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 (Amendment No.   )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_]  Preliminary Proxy Statement [_]  Soliciting Material Under Rule 14a-12

[_]  Confidential, For Use of the
       Commission Only (as permitted by
       Rule 14a-6(e)(2))

[X]  Definitive Proxy Statement

[_]  Definitive Additional Materials

Semotus Solutions, Inc.
(Name of Registrant as Specified In Its Charter)

——————————————————————————————
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

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[_] 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.

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(4) Date Filed:

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SEMOTUS SOLUTIONS, INC.
1735 Technology Drive, Suite 790
San Jose, California 95110

(408) 367-1700

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD SEPTEMBER 13, 2001

Dear Stockholder:

     You are cordially invited to attend the Annual Meeting of Stockholders of Semotus Solutions, Inc. We will be holding the Annual Meeting at the Company’s offices at 1735 Technology Drive, Suite 790, San Jose, California 95110, on Thursday, September 13, 2001, at 2:00 p.m., Pacific Time.

     At the 2001 Annual Meeting, we will ask you to:

     1.  Elect five (5) directors to the Board of Directors of the Company to serve for a one-year term;

     2.  Ratify the appointment of BDO Seidman LLP as the Company’s independent accountants for the fiscal year ending March 31, 2002; and

     3.  Approve an amendment to the Company’s 1996 Stock Option Plan to increase the number of shares of common stock issuable upon the exercise of stock options granted under the Plan from 3,500,000 to 4,345,000 shares; and

     4.  Transact such other business as may properly come before the meeting or any adjournment thereof.

Enclosed with this letter is a Proxy Statement, a proxy card and a return envelope. Also enclosed is Semotus Solutions’ Annual Report on Form 10-KSB for the fiscal year ended March 31, 2001.

     Only holders of common stock of the Company of record at the close of business on July 20, 2001 are entitled to notice of and to vote at the Annual Meeting. The Board of Directors of the Corporation is soliciting the proxies.

     Your vote is very important to us. All stockholders, whether or not you expect to attend the Annual Meeting of Stockholders in person, are urged to sign and date the enclosed Proxy and return it promptly in the enclosed postage-paid envelope which requires no additional postage if mailed in the United States. If you attend the meeting, you may vote in person, even though you have previously returned your proxy.

BY ORDER OF THE BOARD OF DIRECTORS


/s/ Anthony N. LaPine
Anthony N. LaPine
President

San Jose, California
July 27, 2001

TABLE OF CONTENTS

	PAGE
General Information	1
Information About the 2000 Annual Meeting and Voting	2
Proposal 1: Election of Directors	4
Proposal 2: Ratification of Independent Auditors	5
Proposal 3: Approval of Amendment to the 1996 Stock Option Plan	6
Other Business	7
Security Ownership of Certain Beneficial Owners and Management	7
Section 16(a) Beneficial Ownership Reporting Requirements	10
Directors and Executive Officers	10
Executive Compensation	14
Certain Relationships and Related Transactions	18
Report of the Audit Committee	18
Additional Information	19
Stockholder Proposals	19
Appendix A: 1996 Stock Option Plan as Amended	A-	1
Appendix B: Audit Committee Charter	B-	1

SEMOTUS SOLUTIONS, INC.
1735 TECHNOLOGY DRIVE, SUITE 790
SAN JOSE, CALIFORNIA 95110
(408) 367-1700

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 13, 2001

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 2001 Annual Meeting of Semotus Solutions, Inc. (“Semotus” or the “Company”). The 2001 Annual Meeting will be held on September 13, 2001 at the Company’s offices at 1735 Technology Drive, Suite 790, San Jose, California 95110.

     This Proxy Statement provides detailed information about the 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:

     1.  Elect five directors, each for a one-year term;

     2.  Ratify the appointment by the Board of Directors of the firm of BDO Seidman LLP as independent public accountants of Semotus for the fiscal year ending March 31, 2002;

     3.  Approve an amendment to the Company’s 1996 Stock Option Plan to increase the number of shares of common stock issuable upon the exercise of stock options granted under the Plan from 3,500,000 to 4,345,000 shares; and

     4.  Such other matters as may properly come before the meeting.

     THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR EACH OF THESE PROPOSALS.

     On July 27, 2001, we began mailing this proxy statement to people who, according to our records, owned shares of common stock in Semotus as of the close of business on July 20, 2001. We have mailed with this proxy statement a copy of Semotus’ Annual Report on Form 10-KSB for the fiscal year ended March 31, 2001.

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INFORMATION ABOUT THE 2001 ANNUAL MEETING AND VOTING

The Annual Meeting

     The Annual Meeting will be held at the Company’s offices at 1735 Technology Drive, Suite 790, San Jose, California 95110, on Thursday, September 13, 2001, at 2:00 p.m., Pacific Time.

This Proxy Solicitation

     We are sending you this proxy statement because Semotus’ 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 July 27, 2001, we began 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 20, 2001.

     Semotus is paying the cost of requesting these proxies. Semotus’ directors, officers and employees may request proxies in person or by telephone, mail, telecopy or letter. Semotus will reimburse brokers and other nominees their reasonable out-of-pocket expenses for forwarding proxy materials to beneficial owners of our shares.

Voting Your Shares

     You may vote your shares at the Annual Meeting either in person or by proxy. 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 at the Annual Meeting in accordance with the instructions you give on the proxy card.

     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.

     IF YOU DECIDE TO VOTE BY PROXY, YOUR PROXY CARD WILL BE VALID ONLY IF YOU SIGN, DATE AND RETURN IT BEFORE THE ANNUAL MEETING TO BE HELD ON SEPTEMBER 13, 2001.

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     In the election of directors, the five nominees for director who receive the most votes will be elected. If you do not vote for a particular nominee, or you indicate “WITHHELD” on your proxy card, your vote will not count either for or against the nominee. For the other proposals, you may vote “FOR,” “AGAINST” or “ABSTAIN.” If you “ABSTAIN” as to any proposal, it has the same effect as a vote “AGAINST” that proposal.

     If you are a beneficial owner and do not provide the shareowner of record with voting instructions, your shares may constitute broker non-votes. 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 proposals scheduled to be presented at this year’s meeting. If there nevertheless are broker non-votes, in tabulating the voting result for any particular proposal, shares that constitute broker non-votes are not considered entitled to vote on that proposal and will not be considered votes cast for the foregoing purposes. Thus, broker non-votes will not affect the outcome of any of the matters being voted upon at the meeting.

     Failure to return a proxy card or vote in person will not affect the outcome of the proposals as long as a quorum is achieved. If you sign your proxy card or broker voting instruction card with no further instructions, your shares will be voted in accordance with the recommendations of the Board (“FOR” all of the Company’s nominees to the Board, and “FOR” all other items described in this proxy statement and in the discretion of the proxy holders on any other matters that properly come before the meeting).

     We have described in this proxy statement all the proposals that we expect will be made at the Annual Meeting. If we or a stockholder properly present any other proposal to the meeting, the proxies have discretion to vote your shares on the proposal as they see fit.

Revoking Your Proxy

     If you decide to change your vote, you may revoke your proxy at any time before it is voted. You may revoke your proxy in one of three ways:

— You may notify the Secretary of Semotus Solutions in writing that you wish to revoke your proxy. Please contact: Semotus Solutions, Inc., 1735 Technology Drive, Suite 790, San Jose, California 95110, Attention: Tali Durant, General Counsel and Secretary. We must receive your notice before the time of the Annual Meeting.

— You may submit a proxy dated later than your original proxy.

