YUPI INTERNET INC, S-1/A, 2000-04-12

YUPI INTERNET INC
S-1/A, 2000-04-12
BUSINESS SERVICES, NEC

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 12, 2000
REGISTRATION STATEMENT NO. 333-94891
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------

AMENDMENT NO. 5

TO
FORM S-1
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
---------------
YUPI INTERNET INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
FLORIDA 7375 65-0796526
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>

YUPI INTERNET INC.
1688 MERIDIAN AVENUE, 10TH FLOOR
MIAMI BEACH, FLORIDA 33139
(305) 604-0366
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
OSCAR L. COEN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
YUPI INTERNET INC.
1688 MERIDIAN AVENUE, 10TH FLOOR
MIAMI BEACH, FLORIDA 33139
(305) 604-0366
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

---------------
COPIES TO:
<TABLE>
<S> <C>
STEPHEN A. HURWITZ, ESQ. NANCY A. SPANGLER, ESQ.
WILLIAM B. SIMMONS, ESQ. PIPER MARBURY RUDNICK & WOLFE LLP
TESTA, HURWITZ & THIBEAULT, LLP COMMERCE EXECUTIVE PARK III, SUITE 610
125 HIGH STREET 1850 CENTENNIAL PARK DRIVE
BOSTON, MASSACHUSETTS 02110 RESTON, VIRGINIA 20191
(617) 248-7000 (703) 391-7100
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this registration statement becomes effective.
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
---------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) REGISTRATION FEE(3)
<S> <C> <C> <C> <C>
Common Stock, $.0001 par value 8,050,000 shares $ 15.00 $ 120,750,000.00 $ 45,540.00
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes 1,050,000 shares that the underwriters have the option to purchase
to cover over-allotments, if any.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(a) under the Securities Act of 1933, as amended.
(3) Paid in connection with the original filing on January 18, 2000.
---------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
================================================================================

<PAGE>

The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange
Commission is effective. This prospectus is not an offer to sell these
securities and it is not soliciting an offer to buy these securities in any
state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED APRIL 12, 2000

7,000,000 Shares

[GRAPHIC OMITTED]

www.yupi.com

Common Stock

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

All of the shares of common stock are being offered by Yupi. Prior to this
offering, there has been no public market for our common stock. The initial
public offering price is expected to be between $13.00 and $15.00 per share.

We have granted the underwriters a 30-day option to purchase a maximum of
1,050,000 additional shares of common stock to cover over-allotments of shares.

Application has been made to list our common stock on the Nasdaq National
Market under the symbol "YUPI."

INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING
ON PAGE 5.
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS
PUBLIC COMMISSIONS TO YUPI
------------- --------------- -------------
<S> <C> <C> <C>
Per Share ......... $ $ $
Total ............. $ $ $
</TABLE>

Delivery of the shares of common stock will be made on or about ,
2000.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.

CREDIT SUISSE FIRST BOSTON

DONALDSON, LUFKIN & JENRETTE

BANC OF AMERICA SECURITIES LLC

SG COWEN

The date of this prospectus is , 2000
<PAGE>

Inside Front Cover:

Across the top of the page in three centered lines is the phrase "WHY
Yupi.com is SPANISH for INTERNET." Below the phrase, arranged clockwise around
the Yupi logo are the following ten website logos with their corresponding URL
and a parenthetical description of each website's functionality: amarillas.com
www.amarillas.com (Business-to-Business Directory), CiuidadFutura
www.ciudadfutura.com (Entertainment/Community), Claqueta www.claqueta.com (Movie
reviews), Lettera www.lettera.net (e-mail), El Pregonero www.pregonero.com
(Classifieds), bogata.com www.bogata.com (City guide), metabusca
www.metabusca.com (Enhanced search), El-Agora www.el-agora.com (Message boards),
charlas www.charlas.com (Chat community), Mujer futura.com www.mujerfutura.com
(Women's Community).

The following text appears at the bottom of the page: "Yupi is
committed to delivering the best that the Internet has to offer to the
Spanish-speaking world."

<PAGE>

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TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUMMARY .................... 1
RISK FACTORS .......................... 5
SPECIAL NOTE REGARDING FORWARD-
LOOKING STATEMENTS ................. 16
TRADEMARKS ............................ 16
USE OF PROCEEDS ....................... 17
DIVIDEND POLICY ....................... 17
CAPITALIZATION ........................ 18
DILUTION .............................. 19
SELECTED HISTORICAL FINANCIAL DATA..... 20
UNAUDITED PRO FORMA CONSOLIDATED
FINANCIAL DATA ..................... 22
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS .......... 24

</TABLE>
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
BUSINESS .............................. 29
MANAGEMENT ............................ 41
CERTAIN TRANSACTIONS .................. 49
PRINCIPAL SHAREHOLDERS ................ 50
DESCRIPTION OF CAPITAL STOCK .......... 52
SHARES ELIGIBLE FOR FUTURE SALE ....... 57
UNDERWRITING .......................... 59
NOTICE TO CANADIAN RESIDENTS .......... 61
LEGAL MATTERS ......................... 62
EXPERTS ............................... 62
ADDITIONAL INFORMATION ................ 63
INDEX TO FINANCIAL STATEMENTS ......... F-1
</TABLE>

------------
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL
TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE
ON THE DATE OF THIS DOCUMENT.

------------
DEALER PROSPECTUS DELIVERY OBLIGATION

UNTIL , 2000 (25 DAYS AFTER THE COMMENCEMENT OF THIS OFFERING), ALL
DEALERS THAT EFFECT TRANSACTIONS IN THESE SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS
IS IN ADDITION TO THE DEALER'S OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING
AS AN UNDERWRITER AND WITH RESPECT TO UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

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

i
<PAGE>

PROSPECTUS SUMMARY

THIS SUMMARY HIGHLIGHTS INFORMATION CONTAINED ELSEWHERE IN THIS
PROSPECTUS. YOU SHOULD READ THE ENTIRE PROSPECTUS CAREFULLY.

YUPI INTERNET INC.

We are a leading online Spanish language destination, delivering a wide
variety of content and services and an intuitive navigational experience to a
broad and diverse community of Spanish speakers around the world. We attract
users through grass roots, traditional media and online marketing efforts, and
we provide them with aggregated entertainment, news and other content through
relationships with media companies. We also provide our users with relevant
search results exclusively in Spanish through our proprietary search engine.
For the year ended December 31, 1999, we had revenues of approximately $3.2
million and a net loss, excluding a deemed dividend on our preferred stock, of
approximately $35.3 million.

We work with our advertisers and marketers to design, execute and evaluate
online advertising and promotional campaigns that segment and target our users.
As of February 28, 2000, we had approximately 3.8 million registered users.
According to I/PRO, in February 2000, our sites generated approximately 143
million page views and we recorded approximately 9.1 million visits to our
sites, with an average duration of approximately 15 minutes per visit.

Our target market of Spanish-speaking Internet users represents one of the
fastest growing groups of Internet users today. IDC estimates that the number
of Spanish-speaking Internet users outside the United States will increase from
approximately 8.3 million in 1999 to 20.6 million in 2002. Forrester Research
estimates that by the end of 2000, there will be approximately 3.6 million U.S.
Hispanic Internet users. Jupiter Communications estimates that the percentage
of Latin Americans outside of Brazil using the Internet will increase from
approximately 1.0% in 1999 to 4.7% in 2003, representing a compound annual
growth rate of approximately 50%, compared to an estimated rate of
approximately 12% in the United States for the same period. As Internet usage
in Latin America increases, we believe that Spanish-speaking Internet users
will become a more diverse group. According to Nazca S & S, the percentage of
Internet users from the highest socio-economic level in the eight largest Latin
American countries declined from 41% in 1997 to 30% in 1999 and the percentage
of female Internet users increased from 24% to 38% during the same period.

We believe Yupi provides an effective medium for advertisers and marketers
to reach this increasingly diverse audience. We attract users and increase
usage by providing:

/bullet/ aggregated quality content from leading media companies and
publications, such as BMG Entertainment, Cinemark, COMPUTER WORLD,
News Corp., PC WORLD, Sony, Universal Music Group, THE WALL STREET
JOURNAL OF THE AMERICAS, Warner Bros. Studios and WRIGHT INVESTOR
SERVICES;

/bullet/ relevant search and intuitive navigational services, through our
proprietary search engine and a database of Spanish language sites
that has been manually reviewed and categorized by our
Spanish-speaking employees, as well as through AltaVista's
proprietary Spanish language database; and

/bullet/ our simple and efficient presentation of content that allows users
to quickly navigate through our sites.

Our large and diverse online user base enables us to conduct targeted
marketing analyses for advertisers and marketers. We provide advertisers and
marketers with a wide range of media

1
<PAGE>

consulting services, including strategic planning and creative development. In
addition, we provide them with access to real-time feedback on user traffic,
click-through rates, demographics, online surveys and other information that
allows them to reach their target markets more easily and cost effectively.

Our objective is to be the most valuable medium for advertisers and
marketers to reach the Spanish-speaking online community. To achieve this goal,
we intend to:

/bullet/ attract new users and broaden our audience by continuing our
marketing efforts, cross-promotional activities and acquiring
existing Internet sites;

/bullet/ continue to strengthen audience loyalty and increase frequency of
use by furnishing diverse content, pursuing additional strategic
alliances, enhancing the functionality of our core services and
introducing user loyalty and affinity programs;

/bullet/ create value for advertisers and marketers by continuing to offer
consulting services, such as strategic planning, collection and
aggregation of user demographic information, online research and
analysis of advertising data; and

/bullet/ expand electronic commerce opportunities.

Our ability to achieve our objectives is subject to numerous risks and
uncertainties, many of which are beyond our control. For example, our ability
to attract new users or strengthen audience loyalty may be adversely affected
if we are unable to promote our brands successfully or if we fail to establish
and maintain relationships with content providers and electronic commerce
merchants. These risks and other risks to our business are more fully discussed
elsewhere in this prospectus under the heading "Risk Factors."

We were incorporated in Florida on October 20, 1997. Our principal
executive offices are located at 1688 Meridian Avenue, 10th Floor, Miami Beach,
Florida 33139, and our telephone number is (305) 604-0366.

2
<PAGE>

THE OFFERING

<TABLE>
<S> <C>
Common stock offered ......... 7,000,000 shares

Common stock to be outstanding
after this offering ......... 42,746,141 shares

Use of proceeds .............. For general corporate purposes, including
working capital. See "Use of Proceeds."
</TABLE>

- ----------------
The number of shares of common stock to be outstanding after this offering
is based on our shares outstanding at March 24, 2000. This information
excludes:

/bullet/ 10,000,000 shares of common stock reserved for issuance under our
Stock Incentive Plan, of which 9,979,052 shares are issuable upon
exercise of stock options outstanding as of March 24, 2000;

/bullet/ 4,000,000 shares of common stock reserved for issuance under our
2000 Stock Option and Incentive Plan; and

/bullet/ 200,000 shares of common stock reserved for issuance under our
2000 Employee Stock Purchase Plan.

ASSUMPTIONS

Unless otherwise specified, all information in this prospectus:

/bullet/ assumes no exercise of the underwriters' over-allotment option;

/bullet/ reflects the filing of an amended and restated articles of
incorporation;

/bullet/ reflects the mandatory conversion of all outstanding shares of
preferred stock into an aggregate of 19,558,460 shares of common
stock upon the closing of this offering; and

/bullet/ does not reflect any adjustment to the conversion ratios for the
Class B Convertible Preferred Stock and Class C Convertible
Preferred Stock in the event the initial public offering price of
the common stock offered by this prospectus is less than $15.295
per share. At an assumed initial public offering price of $14.00
per share, an aggregate of 582,468 additional shares of common
stock would be issued upon conversion of the Class B Convertible
Preferred Stock and Class C Convertible Preferred Stock. See
"Description of Capital Stock--Conversion of Outstanding Preferred
Stock."

3
<PAGE>

SUMMARY FINANCIAL DATA

The statement of operations data for the period from October 20, 1997
(date of incorporation) through December 31, 1997 and the years ended December
31, 1998 and 1999 and the balance sheet data as of December 31, 1999 are
derived from the audited consolidated financial statements appearing elsewhere
in this prospectus. The historical results are not necessarily indicative of
the operating results to be expected in the future. For more information, see
"Unaudited Pro Forma Consolidated Financial Data," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and our consolidated
financial statements and notes included elsewhere in this prospectus.

<TABLE>
<CAPTION>
DECEMBER 31, 1999
-------------------------------------------------
PRO FORMA
ACTUAL PRO FORMA(2) AS ADJUSTED(3)
-------------- -------------- ---------------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents ........... $ 48,611,519 $48,611,519 $137,711,519
Working capital ..................... 44,556,464 44,556,464 133,656,464
Total assets ........................ 68,151,555 68,151,555 157,251,555
Convertible preferred stock ......... 110,672,402 -- --
Total shareholders' equity .......... 60,117,979 60,117,979 149,217,979
</TABLE>

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

(1) The pro forma summary statement of operations data reflects the
acquisitions of CiudadFutura.com/trademark/ in March 1999 and
Bogota.com/trademark/ in August 1999 as if they were completed on January
1, 1999. These acquisitions were accounted for using the purchase method
of accounting.

(2) The pro forma summary balance sheet data reflects the conversion of all
outstanding shares of preferred stock into 19,558,460 shares of common
stock upon the closing of this offering; and a deemed dividend on
convertible preferred stock of approximately $23.9 million representing
the beneficial conversion feature embedded in the Class B Convertible
Preferred Stock and Class C Convertible Preferred Stock on the date of
their issuance, which dividend will be recognized upon conversion.

(3) The pro forma as adjusted summary balance sheet data reflects the
conversion of all outstanding shares of preferred stock into 19,558,460
shares of common stock upon the closing of this offering; a deemed
dividend on convertible preferred stock of approximately $23.9 million
representing the beneficial conversion feature embedded in the Class B
Convertible Preferred Stock and Class C Convertible Preferred Stock on the
date of their issuance, which dividend will be recognized upon conversion;
and the sale of 7,000,000 shares of common stock in this offering at an
assumed initial offering price of $14.00 per share, after deducting the
estimated underwriting discounts and commissions and estimated offering
expenses.

4
<PAGE>

RISK FACTORS

THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY
CONSIDER THE RISKS DESCRIBED BELOW BEFORE YOU DECIDE TO BUY OUR COMMON STOCK.
IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, OUR BUSINESS, FINANCIAL CONDITION
OR RESULTS OF OPERATIONS WOULD LIKELY SUFFER. IN THIS CASE, THE TRADING PRICE
OF OUR COMMON STOCK COULD DECLINE, AND YOU MAY LOSE ALL OR PART OF YOUR
INVESTMENT.

WE HAVE ONLY BEEN IN BUSINESS FOR A SHORT PERIOD OF TIME AND YOUR BASIS FOR
EVALUATING US IS LIMITED

We were incorporated in October 1997. You must consider the risks,
expenses and uncertainties that an early stage company like ours faces,
particularly in the new and rapidly evolving Internet market. Because we have
only recently begun to develop our sales organization and expand our commercial
operations, our past results and rates of growth may not be meaningful and you
should not rely on them as an indication of our future performance.

