to a total of 1,000,000 shares of our
common stock at an exercise price of $0.39 per share, which was the closing
price of our common stock on June 23, 2005, the date the acquisition closed and
their date of hire, vesting over a one year period and having a ten year term.

INDEBTEDNESS OF DIRECTORS, OFFICERS AND OTHERS

Our directors, senior officers, and their associates were not indebted to
us or to any of our subsidiaries at any time since the beginning of our last
completed fiscal year.

EMPLOYMENT AGREEMENTS

The Company entered into a three-year employment agreement with Anthony LaPine,
our CEO, which became effective on May 1, 1996, and was extended to May 1, 2005.
The agreement automatically renews for one year terms unless notice is provided
by either party. As of May 1, 2006, no notice had been given by either party,
and therefore, the agreement has automatically renewed for an additional one
year term ending May 1, 2007. According to the agreement, Mr. LaPine receives a
base salary of $240,000 per year, plus discretionary increases in conformity
with the Company's standard review procedure. However, on May 1, 2002, Mr.
LaPine voluntarily, along with all other employees with an annual salary of
$50,000 or greater, took a ten percent salary reduction. As of June 15, 2005 his
base salary was re-instated. However, as of March 31, 2006 Mr. LaPine took a
voluntary salary reduction in the amount of $24,000 per year. Mr. LaPine is also
given a car allowance that is not to exceed $1,000 a month. Mr. LaPine receives
health, dental and vision insurance, but contributes the same percentage towards
the monthly premium as all of our employees. If we terminate Mr. LaPine's
employment agreement prior to the end of the current term for reasons other than
disability, or if Mr. LaPine terminates the agreement for "good reason" as
defined in the agreement, we are required to continue paying the salary and
other benefits for the duration of the term of the agreement.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Effective May 1, 1996, the Company entered into a three year employment
agreement with our Chief Executive Officer, Anthony LaPine. This agreement was
extended to May 1, 2004. The agreement automatically renews for one year terms
unless notice is provided by either party. As of May 1, 2006, no notice had been
given by either party, and therefore, the agreement has automatically renewed
for an additional one year term ending May 1, 2007.

Effective January 2005 we entered into an independent contractor agreement
with a company located in Pakistan to provide us with certain engineering
services. This Pakistani company is partially owned by Mr. Umair Khan, who was
our Chief Operating Officer from December 14, 2005 to May 5, 2006 and who was
the Chairman and President of Clickmarks, Inc., one of our wholly owned
subsidiaries, from 1999 until May 5, 2006. Mr. Khan is currently on our Advisory
Board and as of June 30, 2006 holds 81,000 shares of our restricted common
stock.

AUDIT COMMITTEE REPORT

At the time of this Report, the Audit Committee of the Board
consists of three directors who are not employees of the Company or any of its
subsidiaries. The Board believes that all the members of our Committee are
"independent directors" as defined under applicable listing standards imposed by
the American Stock Exchange.

The Board has modified its written Audit Committee Charter. A copy of the
revised Charter is attached as Attachment A.

Our Committee has met and held discussions with management and the
independent auditors at the time of such meeting, LL Bradford & Company, LLC. As
a part of this process, we have:

o reviewed and discussed the audited financial statements with
management,

o discussed with the independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61 (Communication
with Audit Committees), and

o received the written disclosures and the letter from the independent
auditors required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and discussed with
the independent auditors their independence.

Based on the review and discussions referred to above, our committee
recommended to the Board that the audited financial statements be included in
the Company's Annual Report on Form 10-KSB for the fiscal year ended March 31,
2006, for filing with the SEC.

