<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
H-QUOTIENT, INC
-----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
5) Total fee paid:
----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________________________
3) Filing Party:
___________________________________________________________________________
4) Date Filed:
___________________________________________________________________________
<PAGE>
HoQUOTIENT, INC.
12030 Sunrise Valley Drive
Reston, Virginia 20191
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 16, 2000
To the Stockholders:
The annual meeting of stockholders (the "Annual Meeting") of HoQuotient,
Inc. (the "Company") will be held at 12030 Sunrise Valley Drive, Suite 205,
Reston, VA 20191, telephone number (703) 716-0100, on June 16, 2000, at 9:00
A.M. (Eastern daylight time) for the following purposes, each as more fully
described herein:
1) To elect four directors to serve until the next Annual Meeting or until
their respective successors shall have been elected and qualified:
2) To transact such other business as may properly come before the Annual
Meeting.
Only stockholders of record at the close of business on May 26, 2000 are
entitled to notice of and to vote at the Annual Meeting. A list of stockholders
eligible to vote at the meeting will be available for inspection at the meeting
and for a period of ten days prior to the meeting during regular business hours
at the corporate headquarters at the address above. Should you receive more
than one proxy because your shares are registered in different names, each
proxy should be signed and returned to assure that all your shares will be
voted. You may revoke your proxy at any time prior to the Annual Meeting. If
you attend the Annual Meeting and vote by ballot, your proxy will be revoked
automatically and only your vote at the Annual Meeting will be counted.
Whether or not you expect to attend the Annual Meeting, your proxy vote is
important. To assure your representation at the Annual Meeting, please sign and
date the enclosed proxy card and return it promptly in the enclosed envelope,
which requires no additional postage if mailed in the United States.
By Order of the Board of Directors
Douglas A. Cohn
Chief Executive Officer and Chairman
of the Board
Reston, Virginia
June 5, 2000
----------------------------------------------------
IT IS IMPORTANT THAT THE ENCLOSED PROXY CARD
BE COMPLETED AND RETURNED PROMPTLY
----------------------------------------------------
<PAGE>
HoQUOTIENT, INC.
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
Introduction
This Proxy Statement is furnished to stockholders of record of HoQuotient
(the "Company") as of the close of business on May 26, 2000 in connection with
the solicitation of proxies by the Board of Directors of the Company (the
"Board of Directors" or "Board") for use at the Annual Meeting of Stockholders
(the "Annual Meeting") to be held on June 16, 2000.
Shares cannot be voted at the meeting unless the owner is present in
person or by proxy. All properly executed and unrevoked proxies in the
accompanying form that are received in time for the meeting will be voted at
the meeting or any adjournment thereof in accordance with instructions thereon,
or if no instructions are given, will be voted "FOR" the election of the named
nominees as Directors of the Company, and will be voted in accordance with the
best judgement of the persons appointed as proxies with respect to other
matters which properly come before the Annual Meeting. Any person giving a
proxy may revoke it by written notice to the Company at any time prior to the
exercise of the proxy. In addition, although mere attendance at the Annual
Meeting will not revoke the proxy, a stockholder who attends the meeting may
withdraw his or her proxy and vote in person. Abstentions and broker non-votes
will be counted for purposes of determining the presence or absence of quorum
for the transaction of business at the Annual Meeting, Abstentions will be
counted in the tabulation of votes cast on each of the proposals presented at
the Annual Meeting and will have the same effect as votes against a proposal
whereas broker non-votes will not be counted for purposes of determine whether
a proposal has been approved.
The Annual Report of the Company (which does not form a part of the proxy
solicitation materials), including the Annual Report on Form 10-KSB (the "Form
10-KSB") with the financial statements of the Company for the fiscal year ended
December 31, 1999, is being distributed concurrently herewith to the
stockholders.