WE HAVE INCURRED SUBSTANTIAL LOSSES, WE EXPECT CONTINUED LOSSES AND CONTINUED
LOSSES MAY HARM OUR BUSINESS AND THE VALUE OF OUR COMMON STOCK

We have never been profitable. As of December 31, 1999, we had an
accumulated deficit of approximately $44.8 million. We expect to continue to
incur significant losses for the foreseeable future. Although our revenues have
grown in recent quarters, our expenses have grown even faster, and we expect to
increase spending significantly. Accordingly, we will need to generate
significantly higher revenues to achieve profitability. We may not be able to
do so. The failure to attain profitability will have a material adverse effect
on our business and on the value of our common stock.

IF IN THE FUTURE WE ARE ABLE TO RECORD BARTER TRANSACTIONS AS REVENUE, IT MAY
BE DIFFICULT TO EVALUATE OUR HISTORICAL FINANCIAL RESULTS

We have historically engaged in a substantial amount of barter activity.
Barter activity consists of arrangements in which we exchange advertising space
on our network predominately for advertising space in print media, on
television and radio stations, or for placement of our promotions in areas of
high commercial traffic, rather than for cash payment. Under current accounting
rules and our revenue recognition policy, these barter transactions may not be
reported as revenue unless we are able to reliably measure the cash value of
these transactions. For the value of a barter transaction to be reliably
measurable, we must conduct a cash-only transaction that is similar to that
barter transaction. Through December 31, 1999, we have not reported any barter
transactions as revenue. If in future periods we are able to meet the standard
that allows us to report barter transactions as revenue, we may recognize
substantially increased revenue compared to prior periods. In such an event,
our past results and rates of growth may not be meaningful and you should not
rely on them as an indication of our future performance. In addition, because
barter transactions do not generate cash, we may be unable to fund our
operations if we are unable to increase our cash revenue.

SEASONAL FACTORS MAY ADVERSELY AFFECT OUR FIRST QUARTER OPERATING RESULTS WHICH
MAY CAUSE THE TRADING PRICE OF OUR COMMON STOCK TO DECLINE

Historically, advertising expenditures in Latin America have been lower
during the first calendar quarter of each year. As a result, our advertising
revenues may be lower during the first calendar quarter as compared to other
quarters. If our revenues decrease during the first quarter, or do not grow at
the rate anticipated by public market analysts, the trading price of our common
stock may decline.

5
<PAGE>

THE UNPREDICTABILITY OF OUR QUARTERLY RESULTS MAY ADVERSELY AFFECT THE TRADING
PRICE OF OUR COMMON STOCK

Our future revenues and results of operations may fluctuate from quarter
to quarter due to a combination of factors, many of which are outside of our
control and any of which may cause our stock price to fluctuate. The primary
factors that may affect us include the following:

/bullet/ our ability to attract and retain users;

/bullet/ the start-up nature of our business, which means we have not begun
to achieve consistency in revenue and expense growth;

/bullet/ our acquisition and internal growth strategy, which means that we
expect to frequently add new activities to our business, leading
to increased expenses;

/bullet/ promotional activities by us or our competitors, which could cause
heavier Internet usage in some quarters compared to others;

/bullet/ currency fluctuations that affect reported revenues and expenses
from our Latin American and Spanish operations;

/bullet/ seasonal variations in advertising from quarter to quarter, which
would lead to fluctuating advertising revenues; and

/bullet/ heavier retail purchasing activity in some quarters compared to
others, which would contribute to fluctuating electronic commerce
revenues.

Accordingly, you should not rely on quarter-to-quarter comparisons of our
results of operations as an indication of our future performance. In future
periods our results of operations may be below the expectations of public
market analysts and investors. This failure to meet expectations could cause
the trading price of our common stock to decline.

BECAUSE WE DERIVE A SUBSTANTIAL PORTION OF OUR REVENUES FROM A LIMITED NUMBER
OF ADVERTISERS, IF WE ARE UNABLE TO MAINTAIN THESE RELATIONSHIPS OR ATTRACT
ADDITIONAL ADVERTISERS, OUR REVENUES WOULD BE ADVERSELY AFFECTED

For the year ended December 31, 1999, we derived approximately 50.6% of
our revenue from three advertisers. We expect that in the foreseeable future we
will continue to depend on a limited number of advertisers for a substantial
portion of our revenues. If our relationship with these advertisers is
terminated or adversely affected for any reason, or if we fail to develop other
advertising relationships, our advertising revenues may decline or grow at a
rate slower than anticipated.

IF THE INTERNET IS NOT WIDELY ACCEPTED AS A MEDIUM FOR ADVERTISING AND COMMERCE
IN OUR MARKETS, PARTICULARLY IN LATIN AMERICA, OUR ADVERTISING AND ELECTRONIC
COMMERCE REVENUES MAY DECLINE OR GROW AT SLOWER RATES THAN ANTICIPATED AND OUR
BUSINESS WILL SUFFER

We expect to receive a substantial amount of our revenue for the
foreseeable future from Internet advertising, and to a lesser extent, from
facilitating electronic commerce transactions. If the Internet is not accepted
as a medium for advertising and commerce in our markets, especially in Latin
America, our advertising and electronic commerce revenues may decline or grow
at slower rates than anticipated and our business will suffer. The Internet
advertising and electronic commerce markets are new and rapidly evolving in
Spanish-speaking communities, particularly in Latin America. As a result, we
cannot gauge their effectiveness or the long-term market acceptance of online
advertising and electronic commerce.

6
<PAGE>

Many of our current or potential advertisers and electronic commerce
merchants have limited experience using the Internet for advertising and
electronic commerce and historically have not devoted a significant portion of
their budgets to Internet-based activities. Advertisers and marketers have
invested substantial resources in other methods of conducting business, and
companies may choose not to advertise or sell their products or services on our
sites if they do not perceive our audience demographic to be desirable or
advertising on our sites to be effective.

IF STANDARDS TO MEASURE ADVERTISING EFFECTIVENESS ARE NOT DEVELOPED, THE
INTERNET MAY NOT BE ACCEPTED AS AN ADVERTISING MEDIUM AND WE MAY NOT BE ABLE TO
ATTRACT ADVERTISERS TO OUR SITES

No standards have been widely accepted for measuring the effectiveness of
Internet advertising. In particular, few companies that measure Internet
traffic currently offer their services in many of our target markets, including
Latin America. Standards may not develop sufficiently to support the Internet
as an effective advertising medium. If these standards do not develop,
advertisers may choose not to advertise on the Internet in general or,
specifically, on our sites. This decision may cause our advertising revenue to
decline or grow at slower rates than anticipated.

IF INTERNET USE BY SPANISH-SPEAKING USERS DOES NOT GROW, THE NUMBER OF USERS
VISITING OUR SITES MAY DECLINE OR GROW MORE SLOWLY THAN ANTICIPATED WHICH MAY
LIMIT OUR ABILITY TO GENERATE ADVERTISING AND ELECTRONIC COMMERCE REVENUES

The Internet market in Latin America and in other Spanish-speaking markets
is in an early stage of development. The continued growth of Internet usage in
these markets, may be inhibited for various reasons, including:

/bullet/ cost of Internet access;

/bullet/ concerns about security, reliability, and privacy;

/bullet/ difficulty of use; and

/bullet/ quality of service.

Our ability to generate advertising and electronic commerce revenues depends on
attracting an increased number of users to our sites. Consequently, if Internet
use in these markets does not grow, the number of users visiting our sites may
decline or grow more slowly than we anticipate which may limit our ability to
generate revenues.

UNDERDEVELOPED TELECOMMUNICATIONS INFRASTRUCTURE MAY LIMIT THE GROWTH OF THE
INTERNET IN LATIN AMERICA AND ADVERSELY AFFECT OUR BUSINESS

Access to the Internet requires a relatively advanced telecommunications
infrastructure. The telecommunications infrastructure in many parts of Latin
America is not as well-developed as that in the United States or Western
Europe. The quality and continued development of this infrastructure in Latin
America will have a substantial impact on our ability to deliver our services
and on the market acceptance of the Internet in Latin America in general. If
the Latin American telecommunications infrastructure does not improve, the
Internet will not gain broad acceptance. If access to the Internet in Latin
America does not continue to grow or grows more slowly than we anticipate, our
revenues may not increase as anticipated.

UNDERDEVELOPED DISTRIBUTION INFRASTRUCTURE MAY LIMIT THE GROWTH OF ELECTRONIC
COMMERCE IN LATIN AMERICA AND ADVERSELY AFFECT OUR ABILITY TO GENERATE
INCREASED ELECTRONIC COMMERCE REVENUES

Our current business plan depends on the growth of our electronic commerce
revenues. Execution of electronic commerce transactions requires a relatively
advanced distribution infrastructure. Currently, this distribution
infrastructure, which includes roads, airports, ports and

7
<PAGE>

warehouse facilities, in many parts of Latin America is not as well-developed
as in the United States or Western Europe. If further improvements to the
distribution infrastructure in Latin America are not made, the volume of
electronic commerce transactions may not increase or may increase more slowly
than we anticipate. If electronic commerce opportunities in Latin America do
not grow or grow more slowly than anticipated, our ability to generate
increased electronic commerce revenues will be limited, which would materially
and adversely affect our business, financial condition and results of
operations.

LACK OF CREDIT CARD OWNERSHIP MAY LIMIT THE GROWTH OF ELECTRONIC COMMERCE IN
LATIN AMERICA AND ADVERSELY AFFECT OUR ABILITY TO GENERATE INCREASED ELECTRONIC
COMMERCE REVENUES

Unlike consumers in the United States and Western Europe, most Latin
Americans do not own credit cards. Credit cards are often required to conduct
electronic commerce transactions. If credit card ownership by Latin Americans
using the Internet does not increase, or another payment infrastructure is not
adopted, the growth of electronic commerce in Latin America may be limited. If
electronic commerce opportunities in Latin America do not grow, or grow more
slowly than anticipated, our ability to generate increased electronic commerce
revenues will be limited, which would materially and adversely affect our
business, financial condition and results of operations.

VOLATILE SOCIAL AND POLITICAL CONDITIONS IN LATIN AMERICA MAY DECREASE INTERNET
AVAILABILITY AND USAGE AND ADVERSELY AFFECT OUR ABILITY TO ATTRACT ADVERTISERS

A substantial portion of our revenue is, and will continue to be,
dependent upon economic activity in Latin America. Social and political
conditions in Latin America are volatile and may cause our operations to
fluctuate. This volatility could make it difficult for us to achieve our
desired growth in revenues and earnings. Historically, volatility in Latin
America has been caused by:

/bullet/ significant governmental influence over many aspects of local
economies;

/bullet/ political instability;

/bullet/ unexpected changes in regulatory requirements;

/bullet/ social unrest;

/bullet/ slow or negative economic growth;

/bullet/ imposition of trade barriers; and

/bullet/ wage and price controls.

We have no control over these matters. Resulting volatility may decrease
Internet availability and usage, create uncertainty regarding our operating
climate and adversely affect our advertising revenue, all of which may
adversely impact our business.

CURRENCY FLUCTUATIONS AND GENERAL ECONOMIC CONDITIONS IN LATIN AMERICA MAY
RESULT IN DECREASED INTERNET USAGE AND ADVERTISING EXPENDITURES IN OUR MARKETS

The currencies of many countries in Latin America have experienced
substantial depreciation and volatility. Currency fluctuations, as well as high
interest rates, inflation and high unemployment, have materially and adversely
affected the economies of these countries. Poor general economic conditions in
Latin American countries may cause a decrease in our user base and cause our
advertisers to reduce their spending, which could adversely impact our business
and cause our revenue to decline unexpectedly.

In addition, if we generate an increased amount of revenue in currencies
other than the U.S. dollar, currency losses could occur as a result of currency
depreciation.

8
<PAGE>

IF WE ARE UNABLE TO DEVELOP OUR BRANDS, WE MAY NOT BE ABLE TO ATTRACT USERS,
ADVERTISERS AND MARKETERS TO OUR SITES

Developing our Yupi.com brand and the brands of our other sites is
critical to expanding our user base and revenues. We believe the importance of
brand recognition will increase as the number of Spanish language Internet
sites grows. To attract and retain Internet users, advertisers and marketers,
we intend to substantially increase our expenditures to strengthen brand
loyalty. Our success in promoting and enhancing our brands will also depend on
our success in providing high quality content, features and functionality. If
we fail to promote our brands successfully, users, advertisers and marketers
may not perceive our services to be of high quality, and consequently, will not
be attracted to our sites.

IF WE FAIL TO ESTABLISH AND MAINTAIN STRATEGIC RELATIONSHIPS WITH CONTENT
PROVIDERS, ELECTRONIC COMMERCE MERCHANTS AND TECHNOLOGY PROVIDERS, WE MAY NOT
BE ABLE TO ATTRACT AND RETAIN USERS OR ADVERTISERS

We have focused on establishing relationships with leading content
providers, electronic commerce merchants, and technology and infrastructure
providers. Our business depends heavily on these relationships. Because most of
our agreements with these third parties are not exclusive, our competitors may
seek to work with these same parties and adversely impact our relationships. We
might not be able to maintain these relationships or replace them on
financially attractive terms. If these same third parties do not adequately
perform their obligations, or if they reduce their activities with us, compete
with us, or provide their services to competitors, we may have more difficulty
attracting and retaining users and advertisers. This result could cause our
revenues to decline or to grow more slowly than expected. Also, while we intend
to actively seek additional strategic relationships in the future, our efforts
may prove unsuccessful.

OUR MARKET IS HIGHLY COMPETITIVE AND OUR FAILURE TO COMPETE SUCCESSFULLY COULD
LIMIT OUR ABILITY TO ATTRACT AND RETAIN USERS, ADVERTISERS AND ELECTRONIC
COMMERCE MERCHANTS

Many companies provide Internet sites and online destinations targeting
Spanish-speaking people. Competition for users, advertisers and marketers is
intense and is expected to increase significantly in the future because there
are no substantial barriers to entry in our market. Companies may be successful
in competing against us if they are able to offer more compelling content or
services, promote their brand more effectively or bundle their content and
services with related products or services that we cannot offer. If we are
unable to compete successfully we may be unable to attract and retain users,
advertisers and electronic commerce merchants.

Increased competition could also result in lower advertising rates, price
reductions and lower profit margins any one of which could materially and
adversely affect our business, results of operations and financial condition.

OUR FAILURE TO EFFECTIVELY MANAGE OUR EXPANDING OPERATIONS COULD IMPAIR OUR
FUTURE GROWTH

We have recently experienced a period of rapid growth which has placed
significant strain on our managerial, operational and financial resources. To
accommodate this growth, we must implement new or upgraded operating and
financial systems, procedures and controls throughout many different locations.
We may not succeed with these efforts. Our failure to efficiently expand and
integrate these areas could cause our expenses to grow, revenues to decline or
grow more slowly than expected and could otherwise impair our growth.

OUR BUSINESS AND GROWTH WILL SUFFER IF WE ARE UNABLE TO HIRE AND RETAIN KEY
PERSONNEL THAT ARE IN HIGH DEMAND

We depend on the services of senior management and key technical
personnel. In particular, our success depends on the continued efforts of our
President and Chief Executive Officer, Oscar Coen, and Chief Technical Officer,
Carlos Cardona. The loss of the services of these executive officers or any

9
<PAGE>

of our key management, sales or technical personnel could have a material
adverse effect on our business, financial condition and results of operations.
In addition, our success is largely dependent on our ability to hire highly
qualified managerial, sales and technical personnel. These individuals are in
high demand, and we may not be able to attract the staff we need. The
difficulties and costs of personnel growth are compounded by our international
operations.