Audit Committee Of The Board Of Directors

/s/ Robert Lanz
Robert Lanz
CHAIRMAN

/s/ Mark Williams
Mark Williams

/s/ Laurence W. Murray
Laurence W. Murray

INFORMATION REGARDING THE FEES PAID TO L.L. BRADFORD & COMPANY, LLC
DURING THE YEAR ENDING MARCH 31, 2005

AUDIT FEES

The aggregate fees billed for professional services rendered to our Company
by L.L. Bradford & Company, LLC for the years ended March 31, 2005 and 2006
were:

------------------------------------ -------- --------
2005 2006
------------------------------------ -------- --------
Audit fees $ 36,000 $ 36,000
------------------------------------ -------- --------
Audit-related fees:
------------------------------------ -------- --------
SEC filings review and consent -- --
------------------------------------ -------- --------
Total audit and audit-related fees $ 36,000 $ 36,000
------------------------------------ -------- --------
Tax fees -- --
------------------------------------ -------- --------
All other fees -- --
------------------------------------ -------- --------
------------------------------------ -------- --------
Total fees $ 36,000 $ 36,000
------------------------------------ -------- --------

The aggregate fees billed for all audit-related services rendered by L.L.
Bradford & Company, LLC for the years ended March 31, 2005 and 2006 (see chart
above under heading "Audit-related fees") related to the review of various SEC
filings and correspondence, such as Form S-3s. No other professional services
were rendered or fees were billed by L.L. Bradford & Company, LLC for the most
recent fiscal year or for the year ending March 31, 2005.

The Audit Committee has adopted policies and procedures for the
pre-approval of the above fees. All requests for services to be provided by the
Company's independent accountants are submitted to the Audit Committee. Requests
for all non-audit related services require pre-approval form the Audit
Committee.

CORPORATE GOVERNANCE INFORMATION

Stockholders can access our corporate governance information, including our
Code of Ethics for Principal Executive Office and Senior Financial Officers and
the charters of the Audit Committee, Compensation Committee, and Nominating and
Corporate Governance Committee, at our website, www.semotus.com , the content of
which website is not incorporated by, referenced into, or considered a part of,
this document.

ADDITIONAL INFORMATION

THE COMPANY'S 2006 ANNUAL REPORT ON FORM 10-KSB, INCLUDING FINANCIAL
STATEMENTS FOR THE YEAR ENDED MARCH 31, 2006, IS BEING DISTRIBUTED TO ALL
STOCKHOLDERS OF THE COMPANY TOGETHER WITH THIS PROXY STATEMENT, IN SATISFACTION
OF THE REQUIREMENTS OF THE SECURITIES AND EXCHANGE COMMISSION. ADDITIONAL COPIES
OF THE REPORT, EXCEPT FOR EXHIBITS, ARE AVAILABLE AT NO CHARGE UPON REQUEST. TO
OBTAIN ADDITIONAL COPIES OF THE ANNUAL REPORT ON FORM 10-KSB, PLEASE CONTACT
SEMOTUS SOLUTIONS, 718 UNIVERSITY AVE., SUITE 202, LOS GATOS, CA 95032, OR AT
TELEPHONE NUMBER (408) 399-6120.

COMMUNICATING WITH THE BOARD OF DIRECTORS

The Board does not currently have a formal process for security holders to
send communications to the Board. We, however, encourage stockholders to
communicate directly with the Board as a whole, with non-management directors or
with specified individual directors, by sending correspondence to the Secretary
at 718 University Ave., Suite 202, Los Gatos, CA 95032.

Under our Company's Bylaws, stockholders may propose business to be brought
before an annual meeting. In order for a stockholder to submit a proposal for
consideration at our annual meeting, the stockholder must fulfill

the requirements set forth in our by-laws and Rule 14a-8 under the Securities
Exchange Act of 1934 setting forth specified information with respect to the
stockholder and additional information as would be required under Regulation 14A
under the Exchange Act and Rule 14a-8 for a proxy statement used to solicit
proxies for such nominee. In general, the notice must be delivered not less than
one hundred and twenty (120) days prior to the first anniversary of the
preceding year's mailing date of the annual meeting's proxy statement.

If you intend to propose any matter for action at our 2007 Annual Meeting
of Stockholders and wish to have the proposal included in our proxy statement,
you must submit your proposal to the Secretary of Semotus Solutions at 718
University Ave., Suite 202, Los Gatos, CA 95032, not later than 5:00 p.m.
Pacific Standard Time on or before April 8, 2007. Please note that proposals
must comply with all of the requirements of Rule 14a-8 under the Securities
Exchange Act of 1934. Only then can we consider your proposal for inclusion in
our proxy statement and proxy relating to the 2007 Annual Meeting. We will be
able to use proxies you give us for the next year's meeting to vote for or
against any stockholder proposal that is not included in the proxy statement at
our discretion unless the proposal is submitted to us on or before April 8,
2007.