The mailing address of the principal executive offices of the Company is
12030 Sunrise Valley Drive, Suite 205, Reston, Virginia 20191. This Proxy
Statement and the accompanying form of proxy are being mailed to the
stockholders of the Company on or about June 5, 2000.
VOTING SECURITIES
The Common stock of the Company is the only class of voting security. At
the Annual Meeting, each stockholder or record of Common Stock at the close of
business on May 26, 2000 will be entitled to one vote for each share of Common
Stock owned on that date as to each matter presented a the Annual Meeting. On
May 26, 2000, 13,924,280 shares of Common Stock were outstanding. A list of
stockholders eligible to vote at the Annual Meeting will be available for
inspection at the Annual Meeting and for a period of ten days prior to the
Annual Meeting, during regular business hours at the principal executive offices
of the Company at the address specified above.
ELECTION OF DIRECTORS
Unless otherwise directed, the persons appointed in the accompanying form
of proxy intend to vote at the Annual Meeting for the election of the four
nominees named below as Directors of the Company to serve until the next Annual
Meeting or until their successors are duly elected and qualified. If any
nominee is unable to be a candidate when the election takes place, the shares
represented by valid proxies will be voted in favor of the remaining nominees.
The Board of Directors does not currently anticipate that any nominee will be
unable to be a candidate for election.
The Board of Directors currently has four members, all of whom are
nominees for re-election. Each director shall serve until the next Annual
Meeting or until his respective successor shall have been duly elected and
qualified.
<PAGE>
The affirmative vote of a plurality of the Company's outstanding shares of
Common Stock represented and voting at the Annual Meeting is required to elect
the Directors.
Nominees for Election as Directors
The following information with respect to the principal occupation or
employment, other affiliations and business experience of each nominee during
the last five years has been furnished to the Company by such nominee. Except
as indicated, each of the nominees has had the same principal occupation for
the last five years, Additional information with respect to officers, directors
and major stockholders of the Company, including their percentage ownership in
the Company's voting Common Stock is set forth on pages, 4 through 8.
Douglas A. Cohn, age 54, has been Chairman of the Board and Chief
Executive Officer of this Company since October, 1999. He is also a Founder of
the Internet Guide, Inc., Chairman of its Board of Directors, President, Chief
Executive Officer and Publisher. Mr. Cohn is Jack Anderson's writing partner in
the nationally syndicated column Jack Anderson & Douglas Cohn's Washington
Merry-Go-Round. He is the president of American Publishing Corporation, which
publishes five nationally-distributed publications and syndicates writers and
cartoonists to newspapers. He has been in the publishing business since 1985
and publishing the five publications beginning in 1989. He is the author of
Jackson's Valley Campaign with Maps from the West Point Atlas of American Wars.
Mr. Cohn, a 1968 graduate of the U.S. Military Academy at West Point N.Y.,
volunteered for service in Vietnam, where he was wounded. Retired from the
service as a result of those wounds, he was awarded the Silver Star (twice),
Purple Heart and other medals. He is a syndicated writer and speech writer and
has appeared numerous times on national television and radio shows.
Alan W. Grofe, age 55, has been President of the Company since May 15,
1996 and Executive Vice President, Secretary and a director of the Company
since April 1996. From March 1993 to March 1997, Mr. Grofe was President and
Chief Executive Officer of MarketLink, Inc., a direct marketing software
company not affiliated with the Company. From 1991 to 1993, Mr. Grofe served as
President of CCS, Inc., a direct marketing service bureau, and from 1989 to
1991, as Vice President and Chief Operating Officer of Warren & Lewis, a
venture capital firm. Prior to that time, he managed the Federal Computer
Conferences; a series of computer industry trade shows, for Information
Development Corporation from 1988 to 1989. And from 1980 to 1987, he was
account manager and later Director of Federal Systems Operations for Motorola
Computer Systems, for whom he worked in both the healthcare industry and in
computer sales to the federal government.
Jack Anderson, age 77, has been director of the Company since May 31, 2000.