— You may attend the Annual Meeting and vote. Merely attending the Annual Meeting will not by itself revoke a proxy; you must obtain a ballot and vote your shares to revoke the proxy.

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Vote Required by Approval

     Shares Entitled to Vote. On July 20, 2001, (the “Record Date”) 16,948,917 shares of Semotus common stock were issued and outstanding. Each share 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 is that a majority of the issued and outstanding shares on the Record Date be present in person or represented by proxy and entitled to be voted. Accordingly, 8,474,460 shares 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 five persons receiving the highest number of “FOR” votes will be elected. All other proposals require the affirmative “FOR” vote of a majority of those shares present and entitled to vote.

Additional Information

     We are mailing our Annual Report on Form 10-KSB for the fiscal year ended March 31, 2001, including consolidated financial statements, to all shareholders 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 Semotus.

PROPOSAL 1:

ELECTION OF DIRECTORS

Nominees for election to the Board of Directors are:

Anthony N. LaPine
Charles K. Dargan, II
Frederick M. Hoar
Jason Pavona
Scott Goodsell

     Each director will be elected to serve for a one-year term, unless he or she resigns or is removed before his or her term expires, or until his or her replacement is elected and qualified. Each of the five nominees are currently members of the Board of Directors and have consented to serve as directors if re-elected. Anthony N. LaPine is President and Chief Executive Officer of the Company. Charles K. Dargan, II is Chief Financial and Accounting Officer. More detailed information about each of the nominees is available in the section of this proxy statement titled “Directors and Executive Officers,” which begins on page 6.

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     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 of Directors 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 of Directors 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 of Directors of the Company has established the size of the board at five members. Proxies for the Annual Meeting may not be voted for more than the five nominees named.

Board Recommendation

     The Board of Directors unanimously recommends a vote “FOR” each of the nominees to the Board of Directors.

PROPOSAL 2:

RATIFICATION OF INDEPENDENT AUDITORS

     The Board of Directors has appointed BDO Seidman LLP (“BDO”), an accounting firm of independent certified public accountants, to act as independent accountants for Semotus and its consolidated subsidiaries for 2002. The Board believes that BDO’s experience with and knowledge of Semotus are important, and would like to continue this relationship. BDO has advised Semotus that the firm does not have any direct or indirect financial interest in Semotus or any of its subsidiaries, nor has BDO had any such interest since BDO became our accountants other than its capacity as our independent certified public accountants.

     In addition to rendering audit services during fiscal year 2001, BDO performed various other non-audit related services for Semotus and its subsidiaries. During fiscal year 2001, we paid the following fees to BDO:

Audit Fees	$203,316
All Other Fees	$    3,610

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     In making the recommendation for BDO to continue as independent accountants for the fiscal year ended March 31, 2002, the Audit Committee reviewed past audit results and the non-audit services performed during 2001 and proposed to be performed during 2002. In selecting BDO, the Audit Committee and the Board of Directors carefully considered BDO’s independence. The Audit Committee has determined that the performance of the non-audit services performed by BDO did not impair the independence of BDO.

     BDO has confirmed to Semotus that it is in compliance with all rules, standards and policies of the Independent Standards Board and the Securities and Exchange Commission (“SEC”) governing auditor independence.

     A representative of BDO is expected to attend the Annual Meeting. The BDO 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 of Directors unanimously recommends a vote “FOR” ratification of the appointment of BDO Seidman LLP.

PROPROSAL 3:

AMENDMENT TO THE 1996 STOCK OPTION PLAN

Description of the Plan

     In June 1996, the Company adopted the 1996 Stock Option Plan (the “Plan”). The “Plan” provides for the granting of stock options to acquire common stock and/or the granting of stock appreciation rights to obtain, in cash or shares of common stock, the benefit of the appreciation of the value of shares of common stock after the grant date. The Company is currently authorized to issue up to 3,500,000 shares of common stock under the Plan. We propose to have you approve an increase in the number of shares of common stock issuable upon the exercise of stock options granted under the Plan from 3,500,000 to 4,345,000 shares. The Plan as amended is attached as Appendix A to this proxy. The Plan expires ten years after its adoption.

     Under the Plan, the Board of Directors may grant stock options to purchase shares of the Company’s common stock only to employees, directors, officers, consultants and advisers of the Company. The Board of Directors may grant options to purchase shares of the Company’s common stock at prices not less than fair market value, as defined under the Plan, at the date of grant for stock options. The Board of Directors also has the authority to set exercise dates (no longer than ten years from the date of grant), payment terms and other provisions for each grant. In addition, options may be granted to persons owning more than 10% of the voting power of all classes of stock, at a price no lower than 110% of the fair market value at the date of grant, as determined by the Board of Directors. Options granted under the Plan generally vest over four years at a rate of 25% after year one and then equally on a monthly basis over the next three years from the date of grant. As of March 31, 2001, no stock appreciation rights have been granted under the Plan.

     Effective December 27, 2000 the Board of Directors of the Company approved the cancellation and regranting of some of the options with exercise prices ranging from $4.00 to $28.77 per share held by most of the employees (including executive officers) of the Company. The Board of Directors determined such exchange to be appropriate in order to sustain the incentivization of its employees. Employees were offered the opportunity to cancel their existing option grants, and receive a new option grant issued as of December 27, 2000 with an exercise price of $2.00 per share (the current fair market value of the Company’s common stock as of the regrant date) and having a standard four-year vesting schedule. As a result, the Company cancelled a total of 537,000 stock options and granted the same number of new stock options dated as of December 27, 2000 at the aforementioned $2.00 exercise price per share. This is deemed to be a repricing under FASB issued Interpretation No. 44, Accounting for Certain Transactions involving Stock Compensation, an interpretation of APB Opinion No. 25, and will result in variable plan accounting. As of July 10, 2001, the effect was immaterial.

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Amendment

     On June 7, 2001 the Board of Directors voted, subject to shareholder approval, to increase the number of shares of common stock subject to options under the 1996 Plan from 3,500,000 to 4,345,000. The Board of Directors believes that the proposed increase is necessary in order for the Company to have sufficient flexibility to provide the amounts and types of incentives to its officers, employees, directors and consultants which are deemed necessary to encourage the Company’s success.

     During the year ended March 31, 2001, stock options to purchase up to 3,509,000 shares of common stock were granted to a total of 92 employees, directors and consultants under the Plan, and options to purchase 133,788 shares of common stock were exercised. As of July 6, 2001, a total of 3,290,292 stock options to purchase shares of common stock were granted and outstanding. None of these shares are contingent upon Shareholder approval under the Plan.

Board Recommendation

     The Board of Directors unanimously recommends a vote “FOR” approval of the amendment to the 1996 Stock Option Plan.

OTHER BUSINESS

     As of the date of this proxy statement, management of the Company was not aware of any other matter to be presented at the Meeting other than as set forth herein. However, if any other matters are properly brought before the Meeting, the shares 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 represented at the meeting is necessary to approve any such matters.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth certain information with respect to beneficial ownership of our common stock as of July 10, 2001, as to:

— each person (or group of affiliated persons) known by us to own beneficially more than five percent of our common stock;

— each of our directors, our chief executive officer and the five other most highly paid executive officers; and

— all our directors and officers as a group.