/s/ Anthony N. LaPine
Anthony N. LaPine
CHIEF EXECUTIVE OFFICER

Los Gatos, California
July 25, 2006

PROXY

SEMOTUS SOLUTIONS, INC.
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Anthony N. LaPine with the power to appoint
his substitute, and hereby authorizes him to represent and to vote as designated
below, all the shares of common stock of Semotus Solutions, Inc. held of record
by the undersigned on July 24, 2006, at the Annual Meeting of Shareholders to be
held at the Company's offices located at 718 University Ave., Suite 202, Los
Gatos, CA 95032, on Thursday, September 21, 2006, at 2:30 p.m., Pacific Time or
any adjournment thereof.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1, 2, 3 and 4.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF SEMOTUS
SOLUTIONS, INC. PLEASE SIGN AND RETURN THIS PROXY IN THE ENCLOSED PRE-ADDRESSED
ENVELOPE. THE GIVING OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF
YOU ATTEND THE MEETING.

SHARES OF COMPANY STOCK REPRESENTED BY THIS PROXY WILL BE VOTED AT THE
MEETING IN ACCORDANCE WITH THE SHAREHOLDER'S SPECIFICATIONS ON THE REVERSE SIDE.
THIS PROXY CONFERS DISCRETIONARY AUTHORITY IN RESPECT TO MATTERS NOT KNOWN OR
DETERMINED AT THE TIME OF THE MAILING OF THE NOTICE OF THE ANNUAL MEETING OF
SHAREHOLDERS TO THE UNDERSIGNED.

The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Shareholders, Proxy Statement and Annual Report on Form 10-KSB.

(To be signed on the other side)

SEMOTUS SOLUTIONS, INC.
718 UNIVERSITY AVE.
SUITE 202
LOS GATOS, CA 95032
ATTN: TALI DURANT

VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic
delivery of information up until 11:59 P.M. Eastern Time the day before the
cut-off date or meeting date. Have the enclosed proxy card in hand when you
access the web site. You will be prompted to enter a 12-digit Control Number to
obtain your records and to create an electronic voting instruction form.

VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59
P.M. Eastern Time the day before the cut-off date or meeting date. Have the
enclosed proxy card in hand when you call. You will be prompted to enter the
12-digit Control Number and then follow the simple instructions the Vote Voice
provides you.

VOTE BY MAIL
Mark, sign, and date the enclosed proxy card and return it in the postage-paid
envelope we have provided or return it to Semotus Solutions, Inc., c/o ADP, 51
Mercedes Way, Edgewood, NY 11717.

TO VOTE, MARK BLOCKS BELOW IN BLUE SEMTS1 KEEP THIS PORTION FOR YOUR
OR BLACK INK AS FOLLOWS: RECORDS DETACH AND RETURN
THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

SEMOTUS SOLUTIONS, INC.

1. Election of four (4) Directors of the Company to serve until the next
Annual Meeting of Shareholders and until their successors have been duly
elected and qualified:

01) Anthony N. LaPine, 02) Robert Lanz, 03) Mark Williams,
04) Laurence W. Murray

For Withhold For All To withhold authority to vote, mark "For All
All All Except: Except" and write the nominee's number on
[_] [_] [_] the line below.
____________________________________________

VOTE ON PROPOSALS

2. The ratification of the appointment of L.L. Bradford & Company, as the
Company's independent accountants for the fiscal year ending March 31, 2007.

For Against Abstain
[_] [_] [_]

3. The approval of an amendment to the Company's Amended Articles of
Incorporation to effect a reverse stock split in a ratio ranging from
one-for-ten to one-for-twenty of all its issued, outstanding and authorized
shares of its common stock.

