quepasa.com, inc.
410 North 44th Street, Suite 450
Phoenix, Arizona 85008
PROXY STATEMENT AND
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 4, 2003
To the shareholders of quepasa.com, inc.:
The Annual Meeting of the shareholders of quepasa.com, inc. will be held at
our corporate offices located at 410 North 44th Street, Suite 450, Phoenix,
Arizona 85008, at 11:00 A.M. on August 4, 2003, or at any adjournment or
postponement thereof, for the following purposes:
1. To elect five directors.
2. To change our name to "quepasa corporation."
3. To reverse split our Common Stock on the basis of one share for each
20 shares currently outstanding.
4. To transact such other business as may properly come before the
meeting.
Details relating to the above matters are set forth in the attached Proxy
Statement. All shareholders of record as of the close of business on July 9,
2003 will be entitled to notice of and to vote at such meeting or at any
adjournment or postponement thereof.
All shareholders are cordially invited to attend the meeting. If you do not
plan to attend the meeting, you are urged to sign, date and promptly return the
enclosed proxy. A reply card is enclosed for your convenience. The giving of a
proxy will not affect your right to vote in person if you attend the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Jeffrey S. Peterson
-----------------------
Jeffrey S. Peterson
Chairman
July 14, 2003
PROXY STATEMENT
quepasa.com, inc.
410 North 44th Street, Suite 450
Phoenix, Arizona 85008
Telephone: (602) 716-0100
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 4, 2003
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of quepasa.com, inc., a Nevada corporation, of
its $.001 par value Common Stock to be voted at our Annual Meeting of
Shareholders ("Annual Meeting") to be held at 11:00 A.M. on August 4, 2003, or
at any adjournment or postponement thereof. We anticipate that this Proxy
Statement and the accompanying form of proxy will be first mailed or given to
our shareholders on or about July 14, 2003. The shares represented by all
proxies that are properly executed and submitted will be voted at the meeting in
accordance with the instructions indicated thereon. Unless otherwise directed,
votes will be cast (i) for the election of the five nominees for directors
hereinafter named, (ii) to change our name to quepasa corporation, and (iii) to
reverse split our Common Stock on the basis of one share for each 20 shares
outstanding. The holders of a majority of the shares represented at the Annual
Meeting in person or by proxy will be required to elect directors and approve
both of the proposed matters.
Any shareholder giving a proxy may revoke it at any time before it is
exercised by delivering written notice of such revocation to us, by substituting
a new proxy executed at a later date, or by requesting, in person, at the Annual
Meeting, that the proxy be returned.
All of the expenses involved in preparing, assembling and mailing this
Proxy Statement and the materials enclosed herewith and all costs of soliciting
proxies will be paid by us. In addition to the solicitation by mail, proxies may
be solicited by our officers and regular employees by telephone, telegraph or
personal interview. Such persons will receive no compensation for their services
other than their regular salaries. Arrangements will also be made with brokerage
houses and other custodians, nominees and fiduciaries to forward solicitation
materials to the beneficial owners of the shares held of record by such persons,
and we may reimburse such persons for reasonable out of pocket expenses incurred
by them in so doing.
VOTING SHARES AND PRINCIPAL SHAREHOLDERS
The close of business on July 9, 2003 has been fixed by the Board of
Directors as the record date (the "record date") for the determination of
shareholders entitled to notice of and to vote at the Annual Meeting. On the
record date, there were outstanding 41,497,048 shares of Common Stock. Each
share of Common Stock entitles the holder thereof to one vote on each matter
which may come before the Annual Meeting. Cumulative voting for directors is not
permitted. A majority of the issued and outstanding shares entitled to vote,
represented at the meeting in person or by proxy, constitutes a quorum at any
shareholders' meeting.
2
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information with respect to the
beneficial ownership of our Common Stock (and stock options exercisable within
60 days) by (i) each person who is known by us to own of record or beneficially
more than 10% of our Common Stock, (ii) each of our directors and (iii) all
directors and officers as a group. The persons listed in the table have sole
voting and investment powers with respect to the shares of Common Stock and the
address of each person is in care of us.
Name Amount of Ownership Percent of Class
---- ------------------- ----------------
Jeffrey S. Peterson 8,728,318 21%
Michael D. Silberman 3,264,534 8%
Brian Lu 1,408,056 3%
All officers and directors
as a group (3 persons) 13,400,908 32%
ELECTION OF DIRECTORS
At the Annual Meeting, the shareholders will elect five directors.