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     Information as to beneficial ownership is based upon statements furnished to the Company by such persons. Each individual has sole voting and investment power over the shares, except as otherwise noted. For the purposes of calculating percentage ownership as of July 6, 2001, 16,948,917 shares were issued and outstanding and, for any individual who beneficially owns shares represented by options or warrants exercisable on or before September 4, 2001, these shares are treated as if outstanding for that person, but not for any other person. Unless otherwise indicated, the address of each of the individuals and entities named below is: c/o Semotus Solutions, Inc., 1735 Technology Drive, Suite 790, San Jose, CA 95110.

NAME AND ADDRESS OF BENEFICIAL OWNERS	NUMBER OF SHARES		PERCENT
Directors and Executive Officers:
Anthony LaPine	2,115,424	(1)	11.7	%
Charles K. Dargan, II	40,000	(2)	*
Fredrick M. Hoar	3,334	(3)	*
555 Twin Dolphin Drive
Suite 650
Redwood City, CA 94065
Jason Pavona	40,000	(4)	*
400-2 Totten Pond Rd
Waltham, MA 02451
Scott Goodsell	10,000	(5)	*
55 S. Market St., Ste. 1660
San Jose, CA 95113
Pamela LaPine	2,115,424	(6)	11.7	%
Tony Travis	3,333	(7)	*
All Officers and Directors as a Group	2,289,918	(8)	12.6	%
(10 Persons)
5% Stockholders:
Brown Simpson Partners I, Ltd	2,565,308	(9)	13.5	%

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* Less than 1%

(1) Includes 1,003,000 shares of common stock owned directly by Mr. LaPine; exercisable warrants to purchase 700,000 shares of common stock; exercisable options to purchase 335,064 of common stock;and 1,000 shares of common stock and exercisable options to purchase 76,360 shares of common stock owned by Mr. LaPine’s wife, Pamela LaPine, the Company’s President of Financial Services, as set forth below.

(2) Includes exercisable options to purchase 40,000 shares of common stock.

(3) Includes exercisable options to purchase 3,334 shares of common stock.

(4) Includes exercisable options to purchase 40,000 shares of common stock.

(5) Includes exercisable options to purchase 10,000 shares of common stock.

(6) Includes 1,000 shares of common stock owned directly by Pamela LaPine; exercisable options to purchase 76,360 shares of common stock; and 1,003,000 shares of common stock, exercisable options to purchase 335,064 shares of common stock, and exercisable warrants to purchase 700,000 shares of common stock owned by Mrs. LaPine’s husband, Anthony LaPine, President and Chief Executive Officer of the Company, as set forth above.

(7) Includes exercisable options to purchase 3,333 shares of common stock.

(8) Includes the shares listed above as beneficially owned by Messrs. LaPine, Dargan, Hoar, Pavona, Goodsell and Travis and Mrs. LaPine, and 71,161 shares of common stock underlying currently exercisable options held by other executive officers of the Company.

(9) Includes 473,000 shares of common stock owned directly by Brown Simpson Partners I, Ltd.; exercisable warrants to purchase 1,153,846 shares of common stock; and 469,231 shares of Series B convertible preferred shares that convert into 938,462 shares of common stock.

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) 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 Semotus’equity securities, to file reports of ownership and changes in ownership with the SEC. Officers, directors and greater than ten percent shareholders 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 as follows: a Form 4 for Mr. Fota due May 10, 2000 relating to two transactions was filed in June of 2000.

DIRECTORS AND EXECUTIVE OFFICERS

     Set forth below is certain information relating to our directors and executive officers as of July 10, 2001:

NAME	AGE	POSITIONS
Anthony N. LaPine	59	Chairman of the Board, President, and Chief Executive Officer
Charles K. Dargan, II	46	Director, Chief Financial and Accounting Officer
Frederick M. Hoar(1)	55	Director
Jason Pavona(1)	29	Director
Scott Goodsell(1)	43	Director
Taliesin Durant	30	Secretary and General Counsel
Cornel R. Fota	34	Chief Technical Officer
Pamela B. LaPine	43	Executive Vice President and President -Financial Services
Tony Travis	32	Vice President -Sales
Valerie Goodwin	39	Vice President -Marketing

(1) Member of the Audit Committee

     There is no family relationship between any Director or Executive Officer of the Company 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 of the Company.

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     Anthony N. LaPine has been the Company’s President and one of its directors since June of 1996. In June of 1997 Mr. LaPine was elected Chief Executive Officer of the Company, and in August of 1997, Mr. LaPine was elected 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 their Executive Program.

     Charles K. Dargan, II has been a member of the Company’s Board of Directors since March 1999. He was the Executive Vice President of Operations and Administration for the Company from April 2000 to January 2001, at which time Mr. Dargan became the Company’s Chief Financial and Accounting Officer. Prior to joining Semotus Solutions, 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).

     Mr. Hoar has served as a Director of the Company since March 1998. He has over 35 years of experience in public affairs, financial relations and marketing. Currently he is Chairman at Miller Shandwick Technologies. He has shaped and implemented communications strategies for some of America’s seminal technology-based companies, including Apple, Fairchild, Genentech, Raychem and RCA. Mr. Hoar joined Boston-based Miller Communications, a leading international high-tech public relations agency, in 1989. He subsequently became president of Miller/Shandwick Technologies West, with responsibility for offices in Silicon Valley, Los Angeles and Dallas. In 1997 he was named to the additional position of chairman of Shandwick Technologies. Mr. Hoar has provided strategic counsel for a wide range of clients, including Compaq Computer, Hewlett Packard, Motorola, Philips Electronics and Symantec. Mr. Hoar holds a B.A. degree cum laude in American history and literature from Harvard College and an M.A. in editorial journalism from the University of Iowa.

     Mr. Pavona has served on Semotus’ Board of Directors since February of 2000. In May of 2001, Mr. Pavona became Vice President, Corporate Strategy and Business Development at Wallaware, Inc., a wireless web company. Previously, from September 1998 to May 2001, Mr. Pavona was the Director of Wireless Strategy and Personalization for Lycos Network. Before tackling the wireless space, Mr. Pavona managed Lycos’two most challenging accounts: Microsoft and Netscape. Prior to joining Lycos, Mr. Pavona was instrumental in the creation of INPHO, Inc., a venture capital funded Internet real estate venture. Mr. Pavona holds a Bachelor of Science degree in Finance and Entrepreneurial Studies, Cum laude from Babson College. He currently serves on the Board of Directors of several other privately held Internet start-up companies.

     Scott Goodsell became a member of the Company’s Board of Directors in June of 2001. Mr. Goodsell has been a Certified Internal Auditor since 1982 and brings extensive accounting and financial experience to the Board. He has been a Principal and CFO at Campeau Goodsell Diemer since 1991. Mr. Goodsell holds a B.S. degree in Accounting and Management from Brigham Young University and a J.D. from the University of Santa Clara.

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     Taliesin (Tali) Durant joined the Company in August 1999 and became the Corporate Secretary in January 2000. Ms. Durant provides legal counsel for all of Semotus Solutions’corporate, financial and business matters. This includes the drafting and negotiation of agreements connected to the development as well as the distribution, sale and licensing of the Company’s services and technology. 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 issues including those related to merger and acquisition agreements, intellectual property licensing, as well as in software development and service contracts. Durant has experience providing legal guidance in the areas of consumer protection, small business development and contracts, telecommunications, and intellectual property safeguards. Ms. Durant is a member of the American Corporate Counsel Association, the American Bar Association, and the California State Bar Association. She is an alumna of the Northwestern School of Law at Lewis and Clark College, and has specific legal expertise in the area of high technology. Durant holds a Bachelor of Arts in Economics from Connecticut College.