For Against Abstain
[_] [_] [_]

4. The approval of an amendment to the Company's Amended Articles of
Incorporation to increase the number of authorized shares of common stock
from 50,000,000 to 150,000,000 (on a pre-split basis).

For Against Abstain
[_] [_] [_]

5. The transaction of such other business as may properly come before the
meeting or any adjournment thereof.

Signature(s) should agree with the name(s) stenciled hereon. Executors,
administrators, trustees, guardians and attorneys should indicate when
signing. Attorneys should submit powers of attorney.

- ----------------------------------------- --------------------------------
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date

APPENDIX A

RIGHTS OF DISSENTING OWNERS

NRS 92A.300 DEFINITIONS. As used in NRS 92A.300 to 92A.500, inclusive,
unless the context otherwise requires, the words and terms defined in NRS
92A.305 to 92A.335, inclusive, have the meanings ascribed to them in those
sections.
(Added to NRS by 1995, 2086)

NRS 92A.305 "BENEFICIAL STOCKHOLDER" DEFINED. "Beneficial stockholder"
means a person who is a beneficial owner of shares held in a voting trust or by
a nominee as the stockholder of record.
(Added to NRS by 1995, 2087)

NRS 92A.310 "CORPORATE ACTION" DEFINED. "Corporate action" means the action
of a domestic corporation.
(Added to NRS by 1995, 2087)

NRS 92A.315 "DISSENTER" DEFINED. "Dissenter" means a stockholder who is
entitled to dissent from a domestic corporation's action under NRS 92A.380 and
who exercises that right when and in the manner required by NRS 92A.400 to
92A.480, inclusive.
(Added to NRS by 1995, 2087; A 1999, 1631)

NRS 92A.320 "FAIR VALUE" DEFINED. "Fair value," with respect to a
dissenter's shares, means the value of the shares immediately before the
effectuation of the corporate action to which he objects, excluding any
appreciation or depreciation in anticipation of the corporate action unless
exclusion would be inequitable.
(Added to NRS by 1995, 2087)

NRS 92A.325 "STOCKHOLDER" DEFINED. "Stockholder" means a stockholder of
record or a beneficial stockholder of a domestic corporation.
(Added to NRS by 1995, 2087)

NRS 92A.330 "STOCKHOLDER OF RECORD" DEFINED. "Stockholder of record" means
the person in whose name shares are registered in the records of a domestic
corporation or the beneficial owner of shares to the extent of the rights
granted by a nominee's certificate on file with the domestic corporation.
(Added to NRS by 1995, 2087)

NRS 92A.335 "SUBJECT CORPORATION" DEFINED. "Subject corporation" means the
domestic corporation which is the issuer of the shares held by a dissenter
before the corporate action creating the dissenter's rights becomes effective or
the surviving or acquiring entity of that issuer after the corporate action
becomes effective.
(Added to NRS by 1995, 2087)

NRS 92A.340 COMPUTATION OF INTEREST. Interest payable pursuant to NRS
92A.300 to 92A.500, inclusive, must be computed from the effective date of the
action until the date of payment, at the average rate currently paid by the
entity on its principal bank loans or, if it has no bank loans, at a rate that
is fair and equitable under all of the circumstances.
(Added to NRS by 1995, 2087)

NRS 92A.350 RIGHTS OF DISSENTING PARTNER OF DOMESTIC LIMITED PARTNERSHIP.
A partnership agreement of a domestic limited partnership or, unless otherwise
provided in the partnership agreement, an agreement of merger or exchange, may
provide that contractual rights with respect to the partnership interest of a
dissenting general or limited partner of a domestic limited partnership are
available for any class or group of partnership interests in connection with any
merger or exchange in which the domestic limited partnership is a constituent
entity.
(Added to NRS by 1995, 2088)

NRS 92A.360 RIGHTS OF DISSENTING MEMBER OF DOMESTIC LIMITED-LIABILITY
COMPANY. The articles of organization or operating agreement of a domestic
limited-liability company or, unless otherwise provided in the articles of
organization or operating agreement, an agreement of merger or exchange, may
provide that contractual

rights with respect to the interest of a dissenting member are available in
connection with any merger or exchange in which the domestic limited-liability
company is a constituent entity.
(Added to NRS by 1995, 2088)