He is a Founder of Internet Guide, Inc., and Vice Chairman of its Board of
Directors, Vice President, Chief Financial Officer, and Editor. He is a Pulitzer
Prize Winner. "When Ronald Regan sought to discover the most trusted and most
widely-read journalist in the United States, his private pollster, Richard
Wirthlin, ran a national survey and concluded that Jack Anderson was that
writer." Advertising Age, Dec. 6, 1982. Mr. Anderson's fledging newspaper career
was interrupted by World War II during which he served with Chinese guerrillas
and the Merchant Marine. Following the war, he joined the Washington, D.C.,
staff of Drew Pearson, the influential radio broadcaster and columnist.
Eventually, he took over the column (which he and Douglas Cohn continue to this
day) and succeeded in exposing the Mafia, Sen. Joseph McCarthy, misdeeds of
President Richard Nixon (Pulitzer Prize), the TTT-Dita Beard Scandal, and CIA
plots. He founded the Utah State University School of the Future, and with
industrialist J. Peter Grace (of Grace Commission fame), he formed Citizens
Against Government Waste. He appeared on Good Morning America for nine years.
Currently, he is the Washington editor of Parade Magazine, continues his
syndicated column, lectures extensively, and is the editor of The National Forum
(a publication featuring opposing sides to the issues of the day) and Internet
Guide.
Dr. J. Brian Copley, age 53, has been a director of the Company since May
31, 2000. He is a Founder of the Internet Guide, Inc., a member of its Board of
Directors, and the vice chairman, Dept. of Medicine, and chief of Nephrology at
the Ochsner Clinic in New Orleans, La. He has been employed at the Ochsner
Clinic since 1990. He is a 1968 graduate of the U.S. Military Academy at West
Point, N.Y., and a 1976 honor graduate of the University of Washington School of
Medicine at Seattle, Wash. Dr. Copley was awarded the Bronze Star, Vietnamese
Cross of Gallantry and other medals for service in Vietnam. He is a retired
colonel. Dr. Copley is the author or co-author of more than 50 articles and
studies. He is a much sought-after speaker on the lecture circuit.
2
<PAGE>
Meetings of the Board of Directors stud its Committees
In the last fiscal year all actions by the Board of Directors were taken
by unanimous written consent.
Compensation of Directors
Directors who are not officers or related to officers received no cash
compensation during fiscal year 1999. Directors are entitled to reimbursement
for all out-of-pocket expenses incurred in connection with board or committee
meeting attendance. It is contemplated that in the future non-officer directors
will receive stock purchase warrants the amount of which shall be determined by
the Board.
3
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Executive Officers
The names of the Company's executive officers as of June 1, 2000 and
certain information about are set forth below.
<TABLE>
<CAPTION>
Name Age Position
--------------------------- ----- --------------------------------------------------
<S> <C> <C>
Douglas A. Cohn ........... 54 Chairman of the Board and Chief Executive Officer
Alan W. Grofe ............. 55 President, Chief Operating Officer and Director
Michael J. Black .......... 47 Chief Financial Officer, Secretary, Treasurer and
Director
</TABLE>
Information regarding executive officer who is not a nominee for election as
director:
Michael J. Black, age 47, has been employed as a key executive of the
Company since September 1994. He has been Chairman since May 15, 1996 until
October, 1999. From 1991 to September 1994, Mr. Black was a consultant for Asset
Growth Partners, Inc., an investment banking firm, working on mergers and
acquisitions, equity and debt financing and strategic planning, primarily for
technology companies. From 1989 to 1991 he served as vice president of finance
for NMI Network Systems, Inc./The Account Data Group and before that as
president and founder of The Account Data Group. Both of these companies were
involved in various aspects of computer systems integration.