     Cornel Fota has been employed with the Company since 1996 and currently serves as our Chief Technical Officer (CTO). Mr. Fota joined the Company in 1996 as a senior software engineer and was involved in developing Semotus’ core products and technologies. From July 1997 to August 1998 he was a Software Development Manager for the Company. Mr. Fota moved to the position of Director of Engineering from August to October of 1998, and then became Semotus’ Vice President of Engineering until he was promoted to CTO in January 2001. Mr. Fota has experience in the analysis, design, implementation and management of software-based projects. His areas of expertise include real-time systems, Internet technologies, serial communications, paging protocols and object-oriented analysis and design. Mr. Fota is responsible for managing the Company’s development, production and information systems groups. Before joining the Company, he was involved with the development of various Microsoft-based systems. Mr. Fota has a Master of Science in Software Engineering from the Technical University of Bucharest, Romania. He also holds a post-graduate management degree from Ecole Nationale des Ponts et Chaussees, Paris, France.

     Pamela LaPine began with the Company in 1996 and currently serves as Executive Vice President and President of Financial Services. She is responsible for the sales, account management and strategic direction behind the Company’s Financial Services division and product line. 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 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.

     Valerie Goodwin became the Company’s Vice President of Marketing in June 2000. Ms. Goodwin manages the Company’s entire marketing efforts, which consists of overseeing Semotus Solutions’ product development, marketing, Internet technology, public relations, and corporate communication divisions. Prior to joining Semotus Solutions, Ms. Goodwin served as Vice President of Marketing at GetMedia, Inc., a San Jose based pre-IPO, new media company. In this role she was responsible for the development and execution of the company’s marketing strategies and public relations activities. Goodwin also has experience as a marketing consultant, developing marketing strategies for pre-IPO companies on behalf of venture capitalists for portfolio companies. In addition, she has held strategic positions in a marketing capacity for Cadence Design Systems, Inc. and Madge Networks in Silicon Valley, CA. Ms. Goodwin possesses a B.A. in Advertising from San Jose State University.

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     Tony Travis became the Company’s Vice President of Sales in June 2001. Prior to his promotion to Vice President, Mr. Travis served as Director of Sales for Semotus where he developed key strategic alliances with such partners as SkyTel, MobileComm, and Cingular Interactive. Mr. Travis is responsible for developing and executing Semotus’domestic and international sales strategy, as well as managing the Company’s direct sales force. His responsibilities also include building corporate relationships and strategic industry alliances for the Company. Mr. Travis has over nine years of highly successful sales and management experience in the wireless technology and telecommunication industries. In addition, Mr. Travis brings to Semotus a successful track record in selling enterprise software and services and a vast network in the high-tech community. Mr. Travis possesses a B.A. in Communications from Sacramento State University.

Meetings of the Board of Directors and Standing Committees

     The Board of Directors currently consists of five members. The Board of Directors held 1 meeting during 2001, and executed fifty-seven unanimous consents in lieu of a meeting. Each of the directors appointed at that time attended the meeting.

     The standing committees of the Board of Directors include an Audit Committee and a Compensation Committee. The Compensation Committee consists of Messrs. Hoar, Pavona and Goodsell, with Mr. Hoar as its chairman. The Compensation Committee did not hold any meetings during the fiscal year 2001; the entire Board made all decisions related to compensation and the other topics set forth in this paragraph. In the future, the Compensation Committee intends to hold meetings and make these decisions. The Compensation Committee will determine 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; determine the compensation for other officers or delegate such determinations to the chief executive officer; grant options, stock or other equity interests under our stock option or other equity-based incentive plans; and administer those plans and, where such plans specify, our other employee benefit plans.

     The Audit Committee currently consists of Messrs. Hoar, Pavona and Goodsell, with Mr. Goodsell as its chairman. Mr. Goodsell was elected to the Board and to the Audit Committee in June of 2001. During the fiscal year 2001, Mr. Hoar acted as the Audit Committee’s chairman. The Audit Committee’s responsibilities are described in a written charter adopted by the Board of Directors, which is attached as Appendix B to this proxy statement. The Audit Committee makes recommendations to the Board concerning the engagement of independent accountants; reviews with the independent accountants the plans 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 annual CPA audit and recommendations of internal controls and related management response; reviews the audit reports with management and the auditor; oversees the internal audit function; and monitors management’s efforts to correct deficiencies described in any audit examination. A report of the Audit Committee can be found on page 12 of this proxy statement.

     The Audit Committee held a total of 1 meeting during 2001, which was attended by all of the Audit Committee members appointed at that time, and which included Mr. Hoar and Mr. Pavona.

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EXECUTIVE COMPENSATION

     Summary Compensation. The following table sets forth the compensation for the fiscal years ended March 31 1999, 2000, and 2001 awarded to, earned by or paid to our chief executive officer and the five other most highly paid executive officers. We refer to these six officers as the “named executive officers.”

SUMMARY COMPENSATION TABLE

	ANNUAL COMPENSATION						LONG-TERM COMPENSATION AWARDS			PAYOUTS
NAME AND PRINCIPAL POSITION	YEAR	SALARY	BONUS		OTHER ANNUAL COMPENSATION		RESTRICTED STOCK AWARD(S)	SECURITIES UNDERLYING OPTIONS/ SARS (NUMBER)		LTIP PAYOUTS	ALL OTHER COMPEN- SATION
Anthony LaPine	2001	$240,000	—		11,000	(1)	—	300,000		—	—
CEO and President and	2000	$240,000	—		11,000	(1)	—	810,000	(2)	—	—
Chairman of the Board	1999	$140,000	—		11,000	(1)	—	—		—	—
Charles K. Dargan, II	2001	$155,000	—		—		—	140,000		—	—
Chief Financial and	2000	$155,000	$25,000	(3)	—		—	220,000		—	—
Accounting Officer	1999	—	—		—		—	—		—	—
and Director
Valerie Goodwin	2001	$117,000	$16,000	(4)	—		—	70,000		—	—
Vice President of	2000	—	—		—		—	—		—	—
Marketing	1999	—	—		—		—	—		—	—
Tony Travis	2001	$  80,000	$40,000		12,000	(1)	—	25,000		—	—
Vice President of	2000	$  60,000	$22,500		6,050	(1)	—	20,000		—	—
Sales(5)	1999	—	—		—		—	—		—	—
Pamela LaPine	2001	$  98,000	—		7,500	(1)	—	250,000		—	—
Executive Vice President	2000	$  80,000	—		6,000	(1)	—	50,000		—	—
And President, Financial	1999	$  70,000	—		6,000	(1)	—	—		—	—
Services
Stas Wolk	2001	$149,000	$70,000	(3)	—		—	160,000		—	—
Chief Operating
Officer (6)

(1) Represents automobile allowances.

(2) Represents options to purchase 510,000 shares of common stock and warrants to purchase 300,000 shares of common stock.

(3) Represents moving expense allowance.

(4) Represents a signing bonus.

(5) Mr. Travis became Vice President of Sales in June 2001 and was not an executive officer as of March 31, 2001.

(6) Mr. Wolk was Chief Operating Officer from May 30, 2000 to January 2001 and was not an executive officer as of March 31, 2001.

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     Option Grants. The following table sets forth certain information concerning individual grants of stock options made to each of the named Executive Officers during the fiscal year ended March 31, 2001. No stock appreciation rights were granted to these individuals during the year. All options were granted under the Company’s 1996 Stock Option Plan.