NRS 92A.370 RIGHTS OF DISSENTING MEMBER OF DOMESTIC NONPROFIT CORPORATION.
1. Except as otherwise provided in subsection 2, and unless otherwise
provided in the articles or bylaws, any member of any constituent domestic
nonprofit corporation who voted against the merger may, without prior notice,
but within 30 days after the effective date of the merger, resign from
membership and is thereby excused from all contractual obligations to the
constituent or surviving corporations which did not occur before his resignation
and is thereby entitled to those rights, if any, which would have existed if
there had been no merger and the membership had been terminated or the member
had been expelled.
2. Unless otherwise provided in its articles of incorporation or bylaws,
no member of a domestic nonprofit corporation, including, but not limited to, a
cooperative corporation, which supplies services described in chapter 704 of NRS
to its members only, and no person who is a member of a domestic nonprofit
corporation as a condition of or by reason of the ownership of an interest in
real property, may resign and dissent pursuant to subsection 1.
(Added to NRS by 1995, 2088)

NRS 92A.380 RIGHT OF STOCKHOLDER TO DISSENT FROM CERTAIN CORPORATE ACTIONS
AND TO OBTAIN PAYMENT FOR SHARES.
1. Except as otherwise provided in NRS 92A.370 and 92A.390, any stockholder
is entitled to dissent from, and obtain payment of the fair value of his shares
in the event of any of the following corporate actions:
(a) Consummation of a conversion or plan of merger to which the domestic
corporation is a constituent entity:
(1) If approval by the stockholders is required for the conversion or
merger by NRS 92A.120 to 92A.160, inclusive, or the articles of incorporation,
regardless of whether the stockholder is entitled to vote on the conversion or
plan of merger; or
(2) If the domestic corporation is a subsidiary and is merged with its
parent pursuant to NRS 92A.180.
(b) Consummation of a plan of exchange to which the domestic corporation is
a constituent entity as the corporation whose subject owner's interests will be
acquired, if his shares are to be acquired in the plan of exchange.
(c) Any corporate action taken pursuant to a vote of the stockholders to
the extent that the articles of incorporation, bylaws or a resolution of the
board of directors provides that voting or nonvoting stockholders are entitled
to dissent and obtain payment for their shares.
(d) Any corporate action not described in paragraph (a), (b) or (c) that
will result in the stockholder receiving money or scrip instead of fractional
shares.
2. A stockholder who is entitled to dissent and obtain payment pursuant to
NRS 92A.300 to 92A.500, inclusive, may not challenge the corporate action
creating his entitlement unless the action is unlawful or fraudulent with
respect to him or the domestic corporation.
(Added to NRS by 1995, 2087; A 2001, 1414, 3199; 2003, 3189; 2005, 2204)

NRS 92A.390 LIMITATIONS ON RIGHT OF DISSENT: STOCKHOLDERS OF CERTAIN
CLASSES OR SERIES; ACTION OF STOCKHOLDERS NOT REQUIRED FOR PLAN OF MERGER.
1. There is no right of dissent with respect to a plan of merger or
exchange in favor of stockholders of any class or series which, at the record
date fixed to determine the stockholders entitled to receive notice of and to
vote at the meeting at which the plan of merger or exchange is to be acted on,
were either listed on a national securities exchange, included in the national
market system by the National Association of Securities Dealers, Inc., or held
by at least 2,000 stockholders of record, unless:
(a) The articles of incorporation of the corporation issuing the shares
provide otherwise; or
(b) The holders of the class or series are required under the plan of
merger or exchange to accept for the shares anything except:
(1) Cash, owner's interests or owner's interests and cash in lieu of
fractional owner's interests of:
(I) The surviving or acquiring entity; or
(II) Any other entity which, at the effective date of the plan of
merger or exchange, were either listed on a national securities exchange,
included in the national market system by the National Association of Securities
Dealers, Inc., or held of record by a least 2,000 holders of owner's interests
of record; or
(2) A combination of cash and owner's interests of the kind described
in sub-subparagraphs (I) and (II) of subparagraph (1) of paragraph (b).