Cumulative voting is not permitted in the election of directors. In the absence
of instructions to the contrary, the person named in the accompanying proxy will
vote in favor of the election of each of the persons named below as our nominees
for directors. Three of the nominees are presently members of the Board of
Directors, and each of the nominees has consented to be named herein and to
serve if elected. It is not anticipated that any nominee will become unable or
unwilling to accept nomination or election, but if such should occur, the person
named in the proxy intends to vote for the election in his stead of such person
as the Board of Directors may recommend.
The following table sets forth certain information regarding each of our
nominees and each executive officer.
Officer or
Name Age Position Director Since
---- --- -------- --------------
Jeffrey S. Peterson 30 Chairman of the Board of From 1997
Directors, Chief Executive to 1999 and
Officer and Chief Financial since April 2002
Officer
Michael D. Silberman 47 Director From 1998
to 1999 and
since April 2002
David Hansen 24 Chief Technology Officer and 2003
Director Nominee
Brian Lu 21 Director 2002
Victor Roldan 35 Director Nominee Not applicable
3
Directors hold office for a period of one year from their election at the
annual meeting of stockholders or until their successors are duly elected and
qualified. Our officers are elected by, and serve at the discretion of, the
Board of Directors.
Jeffrey S. Peterson has been our Chairman and Chief Executive Officer since
April 2002. He has been the Chairman and Chief Executive Officer of Vayala
Corporation, our wholly-owned subsidiary, since July 2001. From June 1999 to
June 2001, Mr. Peterson managed his personal investments. Mr. Peterson was the
original founder of quepasa and was our Chairman and Chief Executive Officer
from May 1998 to June 1999 when he was appointed Chief Technology Officer. He
was also our Chief Technology Officer from July 1997 until May 1998 and our
President in June 1999. From January 1997 to June 1997, Mr. Peterson served as
co-owner of NetCentury, an Internet design firm he founded. Mr. Peterson is an
experienced Modula, Java, and C++ programmer, who has been involved in the
programming and operations of computers and digital communications for over 20
years. He has developed software applications for operating systems and digital
platforms, beginning with Cp/M based systems in the early 1980s to Unix (Sun
Solaris, BSD, Linux, Irix) and Windows NT. Mr. Peterson is bilingual in English
and Spanish. Mr. Peterson has received national and international media
attention for his accomplishments in the technology sector, currently serves on
the board of directors of several privately-held technology related companies in
both the United States and Latin America and serves as a technology consultant
to the government of Mexico. In June 2003, Mr. Peterson was appointed by Arizona
Governor Janet Napolitano to the Board of Directors of the Arizona - Mexico
Commission.
Michael D. Silberman has been a self-employed investor since July 1999. Mr.
Silberman co-founded quepasa in May 1998 and was our Chief Operating Officer,
Chief Financial Officer, Operations Coordinator and a Director from May 1998
until July 1999. From September 1996 to May 1998, he was Chief Financial
Officer, Secretary and a Director of Retrospettiva, Inc. From May 1994 to
September 1996 he was a financial advisor with Prudential Securities, Inc. From
April 1992 to February 1994, Mr. Silberman was a portfolio manager for Private
Investment Fund, a privately-held and managed investment fund. From September
1991 to April 1992, he was the founder and president of UMB Commercial Capital,
a division of United Mercantile Bank of Pasadena, a federally chartered bank.
From 1983 to 1991, Mr. Silberman served as executive vice president, vice
president and an account executive of Allied Business Capital, a
California-based commercial finance and factoring company. Mr. Silberman earned
a B.A. in Economics from the University of California, Los Angeles (UCLA) and
his MBA from the John E. Anderson Graduate School of Management (Anderson
School) at the University of California, Los Angeles (UCLA).
David Hansen was the lead programmer on our original technology team,
beginning with our original startup in 1997. Mr. Hansen has a strong background
in dynamic systems development. An Arizona native, he attended Arizona State
University and has been involved in technology since early childhood. A key
participant and contributor to the growth of principal technology concerns
throughout the Southwest, Mr. Hansen also serves on the board of directors of
Wild Attire Inc., a leading online retailer.
4
Brian Lu was a co-founder of Vayala Corporation, our wholly-owned
subsidiary, and has been an employee of Vayala since June 2001. He became a
Director and an employee in April 2002.