INDIVIDUAL OPTION GRANTS IN LAST FISCAL YEAR

NAME	NUMBER OF SECURITIES UNDERLYING OPTIONS GRANTED (#)(*)		% OF TOTAL OPTIONS GRANTED TO EMPLOYEES IN FISCAL YEAR		EXERCISE PRICE PER SHARE ($)	EXPIRATION DATE
Anthony LaPine	300,000	(1)	8.6	%	$2.25	03/05/11
Charles K. Dargan, II	140,000	(2)	4.0	%	$2.00	12/27/10
Pamela LaPine	50,000	(2)	1.4	%	$2.00	12/27/10
	200,000	(1)	5.7	%	$2.25	03/05/11
Tony Travis	25,000	(1)	0.7	%	$2.00	12/27/10
Valerie Goodwin	70,000	(2)	2.0	%	$2.00	12/27/10
Stas Wolk	160,000	(3)	4.6	%	$5.44	02/28/01

* Options expire 90 days after the termination of employment of the option holder.

(1) One-third of the options become exercisable beginning January 12, 2001. Thereafter, the remaining two-thirds of the options become exercisable monthly in equal increments over a two-year period thereafter. These options are contingent upon Shareholder approval.

(2) One-fourth of the options become exercisable one year after the date of grant. Thereafter, the remaining three-fourths of the options become exercisable monthly in equal increments over a three-year period.

(3) All of these options expired on February 28, 2001 due to termination of employment of the option holder.

Aggregate Option Exercises. The following table sets forth certain information concerning individual exercises of stock options during the fiscal year ended March 31, 2001, and the shares represented by outstanding options held by each of the named executive officers as of March 31, 2001.

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

NAME	SHARES ACQUIRED ON EXERCISE (#)	VALUE REALIZED ($)	NUMBER OF SHARES UNDERLYING UNEXERCISED OPTIONS AT MARCH 31, 2001 EXERCISABLE/ UNEXERCISABLE (#)	VALUE OF UNEXERCISED IN-THE-MONEY OPTIONS AT MARCH 31, 2001 EXERCISABLE/ UNEXERCISABLE ($)
Anthony N. LaPine	-0-	-0-	1,014,566/495,434	$143,200/-0-
Charles K. Dargan, II	-0-	-0-	40,000/180,000	$17,000/$14,000
Valerie Goodwin	-0-	-0-	-0-/70,000	-0-/$7,000
Stas Wolk	-0-	-0-	-0-/-0-	-0-/-0-
Pamela LaPine	-0-	-0-	73,590/276,410	-0-/$5,000
Tony Travis	13,333	$173,046	3,333/28,334	-0-/$2,500

(1) Options were “in the money” to the extent the closing price of Semotus’common stock on March 31, 2001 exceeded the exercise price of the options. The value of unexercised options represents the difference between the exercise price of net options and $2.10 which was the last reported sale price of Semotus common stock on March 30, 2001.

Director Compensation

     Except for reimbursement for reasonable travel expenses relating to attendance at Board meetings and discretionary grants of stock options, 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 2001, we granted options to purchase 10,000 shares of common stock to Mr. Hoar, at an exercise price of $8.50.

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

NON-EMPLOYEE DIRECTOR	NUMBER OF SHARES UNDERLYING OPTIONS (#)	EXERCISE PRICE ($)
Frederick H. Hoar	20,000	$1.56
	10,000	$8.50
Jason Pavona	40,000	$3.50

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Employment Agreements

     The Company entered into a three-year employment agreement with Anthony LaPine, which became effective on May 1, 1996, and was extended to May 1, 2004. As the Company’s CEO, Anthony LaPine receives a base salary of $240,000 per year, plus discretionary increases in conformity with the Company’s standard review procedure. In addition, to his base salary, Mr. LaPine shall be paid an annual bonus during the term of the agreement in an amount equal to 86% of the base salary, provided there is satisfactory achievement of agreed upon performance goals. Mr. LaPine will also be given a car allowance that is not to exceed $1,000 a month. Mr. LaPine receives full health, dental, vision, and disability insurance. If the Company terminates Mr. LaPine’s employment agreement prior to May 1, 2004 for reasons other than disability, or if Mr. LaPine terminates the agreement for “good reason” as defined in the agreement, the Company is mandated to continue paying the salary and other benefits for the duration of the term.

     The Board of Directors has agreed that no bonuses will be paid to Mr. LaPine until the Company has four consecutive profitable quarters. The Compensation Committee will establish the performance goals for Mr. LaPine.

     In fiscal year 2001 the Company entered into three other employment agreements with the presidents of three of the Company’s subsidiaries, Wares On the Web, Inc., Wizshop.com, Inc. and Application Design Associates, Inc. for three-year periods commencing on November 13, 2000, April 6, 2001, and May 1, 2001 respectively. These agreements provide among other things, an annual salary of $150,000 each, as well as annual bonuses from $37,500 to $75,000, contingent upon the respective subsidiary companies reaching certain revenue targets.

Employee Warrants

     In August 1997, the Board of Directors approved the issuance of warrants to Anthony N. LaPine to purchase 400,000 shares of common stock at $1.875 per share. These warrants vest over a three-year period in equal installments of one-third of the total shares on each annual anniversary of the date of grant, and became 100% exercisable as of November 5, 2000. These warrants expire on November 5, 2002.

     On December 1, 1999, the Company issued warrants to purchase 300,000 shares of common stock at $2.375 per share to Mr. LaPine. These warrants expire on December 4, 2004.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     In conjunction with the private placement dated November 5, 1997 the Chief Executive Officer of the Company entered into a stock purchase agreement. Under the terms of the agreement, the Chief Executive Officer received 280,000 shares of preferred stock, in exchange for a note receivable in the amount of $1,050,000. The note is collateralized by certain assets of the officer and bears interest at a rate of 7.0%.

     On January 15, 2000, the Company entered into a Loan Forgiveness Agreement with the Chief Executive Officer which provided that the $1,050,000 promissory note would be forgiven if he continues to serve as the Company’s Chief Executive Officer through May 1, 2004, and there are no uncured defaults by him under his Employment Agreement on May 1, 2004. The note, together with interest accrued thereon has been presented as contra-equity in the balance sheet. The note plus interest is being amortized over the period of the contract of employment. Consequently, in the year ended March 31, 2001 expense of $375,551 has been recorded as employment compensation.

On February 29, 2000, the Company entered into a secured promissory note with the Chief Executive Officer, in the amount of $100,000 to cover the cost of the Chief Executive Officer’s exercise of 40,000 warrants, that would otherwise be redeemed by the Company on April 3, 2000, pursuant to the Company’s automatic redemption rights against all holders of the Company’s $2.50 warrants.

AUDIT COMMITTEE REPORT

     At the time of this Report, the Audit Committee of the Company’s Board of Directors consists of two 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.

     The Board of Directors has adopted a written Audit Committee Charter. A copy of the Charter is attached as Appendix A.

     Our committee has met and held discussions with management and the independent auditors. As a part of this process, we have:

• Reviewed and discussed the audited financial statements with management,

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

• 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 of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2001, for filing with the SEC.

Audit Committee Of The Board Of Directors

/s/ Jason Pavona
Jason Pavona
Chairman

/s/ Frederick Hoar
Frederick Hoar

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ADDITIONAL INFORMATION

THE COMPANY’S 2001 ANNUAL REPORT ON FORM 10-KSB, INCLUDING FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2001, 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, 1735 TECHNOLOGY DRIVE, SUITE 790, SAN JOSE, CA 95110, OR AT TELEPHONE NUMBER (408) 367-1700.