2. There is no right of dissent for any holders of stock of the surviving
domestic corporation if the plan of merger does not require action of the
stockholders of the surviving domestic corporation under NRS 92A.130.
(Added to NRS by 1995, 2088)

NRS 92A.400 LIMITATIONS ON RIGHT OF DISSENT: ASSERTION AS TO PORTIONS ONLY
TO SHARES REGISTERED TO STOCKHOLDER; ASSERTION BY BENEFICIAL STOCKHOLDER.
1. A stockholder of record may assert dissenter's rights as to fewer than
all of the shares registered in his name only if he dissents with respect to all
shares beneficially owned by any one person and notifies the subject corporation
in writing of the name and address of each person on whose behalf he asserts
dissenter's rights. The rights of a partial dissenter under this subsection are
determined as if the shares as to which he dissents and his other shares were
registered in the names of different stockholders.
2. A beneficial stockholder may assert dissenter's rights as to shares held
on his behalf only if:
(a) He submits to the subject corporation the written consent of the
stockholder of record to the dissent not later than the time the beneficial
stockholder asserts dissenter's rights; and
(b) He does so with respect to all shares of which he is the beneficial
stockholder or over which he has power to direct the vote.
(Added to NRS by 1995, 2089)

NRS 92A.410 NOTIFICATION OF STOCKHOLDERS REGARDING RIGHT OF DISSENT.
1. If a proposed corporate action creating dissenters' rights is submitted
to a vote at a stockholders' meeting, the notice of the meeting must state that
stockholders are or may be entitled to assert dissenters' rights under NRS
92A.300 to 92A.500, inclusive, and be accompanied by a copy of those sections.
2. If the corporate action creating dissenters' rights is taken by written
consent of the stockholders or without a vote of the stockholders, the domestic
corporation shall notify in writing all stockholders entitled to assert
dissenters' rights that the action was taken and send them the dissenter's
notice described in NRS 92A.430.
(Added to NRS by 1995, 2089; A 1997, 730)

NRS 92A.420 PREREQUISITES TO DEMAND FOR PAYMENT FOR SHARES.
1. If a proposed corporate action creating dissenters' rights is submitted
to a vote at a stockholders' meeting, a stockholder who wishes to assert
dissenter's rights:
(a) Must deliver to the subject corporation, before the vote is taken,
written notice of his intent to demand payment for his shares if the proposed
action is effectuated; and
(b) Must not vote his shares in favor of the proposed action.
2. If a proposed corporate action creating dissenters' rights is taken by
written consent of the stockholders, a stockholder who wishes to assert
dissenters' rights must not consent to or approve the proposed corporate action.
3. A stockholder who does not satisfy the requirements of subsection 1 or 2
and NRS 92A.400 is not entitled to payment for his shares under this chapter.
(Added to NRS by 1995, 2089; A 1999, 1631; 2005, 2204)

NRS 92A.430 DISSENTER'S NOTICE: DELIVERY TO STOCKHOLDERS ENTITLED TO
ASSERT RIGHTS; CONTENTS.
1. The subject corporation shall deliver a written dissenter's notice to
all stockholders entitled to assert dissenters' rights.
2. The dissenter's notice must be sent no later than 10 days after the
effectuation of the corporate action, and must:
(a) State where the demand for payment must be sent and where and when
certificates, if any, for shares must be deposited;
(b) Inform the holders of shares not represented by certificates to what
extent the transfer of the shares will be restricted after the demand for
payment is received;
(c) Supply a form for demanding payment that includes the date of the
first announcement to the news media or to the stockholders of the terms of the
proposed action and requires that the person asserting dissenter's rights
certify whether or not he acquired beneficial ownership of the shares before
that date;
(d) Set a date by which the subject corporation must receive the demand
for payment, which may not be less than 30 nor more than 60 days after the date
the notice is delivered; and
(e) Be accompanied by a copy of NRS 92A.300 to 92A.500, inclusive.
(Added to NRS by 1995, 2089; A 2005, 2205)