Section 16 (a) Beneficial Ownership Reporting Compliance
The Company's Directors, executive officers, and persons who beneficially
own more than 10% of the Company's shares of Common Stock, must file initial
reports of ownership and reports of changes in ownership of any equity
securities of the Company with the Securities and Exchange Commission. Copies
of the reports must be furnished to the Company. To the Company's knowledge,
based solely on review of the copies of such reports furnished to the Company,
all persons subject to these reporting requirements filed the required reports
on a timely basis with respect to the Company's most recent fiscal year.
Executive Compensation
The following table sets forth information concerning the compensation
paid during the Company's fiscal years ended December 31, 1999, 1998 and 1997
to the Company's Chief Executive Officer and all other executive officers whose
base salaries during the year were in excess of $100,000 (collectively, the
"Named Executive Officers").
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------- -----------------------
Shares
Underlying
Name and Principal Position Year Salary ($) Warrants (#)
------------------------------------ ---------- ------------ -----------------------
<S> <C> <C> <C>
Douglas A. Cohn .................... 12/31/99 -0- 750,000
Chairman and CEO
Alan W. Grofe ...................... 12/31/99 110,068 750,000
President, Chief Operating Officer 12/31/98 145,000 250,000
12/31/97 81,250 -0-
Michael J. Black ................... 12/31/99 111,440 750,000
Chief Financial Officer, Treasurer, 12/31/98 145,000 250,000
and Corporate Secretary 12/31/97 75,000 -0-
</TABLE>
4
<PAGE>
The following table contains information concerning common stock purchase
warrants granted to the Named Executive Officers during the fiscal year ended
December 31, 1999. No stock options were granted during the period.
Warrant Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Number of Percentage
Securities of Total
Underlying Warrants Exercise Expiration
Warrants Granted (1) Price (2) Date
------------ ------------- ----------- -----------
<S> <C> <C> <C> <C>
Douglas A. Cohn .......... 750,000 27% $ 1.00 11/31/02
Alan W. Grofe ............ 750,000 27% $ .75 9/18/04
Michael J. Black ......... 750,000 27% $ .75 9/18/04
</TABLE>
(1) Based on an aggregate of 2,750,000 warrants granted to employees and
non-employee independent contractors in the fiscal year ended December 31,
1999, including warrants granted to the Named Executive Officers.
(2) The exercise price of each grant is equal to or greater than the fair
market value of the Company's Common Stock on the date of the grant.
The following table sets forth certain information concerning exercisable
and unexercisable warrants held as of December 31, 1999 by each of the Named
Executive Officers:
Aggregate Warrants Exercises in Last Fiscal Year and Fiscal Year-end Warrant
Values
<TABLE>
<CAPTION>
Number of
Unexercised Warrants In-the-Money Warrants (1)
------------------------------- ------------------------------
Exercisable Unexercisable Exercisable Unexercisable
------------- --------------- ------------- --------------
<S> <C> <C> <C> <C>
Douglas A. Cohn .......... 750,000 -0- $656,250 -0-
Alan W. Grofe ............ 750,000 -0- $843,750 -0-
Michael J. Black ......... 750,000 -0- $843,750 -0-
</TABLE>
(1) Based on the difference between the closing price on December 31, 1999
($1.875) and the exercise price of the outstanding warrants.
Employment Agreements
On January 1, 1998, the Company entered into an employment with Alan W.
Grofe to serve as the President and Chief Operating Officer, and a Director of
the Company for a term commencing January 1, 1998 and ending December 31, 2000.
Mr. Grofe has been director of the Company since April 16, 1996. The agreement
provides for a salary of $145,000 per annum and for stock options under the
Company Stock Option Plan or, if there is no such plan, he will be granted
warrants, exercisable immediately for 60 months, to purchase a minimum of
100,000 to a maximum of 250,000 shares of Common Stock at an exercise price of
not less than the most recently issued warrant. The agreement also contains
restrictive covenants restricting Mr. Grofe for two years, after termination of
his employment from competing with the Company and soliciting Company employees
or customers.