STOCKHOLDER PROPOSALS

     If you intend to propose any matter for action at our 2002 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 1735 Technology Drive, Suite 790, San Jose, California 95110, on or before April 15, 2002, not later than 5:00 p.m. Pacific Standard Time. 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 2002 Annual Meeting. We will be able to use proxies you give us for the next year’s meeting to vote for or against any shareholder proposal that is not included in the proxy statement at our discretion unless the proposal is submitted to us on or before April 15, 2002.

/s/ Anthony N. LaPine
Anthony N. LaPine
President

San Jose, California
July 27, 2001

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Attachment A

AMENDED and RESTATED
SEMOTUS SOLUTIONS, INC.
(formerly Datalink.net, Inc.)
1996 STOCK OPTION PLAN

1. Purpose.

     The purpose of the SEMOTUS SOLUTIONS, INC. STOCK OPTION PLAN (the “Plan”) is to grant to selected employees, directors, and consultants of SEMOTUS SOLUTIONS, INC., a Nevada corporation (the “Company”) and its subsidiaries and affiliates, a favorable opportunity to acquire Common Stock of the Company, thereby encouraging such persons to accept or continue a productive relationship with the Company, and furnishing such persons with an incentive to improve operations and increase profits of the Company. Capitalized terms not previously defined herein are defined in Section 17 of this Plan.

2. Options and Shares.

     Options granted under this Plan (the “Options”) are for the purchase of Common Stock.

     The aggregate number of Shares that may be issued pursuant to Options granted under this Plan is Three Million Five Hundred Thousand (3,500,000) Shares, subject to adjustment as provided in this Plan. If any Option expires or is terminated without being exercised in whole or in part, the unexercised or released Shares from such Option shall be available for future grant and purchase under this Plan. At all times during the term of this Plan, the Company shall reserve and keep available such number of Shares as shall be required to satisfy the requirements of outstanding Options under this Plan.

3. Administration.

     The Plan shall be administered by the Board of Directors of the Company (the “Board”), or by a committee appointed by the Board that is comprised solely of two or more Non-Employee Directors. As used in this Plan, references to the “Administrator” shall mean either the committee appointed by the Board to administer this Plan or the Board if no committee has been established. The interpretation by the Administrator of any of the provisions of this Plan or any Option granted under this Plan shall be final and binding upon the Company and all persons having an interest in any Option or any Shares purchased pursuant to an Option. The Administrator may delegate to officers of the Company the authority to grant Options under this Plan to Optionees who are not Insiders, as defined in the Exchange Act.

     The Administrator may delegate nondiscretionary administrative duties to such employees of the Company as it deems proper. Subject to the provisions of the Plan, the Administrator shall have the sole authority, in its discretion:

     (a) to determine to which of the eligible individuals, and the time or times at which, options to purchase Common Stock of the Company shall be granted;

     (b) to determine the number of shares of Common Stock to be subject to options granted to each eligible individual;

     (c) to determine the price to be paid for the shares of Common Stock upon the exercise of each option;

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     (d) to determine the term and the exercise schedule of each option;

     (e) to determine the terms and conditions of each stock option grant (which need not be identical) entered into between the Company and any eligible individual to whom the Administrator has granted an option, subject to Section 14 hereof;

     (f) to interpret the Plan;

     (g) to accelerate the exercise date or schedule with respect to any option granted under the Plan or, with the consent of the holder thereof, to modify or amend any such option;

     (h) to make all determinations deemed necessary or advisable for the administration of the Plan;

     (i) to determine whether Optionee has ceased to be employed by the Company or any Parent, Subsidiary or Affiliate of the Company and the effective date on which such employment terminated; and

     (j) to determine whether an Optionee, who is a director, consultant or advisor of the Company, is “employed by the Company or any Parent, Subsidiary or Affiliate of the Company” pursuant to the foregoing Sections.

4. Eligibility.

     Options may be granted to employees, officers, directors, consultants and advisers (provided such consultants and advisers render bona fide services not in connection with the offer and sale of securities in a capital-raising transaction) of the Company or any Parent, Subsidiary or Affiliate of the Company. Incentive Stock Options may be granted only to employees of the Company or a Parent or Subsidiary of the Company. The Administrator in its sole discretion shall select the recipients of Options (“Optionees”). An Optionee may be granted more than one Option under this Plan. The Company may also, from time to time, assume outstanding options granted by another company, whether in connection with an acquisition of such other company or otherwise, by either (a) granting an Option under this Plan in replacement of the option assumed by the Company, or (b) treating the assumed option as if it had been granted under this Plan if the terms of such assumed option could be applied to an Option granted under this Plan. Such assumption shall be permissible if the holder of the assumed option would have been eligible to be granted an Option hereunder if the other company had applied the rules of this Plan to such grant.

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5.  Terms and Conditions of Options.

     5.1 Option Grant. Each option granted under the Plan shall be evidenced by a written stock option grant (the “Option”). Each such agreement shall designate the option thereby granted as a Common Stock option. Each such Option shall be subject to the terms and conditions set forth in this Section 5, and to such other terms and conditions not inconsistent herewith as the Administrator may deem appropriate in each case.

     5.2 Date of Grant. The date of grant of an Option shall be the date on which the Administrator makes the determination to grant such Option unless otherwise specified by the Administrator. The Option representing the Option will be delivered to Optionee with a copy of this Plan within a reasonable time after the granting of the Option.

     5.3 Exercise Price. The exercise price of an Option shall be not less than 100% of the Fair Market Value of the Shares on the date the Option is granted. The exercise price of any Option granted to a person owning more than 10% of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary of the Company (“Ten Percent Shareholder”) shall not be less than 110% of the Fair Market Value of the Shares on the date the Option is granted. For purposes of this Section 5.3, in determining stock ownership, an Optionee shall be considered as owning the voting capital stock owned, directly or indirectly, by or for his brothers and sisters, spouse, ancestors and lineal descendants. Voting capital stock owned, directly or indirectly, by or for a corporation, partnership, estate or trust shall be considered as being owned proportionately by or for its shareholders, partners or beneficiaries, as applicable. Common Stock with respect to which any such Optionee holds an Option shall not be counted. Additionally, for purposes of this Section 5.3, outstanding capital stock shall include all capital stock actually issued and outstanding immediately after the grant of the Option to the Optionee. Outstanding capital stock shall not include capital stock authorized for issue under outstanding Options held by the Optionee or by any other person.

     5.4 Exercise Period. Subject to the limitations set forth herein, Options shall be exercisable within the times or upon the events determined by the Administrator as set forth in the Option. In no event shall the right to exercise be at a rate less than twenty percent (20%) per year over five (5) years from the date the Option is granted. No Option shall be exercisable after the expiration of ten (10) years from the date the Option is granted.

     5.5 Options Non-Transferable. Options granted under this Plan, and any interest therein, shall not be transferable or assignable by Optionee, and may not be made subject to execution, attachment or similar process, otherwise than by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Code or Title 1 of the Employee Retirement Income Security Act, or the rules thereunder, and shall be exercisable during the lifetime of the Optionee only by Optionee.

     5.6 Assumed Options. In the event the Company assumes an option granted by another company, the exercise price and the number and nature of shares issuable upon exercise, of such assumed option will be adjusted appropriately pursuant to the Code. In the event the Company elects to grant a new option rather than assuming an existing option, such new option need not be granted at Fair Market Value on the date of grant and may instead be granted with a similarly adjusted exercise price.

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6. Exercise of Options.