Victor Roldan was a Strategic Account Executive with Cable and Wireless
from 2001 to 2003, where he managed new accounts totaling over $5.5 million in
revenue annually, serving principal internet customers in Latin America. He was
also responsible for new business development for Cable and Wireless in Mexico,
Central America and South America. From 2000 to 2001, Mr. Roldan was the
Director of Business Development for ZDNet Latin America, where he directed
business development for ZDNet in the Hispanic market, including the U.S., Latin
America and Brazil; initiated partnership negotiations, expanding existing
partnerships and closing new partnerships with a number of companies, including
Televisa/Esmas.com, UOL, Terra, Starmedia, IG.com, Globo.com, Univision, Yahoo
en Espanol and AOL Latin America. He also was responsible for creating new
revenue streams for the company through content syndication to print media
companies. From 1999 to 2000, Mr. Roldan was Vice President of Business
Development at Espanol.com, where he created partnerships with El Nuevo Dia,
Hispanic Broadcasting Corporation, Telemundo, Terra Networks, LatinTrade.com,
Vcom, Scholastic, DownTown Books, BeFree and others. From 1997 to 1999, Mr.
Roldan was our Executive Vice President during which time he directed business
development and marketing; creating partnerships with Fox Sports World Espanol,
the Miami Herald, GarciaLKS, H.B.C., IDT/Nuestravoz.com and others. During his
time with us, Mr. Roldan brought Jose Maria Figueres, former president of Costa
Rica, to our board of directors, as well as Lionel Sosa, named one of the 100
most influential Hispanics in the U.S. From 1995 to 1997, Mr. Roldan was
employed as an Attorney with Alfredo Fournier & Associates in San Jose, Costa
Rica, where he specialized in Labor and Civil Law. He directed all litigation
for FERTICA, the largest export company in Central America. Mr. Roldan studied
law at the University of Costa Rica, San Jose, where he graduated and was
certified as an Attorney and Notary Public in 1995.
5
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table provides certain summary information concerning the
compensation earned by our current president and our former chief executive
officer for services rendered in all capacities to us and our subsidiaries for
the fiscal years ended December 31, 2002, and 2001.
Annual Compensation Long Term Compensation
-------------------------------------- ----------------------
Restricted Securities
Name and Principal Other Annual Stock Underlying All Other
Positions Year Salary Bonus Compensation Awards Options Compensation
------------------ ---- ------ ----- ------------ ------ ------- ------------
Jeffery S. Peterson 2002 $ 93,931 $ 0 $ 0 $ 0 $ 0 $ 0
Chairman and Chief
Financial Officer
Gary L. Trujillo 2002 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Chairman and former 2001 $215,531 $ 0 $ 0 $ 0 $100,000 $700,000 (1)
Chief Executive
Officer and President
Robert J. Taylor 2002 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
President and Chief 2001 $175,000 $ 0 $26,065 (2) $ 0 $100,000 $ 0
Financial Officer
(1) Represents severance in connection with the early termination of Mr.
Trujillo's employment agreement.
(2) Of this amount, $20,065 represents vacation pay and $6,000 represents
vehicle allowance.
6
Option Grants Table
We granted 1.150 million stock options to our executive officers during the
year ended December 31, 2002.
Aggregated Option Exercises in 2002 and Year-End Option Values/Table
Value of Unexercised
In-the-Money Options
Number of Unexercised at
Options at Year-end Year-end ($)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexercisable(1)
---- ----------- -------- ------------- ----------------
Jeffrey S. Peterson -- -- 37,500/37,500 $ 0/0
No options were exercised during 2002 by our executive officers.
(1) Based on the closing bid price of our Common Stock of $0.02 per share on
December 31, 2002.
Director Compensation
Our directors do not currently receive compensation for their services as
directors, although they are provided reimbursement for any out-of-pocket
expenses incurred in attending Board meetings.
CERTAIN TRANSACTIONS
On October 30, 2002 we acquired all of the issued and outstanding common
stock of Vayala Corporation initially for 10,000,000 shares of our Common Stock.
We also agreed to issue up to 22,000,000 additional shares and stock options to
purchase an additional 65,000,000 shares exercisable at $.0001 per share based
upon certain performance criteria to be met by Vayala. Vayala is an affiliated
company by virtue of the fact that Messrs. Peterson, Silberman and Lu were
principal stockholders and/or executive officers and directors of Vayala.