IF WE ARE UNABLE TO SUCCESSFULLY INTEGRATE OUR ACQUIRED BUSINESSES, THE QUALITY
OF OUR SITES MAY SUFFER, AND USERS MAY BE LESS LIKELY TO VISIT OUR SITES

Our operations have grown in part due to our acquisition of local
Internet-based businesses including our:

/bullet/ March 1999 acquisition of CiudadFutura.com in Spain;

/bullet/ August 1999 acquisition of Bogota.com in Colombia;

/bullet/ October 1999 acquisition of Claqueta.com in Spain; and

/bullet/ November 1999 acquisition of La Cosa Interactive in Argentina.

We are now involved in integrating the operations, personnel and services
of these businesses. We also expect to acquire or form relationships with other
Internet companies in Latin America, Spain and the United States, and will
therefore need to integrate their operations, personnel and services with ours.
If we are unable to integrate all of these businesses, the quality of our sites
may suffer and our users may be less likely to use our sites.

WE MAY NOT BE ABLE TO IDENTIFY OR FINANCE ACQUISITIONS OR JOINT VENTURES IN THE
FUTURE, WHICH WOULD LIMIT OUR GROWTH PROSPECTS

In our business strategy, we continually review possible acquisitions,
joint ventures and strategic alliances that we expect to complement our
existing business, increase our user traffic, enhance our content offerings or
increase our advertising and electronic commerce revenues. We do not know if we
will succeed in identifying future joint ventures, acquisitions or alliances or
in financing these transactions. A failure to identify or finance these future
transactions may impair our growth.

OUR ACQUISITIONS AND JOINT VENTURES INVOLVE RISKS AND UNCERTAINTIES THAT MAY
HARM OUR BUSINESS OR CAUSE US NOT TO PERFORM AS EXPECTED

Our acquisitions and joint ventures could result in numerous risks and
uncertainties, including:

/bullet/ the need to raise additional funds through public or private
financings, which may result in dilution to existing shareholders
and substantially increase our debt;

/bullet/ difficulties in assimilating the operations, personnel,
technologies, services and products of acquired companies;

/bullet/ conflicts of interest with joint venture partners;

/bullet/ the risks of entering geographic or business markets in which we
have limited or no prior experience;

/bullet/ the diversion of management's attention from our other business
concerns;

/bullet/ the risk that an acquired business will not perform as expected or
that it will have unforeseen liabilities; and

/bullet/ loss of key personnel of acquired organizations.

10
<PAGE>

IF OUR ADVERTISING PRICING MODEL, BASED ON THE NUMBER OF TIMES AN ADVERTISEMENT
IS DELIVERED TO USERS, IS NOT SUCCESSFUL, WE MAY BE UNABLE TO ACHIEVE OR
MAXIMIZE PROFITABILITY

Different pricing models are used to sell advertising on the Internet, and
models we adopt may not prove to be the most profitable. Advertising based on
impressions, or the number of times an advertisement is delivered to users,
currently comprises substantially all of our revenues. When minimum guaranteed
impression levels are not met, we defer recognition of the corresponding
revenues until guaranteed levels are achieved. If they are not achieved, we may
be required to provide additional impressions after the contract term, which
would reduce our advertising inventory, thereby reducing our anticipated
advertising revenues. This requirement could have a material adverse effect on
our business, financial condition and results of operations.

In addition, it is difficult to predict which pricing model, if any, will
emerge as the industry standard. This uncertainty makes it difficult to project
our future advertising rates and revenues. Our advertising revenues could be
adversely affected if we are unable to adapt to new forms of Internet
advertising or if we do not adopt the most profitable pricing model or
advertising form.

UNEXPECTED NETWORK INTERRUPTIONS CAUSED BY SYSTEM FAILURES MAY RESULT IN
REDUCED USER TRAFFIC, REDUCED REVENUE AND HARM TO OUR REPUTATION

In the past, we have experienced:

/bullet/ system disruptions;

/bullet/ inaccessibility of our network;

/bullet/ long response times;

/bullet/ impaired quality; and

/bullet/ loss of important reporting data.

Although we are in the process of improving our sites to reduce the frequency
of these events, we may not be successful. If we experience delays and
interruptions, user traffic may decrease and our brand could be adversely
affected. Because our revenues depend on the number of individuals who use our
sites, our business may suffer if improvement efforts are unsuccessful. We
maintain our central production servers at the New Jersey data center of Exodus
Communications. A failure by Exodus to protect its systems against damage from
power loss, telecommunications failure, break-ins, fire, natural disasters or
other events causing unexpected network disruptions could have a material
adverse effect on our business and our revenues.

CONCERNS ABOUT SECURITY OF ELECTRONIC COMMERCE TRANSACTIONS AND
MISAPPROPRIATION OF CONFIDENTIAL INFORMATION FROM OUR SITES MAY REDUCE THE USE
OF OUR SITES AND IMPEDE OUR GROWTH

A significant barrier to electronic commerce and confidential
communications over the Internet has been the need for security. The use of our
sites could decline if any well-publicized security failure occurs.
Unauthorized persons could attempt to penetrate our network security. If
successful, they could misappropriate confidential information concerning our
users or cause interruptions in our services. We may incur significant costs to
protect against the threat of security breaches or to alleviate problems caused
by these breaches. Security breaches could have a material adverse effect on
our business and our revenues.

COMPUTER VIRUSES OR ATTEMPTS BY THIRD PARTIES TO DISRUPT OUR SERVICES MAY CAUSE
OUR SYSTEMS TO INCUR DELAYS OR INTERRUPTIONS AND MAY REDUCE THE USE OF OUR
SITES AND IMPEDE OUR GROWTH

Computer viruses or attempts by third parties to disrupt our services may
cause delays in our systems or other service interruptions. If any of these
disruptions are prolonged or are highly

11
<PAGE>

publicized, our reputation could be greatly damaged and our user traffic could
decline. In addition, the inadvertent transmission of computer viruses could
expose us to material losses or litigation and material liability.

WE MAY BECOME SUBJECT TO BURDENSOME GOVERNMENT REGULATIONS AND LEGAL
UNCERTAINTIES AFFECTING THE INTERNET WHICH COULD PLACE RESTRICTIONS ON INTERNET
USE AND INCREASE OUR COSTS OF DOING BUSINESS

Until now, governmental regulations have not materially restricted use of
the Internet in our markets. However, the legal and regulatory environment
pertaining to the Internet is uncertain and may change. Uncertainty and new
regulations could increase our costs of doing business and prevent us from
delivering our services over the Internet. The growth of the Internet may also
be significantly slowed. These circumstances could delay growth in demand for
our sites and limit the growth of our revenues. In addition to new laws and
regulations, existing laws may be applied to the Internet. New and existing
laws may cover issues, including:

/bullet/ sales and other taxes;

/bullet/ user privacy;

/bullet/ pricing controls;

/bullet/ characteristics and quality of products and services;

/bullet/ consumer protection;

/bullet/ cross-border commerce;

/bullet/ libel and defamation;

/bullet/ copyright, trademark and patent infringement;

/bullet/ pornography;

/bullet/ antitrust and competition; and

/bullet/ other claims based on the nature and content of Internet
materials.

WE MAY BECOME SUBJECT TO CLAIMS REGARDING FOREIGN LAWS AND REGULATIONS WHICH
MAY BE COSTLY, TIME CONSUMING AND DISTRACTING

Because we have employees, property and business operations in the United
States, Spain and throughout Latin America, we are subject to the laws and the
court systems of many jurisdictions. We may face claims based on foreign
jurisdictions for violations of their laws. These laws may be changed or new
laws may be enacted in the future. International litigation is often expensive,
time consuming and distracting. Accordingly, any of these matters could
increase our expenses and have a material adverse effect on our financial
condition and results of operations.

UNAUTHORIZED USE OF OUR INTELLECTUAL PROPERTY BY THIRD PARTIES MAY ADVERSELY
AFFECT OUR BUSINESS

We regard our copyrights, service marks, trade names, trademarks, trade
secrets and other intellectual property as critical to our success.
Unauthorized use of our intellectual property by third parties may adversely
affect our business and our reputation. We rely on trademark and copyright law,
trade secret protection and confidentiality and license agreements with our
employees, customers, suppliers and others to protect our intellectual property
rights. Despite these precautions, it may be possible for third parties to
obtain and use our intellectual property without authorization.

12
<PAGE>

Furthermore, the validity, enforceability and scope of protection of
intellectual property in Internet-related industries is uncertain and still
evolving. The laws of some foreign countries are uncertain or do not protect
intellectual property rights to the same extent as do the laws of the United
States.

DEFENDING AGAINST INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS COULD BE TIME
CONSUMING AND EXPENSIVE AND, IF WE ARE NOT SUCCESSFUL, COULD SUBJECT US TO
SIGNIFICANT DAMAGES AND DISRUPT OUR BUSINESS

We cannot be certain that we do not or will not infringe valid patents,
copyrights or other intellectual property rights of third parties. We may be
subject to legal proceedings and claims from time to time relating to the
intellectual property of others in the ordinary course of our business. We may
incur substantial expenses in defending against these third party infringement
claims, regardless of their merit. Successful infringement claims against us
may result in substantial monetary liability or may materially disrupt the
conduct of our business.

WE MAY BE SUBJECT TO CLAIMS BASED ON THE CONTENT WE PROVIDE ON OUR SITES WHICH
MAY EXPOSE US TO LIABILITY AND ADVERSELY AFFECT OUR BUSINESS

The laws in the United States, Spain and in Latin American countries
relating to the liability of companies providing online services, like ours,
for activities of their visitors, are currently unsettled. Claims have been
made against online service providers and networks in the past for defamation,
negligence, copyright or trademark infringement, obscenity, personal injury or
other reasons based on the nature and content of information posted online by
their visitors. We could be subject to similar claims and incur significant
costs in their defense. In addition, we could be exposed to liability for the
selection of listings that may be accessible through our sites or through
content and materials that users may post in classifieds, message boards, chat
rooms or other interactive services. If any information provided through our
services contains errors, third parties could make claims against us for losses
incurred in reliance on the information. We offer Internet-based email
services, which expose us to potential liabilities or claims resulting from:

/bullet/ unsolicited email;

/bullet/ lost or misdirected messages;

/bullet/ illegal or fraudulent use of email; or

/bullet/ interruptions or delays in email service.

Investigating and defending these claims is expensive, even if they do not
result in liability and the expenses we incur may increase our losses or reduce
our profitability.

WE MAY BE SUBJECT TO CLAIMS BASED ON PRODUCTS SOLD ON OUR SITES WHICH MAY
EXPOSE US TO LIABILITY AND ADVERSELY AFFECT OUR BUSINESS

We offer third party products and services on our sites under arrangements
where we receive a portion of the revenues generated from these transactions.
These arrangements may expose us to additional claims including product
liability or personal injury from these products and services, even when the
products or services are not ours. These claims may require us to incur
significant expenses in their defense or satisfaction. While some of our
agreements with these parties may provide that we will be indemnified against
these liabilities, such indemnification may not be adequate. Although we carry
general liability insurance, our insurance may not cover all potential claims
to which we are exposed or may not be adequate to indemnify us for all
liability that may be imposed. Liabilities not covered by our insurance could
increase our losses or reduce our profitability or could result in criminal
penalties. In addition, the increased attention focused on liability issues as
a result of these lawsuits and legislative proposals could adversely impact the
overall growth of Internet use.

13
<PAGE>

OUR ABILITY TO COLLECT PERSONAL DATA ON OUR USERS MAY BE RESTRICTED AND MAY
LIMIT OUR ABILITY TO GENERATE ADVERTISING AND ELECTRONIC COMMERCE REVENUE

We must comply with applicable data protection laws, including a European
Union directive that limits our ability to collect and use information relating
to our users. Spain has adopted legislation implementing the standards of this
directive. Increased public awareness of privacy issues and changes to
legislation could limit our ability to use personal information about our users
to attract advertisers and marketers.

IF WE ARE UNABLE TO OBTAIN ADDITIONAL CAPITAL, WE MAY BE UNABLE TO CONDUCT OUR
BUSINESS AS PLANNED, AND WE MAY NOT BE ABLE TO FURTHER DEVELOP OR ENHANCE OUR
SITES OR INCREASE OUR REVENUES

We expect the net proceeds from this offering, together with our current
cash and cash equivalents, will be sufficient to meet our requirements for at
least the next 12 months. After that, we expect that we will need to raise
additional funds. The actual amount and timing of our future capital
requirements may differ from our estimates depending on many factors,
including:

/bullet/ our ability to generate cash from operations;

/bullet/ technological developments;

/bullet/ competitive developments;

/bullet/ new business activities, including new market developments or new
opportunities in our industry; and

/bullet/ the occurrence of additional acquisitions.

Our ability to obtain additional financing will be subject to a number of
factors, including our operating performance, market conditions and investor
sentiment. We cannot be certain that we will be able to obtain additional
financing on favorable terms, if at all. Further, if we issue additional equity
securities, shareholders may experience additional dilution and the new equity
securities may have rights, preferences or privileges senior to those of
existing holders of common stock. If we cannot raise funds on acceptable terms,
if and when needed, we may be unable to further develop or enhance our sites,
take advantage of future opportunities, grow our business or respond to
competitive pressures or unanticipated requirements, which could seriously harm
our business.

OUR STOCK PRICE MAY BE VOLATILE, WHICH COULD RESULT IN SUBSTANTIAL LOSSES FOR
INVESTORS PURCHASING SHARES IN THIS OFFERING

Prior to this offering, you could not publicly buy or sell our common
stock. An active public market for our common stock may not develop or be
sustained after this offering. We will negotiate and determine the initial
public offering price with the representatives of the underwriters. You may be
unable to sell your shares of common stock at or above the initial public
offering price, which may result in substantial losses to you. The market price
of our common stock may fluctuate significantly in response to the following
factors, some of which are beyond our control:

/bullet/ variations in our quarterly operating results;

/bullet/ changes in securities analysts' estimates of our financial
performance;

/bullet/ changes in market valuations of similar companies;

/bullet/ announcements by us or our competitors of new or enhanced products
or of significant contracts, acquisitions or strategic
relationships;

14
<PAGE>

/bullet/ additions or departures of key personnel; and

/bullet/ future sales of our common stock or other securities.

OUR STOCK PRICE COULD BE ADVERSELY AFFECTED BY SHARES OF OUR COMMON STOCK
BECOMING AVAILABLE FOR SALE

If our existing shareholders sell a large number of shares of our common
stock, the market price of the common stock could decline significantly. The
perception in the public market that our existing shareholders might sell
shares of common stock could depress the market price of our common stock.
Immediately after this offering, 42,746,141 shares of our common stock will be
outstanding. Of these shares, 7,000,000 are included in this offering and will
be available for immediate resale in the public market. The remaining
35,746,141 shares of our common stock will become available for resale in the
public market at various times in the future. Substantially all of these
remaining 35,746,141 shares are subject to lock-up agreements restricting the
sale of such shares for 180 days from the date of this prospectus. However, the
underwriters can waive this restriction and allow these shareholders to sell
their shares at any time. Sales of our common stock in the public market might
also make it more difficult for us to sell equity securities in the future at a
time and price we deem appropriate. For a more detailed description, see
"Shares Eligible for Future Sale."

PURCHASERS IN THIS OFFERING WILL INCUR IMMEDIATE, SUBSTANTIAL DILUTION

The initial public offering price of our common stock is substantially
higher than the book value per share of our outstanding common stock. As a
result, investors purchasing common stock in this offering will incur immediate
and substantial dilution. In the past, we issued options to acquire common
stock at prices significantly below the initial public offering price. If these
outstanding options are exercised, there will be further dilution to investors
in this offering.