On January 1, 1998, the Company entered into an employment agreement with
Michael J. Black to serve as the Chairman of the Board and Chief Executive
Officer for a term commencing January 1, 1998 and ending December 31, 2000. Mr.
Black was Chairman of the Company from May 15, 1996 to November 16, 1999.
Pursuant to a letter agreement dated November 16, 1999, Mr. Black will no longer
serve as Chairman and Chief Executive Officer but will continue as the Chief
Financial Officer of the Company for such period of time as is necessary to
effect a transition of his duties, at a salary of $10,000 per month. Pursuant to
the original agreement, Mr. Black will be granted warrants, exercisable
immediately for 60 months, to purchase a minimum of 100,000 to a maximum of
250,000 shares of Common Stock at an exercise price of not less than the most
recently issued warrants. The agreement also contains restrictive covenants
restricting Mr. Black for two years after termination of his employment from
competing with the Company and soliciting Company employees or customers.
5
<PAGE>
None of the other Company's executive officers have existing employment
agreements. Any previous employment agreements between the Company and its
executive officers have either lapsed or have been rescinded, and no new
agreements have been executed.
Limitation of Liability and Indemnification Matters
The Articles of Incorporation and By-Laws of the Company require the
Company to indemnify its current or former directors, officers, employees or
agents in such capacities to the full extent permitted by the Virginia Stock
Corporation Act (the "Act").
Under the Act, even if an officer, director, employee or agent loses a
lawsuit, it is possible he/she was acting in good faith, acting in the best
interests of the Company or had no reasonable cause to believe his conduct was
unlawful in the performance of his/her duties, the Company or its insurance
carrier, if any, will pay the amount of such judgement or settlement and
reasonable legal fees.
The Act contains provisions authorizing indemnification of directors,
officers, employees or agents of the Company or of certain other entities
against certain liabilities and expenses which they may incur by reason of
performing his/her duties in such capacities. The law also provides that such
indemnification may include payment by the Company of expenses incurred in
defending a civil or criminal action or proceeding in advance of the final
disposition of such action or proceeding upon receipt of an undertaking by the
person indemnified to repay such payment if he or she shall be ultimately found
not to be entitled to indemnification. Indemnification may be provided even
though the person to be indemnified is no longer a director, officer, employee
or agent of the Company or such entities. The Act also contains provisions
authorizing the Company to obtain insurance on behalf of any such director,
officer, employee or agent against such liabilities, whether or not the Company
would have the power to indemnify such person against such liabilities under
its provisions.
Because the Company's Articles of Incorporation or By-Laws do not
otherwise provide, notwithstanding its failure to provide indemnification and
despite, a contrary determination by the Board of Directors or its shareholders
in a specific case a director, officer, employee or agent of the Company who is
or was a party to a proceeding may apply to a court of competent jurisdiction
for indemnification or advancement of expenses or both. The court may order
indemnification and advancement of expenses or both, including expenses
incurred in seeking court ordered indemnification or advancement of expenses if
it determines that the petitioner is entitled to mandatory indemnification
pursuant to the Act because he or she has been successful on the merits, or
because the Company has the power to indemnify on a discretionary basis
pursuant to the Act or because the court determines that the director, officer,
employee or agent is fairly reasonably entitled to indemnification or
advancement of expenses or both in view of all the relevant circumstances.
At present, the Company does not maintain Officer and Directors Liability
Insurance.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of March 31, 2000, certain information
with respect to the beneficial ownership of shares of Common Stock of: (i) each
person who is known to the Company to be the beneficial owner of more than five
percent of the Company's Common Stock, (ii) each Director of the Company and
Named Executive Officer, and (iii) all directors and executive officers of the
Company as a group. As of March 31, 2000, the Company had 13,170,680 shares of
Common Stock outstanding.