PROPOSAL TO CHANGE OUR NAME TO "QUEPASA CORPORATION"
As a result of our purchase of Vayala Corporation, we have expanded our
business beyond the operation of our quepasa.com Web site. Accordingly, we
believe it appropriate to reflect our expanded operations through the proposed
name change. The Board of Directors recommends that our shareholders approve a
change in our name to "quepasa corporation."
7
PROPOSAL TO REVERSE SPLIT OUR COMMON STOCK
ON THE BASIS OF ONE SHARE FOR EACH 20 SHARES OUTSTANDING
Introduction
In June 2003, our Board of Directors approved a proposal to effect a
reverse split of our Common Stock, subject to the approval of our shareholders.
The reverse split, as approved, will combine our outstanding Common Stock on a
one share for 20 shares basis. In other words, once the reverse split takes
place, every 20 shares of Common Stock held by shareholders will be reduced to
one share. Accordingly, the 41,497,048 shares currently issued and outstanding
will be reduced to approximately 2,074,852 shares (subject to rounding) issued
and outstanding.
Reasons for the Reverse Split
Our Common Stock currently trades at less than $.10 per share and we
currently have almost 50 million shares outstanding. Our Board of Directors
believes it is in our interest to reduce the number of shares outstanding, which
may proportionately increase the price per share, thereby possibly interesting
broker dealers and investors who would otherwise be reluctant to purchase
securities trading at less than $.10 per share.
Certain Effects of the Reverse Split
The following table illustrates the principal effects of the reverse split
on our Common Stock based on the number of shares issued and outstanding as of
the date hereof, and the number of shares authorized resulting from approval of
the proposal.
Number of Shares Number of Shares
Prior to Reverse Split After Reverse Split
---------------------- -------------------
Authorized Common Stock 50,000,000 50,000,000
Issued and Outstanding
Common Stock 41,497,048 2,074,852
Common Stock Available
for Issuance 5,502,952 47,925,148
Fractional shares will be paid in cash based upon the average closing bid
price of our Common Stock on the Electronic Bulletin Board for the ten trading
days prior to the Annual Meeting. Shares of Common Stock issued pursuant to the
reverse split will be fully paid and nonassessable. The reverse split will not
alter the relative voting and other rights of holders of the Common Stock, and
each share of Common Stock will continue to entitle its owner to one vote.
8
As a result of the reverse split, the number of shares of Common Stock
presently outstanding will be consolidated but the number of shares authorized
for issuance will remain unchanged at 50 million. Accordingly, we will have the
ability to issue more shares of Common Stock than is presently the case without
additional shareholder approval. Doing so may have a dilutive effect on the
equity and voting power of our existing shareholders. Your percentage ownership
in our company will remain essentially unchanged.
The reverse split may result in some shareholders owning "odd-lots" of less
than 100 shares of Common Stock. Brokerage commissions and other costs of
transactions in odd-lots are generally somewhat higher than the costs of
transactions in round lots of even multiples of 100 shares.
The reverse split will not affect our shareholders' equity as reflected on
its financial statements, except to change the number of issued and outstanding
shares of Common Stock and to reduce additional paid-in capital to the extent we
pay cash for fractional shares. Accordingly, the payment of cash will reduce our
shareholders' equity and shares of Common Stock outstanding.
Certain Federal Income Tax Consequences
The following is a summary of the material anticipated federal income tax
consequences of the proposed reverse split. This summary is based upon existing
law which is subject to change by legislation, administrative action and
judicial decision, and is necessarily general. In addition, this summary does
not address any consequence of the reverse split under any state, local or
foreign tax laws. Accordingly, this summary is not intended as tax advice to any
person or entity, and we advise you to consult with your own tax advisor for
more detailed information relating to your individual circumstances.
We understand that the reverse split will be a "recapitalization" under
applicable federal tax laws and regulations. As a result of such tax treatment,
no gain or loss should be recognized by us or our shareholders as a result of
the reverse split or the exchange of pre- reverse split shares for post-reverse
split shares. A shareholder's aggregate tax basis in his or her post-reverse
split shares should be the same as his or her aggregate tax basis in the
pre-reverse split shares. In addition, the holding period of the post-reverse
split shares received by such shareholder should include the period during which
the pre-reverse split shares were held, provided that all such shares were held
as capital assets in the hands of the shareholder at the time of the exchange.
Shareholders will recognize gain for federal income tax purposes to the extent
that payment made to them for fractional shares exceeds the shareholder's tax
basis in his or her shares.