ANTI-TAKEOVER PROVISIONS IN OUR CHARTER DOCUMENTS AND FLORIDA LAW COULD PREVENT
OR DELAY A CHANGE IN CONTROL OF YUPI THAT SHAREHOLDERS CONSIDER FAVORABLE

Provisions of our articles of incorporation and bylaws, as well as
provisions of Florida law, could make it more difficult for a third party to
acquire us, even if doing so would be beneficial to our shareholders. If such a
change in control is delayed or prevented, the market price of our common stock
may decline. For more information, see "Description of Capital
Stock--Anti-Takeover Effects of Provisions of the Florida Business Corporation
Act, Our Charter and Our By-Laws."

INSIDERS WHO WILL CONTINUE TO HAVE SUBSTANTIAL CONTROL OVER US AFTER THIS
OFFERING MAY HAVE INTERESTS DIFFERING FROM THOSE OF OTHER SHAREHOLDERS AND
COULD DELAY OR PREVENT A CHANGE IN CORPORATE CONTROL

Upon completion of this offering, our executive officers, directors and
principal shareholders will beneficially own, in the aggregate, approximately
61.2% of our outstanding common stock. As a result, these shareholders will be
able to exercise control over all matters requiring shareholder approval,
including the election of directors and approval of significant corporate
transactions, including mergers, consolidations and sale of substantially all
of our assets. This could have the effect of delaying or preventing a change of
control of Yupi.

WE HAVE BROAD DISCRETION TO USE THE PROCEEDS FROM THIS OFFERING, AND THE
FAILURE OF MANAGEMENT TO APPLY THESE FUNDS EFFECTIVELY COULD HAVE A MATERIAL
ADVERSE EFFECT ON OUR BUSINESS

We plan to use a substantial portion of the proceeds from this offering
for general corporate purposes. Therefore, we will have broad discretion as to
how we spend the proceeds, and shareholders may not agree with how we use the
proceeds. We may not be successful in investing the proceeds from this offering
in our operations or external investments in ways that will yield favorable
returns. See "Use of Proceeds."

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<PAGE>

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements under "Prospectus Summary," "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Business," and elsewhere in this prospectus constitute
forward-looking statements. These statements relate to future events or our
future financial performance, and are identified by terminology such as "may,"
"will," "should," "expects," "scheduled," "plans," "intends," "anticipates,"
"believes," "estimates," "potential," or "continue" or the negative of such
terms or other comparable terminology. These statements are only predictions.
Actual events or results may differ materially. In evaluating these statements,
you should specifically consider various factors, including the risks outlined
under "Risk Factors." These factors may cause our actual results to differ
materially from any forward-looking statement.

Although we believe the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance, or achievements. Moreover, neither we nor any other
person assumes responsibility for the accuracy and completeness of these
statements. We are under no duty to update any of the forward-looking
statements after the date of this prospectus to conform these statements to
actual results.

TRADEMARKS

Yupi/trademark/, Yupi.com/trademark/, CiudadFutura.com/trademark/,
Bogota.com/trademark/, Claqueta.com/trademark/, MiYupi.com/trademark/, La Cosa
Interactive/trademark/, MiCasa.Yupi.com/trademark/, Metabusca.com/trademark/,
Amarillas.com/trademark/, Lettera.net/trademark/, Pregonero.com/trademark/,
El-Agora.com/trademark/, Charlas.com/trademark/, MujerFutura.com/trademark/ and
the Yupi logo are our trademarks or service marks. Other trademarks or service
marks appearing in this prospectus are the property of their respective holders.

16
<PAGE>

USE OF PROCEEDS

Our net proceeds from the issuance and sale of 7,000,000 shares of common
stock in this offering are estimated to be approximately $89.1 million, at an
assumed initial public offering price of $14.00 per share, after deducting
underwriting discounts and commissions and estimated offering expenses. If the
underwriters' over-allotment option is exercised in full, we estimate that we
will receive an additional $13.7 million. We intend to use the proceeds from
this offering as follows:

/bullet/ approximately $40.0 million to fund branding and advertising
activities;

/bullet/ approximately $7.0 million for working capital; and

/bullet/ approximately $42.1 million for general corporate purposes.

However, changing business conditions and unforeseen circumstances could cause
the actual amounts used for these purposes to vary from these estimates.

A portion of the proceeds may also be used to acquire or invest in
complementary businesses or products or to obtain the right to use
complementary technologies. We have no specific understandings, commitments or
agreements with respect to any such acquisition or investment.

Pending such uses, the proceeds of this offering will be invested in
short-term, interest-bearing, investment-grade securities, certificates of
deposit or direct or guaranteed obligations of the United States.

DIVIDEND POLICY

We have never declared or paid any cash dividends on our common stock and
do not anticipate paying cash dividends in the foreseeable future. We currently
intend to retain future earnings, if any, to fund the expansion and growth of
our business. Payment of future dividends, if any, will be at the discretion of
our Board of Directors after taking into account various factors, including our
financial condition, operating results, current and anticipated cash needs and
plans for expansion.

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<PAGE>

CAPITALIZATION

The following table shows our capitalization as of December 31, 1999:

/bullet/ on an actual basis;

/bullet/ on a pro forma basis to reflect the conversion of our preferred
stock into an aggregate of 19,558,460 shares of common stock upon
the closing of this offering; a deemed dividend on convertible
preferred stock of approximately $23.9 million representing the
beneficial conversion feature embedded in the Class B Convertible
Preferred Stock and Class C Convertible Preferred Stock on the
date of their issuance, which dividend will be recognized upon
conversion; and the filing of an amended and restated articles of
incorporation; and

/bullet/ on a pro forma as adjusted basis to reflect the conversion of our
preferred stock into an aggregate of 19,558,460 shares of common
stock upon the closing of this offering; a deemed dividend on
convertible preferred stock of approximately $23.9 million
representing the beneficial conversion feature embedded in the
Class B Convertible Preferred Stock and Class C Convertible
Preferred Stock on the date of their issuance, which dividend will
be recognized upon conversion; the filing of an amended and
restated articles of incorporation; and the sale by us of
7,000,000 shares of common stock in this offering at an assumed
initial public offering price of $14.00 per share after deducting
underwriting discounts and commissions and estimated offering
expenses.

This information should be read in conjunction with our consolidated
financial statements and notes thereto appearing elsewhere in this prospectus.

<TABLE>
<CAPTION>
DECEMBER 31, 1999
---------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
---------------- ---------------- ----------------
<S> <C> <C> <C>
Shareholders' equity:
Preferred Stock, $0.01 par value; 647,009 shares authorized and
no shares issued and outstanding, actual; 5,000,000 shares
authorized and no shares issued or outstanding, pro forma
and pro forma as adjusted ......................................... $ -- $ -- $ --
Class A Convertible Preferred Stock, $0.01 par value, 428,762
shares authorized, issued and outstanding, actual; no shares
authorized, issued or outstanding, pro forma and pro forma as
adjusted .......................................................... 13,160,468 -- --
Class B Convertible Preferred Stock, $0.01 par value; 4,924,229
shares authorized, and 2,955,016 shares issued and outstanding,
actual; no shares authorized, issued or outstanding, pro forma
and pro forma as adjusted ......................................... 33,898,805 -- --
Class C Convertible Preferred Stock, $0.01 par value; 6,000,000
shares authorized, and 5,858,698 shares issued and outstanding,
actual; no shares authorized, issued or outstanding, pro forma
and pro forma as adjusted ......................................... 63,613,129 -- --
Common Stock, $0.0001 par value, 60,000,000 shares authorized
and 16,187,681 shares issued and outstanding, actual;
300,000,000 shares authorized, 35,746,141 shares and 42,746,141
shares issued and outstanding, pro forma and pro forma as
adjusted, respectively ............................................ 1,619 3,575 4,275
Additional paid-in capital ........................................... 20,250,113 154,804,318 243,903,618
Deferred marketing costs ............................................. (19,305,000) (19,305,000) (19,305,000)
Deferred stock-based compensation .................................... (6,681,716) (6,681,716) (6,681,716)
Accumulated other comprehensive income ............................... (12,718) (12,718) (12,718)
Accumulated deficit .................................................. (44,806,721) (68,690,480) (68,690,480)
------------- ------------- -------------
Total shareholders' equity ........................................ 60,117,979 60,117,979 149,217,979
------------- ------------- -------------
Total capitalization .............................................. $ 60,117,979 $ 60,117,979 $ 149,217,979
============= ============= =============
</TABLE>

18
<PAGE>

DILUTION

Our pro forma net tangible book value at December 31, 1999 was
approximately $47.2 million, or $1.32 per share of common stock. Pro forma net
tangible book value per share represents the amount of total tangible assets
less total liabilities, divided by 35,746,141 shares of common stock
outstanding after giving effect to the conversion of all shares of preferred
stock into common stock upon the closing of this offering. After giving effect
to the sale of 7,000,000 shares of common stock offered by this prospectus at
an assumed initial public offering price of $14.00 per share and after
deducting underwriting discounts and commissions and estimated offering
expenses, our pro forma net tangible book value as of December 31, 1999 would
have been approximately $136.3 million, or $3.19 per share. This represents an
immediate increase in pro forma net tangible book value of $1.87 per share to
existing shareholders and an immediate dilution of $10.81 per share to new
investors purchasing shares of common stock in this offering. The following
table illustrates this dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share .................................. $ 14.00
Pro forma net tangible book value per share at December 31, 1999 ................. $ 1.32
Increase attributable to this offering ......................................... 1.87
-------
Pro forma net tangible book value per share after this offering .................. 3.19
--------
Net tangible book value dilution per share to new investors in this offering ..... $ 10.81
========
</TABLE>

The following table summarizes, at December 31, 1999, on the pro forma
basis described above, the total number of shares purchased, the consideration
paid to us and the average price per share paid by the existing shareholders
and by new investors purchasing shares of common stock in this offering at an
assumed initial public offering price of $14.00 per share before deducting the
underwriting discounts and commissions and estimated offering expenses:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
------------------------ --------------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
------------ --------- --------------- --------- ----------
<S> <C> <C> <C> <C> <C>
Existing shareholders ......... 35,746,141 83.6% $112,661,681 53.5% $ 3.15
New investors ................. 7,000,000 16.4 98,000,000 46.5 14.00
---------- ----- ------------ -----
Totals ..................... 42,746,141 100.0% $210,661,681 100.0%
========== ===== ============ =====
</TABLE>

The foregoing table and calculation exclude, as of March 24, 2000:

/bullet/ 9,979,052 shares of common stock issuable upon exercise of outstanding
stock options, at a weighted average exercise price of $1.49 per share;

/bullet/ 20,948 shares of common stock available for issuance under our Stock
Incentive Plan;

/bullet/ 4,000,000 shares of common stock available for issuance under our 2000
Stock Option and Incentive Plan; and

/bullet/ 200,000 shares of common stock available for issuance under our 2000
Employee Stock Purchase Plan.

If the underwriters' over-allotment is exercised in full, the number of
shares held by new investors will increase to 8,050,000, or 18.4% of the total
number of shares of common stock outstanding after this offering.

19
<PAGE>

SELECTED HISTORICAL FINANCIAL DATA

The statement of operations data for the period from October 20, 1997
(date of incorporation) through December 31, 1997 and the years ended December
31, 1998 and 1999 and the balance sheet data as of December 31, 1998 and 1999
are derived from the audited consolidated financial statements included
elsewhere in this prospectus. The balance sheet data as of December 31, 1997
has been derived from our audited financial statements not included in this
prospectus. The historical results are not necessarily indicative of the
operating results to be expected in the future. For more information, see
"Unaudited Pro Forma Consolidated Financial Data," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and our consolidated
financial statements and notes included elsewhere in this prospectus.

<TABLE>
<CAPTION>
OCTOBER 20, 1997
(DATE OF YEAR ENDED
INCORPORATION) TO DECEMBER 31,
DECEMBER 31, ----------------------------------
1997 1998 1999
------------------ --------------- ----------------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues ............................................... $ 2,095 $ 77,147 $ 3,206,932
Operating expenses:
Product and technology development .................... 6,053 36,164 4,812,909
Sales and marketing ................................... 300 14,221 25,867,625
General and administrative ............................ 16,477 1,832,944 4,560,499
Depreciation and amortization ......................... 742 2,197 2,262,752
Stock-based compensation .............................. -- 62,973 540,919
----------- ------------ -------------
Total operating expenses ............................ 23,572 1,948,499 38,044,704
----------- ------------ -------------
Loss from operations ................................... (21,477) (1,871,352) (34,837,772)
Other income (expense):
Interest income ....................................... -- -- 379,021
Interest expense ...................................... -- (1,739) (859,444)
Other ................................................. -- -- (2,639)
----------- ------------ -------------
-- (1,739) (483,062)
----------- ------------ -------------
Loss before income taxes ............................... (21,477) (1,873,091) (35,320,834)
Income taxes ........................................... -- -- --
----------- ------------ -------------
Net loss ............................................... (21,477) (1,873,091) (35,320,834)
Deemed dividend on convertible preferred stock ......... -- -- (7,581,119)
----------- ------------ -------------
Net loss available to common shareholders .............. $ (21,477) $ (1,873,091) $ (42,901,953)
=========== ============ =============
Basic and diluted net loss per common share ............ $ (0.00) $ (0.16) $ (2.64)
Weighted average number of shares used in computing
basic and diluted net loss per common share .......... 10,625,000 11,903,777 16,269,836
Pro forma basic and diluted net loss per
common share(1) ...................................... $ (2.66)
Pro forma weighted average number of shares used in
computing basic and diluted net loss per
common share(1) ...................................... 16,439,087
</TABLE>

20
<PAGE>

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, 1999
-------------------------- -------------------------------------------------
PRO FORMA
1997 1998 ACTUAL PRO FORMA(2) AS ADJUSTED(3)
------------ ----------- -------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents .................... $ 11,213 $106,425 $48,611,519 $48,611,519 $137,711,519
Working capital (deficit) .................... (24,297) 10,337 44,556,464 44,556,464 133,656,464
Total assets ................................. 14,458 211,174 68,151,555 68,151,555 157,251,555
Convertible preferred stock .................. -- -- 110,672,402 -- --
Total shareholders' equity (deficit) ......... (21,052) 73,115 60,117,979 60,117,979 149,217,979
</TABLE>

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

(1) The pro forma selected statement of operations data reflects the
acquisitions of CiudadFutura.com and Bogota.com as if they were completed
on January 1, 1999. These acquisitions were accounted for using the
purchase method of accounting.

(2) The pro forma summary balance sheet data reflects the conversion of all
outstanding shares of preferred stock into an aggregate of 19,558,460
shares of common stock upon the closing of this offering; and a deemed
dividend on convertible preferred stock of approximately $23.9 million
representing the beneficial conversion feature embedded in the Class B
Convertible Preferred Stock and Class C Convertible Preferred Stock on the
date of their issuance, which dividend will be recognized upon conversion.

(3) The pro forma as adjusted balance sheet data reflects the conversion of all
outstanding preferred stock into an aggregate of 19,558,460 shares of
common stock upon the closing of this offering; a deemed dividend on
convertible preferred stock of approximately $23.9 million representing
the beneficial conversion feature embedded in the Class B Convertible
Preferred Stock and Class C Convertible Preferred Stock on the date of
their issuance, which dividend will be recognized upon conversion; and the
sale of 7,000,000 shares of common stock in this offering at an assumed
initial public offering price of $14.00 per share, after deducting
underwriting discounts and commissions and estimated offering expenses.