NRS 92A.440 DEMAND FOR PAYMENT AND DEPOSIT OF CERTIFICATES; RETENTION OF
RIGHTS OF STOCKHOLDER.
1. A stockholder to whom a dissenter's notice is sent must:
(a) Demand payment;
(b) Certify whether he or the beneficial owner on whose behalf he is
dissenting, as the case may be, acquired beneficial ownership of the shares
before the date required to be set forth in the dissenter's notice for this
certification; and
(c) Deposit his certificates, if any, in accordance with the terms of the
notice.
2. The stockholder who demands payment and deposits his certificates, if
any, before the proposed corporate action is taken retains all other rights of a
stockholder until those rights are cancelled or modified by the taking of the
proposed corporate action.
3. The stockholder who does not demand payment or deposit his certificates
where required, each by the date set forth in the dissenter's notice, is not
entitled to payment for his shares under this chapter.
(Added to NRS by 1995, 2090; A 1997, 730; 2003, 3189)

NRS 92A.450 UNCERTIFICATED SHARES: AUTHORITY TO RESTRICT TRANSFER AFTER
DEMAND FOR PAYMENT; RETENTION OF RIGHTS OF STOCKHOLDER.
1. The subject corporation may restrict the transfer of shares not
represented by a certificate from the date the demand for their payment is
received.
2. The person for whom dissenter's rights are asserted as to shares not
represented by a certificate retains all other rights of a stockholder until
those rights are cancelled or modified by the taking of the proposed corporate
action.
(Added to NRS by 1995, 2090)

NRS 92A.460 PAYMENT FOR SHARES: GENERAL REQUIREMENTS.
1. Except as otherwise provided in NRS 92A.470, within 30 days after
receipt of a demand for payment, the subject corporation shall pay each
dissenter who complied with NRS 92A.440 the amount the subject corporation
estimates to be the fair value of his shares, plus accrued interest. The
obligation of the subject corporation under this subsection may be enforced by
the district court:
(a) Of the county where the corporation's registered office is located; or
(b) At the election of any dissenter residing or having its registered
office in this State, of the county where the dissenter resides or has its
registered office. The court shall dispose of the complaint promptly.
2. The payment must be accompanied by:
(a) The subject corporation's balance sheet as of the end of a fiscal year
ending not more than 16 months before the date of payment, a statement of income
for that year, a statement of changes in the stockholders' equity for that year
and the latest available interim financial statements, if any;
(b) A statement of the subject corporation's estimate of the fair value of
the shares;
(c) An explanation of how the interest was calculated;
(d) A statement of the dissenter's rights to demand payment under NRS
92A.480; and
(e) A copy of NRS 92A.300 to 92A.500, inclusive.
(Added to NRS by 1995, 2090)

NRS 92A.470 PAYMENT FOR SHARES: SHARES ACQUIRED ON OR AFTER DATE OF
DISSENTER'S NOTICE.
1. A subject corporation may elect to withhold payment from a dissenter
unless he was the beneficial owner of the shares before the date set forth in
the dissenter's notice as the date of the first announcement to the news media
or to the stockholders of the terms of the proposed action.
2. To the extent the subject corporation elects to withhold payment, after
taking the proposed action, it shall estimate the fair value of the shares, plus
accrued interest, and shall offer to pay this amount to each dissenter who
agrees to accept it in full satisfaction of his demand. The subject corporation
shall send with its offer a statement of its estimate of the fair value of the
shares, an explanation of how the interest was calculated, and a statement of
the dissenters' right to demand payment pursuant to NRS 92A.480.
(Added to NRS by 1995, 2091)