6
<PAGE>
Beneficially Percent
Name and Address of Beneficial Owner Owned (1) of Class
----------------------------------------------- -------------- ---------
The Steven W. Bingaman 1996 Trust (2) . 3,431,514 19.5%
551 Fifth Avenue, Suite 1625
New York, NY 10176
Internet Guide Inc. (3) ....................... 4,356,157 24.7%
1365 Beverly Street
McLean, VA 22101 .............................
Douglas A. Cohn (4) ........................... 1,050,682 5.95%
Alan W. Grofe (5) ............................. 874,668 4.96%
Michael J. Black (6) .......................... 998,105 5.66%
All Directors and Officers as a group ......... 2,923,455 16.57%
Total ....................................... 10,711,126 60.7%
------------
(1) Shares of the Company's Common Stock which any person or entity set forth
in this table has a right to acquire, pursuant to the exercise of options
or warrants, are deemed to be outstanding for the purpose of computing the
percentage ownership of such person or entity, but are not deemed
outstanding for the purpose of computing the percentage ownership of any
other person or entity.
(2) Number of shares Beneficially Owned includes 100,000 shares of common stock
and 1,568,471 shares issuable upon exercise of various series warrants
beneficially owned by Appleby Partners, Ltd. exercisable during various
periods ending June 30, 2000 to June 15, 2004 at prices ranging from $1.00
each to $7.00 each. Appleby Partners, Ltd. has the sole power not only to
vote and direct the disposition of the shares of common stock and warrants
held by it but also has the sole power to vote and direct the disposition
of 1,438,043 shares of common stock and the 325,000 warrants held by the
Steven W. Bingaman 1996 Trust.
(3) Number of shares Beneficially Owned includes: 356,397 shares issuable upon
exercise of warrants exercisable until November 21, 2000 at a price of
$1.00, 250,000 shares issuable upon exercise of warrants exercisable until
August 31, 2002 at a price of $1.00 and 250,000 shares issuable upon
exercise of warrants exercisable until August 31, 2002 at a price of $2.00
all held by such entity. Does not include warrants to purchase 750,000
shares of common stock owned by Douglas A. Cohn, the Chairman and Chief
Executive Officer of the Company and of Internet Guide, Inc. in his
individual capacity. Mr. Cohn disclaims beneficial ownership of the shares
of the Company common stock and warrants held by Internet Guide, Inc.
except to the extent of his pecuniary interest therein.
(4) Number of shares Beneficially Owned includes 750,000 shares issuable upon
exercise of warrants exercisable until November 30, 2002 at a price of
$1.00 each held by Mr. Cohn. Does not include warrants to purchase 856,397
shares of common stock owned by Internet Guide, Inc. and Mr. Cohn
disclaims beneficial ownership thereof except to the extent of his
pecuniary interest therein, if any.
(5) Number of shares Beneficially Owned includes: 250,000 shares issuable upon
exercise of warrants until May 31, 2003 at a price of $.75 each, 62,334
shares issuable upon exercise of warrant until June 15, 2004 at a price of
$5.00 each and 500,000 shares issuable upon exercise of warrants until
September 18, 2004 at a price of $.75 each.
(6) Number of shares Beneficially Owned includes: 250,000 shares issuable upon
exercise of warrants exercisable until May 31, 2003 at a price of $.75
each, 107,666 shares issuable upon exercise of warrants exercisable until
June 15, 2004 at a price of $5.00 each and 500,000 shares issuable upon
exercise of warrants exercisable until September 18, 2004 at a price of
$.75 each.
Certain Relationships and Related Transactions
Many of the transactions during the last two years between the Company and
any of its officers, directors, principal stockholders or their affiliates are
the issuance of common stock to certain of the Company's officers described in
the Registration Statement on Form 10-SB incorporated by reference at "Recent
Sales of Unregistered Securities", described at page 54, the issuance of
warrants to certain of the Company's officers, described
7
<PAGE>
in "Executive Compensation" at page 45, the issuance of warrants to a certain
director of the Company described in "Executive Compensation" at page 45
thereof, the issuance of warrants to Aesop Financial Corporation, described in
"Description of the Company's Securities" at page 46 thereof and the lease of
computer equipment from Aesop, described in "Description of Properties" at page
41 thereof. Aesop Financial Corporation is a wholly owned subsidiary of Appleby
Partners, Ltd. which is a principal stockholder as set forth in "Principal
Stockholders" at page 42.