21
<PAGE>

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

The following sets forth unaudited pro forma consolidated statement of
operations data for Yupi for the year ended December 31, 1999 giving effect to:

/bullet/ the acquisition of the operations of Planificacion y Estrategia en
Internet, S.L. and Illimited, S.L., or CiudadFutura.com, in March
1999 for $10.1 million in cash and a promissory note; and

/bullet/ the acquisition of the operations of Proveedora de Servicios para
Red Bogota.com Ltda., or Bogota.com, in August 1999 for $2.0
million in cash and 261,765 shares of our common stock valued at
approximately $1.8 million.

The acquisitions of CiudadFutura.com and Bogota.com have been accounted
for using the purchase method of accounting. The aggregate purchase price for
CiudadFutura.com and Bogota.com of approximately $13.9 million, including
transaction costs, was substantially allocated to property rights of trade
names and Internet domain names.

The pro forma statement of operations information assumes that the
acquisitions of CiudadFutura.com and Bogota.com had been completed as of
January 1, 1999. The pro forma financial information does not purport to
present our financial condition or results of operations had these transactions
occurred on these dates and is not necessarily indicative of our results of
operations for future periods.

The historical statement of operations data of Yupi has been derived from
the audited financial statements included elsewhere in this prospectus. The
statement of operations data includes financial data for CiudadFutura.com and
Bogota.com for the period from January 1, 1999 to their respective dates of
acquisition. The pro forma adjustments relating to the acquisitions of these
entities are based upon available information and assumptions that we consider
reasonable under the circumstances. Final adjustments could differ from these
adjustments.

22
<PAGE>

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999

<TABLE>
<CAPTION>
PRO FORMA
ACTUAL CIUDADFUTURA.COM BOGOTA.COM ADJUSTMENTS PRO FORMA
---------------- ------------------ ------------ ---------------- ------------------
<S> <C> <C> <C> <C> <C>
Revenues .......................... $ 3,206,932 $72,161 $ 124,000 $ -- $ 3,403,093
Operating expenses:
Product and technology
development .................... 4,812,909 10,693 24,000 -- 4,847,602
Sales and marketing .............. 25,867,625 1,297 24,000 -- 25,892,922
General and administrative ....... 4,560,499 5,581 91,000 -- 4,657,080
Depreciation and
amortization ................... 2,262,752 -- 14,000 854,647(a) 3,131,399
Stock-based compensation ......... 540,919 -- -- -- 540,919
------------- ------- --------- ---------- --------------
Total operating
expenses .................... 38,044,704 17,571 153,000 854,647 39,069,922
------------- ------- --------- ---------- --------------
Income (loss) from operations ..... (34,837,772) 54,590 (29,000) (854,647) (35,666,829)
------------- ------- --------- ---------- --------------
Other income (expense):
Interest income .................. 379,021 12 -- -- 379,033
Interest expense ................. (859,444) (10) -- -- (859,454)
Other ............................ (2,639) -- (10,000) -- (12,639)
------------- ------- --------- ---------- --------------
(483,062) 2 (10,000) -- (493,060)
------------- ------- --------- ---------- --------------
Net income (loss) before
income taxes .................... (35,320,834) 54,592 (39,000) (854,647) (36,159,889)
Income taxes ...................... -- -- -- -- --
------------- ------- --------- ---------- --------------
Net income (loss) ................. (35,320,834) 54,592 (39,000) (854,647) (36,159,889)
Deemed dividend on
convertible preferred stock ..... (7,581,119) -- -- -- (7,581,119)
------------- ------- --------- ---------- --------------
Net income (loss) available to
common shareholders ............. $ (42,901,953) $54,592 $ (39,000) $ (854,647) $ (43,741,008)
============= ======= ========= ========== ==============
Basic and diluted net loss per
common share .................... $ (2.64) $ (2.66)
Number of shares used in
computing basic and diluted
net loss per common share ....... 16,269,836 -- -- 169,251 16,439,087
</TABLE>

- ----------------
(a) Reflects the amortization over five years of intangible assets acquired in
connection with the acquisitions of CiudadFutura.com and Bogota.com. Total
intangible assets acquired in connection with the CiudadFutura.com and
Bogota.com acquisitions amounted to $10.1 million and $3.8 million,
respectively. The adjustments of $333,907 and $520,740 associated with
these acquisitions represent amortization expense of two months for
CiudadFutura.com and amortization expense of eight months for Bogota.com,
respectively.

23
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THE FOLLOWING DISCUSSION AND ANALYSIS OF OUR FINANCIAL CONDITION AND
RESULTS OF OPERATIONS SHOULD BE READ IN CONJUNCTION WITH "SELECTED HISTORICAL
FINANCIAL DATA," "UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA" AND OUR
CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO APPEARING ELSEWHERE IN THIS
PROSPECTUS. THIS DISCUSSION AND ANALYSIS CONTAINS FORWARD-LOOKING STATEMENTS
THAT INVOLVE RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS MAY DIFFER MATERIALLY
FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF
CERTAIN FACTORS, INCLUDING, BUT NOT LIMITED TO, THOSE SET FORTH UNDER "RISK
FACTORS" AND ELSEWHERE IN THIS PROSPECTUS.

OVERVIEW

We are a leading online Spanish-language destination, delivering content,
services and search and navigation capabilities to a wide and diverse community
of Spanish speakers around the world. We aggregate entertainment, news and
other content for our users, and our search engine provides users with search
results exclusively in Spanish.

We were incorporated in October 1997. For the first eighteen months of
operations after our incorporation, we focused primarily on enhancing the
capabilities of our proprietary search engine, expanding our database of
Spanish language sites and entering into agreements with content providers for
purposes of developing our sites. In April 1999, we began to focus on
developing our sales organization and increasing the scale of our commercial
operations.

We derive our revenues principally through the sale of advertisements and
sponsorships on our sites. Advertisements are sold on a cost-per-thousand
impressions, or CPM, basis and sponsorships are sold at a fixed rate for a
given period of time. We record advertising revenues at the time advertisements
are displayed and we record sponsorship revenues ratably over the period of
sponsorship.

In addition to the sale of advertisements for cash, we also exchange
advertisements on our sites for promotions with our advertisers. These
arrangements are commonly referred to as barter transactions. We typically
enter into these arrangements because we receive opportunities to promote our
brands in both traditional and non-traditional media. Examples of these
arrangements have included promotions of our brands on store shelves where our
advertisers' products were sold as well as signage identifying Yupi as the
co-sponsor of a musical concert series. For financial reporting purposes, we
establish the value of barter transactions based on the value of similar
cash-only transactions. Advertising surrendered for cash is considered similar
to advertising surrendered in a barter transaction if both are in the same
media and within the same advertising vehicle and both have reasonably similar
characteristics with respect to circulation, prominence, duration, demographics
and timing. For the period from inception to December 31, 1999, we did not have
sufficient revenue from similar cash-only advertising sales to establish a
basis of value for our barter transactions. Accordingly, we did not record the
revenue or the expense portion of these transactions in our financial
statements.

We also derive revenues from electronic commerce transactions conducted on
our sites. Revenues from these activities have primarily been commission-based
and have been insignificant to date. We expect to derive a greater proportion
of our revenues from these activities in the future.

We aggregate content from numerous sources. This content is edited,
translated, formatted and reviewed for relevance by our staff. We display
content developed by third parties through agreements under which we agree to
share revenues, pay a flat fee, or provide co-branded presence on our sites.

Between April 1999 and August 1999, we sold shares of Class A Convertible
Preferred Stock which provided aggregate proceeds of approximately $13.0
million. We used the proceeds from this

24
<PAGE>

transaction to complete the acquisitions of CiudadFutura.com and Bogota.com, to
begin hiring personnel in all areas, and to begin a significant advertising and
branding campaign. Additionally, we completed the private placement of Class B
Convertible Preferred Stock in October 1999 and Class C Convertible Preferred
Stock in November 1999, for a total purchase price of approximately $101.7
million.

We completed the acquisitions of CiudadFutura.com in March 1999,
Bogota.com in August 1999, Claqueta.com in October 1999 and LaCosa Interactive
in November 1999. The aggregate purchase price for these acquisitions was
approximately $15.0 million, primarily paid for in cash and debt. Although
these acquisitions involved established sites with significant user traffic,
these sites had minimal revenues associated with them prior to our acquisition.
The acquisitions were accounted for under the purchase method of accounting.

We have a limited operating history and have incurred losses in every
quarter of operations. Our accumulated deficit as of December 31, 1999 is $44.8
million and we expect to continue to incur losses as we build brand identity
and support infrastructure to allow us to maintain our position as a leader in
the Spanish language Internet market.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, our statements
of operations. The information for the period from October 20, 1997 (date of
incorporation) through December 31, 1997 and the years ended December 31, 1998
and 1999 is derived from our audited consolidated financial statements.

<TABLE>
<CAPTION>
OCTOBER 20, 1997
(DATE OF
INCORPORATION) TO YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1998 1999
------------------- -------------- -------------
(IN THOUSANDS)
<S> <C> <C> <C>
Revenues .................................... $ 2 $ 77 $ 3,207
Operating expenses:
Product and technology development ......... 6 36 4,813
Sales and marketing ........................ -- 14 25,868
General and administrative ................. 16 1,833 4,560
Depreciation and amortization .............. 1 2 2,263
Stock-based compensation ................... -- 63 541
----- ------- ---------
Total operating expenses .................. 23 1,948 38,045
----- ------- ---------
Loss from operations ........................ (21) (1,871) (34,838)
Other expense, net .......................... -- (2) (483)
----- ---------- ---------
Net loss .................................... $ (21) $(1,873) $ (35,321)
===== ========= =========
</TABLE>

YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998 AND
PERIOD FROM OCTOBER 20, 1997 (DATE OF INCORPORATION) TO DECEMBER 31, 1997

REVENUES. Revenues increased to $3.2 million for the year ended December
31, 1999 from $77,000 for the year ended December 31, 1998 and $2,000 for the
partial year ended December 31, 1997. The increase for each period was the
result of an increase in the number of advertisers that displayed
advertisements on our sites. For the year ended December 31, 1999, we had 55
advertisers and sponsors on our sites.

PRODUCT AND TECHNOLOGY DEVELOPMENT. Product and technology development
expenses consist primarily of payroll and benefits for employees dedicated to
the design and maintenance of our technology infrastructure as well as for
employees involved in the aggregation and editing of content

25
<PAGE>

for our sites. Product and technology development expenses also include fees
paid to content providers and connectivity costs for our network. Product and
technology development expenses increased to $4.8 million for the year ended
December 31, 1999 from $36,000 for the year ended December 31, 1998 and from
$6,000 for the partial year ended December 31, 1997. The primary reason for the
increase for each period was the increase in headcount from one as of December
31, 1997 to four as of December 31, 1998 and to 104 as of December 31, 1999.

SALES AND MARKETING. Sales and marketing expenses consist primarily of
advertising in various types of media, public relations, and payroll and
benefits for employees dedicated to marketing and sales efforts. Sales and
marketing expenses for the year ended December 31, 1999 increased by
approximately $25.9 million over the year ended December 31, 1998 and the
partial year ended December 31, 1997. The increase in sales and marketing
expenses is attributable primarily to the following: the expansion of our
domestic and international branding campaign beginning in the third quarter of
1999 which amounted to approximately $13.2 million, the increase in number of
employees in the sales and marketing department from zero as of December 31,
1997 and 1998 to 49 as of December 31, 1999, and the charge of approximately
$10.0 million recorded during the fourth quarter of 1999 in connection with
services provided to us by Sony Corporation of America as part of its purchase
of Class B Convertible Preferred Stock in October 1999. As of December 31,
1999, we had approximately $19.3 million of deferred marketing costs that we
will record as expense over a three-year period associated with the agreement
with Sony.

GENERAL AND ADMINISTRATIVE. General and administrative expenses consist of
professional and legal fees, occupancy, travel, and payroll and benefits for
employees in the corporate, accounting, human resources and legal departments.
General and administrative expenses increased to $4.6 million for the year
ended December 31, 1999 from $1.8 million for the year ended December 31, 1998
and from $16,000 for the partial year ended December 31, 1997. The increase in
general and administrative expenses is attributable partially to an increase in
the number of employees in these departments from zero as of December 31, 1997
to one as of December 31, 1998 and to 35 as of December 31, 1999. Additionally,
our professional and legal fees increased from approximately $54,000 for the
year ended December 31, 1998 to $1.5 million for the year ended December 31,
1999. We recorded a charge of approximately $1.6 million during the fourth
quarter of 1998 in connection with the settlement of a dispute between our
founders and an individual who participated in our development prior to
incorporation. In connection with that settlement, the individual received an
ownership interest in Yupi in exchange for agreeing to end the dispute. The
charge was recorded based on the estimated fair value of the shares that the
individual received.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization expenses
consist primarily of amortization of trade names and Internet domain names
relating to our acquisitions. Depreciation and amortization expenses for the
year ended December 31, 1999 increased by approximately $2.3 million over the
year ended December 31, 1998 and the partial year ended December 31, 1997 due
to the acquisitions of Ciudadfutura.com, Bogota.com, Claqueta.com and LaCosa
Interactive, all of which were completed during 1999.

STOCK-BASED COMPENSATION. We recognize stock-based compensation expenses
if the estimated fair value of the underlying stock at the date that options
are granted to employees exceeds their exercise price. This cost is recognized
over the vesting period of the options, which is generally four years. Options
and stock grants to non-employees in lieu of cash payments are recorded as
either sales and marketing or general and administrative expense based on the
value of such instruments in the period that the services are provided.
Stock-based compensation expense for the year ended December 31, 1999 increased
to $541,000 from $63,000 during the year ended December 31, 1998 due to
additional options granted to new employees.

OTHER EXPENSE, NET. Other expense, net for the year ended December 31,
1999, increased by approximately $481,000 over the year ended December 31, 1998
and the partial year ended December 31, 1997. In connection with the private
placement of Class A Convertible Preferred Stock

26
<PAGE>

in April 1999, we recognized an interest charge of approximately $669,000
representing the estimated fair value of equity acquisition rights granted to a
lender in connection with a line of credit and the estimated fair value of
certain options granted by our then-principal shareholders to the lender.
Interest expense during the year ended December 31, 1999 was partially offset
by interest income of approximately $379,000 earned from investment of funds
raised during the private placements of preferred stock.

NET LOSS. As a result of the factors discussed above, the net loss
increased from approximately $1.9 million during the year ended December 31,
1998 to approximately $35.3 million during the year ended December 31, 1999.
Net loss available to common shareholders was approximately $42.9 million for
the year ended December 31, 1999 as a result of a deemed dividend on our
convertible preferred stock equal to approximately $7.6 million.

LIQUIDITY AND CAPITAL RESOURCES

From incorporation, we have financed our operations through private sales
of our common stock and convertible preferred stock. Through December 31, 1999
we had raised approximately $81.6 million in cash through such sales, almost
all of which was raised in the second half of 1999.

Net cash used in operating activities was approximately $19,000 for the
period from October 20, 1997 (date of incorporation) to December 31, 1997,
$120,000 for the year ended December 31, 1998 and $21.4 million for the year
ended December 31, 1999. This use of cash was primarily attributable to our net
losses in each of those periods. In 1998, we recorded a net loss of
approximately $1.9 million, including a non-cash charge of approximately $1.6
million in connection with a settlement recorded as a general and
administrative expense. For the year ended December 31, 1999, we recorded a net
loss of approximately $35.3 million, including non-cash expenses of $12.3
million relating to depreciation and amortization and non-cash marketing
expenses.