     6.1 Notice. Options may be exercised only by delivery to the Company of a written stock option exercise agreement (the “Exercise Agreement”) in a form approved by the Administrator (which need not be the same for each Optionee), stating the number of Shares being purchased, the restrictions imposed on the Shares, if any, and such representations and agreements regarding Optionee’s investment intent and access to information, if any, as may be required by the Company to comply with applicable securities laws, together with payment in full of the exercise price for the number of Shares being purchased.

     6.2 Payment. Payment for the Shares may be made in cash (by check) or, where approved by the Administrator in its sole discretion and where permitted by law: (a) by cancellation of indebtedness of the Company to the Optionee; (b) by surrender of shares of common stock of the Company having a Fair Market Value equal to the applicable exercise price of the Option that have been owned by Optionee for more than six (6) months (and which have been paid for within the meaning of the Securities and Exchange Commission (“SEC”) Rule 144 and, if such Shares were purchased from the Company by use of a promissory note, such note has been fully paid with respect to such shares), or were obtained by Optionee in the open public market; (c) by waiver of compensation due or accrued to Optionee for services rendered; (d) provided that a public market for the Company’s stock exists, through a “same day sale” commitment from Optionee and a broker-dealer that is a member of the National Association of Securities Dealers (an “NASD Dealer”) whereby Optionee irrevocable elects to exercise the Option and to sell a portion of the Shares so purchased to pay for the exercise price and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the exercise price directly to the Company; (e) provided that a public market for the Company’s stock exists, through a “margin” commitment from Optionee and an NASD Dealer whereby Optionee irrevocable elects to exercise the Option and to pledge the Shares so purchased to the NASD Dealer in a margin account as security for a loan from the NASD Dealer in the amount of the exercise price, and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the exercise price directly to the Company; or (f) by any combination of the foregoing.

     6.3 Withholding Taxes. Prior to issuance of the Shares upon exercise of an Option, Optionee shall pay or make adequate provision for any federal or state withholding obligations of the Company, if applicable. Where approved by the Administrator in its sole discretion, and so long as the Company is not a reporting company under the Exchange Act, Optionee may provide for payment of withholding taxes upon exercise of the Option by requesting that the Company retain Shares with a Fair Market Value equal to the minimum amount of taxes required to be withheld. In such case, the Company shall issue the net number of Shares to Optionee by deducting the Shares retained from the Shares exercised. The Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined in accordance with Section 83 of the Code (the “Tax Date”). All elections by Optionees to have Shares withheld for this purpose shall be made in writing in a form acceptable to the Administrator and shall be subject to the following restrictions:

     (a) the election must be made on or prior to the applicable Tax Date;

     (b) once made, the election shall be irrevocable as to the particular Shares as to which the election is made; and

     (c) all elections shall be subject to the consent or disapproval of the Administrator.

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     6.4 Limitations on Exercise. Notwithstanding the exercise periods set forth in the Option, exercise of an Option shall always be subject to the following:

     6.4.1 If Optionee ceases to be employed by the Company or any Parent or Subsidiary of the Company for any reason except death or disability, Optionee may exercise such Optionee’s ISOs to the extent (and only to the extent) that they would have been exercisable upon the date of termination, within ninety (90) days after the date of termination (or such shorter time period as may be specified in the Option);

     6.4.2 If Optionee’s employment with the Company or any Parent or Subsidiary of the Company is terminated because of the death of Optionee or disability (as defined in Section 22(e)(3) of the Code) of Optionee, Optionee’s Options may be exercised to the extent (and only to the extent) that they would have been exercisable by Optionee on the date of termination, by Optionee (or Optionee’s legal representative) within one year after the date of termination (or such shorter time period as may be specified in the Option), but in any event no later than the expiration date of the Options.

7. Securities Law Requirements.

     7.1 The Administrator may require an individual as a condition of the grant and of the exercise of an option, to represent and establish to the satisfaction of the Administrator that all shares of Common Stock to be acquired upon the exercise of such option will be acquired for the investment and not for resale. The Administrator shall cause such legends to be placed on certificates evidencing shares of Common Stock issued upon exercise of an option as, in the opinion of the Company’s counsel, may be required by federal and applicable state securities laws.

     7.2 No shares of Common Stock shall be issued upon the exercise of any option unless and until counsel for the Company determines that:

     (a) the Company and the Optionee have satisfied all applicable requirements under the Securities Act of 1933 and the Securities Exchange Act of 1934;

     (b) any applicable listing requirement of any stock exchange on which the Company’s Common Stock is listed has been satisfied; and

     (c) all other applicable provisions of state and federal law have been satisfied.

8. Modification, Extension and Renewal of Options.

     The Administrator shall have the power to accelerate the exercise date or schedule of any outstanding Option, or to otherwise modify, extend or renew outstanding Options and to authorize the grant of new Options in substitution therefore, provided that any such action may not, without the written consent of Optionee, impair any rights under any Option previously granted. The Administrator shall have the power to reduce the exercise price of outstanding Options without the consent of Optionee’s by a written notice to the Optionee’s affected; provided, however, that the exercise price per Share may not be reduced below the minimum exercise price that would be permitted under Section 5.3 of this Plan for Options granted on the date the action is taken to reduce the exercise price.

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9. Stock Ownership; Financial Statements.

     Notwithstanding any other provisions of the Plan and except as provided in this Section 9, no Optionee shall have any of the rights of a shareholder (including the right to vote and receive dividends) of the Company, by reason of the provisions of this Plan or any action taken hereunder, until the date such Optionee shall both have paid the exercise price for the Common Stock and shall have been issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) the stock certificate evidencing such shares. No adjustment shall be made for dividends or distributions or other rights for which the record date is prior to such date, except as provided in this Plan. However, the Company shall provide to each Optionee, during the period for which such Optionee has one or more Options outstanding, copies of the financial statements of the Company, consisting of, at a minimum, a balance sheet and an income statement, at such time after the close of each fiscal year of the Company as such statements are released by the Company to its shareholders. The Company shall not be required to provide such information to key employees whose duties in connection with the Company assume their access to equivalent information.

10. No Obligation to Employ.

     Nothing in this Plan or any Option granted under this Plan shall confer on any Optionee any right to continue in the employ of, or other relationship with, the Company or any Parent, Subsidiary or Affiliate of the Company, nor limit or otherwise impair the right of the Company, or any Parent, Subsidiary, or Affiliate of the Company to terminate Optionee’s employment or other relationship at any time, with or without cause.

11. Adjustments Upon Changes in Capitalization or Merger.

     11.1 Changes in Capitalization. Subject to any required action by the Company’s shareholders, the number of Shares of Common Stock covered by this Plan as provided in Section 2, the number of Shares covered by each outstanding Option granted hereunder and the exercise price thereof shall be proportionately adjusted for any increase or decrease in the number of shares of Common Stock resulting from a stock split, reverse stock split, recapitalization, combination or reclassification of the shares or the payment of a stock dividend (but only on the Common Stock) or any other increase or decrease in the number of such outstanding shares of Common Stock effected without the receipt of consideration by the Company; provided, however, that the conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration”.