NRS 92A.480 DISSENTER'S ESTIMATE OF FAIR VALUE: NOTIFICATION OF SUBJECT
CORPORATION; DEMAND FOR PAYMENT OF ESTIMATE.
1. A dissenter may notify the subject corporation in writing of his own
estimate of the fair value of his shares and the amount of interest due, and
demand payment of his estimate, less any payment pursuant to NRS 92A.460, or

reject the offer pursuant to NRS 92A.470 and demand payment of the fair value of
his shares and interest due, if he believes that the amount paid pursuant to NRS
92A.460 or offered pursuant to NRS 92A.470 is less than the fair value of his
shares or that the interest due is incorrectly calculated.
2. A dissenter waives his right to demand payment pursuant to this section
unless he notifies the subject corporation of his demand in writing within 30
days after the subject corporation made or offered payment for his shares.
(Added to NRS by 1995, 2091)

NRS 92A.490 LEGAL PROCEEDING TO DETERMINE FAIR VALUE: DUTIES OF SUBJECT
CORPORATION; POWERS OF COURT; RIGHTS OF DISSENTER.
1. If a demand for payment remains unsettled, the subject corporation
shall commence a proceeding within 60 days after receiving the demand and
petition the court to determine the fair value of the shares and accrued
interest. If the subject corporation does not commence the proceeding within the
60-day period, it shall pay each dissenter whose demand remains unsettled the
amount demanded.
2. A subject corporation shall commence the proceeding in the district
court of the county where its registered office is located. If the subject
corporation is a foreign entity without a resident agent in the State, it shall
commence the proceeding in the county where the registered office of the
domestic corporation merged with or whose shares were acquired by the foreign
entity was located.
3. The subject corporation shall make all dissenters, whether or not
residents of Nevada, whose demands remain unsettled, parties to the proceeding
as in an action against their shares. All parties must be served with a copy of
the petition. Nonresidents may be served by registered or certified mail or by
publication as provided by law.
4. The jurisdiction of the court in which the proceeding is commenced
under subsection 2 is plenary and exclusive. The court may appoint one or more
persons as appraisers to receive evidence and recommend a decision on the
question of fair value. The appraisers have the powers described in the order
appointing them, or any amendment thereto. The dissenters are entitled to the
same discovery rights as parties in other civil proceedings.
5. Each dissenter who is made a party to the proceeding is entitled to a
judgment:
(a) For the amount, if any, by which the court finds the fair value of his
shares, plus interest, exceeds the amount paid by the subject corporation; or
(b) For the fair value, plus accrued interest, of his after-acquired
shares for which the subject corporation elected to withhold payment pursuant to
NRS 92A.470.
(Added to NRS by 1995, 2091)

NRS 92A.500 LEGAL PROCEEDING TO DETERMINE FAIR VALUE: ASSESSMENT OF COSTS
AND FEES.
1. The court in a proceeding to determine fair value shall determine all
of the costs of the proceeding, including the reasonable compensation and
expenses of any appraisers appointed by the court. The court shall assess the
costs against the subject corporation, except that the court may assess costs
against all or some of the dissenters, in amounts the court finds equitable, to
the extent the court finds the dissenters acted arbitrarily, vexatiously or not
in good faith in demanding payment.
2. The court may also assess the fees and expenses of the counsel and
experts for the respective parties, in amounts the court finds equitable:
(a) Against the subject corporation and in favor of all dissenters if the
court finds the subject corporation did not substantially comply with the
requirements of NRS 92A.300 to 92A.500, inclusive; or
(b) Against either the subject corporation or a dissenter in favor of any
other party, if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously or not in good faith with
respect to the rights provided by NRS 92A.300 to 92A.500, inclusive.
3. If the court finds that the services of counsel for any dissenter were
of substantial benefit to other dissenters similarly situated, and that the fees
for those services should not be assessed against the subject corporation, the
court may award to those counsel reasonable fees to be paid out of the amounts
awarded to the dissenters who were benefited.
4. In a proceeding commenced pursuant to NRS 92A.460, the court may assess
the costs against the subject corporation, except that the court may assess
costs against all or some of the dissenters who are parties to the proceeding,
in amounts the court finds equitable, to the extent the court finds that such
parties did not act in good faith in instituting the proceeding.
5. This section does not preclude any party in a proceeding commenced
pursuant to NRS 92A.460 or 92A.490 from applying the provisions of N.R.C.P. 68
or NRS 17.115.
(Added to NRS by 1995, 2092)