Net cash used in investing activities was approximately $4,000 for the
period from October 20, 1997 (date of incorporation) to December 31, 1997,
$16,000 for the year ended December 31, 1998 and $11.0 million for the year
ended December 31, 1999. The use of cash for the year ended December 31, 1999
was primarily attributable to the acquisitions of CiudadFutura.com, Bogota.com
and LaCosa Interactive, which represented $8.5 million of cash payments as of
December 31, 1999. In connection with the CiudadFutura.com acquisition, we
issued a $4.0 million promissory note with an annual interest rate of 9% due
March 2000. Pursuant to the terms of this promissory note, on March 15, 2000,
we paid $3.0 million to the sellers of CiudadFutura.com and withheld $1.0
million as an offset against a potential third-party claim. We are currently
negotiating with the sellers of CiudadFutura.com to resolve this matter.

Net cash provided by financing activities was approximately $34,000 for
the period from October 20, 1997 (date of incorporation) to December 31, 1997,
$231,000 for the year ended December 31, 1998 and $80.9 million for the year
ended December 31, 1999. The proceeds were derived mainly from the sale of
shares of Class A Convertible Preferred Stock, Class B Convertible Preferred
Stock and Class C Convertible Preferred Stock.

As of December 31, 1999, we had approximately $48.6 million in cash and
cash equivalents. We expect to continue to incur losses and to utilize cash in
our operations for the next several years. We believe that the net proceeds
from this offering, together with our current cash and cash equivalents, will
be sufficient to meet our anticipated requirements for at least the next 12
months. We expect that we will need to raise additional funds, including
through equity offerings, in the future in order to complete a successful
implementation of our strategy. The actual amount and terms of our future
capital requirements may differ from our estimates. We cannot assure you that
additional funding will be available to us in amounts or on terms acceptable to
us, if at all. If we cannot raise funds on acceptable terms, if and when
needed, we may be unable to further develop or enhance our sites, take
advantage of future opportunities, grow our business or respond to competitive
pressures or unanticipated requirements, which could seriously harm our
business.

27
<PAGE>

YEAR 2000 READINESS

The Year 2000 issue refers to the potential for system and processing
failures of date-related calculations, and is the result of computer-controlled
systems using two digits rather than four to define the applicable year. For
example, computer programs that have time-sensitive software may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result
in system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
operate our sites, send invoices, or engage in similar normal business
activities.

To date, we have not experienced any material Year 2000 issues and have
been informed by our material suppliers and vendors that they have also not
experienced material Year 2000 issues. We have not spent a material amount on
Year 2000 compliance issues. Most of our expenses have related to the operating
costs associated with time spent by employees and consultants in the evaluation
process and Year 2000 compliance matters generally.

If we fail to identify and remedy any non-compliant internal or external
Year 2000 problems, or Year 2000 problems create a systemic failure beyond our
control, including a prolonged telecommunications or electrical failure or a
prolonged failure of third party software on which we rely, we could be
prevented from operating our business and permitting users access to our sites.
Such an occurrence would have a material adverse effect on our business.

MARKET RISK

To date, our results of operations have not been impacted materially by
inflation in the United States, Spain or in the countries that comprise Latin
America.

Although a substantial portion of our revenues are denominated in U.S.
dollars, a small percentage of our revenues are denominated in foreign
currencies. As a result, our revenues may be impacted by fluctuations in these
currencies and the value of these currencies relative to the U.S. dollar. In
addition, a portion of our monetary assets and liabilities and our accounts
payable and operating expenses are denominated in foreign currencies.
Therefore, we are exposed to foreign currency exchange risks. However, revenues
derived from foreign currencies historically have not comprised a material
portion of our revenues. As a result we have not tried to reduce our exposure
to exchange rate fluctuations by using hedging transactions. However, we may
choose to do so in the future. We may not be able to do this successfully.
Accordingly, we may experience economic loss and a negative impact on earnings
and equity as a result of foreign currency exchange rate fluctuations.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "ACCOUNTING FOR DERIVATIVE INSTRUMENTS
AND HEDGING ACTIVITIES." This statement establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts and for hedging activities. It requires that an
entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair value.
Historically, we have not entered into derivative contracts to hedge existing
risks or for speculative purposes. Accordingly, we do not expect the adoption
of the new standard on January 1, 2001 to affect our financial statements.

In January 2000, the Emerging Issues Task Force issued a consensus
statement on Issue No. 99-17, "ACCOUNTING FOR ADVERTISING BARTER TRANSACTIONS."
This statement defined criteria to be used in assessing the fair value of
barter transactions that involve a non-monetary exchange of advertising. The
statement also identified new disclosure requirements related to these
transactions. Our historical financial statements and related disclosures have
been presented consistent with this statement.

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BUSINESS

YUPI

We are a leading online Spanish language destination, delivering a wide
variety of content and services and an intuitive navigational experience to a
broad and diverse community of Spanish speakers around the world. Through
relationships with media companies, including our shareholders, Sony and News
Corp., and over 100 other content providers, we aggregate entertainment, news
and other content for our users. We also provide our users with relevant search
results exclusively in Spanish through our proprietary search engine.

We offer advertisers and marketers a valuable medium to reach a diverse
Spanish-speaking online audience, and help them design, execute and evaluate
online advertising and promotional campaigns that segment and target our users.

INDUSTRY OVERVIEW

Spanish speakers represent one of the fastest growing groups of Internet
users today. IDC estimates that the number of Spanish-speaking Internet users
outside the United States will increase from approximately 8.3 million in 1999
to 20.6 million in 2002. This growth is projected to occur despite Latin
America's poor telecommunications infrastructure and low bandwidth capacity.

As the telecommunication infrastructure in Spanish-speaking countries
improves, we believe that the Spanish-speaking online audience will become
increasingly diverse and that Internet usage will continue to spread across
genders and across wider age and income brackets. According to Nazca S & S, the
percentage of Internet users from the highest socio-economic level in the eight
largest Latin American countries declined from 41% in 1997 to 30% in 1999 and
the percentage of female Internet users increased from 24% to 38% during the
same period. As the Spanish-speaking Internet community diversifies, we believe
that advertisers will increase their online expenditures to reach targeted
audiences of consumers. In addition, we believe that online advertising
expenditures targeted at the Spanish-speaking community will increase as
advertisers become more aware of how to execute and evaluate online advertising
campaigns. Forrester Research estimates that online advertising revenues in the
Spanish-speaking world outside of the United States will increase from $34
million in 1999 to over $1.1 billion by 2004, which will represent 3.4% of
total advertising spending in the region.

IDC estimates that commerce spending over the World Wide Web among
Spanish-speaking users outside of the United States will increase from $890
million in 1999 to $11.1 billion in 2002, representing a compound annual growth
rate of 132.0%. We believe that much of this consumer spending will be in the
music and entertainment categories. According to Nazca S & S, Latin Americans
visit sites with music-related content more frequently than sites in any other
category. In addition, art, culture and film are among the top ten most
frequently visited categories of sites. According to IDC, Latin Americans who
use the Internet at home buy more music-related products than any other item
available online.

THE YUPI SOLUTION

BENEFITS TO USERS

AGGREGATE QUALITY CONTENT

By aggregating content from many different sources, we encourage longer
and more frequent visits to our sites. We aggregate branded Spanish language
content through relationships with well-known global entertainment and other
content providers such as:

<TABLE>
<S> <C>
/bullet/ Cinemark /bullet/ Sony
/bullet/ COMPUTER WORLD /bullet/ Universal Music Group
/bullet/ LATIN TRADE /bullet/ THE WALL STREET JOURNAL OF THE AMERICAS
/bullet/ News Corp. /bullet/ Warner Bros. Studios
/bullet/ PC WORLD /bullet/ WRIGHT INVESTOR SERVICES
</TABLE>

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<PAGE>

Our content and media relationships enable us to provide our users with a
broad selection of entertainment and news content, including preferred exposure
to artists, and access to music, television and movie information and products.
Recently, we posted on our sites exclusive interviews and promotions with Ricky
Martin, Antonio Banderas, Robin Williams, Harrison Ford, Edward James Olmos,
Winona Ryder, Enrique Iglesias, Jennifer Lopez and other popular entertainers.
In addition, our relationship with Sony provides us with limited periods of
exclusive access to Sony's content as well as digital downloads of online
premieres of new music to the Spanish-speaking world. We also provide special
coverage of events such as film festivals, the Pan American Games, the World
Cup and other sports and entertainment events of interest to our users.

Typically, our agreements with content providers are non-exclusive, have
renewable one-year terms and require us to share revenues, pay a flat fee or
provide co-branded presence on our sites. In some cases, we receive content
through informal business relationships.

PROVIDE RELEVANT SEARCH AND NAVIGATION CONVENIENCE

We have designed an easy-to-use search engine and a database of Spanish
language sites that have been manually selected and categorized by our
Spanish-speaking employees. We believe our database provides users with more
relevant search results than does a computer-generated database, because we
manually review these sites. In addition, we offer users access to AltaVista's
proprietary Spanish language database.

We have designed Yupi.com to allow users who access the Internet at slower
connection speeds to effectively navigate our site. In a survey conducted by
IDC, Latin Americans were 25% more likely than users in the United States to
access the Internet at speeds of 33.6 kilobits per second or lower. We deliver
a simple and efficient presentation of content because we believe our users
value the opportunity to quickly navigate through the Internet.

DEVELOP LOYAL COMMUNITY OF USERS

We encourage our users to join and actively participate in our online
communities. We host personal Web sites for our users and offer other services
including chats and forums to encourage development of interest-focused online
communities. One of our virtual communities, CiudadFutura.com, is a source of
diverse collaborative content in areas of local and special interest. We
promote and compensate approximately 200 selectively chosen contributors who
maintain and update specific content Web sites on CiudadFutura.com.

BENEFITS TO ADVERTISERS AND MARKETERS

PROVIDE ACCESS TO A WIDE AUDIENCE. We provide advertisers and marketers
access to our diverse and fast-growing online audience. As of February 28,
2000, we had approximately 3.8 million registered users. In February 2000, our
sites generated approximately 143 million page views and we recorded
approximately 9.1 million visits to our sites.

CONDUCT TARGETED MARKETING ANALYSES. Our large and diverse online user
base enables us to conduct targeted marketing analyses for advertisers and
marketers seeking to reach particular demographic segments of the
Spanish-speaking market. In addition, we target, track and analyze user data
and campaign effectiveness for our advertisers and marketers. We provide our
advertisers and marketers with access to real-time feedback on user traffic,
click-through rates, demographics, online surveys and other information that
allows them to reach their target markets more easily and cost effectively.

PROVIDE MEDIA CONSULTING SERVICES. We provide advertisers and marketers
with media consulting services ranging from campaign planning to creative
development. Our marketing professionals have extensive senior management
experience in Latin America obtained at leading advertising, media and

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consumer products companies, including Young & Rubicam, Grey Advertising, Sony,
Viacom, Procter & Gamble and Pillsbury. Our local presence allows us to
maintain strong relationships and to address the specific needs of local
advertisers and businesses. We currently have offices in Miami Beach, Los
Angeles, Mexico City, Buenos Aires, Bogota, Madrid and Barcelona, and expect to
open additional offices in major cities in Venezuela, Peru, Ecuador, Puerto
Rico, Chile and the Dominican Republic during 2000.

BRANDING AND USER ACQUISITION

We attract users to our sites using a combination of grass roots,
traditional media and online marketing efforts. Our grass roots efforts have
included:

/bullet/ being the exclusive Internet advertiser in AVANZANDO, a
family-oriented Spanish language magazine published by Procter &
Gamble, that was distributed door-to-door during the second half
of 1999 to over 4.5 million households in the United States and
Puerto Rico;

/bullet/ "Mes de Yupi" at Blockbuster Video, a month long promotion in
which customers received Yupi merchandise in over 172 Blockbuster
outlets throughout Mexico; and

/bullet/ sponsorship of events at social clubs and other entertainment
venues.

We have entered into agreements with local ISPs under which we create
co-branded portals for their subscribers. In addition, we license our branded
search engine to other Internet sites that target Spanish-speaking users. These
arrangements provide us with valuable branding opportunities as well as access
to additional Spanish speakers. In addition, our content relationships provide
us with co-branding opportunities on other Internet properties.

OUR STRATEGY

Our objective is to be the most valuable medium for advertisers and
marketers to reach the Spanish-speaking online community. To achieve this goal,
we intend to:

ATTRACT NEW USERS AND BROADEN AUDIENCE PROFILE

We plan to further expand our audience and increase its diversity by:

/bullet/ continuing our grass roots marketing efforts and other innovative
techniques to attract a diverse group of Spanish speakers to our
sites;

/bullet/ aggressively increasing brand awareness by expanding our
traditional media and online marketing efforts;

/bullet/ emphasizing cross-promotional activities with other media and
consumer product companies;

/bullet/ increasing the number of links to our sites from other sites;

/bullet/ expanding our local presence by growing internally, acquiring
existing Internet sites and forming relationships with local
distribution and content providers; and

/bullet/ offering new and existing services to small businesses, small
offices and home offices in our target markets.

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CONTINUE TO BUILD AUDIENCE LOYALTY AND INCREASE FREQUENCY OF USE

We intend to strengthen user loyalty and increase usage of our sites by:

/bullet/ furnishing branded content from our existing relationships with
Sony, News Corp. and other content providers to provide users with
a rich and informative experience;

/bullet/ pursuing strategic alliances and acquisitions to expand our
content and service offerings to meet the needs of the growing
Spanish-speaking Internet audience;

/bullet/ enhancing the functionality of our core services and expanding the
database of Spanish language sites used in our search engines;

/bullet/ introducing user loyalty and affinity programs; and

/bullet/ continuing to address telecommunications capacity constraints in
our target market through both technology and design enhancements.

CREATE VALUE FOR ADVERTISERS AND MARKETERS

We believe that the combination of our large and growing audience and our
integrated marketing solutions enhances the value of our sites to advertisers
and marketers. To increase the value of our sites, we will continue to:

/bullet/ provide access to a large, attractive Spanish-speaking audience
and deliver targeted advertising and direct marketing services;

/bullet/ offer consultation services, including:

--strategic planning and creative development;

--collection and aggregation of user demographic information
through promotions and personalization services for campaign
planning purposes;

--online research allowing advertisers and marketers to target
specific segments of our Spanish-speaking audience; and

--analysis of advertising data; and

/bullet/ expand electronic commerce opportunities, including:

--integration of electronic commerce opportunities for our users
into our content and community offerings;

--expansion of our electronic commerce environment, including
hosting and maintenance, to third party merchants to offer
products and services to our users; and

--creation of transaction opportunities for businesses interested
in engaging in commerce to and from Latin America.

CONTENT, COMMUNITY AND SERVICES

We offer the following content, community and services to our users:

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CONTENT

ENTERTAINMENT. Through our relationships with leading media companies we
provide our users with diverse, high quality entertainment content. This
content includes exclusive interviews with major motion picture stars and
performers such as Antonio Banderas, Harrison Ford, Chayanne, Robin Williams,
Winona Ryder and other popular celebrities. In addition, through Claqueta.com
and CiudadFutura.com, we provide coverage and reviews of Ibero-American movies.
Other entertainment content that can be found on our sites includes LAS ALAS
DEL AMOR, our online soap opera, interactive games, jokes and exclusive music
downloads.