Effective Date of the Reverse Split
If the proposal is approved by our shareholders, we anticipate that it will
become effective in July 2003. After the reverse split is effective,
certificates representing shares of pre-reverse split Common Stock will be
deemed to represent only the right the receive the appropriate number of shares
of post-reverse split Common Stock.
9
Exchange of Certificates
Shareholders are not being asked to exchange their certificates at this
time. However, they are entitled to do so after the reverse split takes place,
if they wish, by contacting our transfer agent, Corporate Stock Transfer,
Denver, Colorado. Otherwise, certificates representing pre- reverse split shares
will be exchanged for certificates reflecting post-reverse split shares at the
first time they are presented to the transfer agent for transfer.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Ehrhardt Keefe Steiner & Hottman, P.C., Denver, Colorado, conducted the
audit of our financial statements for the year ended December 31, 2002. It is
our understanding that this firm is obligated to maintain audit independence as
prescribed by the accounting profession and certain requirements of the
Securities and Exchange Commission. As a result, our directors do not
specifically approve, in advance, non-audit services provided by the firm, nor
do they consider the effect, if any, of such services on audit independence.
PROPOSALS OF SHAREHOLDERS FOR PRESENTATION
AT NEXT ANNUAL MEETING OF SHAREHOLDERS
Any shareholders of record who desires to submit a proper proposal for
inclusion in the proxy materials relating to the next annual meeting of
shareholders must do so in writing and it must be received by us at our
principal executive offices prior to our fiscal year end. The proponent must be
a record or beneficial shareholder entitled to vote at the next annual meeting
of shareholders on the proposal and must continue to own the securities through
the date on which the meeting is held.
OTHER BUSINESS
Management is not aware of any other matters which are to be presented to
the Annual Meeting, nor has it been advised that other persons will present any
such matters. However, if other matters properly come before the meeting, the
individual named in the accompanying proxy shall vote on such matters in
accordance with his best judgment.
The above notice and Proxy Statement are sent by order of the Board of
Directors.
/s/ Jeffrey S. Peterson
-----------------------
Jeffrey S. Peterson
Chairman
July 14, 2003
10
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY
FOR THE ANNUAL MEETING OF SHAREHOLDERS OF
quepasa.com, inc.
TO BE HELD AUGUST 4, 2003
The undersigned hereby appoints Jeffrey S. Peterson as the lawful agent and
Proxy of the undersigned (with all the powers the undersigned would possess if
personally present, including full power of substitution), and hereby authorizes
him to represent and to vote, as designated below, all the shares of Common
Stock of quepasa.com, inc. held of record by the undersigned on July 9, 2003, at
the Annual Meeting of Shareholders to be held August 4, 2003, or any adjournment
or postponement thereof.
1. ELECTION OF DIRECTORS
_____ FOR the election as a director of all nominees listed below (except
as marked to the contrary below).
_____ WITHHOLD AUTHORITY to vote for all nominees listed below.
NOMINEES: Jeffrey S. Peterson, Michael D. Silberman, Brian Lu, Victor
Roldan and David Hansen
INSTRUCTION: To withhold authority to vote for individual nominees, write their
names in the space provided below:
______________________________________________________________________
______________________________________________________________________
2. TO CHANGE OUR NAME TO "QUEPASA CORPORATION."
_____ FOR _____ ABSTAIN _____ AGAINST
3. To reverse split our Common Stock on the basis of one share for each 20
shares outstanding.
_____ FOR _____ ABSTAIN _____ AGAINST
4. In his discretion, the Proxy is authorized to vote upon any matters which
may properly come before the Annual Meeting, or any adjournment or postponement
thereof.
It is understood that when properly executed, this proxy will be voted in
the manner directed herein by the undersigned shareholder. Where no choice is
specified by the shareholder, the proxy will be voted for the election of the
directors named in item 1 above, for changing our name to quepasa corporation
and for the one share for 20 shares reverse stock split.
The undersigned hereby revokes all previous proxies relating to the shares
covered hereby and confirms all that said Proxy may do by virtue hereof.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Dated:
---------------------------- ---------------------------------------
Signature
PLEASE MARK, SIGN, DATE
AND RETURN THE PROXY
CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
---------------------------------------
Signature, if held jointly
PLEASE CHECK THIS BOX IF YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING OF
SHAREHOLDERS. _____