More recent transactions are reported in this report under "Common Stock
Issued in 1999". In addition, the following transactions took place in 1999.
In December 1999, the Company loaned an officer and director of the
Company $50,000 to purchase shares of common stock of the Company (at $0.6875
per share). Pursuant to an unsecured promissory note, the loan is due upon
demand, but no later than December 31, 2000 and accrues interest at a rate of
eight percent (8%) per annum.
On December 31, 1999, the Company sold 150,000 shares of common stock of
Internet Guide, Inc. at $10.375 per share and 185,000 shares of common stock of
the Company at $1.75 per share plus debt of $70,833 paid on behalf of the
Company, in exchange for a promissory note totaling $1,950,833. The promissory
note was subsequently paid in three installments in March, April and May, 2000
with cash in the amount of $330,000 and stocks of publicly traded companies
with a fair value of $1,648,800, an amount equal to the balance due on the
Note. The promissory note was secured by underlying securities and
collateralized by additional securities held by a third-party Trust. The
promissory note accrued interest at an annual rate of seven percent (7%)
calling for payments due in January, February and March 2000.
In 1995, the Company accrued salary to an officer of the Company in the
amount of $68,833. In 1998, an additional accrual of $31,167 relating to salary
was made for two officers of the Company. In January 1999, these obligations
were paid through the issuance of 200,000 shares of common stock in connection
with a Regulation D, Rule 504 offering.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the Company's 2001 Annual
Meeting of Stockholders pursuant to the provisions of Rule 14a-8 of the
Securities and Exchange Commission, promulgated under the Securities Exchange
Act of 1934, as amended, must be received at the Company's offices in Reston,
Virginia by January 2, 2001 for inclusion in the Company's proxy statement and
form of proxy relating to that meeting.
OTHER MATTERS
Management knows of no matters that are to be presented for action at the
meeting other than those set forth above. If any other matters properly come
before the meeting, the persons named in the enclosed form of proxy will vote
the shares represented by proxies in accordance with their best judgement on
such matters.
Proxies will be solicited by mail and may also be solicited in person or
by telephone by some regular employees of the Company. The Company may also
consider the engagement of a proxy solicitation firm. Costs of the solicitation
will be borne by the Company.
By Order of the Board of Directors
Douglas A. Cohn
Chief Executive Officer and Chairman of
the Board
Reston, Virginia
June 5, 2000
8
<PAGE>
HoQUOTIENT, INC.
This proxy is solicited on behalf of the Board of Directors
The undersigned stockholder of HoQUOTIENT, INC. (the "Company") hereby
appoints Douglas A. Cohn as Proxy, with power to appoint his substitute, and
hereby authorizes him to represent and vote as designated below, all of the
shares of the Company's Common Stock held of record by the undersigned on May
26, 2000 at the Annual Meeting of Stockholders of the Company to be held at
12030 Sunrise Valley Drive, Suite 205, Reston, VA 20191, on June 16, 2000 at
9:00 a.m. (Eastern daylight time), or at any adjournment thereof.
(1) Election of Directors
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for any individual
nominee listed below.
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name in the list below.)
Douglas A. Cohn Alan W. Grofe Jack Anderson J. Brian Copley
(2) In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE THIS PROXY WILL BE
VOTED FOR THE NOMINEES SIDE.
--------------------------------------------------------------------------------
DATE:________________ , 2000
____________________________
Signature
____________________________
Signature if held jointly
Please sign exactly as your
name appears on this card.
When shares are held by
joint tenants, both should
sign. When signing as
attorney, as 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
partnership, please sign in
partnership name by
authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