BUSINESS. We offer a wide variety of business content to our users,
including access to THE WALL STREET JOURNAL OF THE AMERICAS, BANK RATE MONITOR,
Spanish language BUSINESS WIRE, AMERICA ECONOMIA, AMBITO FINANCIERO,
Patagon.com, LATIN TRADE, WRIGHT INVESTOR SERVICES and ZONA FINANCIERA. Through
these relationships we provide broad coverage of major domestic and
international markets. In addition, we provide financial calculators, stock and
bond quotes and specialized news coverage.

NEWS. We have developed a proprietary technology that categorizes and
indexes the news feeds we receive from Agencia EFE, Reuters and Notimex. This
technology allows our users to search our news offerings by keyword, country,
date or topic. In addition, our users can read Spanish versions of headlines
and news summaries from THE WASHINGTON POST, THE NEW YORK TIMES, LE MONDE, THE
LOS ANGELES TIMES, EL PAIS, FINANCIAL TIMES, LE PARISIEN, LE SOIR, O GLOBO,
CORRIERE DELLA SERA, THE MIAMI HERALD and DIARIO ABC. We also provide our users
headlines and news articles from several local newspapers in Latin America and
Spain.

SPORTS. In addition to aggregating sports information from our content
providers, we provide special event coverage. In 1999, this coverage included
the Pan American Games, Formula 1 car racing, the Copa America soccer
championship, the World Series and the Tour de France. Through our relationship
with Fox Sports, a subsidiary of News Corp., we provide our users with
additional sports coverage.

TECHNOLOGY. We provide our users with access to articles, reports and
other information from technology publications, including COMPUTER WORLD, PC
WORLD and International Data Group's newswire.

CHILDREN. We provide extensive content selected for children, including
cartoons, online kids' clubs, games, comics and movie information. We also
cover items of particular interest to children, such as Pokemon, Stuart Little
and Shakira.

SOCIETY/CULTURE. We provide a wide variety of content relating to
literature, art and religion. We also provide access to online fashion shows,
museums and sites of interest to women. Additional topics include news and
information regarding society, people and culture which we tailor to local
interests.

OTHER. We also provide content on other subjects, including education,
law, politics, health, tourism and weather.

COMMUNITY

CIUDADFUTURA.COM. An online community providing diverse, collaborative
content created by over 200 contributors. This site includes content oriented
around community, entertainment and information. Our community-building
activities include chats, moderated chats, forums, virtual postcards, online
clubs, such as our popular club based on last names, personal matchmaking and
online games, including a popular chess site. We provide entertainment and
information in areas, such

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as love, music, astrology, tarot, horoscope, I Ching, comics and content of
particular interest to women, including beauty, exercise and health.

MICASA.YUPI.COM. A personal Web site creation and hosting service that
assists users in creating their own Web sites through the use of templates and
a step-by-step wizard tool and also contains the manually-reviewed Web sites of
our users.

CHATS. Our users can instantly and easily communicate with each other. We
present live chats with well-known Spanish-speaking celebrities and experts on
specific topics.

FORUMS. Our online message boards have advanced features, including
country and keyword search capabilities, as well as features that enable users
to create their own personal forums.

SERVICES

SEARCH ENGINE. Yupi.com's proprietary search engine was among the first to
deliver results exclusively in Spanish. Our Spanish-speaking employees manually
select and categorize the sites in our Spanish language database. We believe
our database provides users with more relevant search results than does a
computer-generated database, because we manually review and categorize these
sites. We license our search engines, Yupi.com and Metabusca.com, to thousands
of other sites. Through our relationship with AltaVista, our users also have
access to AltaVista's extensive database of Web sites.

ELECTRONIC COMMERCE. We provide an international and regional electronic
commerce environment to our users. Our electronic commerce offering currently
includes:

/bullet/ CONTEXTUALIZED ELECTRONIC COMMERCE--hyperlinks placed within
content areas throughout our sites allow our users to purchase
products relevant to the content of the page being viewed;

/bullet/ YUPI COMPRAS AND CIUDADFUTURA.COM COMPRAS--shopping channels that
facilitate the purchase of a wide variety of products;

/bullet/ YUPI HIPOTECAS--our users can obtain financing online for
properties located in the United States through our relationship
with Mortgage.com;

/bullet/ HOTEL RESERVATIONS--our users can make reservations at hotels
worldwide through our relationship with Hotel Reservation Network;
and

/bullet/ DOMAIN NAME REGISTRATION--our users can register domain names
online through our relationship with Network Solutions.

MI.YUPI.COM. A personalized version of Yupi.com that allows users to
select and design the look and feel as well as content of their personal
homepages based on their tastes and preferences. In addition, when users
personalize their homepages, we gain valuable user profiles that allow
advertisers and marketers to better reach their target audience.

LANGUAGE TRANSLATOR. We provide instant, Internet-based translation into
six languages for single words, sentences and entire Web sites.

CLASSIFIEDS. Our classifieds have an easy-to-use interface that includes
features such as search by country, region, category and other detailed keyword
and advanced search capabilities. In addition, our classifieds are easily
administered and can be accessed and updated directly by the person posting the
classified.

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FREE EMAIL. Our licensed email services allow our users to send electronic
messages anywhere in the world, from an easy-to-understand Spanish language
platform.

VIRTUAL GREETING CARDS/POSTCARDS. Our proprietary virtual postcard service
allows users to design and send free electronic greeting cards over the
Internet.

MARKETING

Our marketing campaign is designed to attract and retain Spanish-speaking
users, advertisers and marketers. From October 1997 to July 1999, we focused
our limited resources on collecting quality Spanish language content and
improving the functionality of our various services. Our marketing efforts were
limited to banner exchanges with other Spanish language Internet sites.

In July 1999, we expanded our marketing campaign in an effort to promote
the Yupi.com brand to a broad spectrum of Spanish speakers. For example, we
conducted co-promotions with advertisers, including:

/bullet/ sponsorship of a Heineken U.S.A. tour of Latino musical artists
targeting U.S. Hispanics;

/bullet/ outdoor promotions in conjunction with the Hallmark Entertainment
film, ALICE IN WONDERLAND;

/bullet/ promotion hosted by Yupi.com with Sony, United Airlines and
Intercontinental Hotels for tickets to attend Ricky Martin's
concert tour; and

/bullet/ "Team of the Century" promotion in conjunction with Fox Sports
where our users voted for their favorite soccer players.

In addition, we began television and outdoor advertising in Hispanic
markets in the United States, such as Los Angeles, New York and Miami and
expanded our media efforts to include online advertising, pan-regional cable
television, radio and print advertising in Latin America and Spain.

In 2000, we intend to increase our marketing efforts using the following:

/bullet/ banner advertising with links to our sites;

/bullet/ broadcast and cable television;

/bullet/ print media, including trade magazines, general circulation
newspapers and magazines and business journals;

/bullet/ billboard and other outdoor advertising; and

/bullet/ grass roots and local marketing efforts.

In addition to our pan-regional marketing efforts we intend to localize
our marketing efforts in specific key traffic countries, including the United
States, Puerto Rico, Mexico, Spain, Argentina, Colombia, Chile and Venezuela.

SALES

Our ability to attract a large and diverse audience of Spanish-speaking
Internet users gives advertisers and marketers the opportunity to focus their
efforts on highly attractive target markets. We believe that our growing sales
organization, with its consultative approach, and the diversity of our audience
will attract additional advertisers and marketers to our sites.

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OUR SALES ORGANIZATION

Prior to August 1999, we used a media sales company to sell advertising on
our sites. Upon completion of our equity financing in November 1999, we began
to expand our sales organization. We educate advertisers and marketers about
the benefits of using our sites as an effective medium to reach the
Spanish-speaking community. By employing a consultative approach, we seek to
establish long term relationships with advertisers, advertising agencies and
marketers.

Our sales force has extensive experience in the media, advertising and
consumer products industries obtained at leading companies, including Young &
Rubicam, Grey Advertising, USA Networks, Viacom, Procter & Gamble, Pillsbury
and Knight Ridder. As a result, we are able to provide our advertisers with
assistance in developing effective Internet advertising campaigns that serve
their needs. As of March 24, 2000, we had an internal sales force of 18
professionals located in the United States, Spain, Mexico, Argentina and
Colombia. We plan to significantly increase our sales force as we expand our
business.

ADVERTISING SERVICES

We offer a variety of advertising opportunities to our clients, including:

/bullet/ banner advertising;

/bullet/ contextual links to merchandise and services;

/bullet/ online sweepstakes, contests and promotions;

/bullet/ event sponsorships; and

/bullet/ channel sponsorships.

We enable advertisers to target their advertisements at the local,
regional and interest-specific level. By providing a broad array of channels of
interest, we offer advertisers expanded brand communications options.

Our sales organization assists advertisers in conducting market research,
analyzing the effectiveness of their advertising campaigns by gathering user
feedback and providing monitored, statistical information relating to user
traffic on our sites. We provide our advertisers and marketers with real-time
feedback on user traffic, click-through rates, demographics, online surveys and
other information. Advertisers seek cost effective ways to gather and track
information, obtain user feedback and continuously assess their market and
customers. We enable advertisers to quickly and accurately assess the
effectiveness of their advertising campaign.

OUR ADVERTISERS

In 1999, we had 55 advertisers and sponsors on our sites of which 42
advertised on or sponsored our sites during the fourth quarter of 1999. Our
advertisers have included:

/bullet/ Banamex /bullet/ Patagon.com
/bullet/ BellSouth /bullet/ Pepsi USA
/bullet/ Dell Computers /bullet/ Procter & Gamble
/bullet/ Fox /bullet/ Siemens
/bullet/ Hallmark Entertainment /bullet/ Televideos Services, Inc.
/bullet/ Heineken USA /bullet/ USA Networks
/bullet/ Nortel Networks

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We have derived substantially all of our revenues to date from the sale of
advertising and sponsorships on our sites. Typically, our agreements with
advertisers have terms of two to four months. During 1999, each of BellSouth,
Patagon.com and Televideos Services, Inc. accounted for at least 10% of our
revenues.

Historically, advertising expenditures in Latin America have been lower
during the first calendar quarter of each year because:

/bullet/ that period includes the summer months in most of Latin America;

/bullet/ many users in our target market take extended vacations during
these months; and

/bullet/ schools and universities in our target market are generally closed
during this time.

As a result, our advertising revenues may be lower during the first quarter as
compared to other quarters.

SONY RELATIONSHIP

In October 1999, we sold shares of our Class B Convertible Preferred Stock
to Sony in exchange for $5.0 million in cash and an agreement by Sony to
perform $29.3 million in future services. Under the terms of this agreement,
Sony provided us a "menu" of potential services that we may select over the
agreement's anticipated three year term. The services we may select include
access to content, promotion of Yupi on Sony's Internet sites and its Latin
American and Spanish television properties and inclusion on Sony enhanced CDs
of links to our sites.

TECHNOLOGY

We have a reliable systems architecture that is able to cost effectively
handle increasing and variable volumes of user traffic. We make our sites
available using Dell-based, Microsoft Windows NT servers, Sun Microsystems
servers and EMC disk arrays as our central production servers, currently
located at the facilities of Exodus Communications in New Jersey. Exodus
provides comprehensive facilities management services, including monitoring of
all production servers 24 hours a day, seven days a week. We have implemented
an environment in which each server can function separately. In Argentina,
Colombia, Mexico, Spain and the United States, we maintain data centers for
content and Internet development and staging.

Additional components of our server architecture enable us to administer
content, log traffic and serve advertisements. The connectivity layer of our
server architecture is operated with Cisco equipment. The Exodus server farm
facilities provide up to 200 megabits per second of bandwidth access over our
Internet connections. All of our facilities are protected by multiple power
supplies.

We use in-house and third party monitoring software for our servers,
processes and network connectivity. Reporting and tracking systems generate
daily traffic, demographic and advertising reports. All of our production
systems are copied to backup tapes each night and regularly stored in a storage
facility on Exodus's premises as well as in a storage facility in South
Florida.

Our sites must accommodate a high volume of traffic and deliver frequently
updated information. Components or features of our network have in the past
suffered outages or experienced slower response times because of equipment or
software down time. We are in the process of designing a mirrored co-location
site at another location to increase our availability and reliability, perform
load balancing of traffic and increase the serviceability of our sites.

COMPETITION

Many companies provide content, connectivity services and electronic
commerce opportunities to Spanish-speaking Internet users located in Latin
America, the United States and Spain. As such, these

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companies compete with us for user traffic, advertising relationships and
revenues and strategic partners and alliances. Although the market for online
Spanish language content is relatively new and evolving, we expect competition
for users and revenues from advertising and electronic commerce to increase
significantly in the future because there are no substantial barriers to entry
in our target markets.

We compete against providers of Spanish language content, including ISPs,
portals, directories, content sites, Internet communities and Internet sites
maintained by governmental and/or educational institutions.

We face competition on a country-specific and pan-regional level. Our
primary competitors include, among others, StarMedia Network, Inc., Terra
Networks, S.A., America Online Latin America, Inc. and El Sitio, Inc. We also
face competition from Internet companies that provide products and services
primarily in English, but that also offer similar products and services in
Spanish such as Yahoo!, America Online, Lycos and Prodigy. These competitors
may create or collect content that is better than ours or achieves greater
market acceptance. New competitors may emerge and acquire significant market
share. Some of our established competitors and potential new competitors may
have better brand recognition and greater financial, technical and marketing
resources than us.

Our ability to compete successfully depends on many factors, including:

/bullet/ the quality of the content provided by us and our competitors;

/bullet/ how easy our services are to use;

/bullet/ sales and marketing efforts;

/bullet/ the prices that we charge our advertisers and electronic commerce
merchants; and

/bullet/ performance of our technology.

We also compete with traditional forms of media, including newspapers,
magazines, radio and television for advertising revenue. If advertisers view
the Internet or our sites as an ineffective advertising medium, they may be
reluctant to allocate a portion of their advertising budget to advertising on
our sites and on the Internet.

INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS

We regard our copyrights, service marks, trademarks, trade secrets and
other intellectual property as critical to our success. We rely on trademark
and copyright law, trade secret protection and confidentiality and/or license
agreements with our employees, customers, suppliers and others to protect our
intellectual property rights. Despite our precautions, it may be possible for
third parties to obtain and use our intellectual property without
authorization. Furthermore, the validity, enforceability and scope of
protection of intellectual property in Internet-related industries are
uncertain and still evolving. The laws of some foreign countries are uncertain
or do not protect intellectual property rights to the same extent as do the
laws of the United States.

We are pursuing the registration of our trademarks and service marks in
the United States, Spain and in key countries of Latin America. We may not be
able to secure adequate protection for our trademarks in the United States and
other countries. Policing unauthorized use of our marks is also difficult and
expensive. In addition, it is possible that our competitors will adopt product
or service names similar to ours, thereby impeding our ability to build brand
identity and possibly leading to customer confusion. Our inability to protect
our trademarks and service marks would have a material adverse effect on our
business, financial condition and results of operations.

Many parties are actively developing chat, homepage, search and related
Internet technologies. We expect these developers to continue to take steps to
protect these technologies, including seeking

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patent protection. There may be patents issued or pending that are held by
others and that cover significant parts of our technology, business methods or
services. For example, we are aware that a number of patents have been issued
for electronic commerce, Internet-based information indexing and retrieval and
online direct marketing. Disputes over rights to these technologies are likely
to arise in the future. We cannot be certain that our products do not or will
not infringe valid patents, copyrights or other intellectual property rights
held by third parties. We may be subject to legal proceedings and claims from
time to time relating to the intellectual property of others in the ordinary
course of our business. If we determine that licensing this intellectual
property is appropriate, we may not be able to obtain a license on reasonable
terms or at all. We may also incur substantial expenses in defending against
third party infringement claims, regardless of the merit of these claims.
Successful infringement claims against us may result in substantial monetary
liability or may prevent us from conducting all or part of our business.