     11.2 Assumption or Substitution. In the event of (a) a merger or consolidation in which the Company is not the surviving corporation (other than a merger or consolidation with a wholly owned subsidiary, a reincorporation, or other transaction in which there is no substantial change in the shareholders of the corporation and the Options granted under this Plan are assumed by the successor corporation, which assumption shall be binding on all Optionee’s), (b) a dissolution or liquidation of the Company, (c) the sale of substantially all of the assets of the Company, or (d) any other transaction which qualifies as a “corporate transaction”under Section 424(a) of the Code wherein the shareholders of the Company give up all of their equity interest in the Company (except for the acquisition of all or substantially all of the outstanding shares of the Company), any or all outstanding Options may be assumed by the successor corporation, which assumption shall be binding on all Optionee’s. In the alternative, the successor corporation may substitute an equivalent option or provide substantially similar consideration to Optionees as was provided to shareholders (after taking into account the existing provisions of Optionee’s options, such as the exercise price and the vesting schedule). The successor corporation may also issue, in place of outstanding shares of the Company held by Optionee as a result of the exercise of an Option that is subject to repurchase, substantially similar shares or other property subject to similar repurchase restrictions no less favorable to Optionee.

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     11.3 Expiration. In the event such successor corporation, if any, refuses to assume or substitute Options, as provided above, pursuant to a transaction described in Subsection 11.2 above, or there is no successor corporation, and if the Company is ceasing to exist as a separate corporate entity, the Options shall, notwithstanding any contrary terms in the Option, expire on (and, in the case of a transaction described in Subsection 11.2 above, if the Company has reserved to itself a right to repurchase Shares issued on exercise of Option at the original purchase price of such Shares, such right shall terminate on) a date at least 20 days after the Board gives written notice to Optionees, specifying the terms and conditions of such termination.

     11.4 Additional Provisions. Subject to the foregoing provisions of this Section 11, in the event of the occurrence of any transaction described in Section 11.2, any outstanding Option shall be treated as provided in the applicable agreement or plan of merger, consolidation, dissolution, liquidation, sale of assets or other corporate transaction.

12. Adoption and Shareholder Approval.

     This Plan shall become effective on the date that it is adopted by the Board of the Company. This Plan shall be approved by the shareholders of the Company, in any manner permitted by applicable corporate law, within twelve months before or after the date this Plan is adopted by the Board. Upon the effective date of the Plan, the Board may grant Options pursuant to this Plan; provided that, in the event that shareholder approval is not obtained within the time period provided herein, all Options granted hereunder shall terminate. No Option that is issued as a result of any increase in the number of shares authorized to be issued under this Plan shall be exercised prior to the time such increase has been approved by the shareholders of the Company and all such Options granted pursuant to such increase shall similarly terminate if such Shareholder approval is not obtained.

13. Term of Plan and Governing Law.

     Options may be granted pursuant to this Plan from time to time within a period of ten (10) years after the date on which the Board adopts this Plan. This Plan and the Options granted pursuant hereto shall be governed by California law, except for that body of law pertaining to conflict of laws.

14. Amendment or Termination of Plan.

     The Board may terminate the Plan or amend the Plan from time to time in such respects as the Board may deem advisable, except that, without the approval of the Company’s shareholders in compliance with the requirements of applicable law, no such revision or amendment shall:

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     (a) increase the number of shares of Common Stock except as provided in Section 11 hereof;

     (b) change the class of persons eligible to participate in the Plan under Section 4 hereof;

     (c) extend the term of the Plan under Section 13 hereof;

     (d) amend this Section 14 to defeat its purpose; or

     (e) amend this Plan in any manner that requires shareholder approval pursuant to the Code or the regulations promulgated thereunder as such provisions apply to ISO plans, without obtaining such shareholder approval.

15. Reservation of Shares. The Company, during the term of this Plan, will at all times reserve and keep available such number of shares of its Common Stock as shall be sufficient to satisfy the requirements of the Plan.

16. Effective Date. This Plan was adopted by the Board of Directors of the Company on June 14, 1996, and shall be effective on said date, provided the Plan is approved within twelve (12) months of said date by the shareholders of the Company in accordance with the requirements of the Code and other applicable law. Options may be granted, but may not be exercised, prior to the date of such shareholder approval.

17. Certain Definitions. As used in this Plan, the following terms shall have the following meanings:

     17.1 “Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if, at the time of the granting of the Option, each of such corporations other than the Company owns stock possession 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

     17.2 “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of granting of the Option, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

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     17.3 “Affiliate” means any corporation that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, another corporation, where “control” (including the terms “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to cause the direction of the management and policies of the corporation, whether through the ownership of voting securities, by contract or otherwise.

     17.4 “Fair Market Value” shall mean the fair market value of the Shares as determined by the Administrator from time to time in good faith. If a public market exists for the Shares, the Fair Market Value shall be the average of the last reported bid and asked prices for common stock of the Company on the last trading day prior to the date of determination (or the average closing price over the number of consecutive working days preceding the date of determination as the Administrator shall deem appropriate) or, in the event the common stock of the Company is listed on a stock exchange or on the NASDAQ National Market System, the Fair Market Value shall be the closing price on such exchange or quotation system on the last trading day prior to the date of determination (or the average closing price over the number of consecutive working days preceding the date of determination as the Administrator shall deem appropriate).

     17.5 “Exchange Act” shall mean Securities and Exchange Act of 1934, as amended.

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ATTACHMENT B

CHARTER

Audit Committee of the Board of Directors

Semotus Solutions, Inc.

     The Audit Committee of the Board of Directors of the Company was established by the action of the Board in adopting the Bylaws of the Company. The provisions of the Bylaws set forth the basic responsibilities and board procedures for the Audit Committee. This Charter is intended to supplement the Bylaw provisions and to specify in more detail the membership and responsibilities of the Committee, as outlined below:

Membership

     The Audit Committee shall consist of not fewer than three nor more than five members of the Board of Directors. No member of the Committee shall be an active or retired employee of the Company, and all of them shall be independent of management and free from any relationship that, in the opinion of the Board of Directors, would interfere with their independent judgment as a member of the Committee.

Responsibilities

     The Audit Committee serves as the representative of the Board for the general oversight of Company affairs in the area of financial accounting and reporting and the underlying internal controls as well as the financial aspects of the Company’s funded benefit plans. Through its activities, the Committee will facilitate open communication among directors, the Company’s independent accountants, any internal audit function, and corporate management.

     The Audit Committee will assist the Board in discharging its fiduciary responsibilities to shareholders, providing assurance as to the independence of the Company’s outside accountants and the adequacy of disclosure to shareholders and to the public.

     Specifically, the Audit Committee will:

     1. Hold no less than three regularly scheduled meetings each year, normally in February, June and November, and other meetings from time to time as may be called pursuant to the Company’s Bylaws. A majority shall constitute a quorum of the Audit Committee. A majority of the members in attendance shall decide any question brought before any meeting of the Committee.

     2. Recommend to the Board, annually, the appointment of a firm of independent public accountants as the Company’s outside auditors.

     3. Review with representatives of the independent accountants:

• The plan for and scope of its annual audit of the Company’s financial statements.

• The Results of the annual audit.

• Any recommendations with respect to internal controls and other financial matters, including any perceived weaknesses in the Company’s internal controls, policies, and procedures.

• Any significant changes made by management in the basic accounting principles and reporting standards used in the preparation of the Company’s financial statements.

• Review the Annual Report in detail with the outside auditors.

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4. Review the extent of any services outside the audit area performed for the Company by its independent accountants.

5. Review the fees proposed by the Company’s independent accountants for their services.

6. Review whether management has sought a second opinion regarding a significant accounting issue, and, if so, obtain the rationale for the particular accounting treatment chosen.

7. Review compliance by officers and employees with the Company’s policies on business ethics and public responsibility.

8. Make such other recommendations to the Board on such matters, within the scope of its functions, as may come to its attention and which in its discretion warrant consideration by the Board.

9. Meet privately from time to time with representatives of the independent accountants, the Chief Financial Officer and management.

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