We also intend to continue to license technology from third parties,
including our email, chat and ad-serving technology. The market is evolving and
we may need to license additional technologies to remain competitive. We may
not be able to license these technologies on commercially reasonable terms or
at all. In addition, we may fail to successfully integrate any licensed
technology into our services. Our inability to obtain any of these licenses
could delay product and service development until alternative technologies can
be identified, licensed and integrated.

GOVERNMENT REGULATION

There are currently few laws or regulations directly applicable to access
to or commerce on the Internet. However, due to the increasing use of the
Internet, various legislative and regulatory proposals are under consideration
by various governments and governmental agencies or bodies. Laws or regulations
may be adopted or applied with respect to the Internet relating to issues such
as the following:

/bullet/ sales and other taxes;

/bullet/ user privacy;

/bullet/ pricing controls;

/bullet/ characteristics and quality of services and products;

/bullet/ consumer protection;

/bullet/ cross-border electronic commerce;

/bullet/ libel and defamation;

/bullet/ pornography;

/bullet/ copyright, trademark and patent infringement; and

/bullet/ other claims based on the nature and content of Internet
materials.

The adoption or application of any of these laws or regulations may
negatively affect the growth in the use of the Internet, which could, in turn,
decrease the demand for our sites, increase our costs of doing business, or
otherwise have a material adverse effect on our business.

EMPLOYEES

As of March 24, 2000, we had 263 employees, 163 of whom were based in
Miami Beach, Florida. None of our employees is subject to a collective
bargaining agreement. We believe that our relations with our employees are
good.

39
<PAGE>

FACILITIES

Our principal executive offices occupy approximately 15,000 square feet in
Miami Beach, Florida pursuant to a seven year lease. We also lease office space
in other cities, including Los Angeles, Bogota, Buenos Aires, Madrid and Mexico
City with lease terms ranging from month-to-month up to three years.

LEGAL PROCEEDINGS

We are not a party to any material legal proceedings.

40
<PAGE>

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The directors and executive officers of Yupi and their ages and positions
as of March 24, 2000 are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------------- ----- -------------------------------------------------------------
<S> <C> <C>
Oscar L. Coen ..................... 36 President, Chief Executive Officer and Director
Luis E. San Miguel ................ 40 Senior Vice President, Chief Financial Officer and Treasurer
Victor Gutierrez .................. 54 Senior Vice President, Chief Operating Officer
Marlena Delgado-Coen .............. 38 Executive Vice President, Managing Director
Carlos Cardona .................... 26 Senior Vice President, Chief Technology Officer and Director
Jackie O'Brien .................... 31 Senior Vice President of Marketing
Rudy Vila ......................... 42 Vice President of Entertainment/Content
Scott Tonneberger ................. 35 Vice President of International Operations
Damaris Valero .................... 34 Vice President of Global Sales
Gabriel Alvarez ................... 41 Vice President of International E-Commerce
Maria Elena Prio .................. 50 General Counsel, Secretary
Ariel Bentata(1) .................. 30 Director
Juan Carlos Campuzano(2) .......... 39 Director
Camilo Cruz(1)(2) ................. 39 Director
Fred Ehrlich ...................... 38 Director
David R. Parker(1) ................ 56 Director
Armando M. Codina ................. 53 Director
</TABLE>

- ----------------
(1) Member of the compensation committee
(2) Member of the audit committee

OSCAR L. COEN joined Yupi in May 1998 and has been our President since May
1999, our Chief Executive Officer since November 1998 and a director since
February 1999. From July 1997 to February 1998, Mr. Coen was an investment
banker with Preferred Capital Markets, an institutional investment banking and
securities firm, where he specialized in early stage technology and
biotechnology companies. From March 1996 to July 1997, Mr. Coen worked at First
Meridian Corporation, where he specialized in business development and
financing in Latin America. From October 1993 to December 1995, Mr. Coen was a
Vice President of Development and Sales advising emerging markets portfolio
managers for A.B. Laffer, V.A. Canto & Associates, an economic consulting firm.
Mr. Coen earned his undergraduate degree in Economics at INTEC in the Dominican
Republic, as well as an M.B.A. in International Finance and an M.B.A. in Public
Accounting from St. John's University. Mr. Coen is married to Ms. Delgado-Coen.

LUIS E. SAN MIGUEL has been our Senior Vice President, Chief Financial
Officer and Treasurer since July 1999. Prior to joining Yupi, Mr. San Miguel
was Chief Financial Officer of AnswerThink Consulting Group from its inception
in April 1997. From July 1994 to April 1997, Mr. San Miguel was Vice President
of Finance for the Strategic Services Consulting division of KPMG Peat Marwick.
From April 1991 to July 1994, Mr. San Miguel held a number of corporate
financial positions, including Director of Cash Management and Divisional
Controller, at Burger King Corp. Mr. San Miguel began his career in the audit
department of Peat Marwick Mitchell in 1981. Mr. San Miguel holds a B.S. in
Accounting and Finance from Fordham University and is a Certified Public
Accountant in the State of Florida.

VICTOR GUTIERREZ has been our Senior Vice President and Chief Operating
Officer since May 1999. From June 1991 to May 1999, Mr. Gutierrez worked in
various positions at Young & Rubicam Latin America, including Vice President,
Business Affairs Latin America, Worldwide Financial Director on the agency's
global Colgate-Palmolive account, and, most recently, as Vice Chairman, where
he managed more than 23 advertising agencies throughout the region. From 1987
to 1991, he owned fast

41
<PAGE>

food franchises and private retail outlets. From 1972 to 1987, Mr. Gutierrez
served in various management capacities, including Chief Financial Officer at
J. Walter Thompson Advertising.

MARLENA DELGADO-COEN has been our Executive Vice President and Managing
Director since January 1999. From April 1997 to January 1999, Ms. Delgado-Coen
was the co-owner of Delbrey, an advertising agency. From August 1996 to March
1997, Ms. Delgado-Coen was the General Manager of Young & Rubicam Advertising.
From November 1991 to December 1995, Ms. Delgado-Coen served as President of
FoVa/Grey Advertising, one of the largest Hispanic advertising agencies in the
United States. From October 1988 to November 1991, she served in various
capacities at Grey Advertising. From October 1986 to September 1988, Ms.
Delgado-Coen worked for Procter & Gamble in various sales and marketing
positions. Ms. Delgado-Coen holds a B.S. in Marketing from Barry University and
an M.B.A. from University of Miami in Florida. Ms. Delgado-Coen is married to
Mr. Coen.

CARLOS CARDONA founded Yupi and has been a Senior Vice President since
October 1997, our Chief Technology Officer since November 1998 and a director
since our incorporation. Prior to founding Yupi, Mr. Cardona worked from May
1996 to November 1996 for Internet Solutions Inc., an Internet development
company, where he was a Web designer and programmer. Mr. Cardona holds a B.S.
in Computer Engineering from Florida Atlantic University.

JACKIE O'BRIEN was named our Senior Vice President of Marketing in January
2000. Ms. O'Brien served as our Vice President, Marketing from November 1998 to
December 1999. From January 1995 to November 1998, Ms. O'Brien worked at Young
& Rubicam Advertising, where she held various management positions, including
most recently, Vice President and Director of Business Development for Latin
America. Ms. O'Brien holds a B.S. in Marketing from Fordham University.

RUDY VILA has been our Vice President of Entertainment/Content since
February 1999. Prior to joining Yupi, Mr. Vila was Vice President of Business
Development for PolyGram Records Latin America. From 1994 to 1996, Mr. Vila
held various positions at Columbia Pictures, including Vice President / Head of
International Marketing and as Regional Vice President at Latin America--
Columbia Tri-Star Pictures. Mr. Vila holds an M.B.A. from St. John's
University.

SCOTT TONNEBERGER has been our Vice President of International Operations
since December 1999. From May 1999 to November 1999, Mr. Tonneberger held the
position of Vice President, Strategic Services at Yupi. From June 1998 to May
1999, Mr. Tonneberger was Vice President of Latin America for Copernicus, a
market strategy consulting firm. From January 1996 to June 1998 Mr. Tonneberger
was involved in Client Services for The Market Segment Group, a marketing
research firm specializing in market research for various ethnic groups. From
July 1994 to December 1995, Mr. Tonneberger worked at Research International, a
market research company, as Director of Global Client Services. From June 1987
to June 1994, Mr. Tonneberger held various positions at FoVa/Grey Advertising,
including Account Director and Vice President of Strategic Services. Mr.
Tonneberger holds a Masters in International Studies from John Hopkins
University and an M.B.A. from Columbia University.

DAMARIS VALERO has been our Vice President of Global Sales since October
1999. From June 1997 to September 1999, Ms. Valero was Vice President of Sales
and Business Development for Universal Television Networks Group in Latin
America. From July 1993 to February 1997, Ms. Valero held various positions at
Music Television Networks Latin America, including Senior Vice President of
advertising and affiliate sales. From 1989 to 1993, Ms. Valero was Director of
International Sales for Telemundo Group Inc. From 1986 to 1989, Ms. Valero
worked for the Pillsbury Company in various sales positions. Ms. Valero holds
an M.B.A. from St. Joseph's University.

GABRIEL ALVAREZ has been our Vice President, International E-Commerce,
since March 2000. From April 1991 to January 2000, Mr. Alvarez worked at
MasterCard International, where he held various marketing positions including
most recently Senior Vice President of Marketing and Public Relations. From
1987 to 1991 he was with American Express TRS Latin America. Mr. Alvarez holds
a B.S. in Engineering and an M.B.A. from Tulane University.

42
<PAGE>

MARIA ELENA PRIO has been our General Counsel since November 1999 and our
Secretary since January 2000. From August 1993 to October 1999, Ms. Prio was a
shareholder at the law firm of Gunster, Yoakley, Valdes-Fauli & Stewart, P.A.,
where she was a member of the corporate and international law departments. From
1985 to 1993, Ms. Prio was a partner at the law firm of Tew Jorden & Schulte.
Ms. Prio holds a B.A. from Duke University and received her J.D. from the
University of Miami School of Law in 1981.

ARIEL BENTATA has been a director since February 1999. Mr. Bentata served
as our Secretary from November 1998 to December 1999. Mr. Bentata is of-counsel
to the law firm of Bentata Hoet and Associates, concentrating on cross-border
transactions primarily in Latin America. Mr. Bentata is also a director of
Latin American Access, an Internet business and strategy consulting company for
Spanish and Portuguese language Internet markets. He was formerly Latin
American counsel for MTV Networks-Latin America from January 1997 to December
1998 and of-counsel to the Miami law firm of Steel Hector & Davis LLP from July
1993 to October 1996.

JUAN CARLOS CAMPUZANO has been a director since April 1999. Mr. Campuzano
is a director of the general partner of Interprise Technology Partners, L.P.,
which is a shareholder of Yupi. From August 1992 to January 1999, Mr. Campuzano
was a portfolio manager with INVESCO Capital Management, Inc., where he also
served as a Managing Director of the International Group focusing on business
development efforts in Latin America. From August 1982 to July 1990, Mr.
Campuzano was a general practice manager with Coopers & Lybrand.

CAMILO CRUZ has been a director since our incorporation. Mr. Cruz served
as our President until May 1999. In 1990, Mr. Cruz founded and is President of
Taller Del Exito, Inc., a company which provides training and consulting
services to businesses in Latin America. Mr. Cruz is also a corporate and
motivational speaker in Latin America, Europe and the United States. Mr. Cruz
holds a Ph.D. in Analytical Spectroscopy from Seton Hall University.

FRED EHRLICH has been a director since November 1999. Since July 1999, Mr.
Ehrlich has served as President of New Technology & Business Development of
Sony Music Entertainment Inc., an affiliate of Sony Corporation of America,
which is a shareholder of Yupi. From October 1994 to June 1999, Mr. Ehrlich
served as Vice President/General Manager of New Technology & Business
Development of Sony Music Entertainment Inc. From August 1991 to September
1994, Mr. Ehrlich served as Vice President and General Manager of Columbia
Records. From August 1988 to August 1991, Mr. Ehrlich served as Vice President
of Columbia Records.

DAVID R. PARKER has been a director since April 1999. Mr. Parker is
founder and Managing Principal of Interprise Technology Partners, L.P., a
venture capital fund focused on Internet and information technology investments
founded in January 1999. From 1992 to May 1998, Mr. Parker was Chairman of
ProSource Distribution Services, Inc. a leading U.S. food services distributor
which was sold for cash to AmeriServe Inc. in May 1998. From May 1998 to August
1998, Mr. Parker was Vice Chairman of AmeriServe Inc., overseeing the
integration of ProSource into AmeriServe and remained on the board of directors
until he resigned from the board in November 1999. Mr. Parker is a director of
Tupperware, Inc. and Applied Graphics Technologies Inc. Mr. Parker received a
bachelors degree in Engineering from the University of Texas and an M.B.A. from
Harvard University, where he was a Baker Scholar.

ARMANDO M. CODINA has been a director since March 2000. Mr. Codina is the
Chairman of the Board and Chief Executive Officer of Codina Group Inc., a real
estate development company, which he founded in 1979. Mr. Codina is a director
of BellSouth Corporation, AMR Corporation, FPL Group, Inc., Quaker Oats Company
and Winn-Dixie Stores.

43
<PAGE>

COMMITTEES OF THE BOARD OF DIRECTORS

Our compensation committee consists of Messrs. Bentata, Cruz and Parker.
It reviews and evaluates the salaries and incentive compensation of our
management and key employees and makes recommendations concerning these matters
to the Board of Directors. Our compensation committee also administers our
stock plans.

Our audit committee consists of Messrs. Campuzano and Cruz. It reviews the
results and scope of audits and other services provided by our independent
public accountants and reviews our system of internal accounting and financial
controls.

DIRECTOR COMPENSATION

Directors who are our employees receive no additional compensation for
their services as directors. Directors who are not our employees do not receive
cash compensation for their services as directors, but are reimbursed for
travel expenses and other out-of-pocket costs incurred in connection with the
attendance at meetings.

Directors are also eligible to participate in our 2000 Stock Option and
Incentive Plan. In accordance with a policy adopted by the Board of Directors,
upon the effectiveness of the registration statement of which this prospectus
is a part, each non-employee director elected or appointed to the Board of
Directors after March 1, 2000 who is not a representative, employee, officer or
affiliate of any entity which is a shareholder of Yupi prior to the closing of
our public offering of common stock will be granted a non-qualified stock
option to purchase 25,000 shares of our common stock at an exercise price equal
to the fair market value of our common stock on the date of grant. These
options will vest in equal annual installments over three years from the date
of grant. Upon re-election, non-employee directors will be granted
non-qualified stock options to purchase 5,000 shares of our common stock equal
to the fair market value of our common stock on the date of grant. These
options will vest one year from the date of grant. According to the policy
established by the Board of Directors, Mr. Codina will be granted a
non-qualified stock option to purchase 25,000 shares of our common stock. These
options will vest as provided above. See also "Employee Benefit Plans."

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During the year ended December 31, 1999, the members of our compensation
committee were Messrs. Bentata, Cruz, Parker and Michael Shalom, a former
director. None of our executive officers has served as a director or member of
the compensation committee of any other entity whose executive officers served
as a director or member of our compensation committee. See "Certain
Transactions" for a description of relationships between Yupi and each of
Messrs. Bentata and Parker.

44
<PAGE>

EXECUTIVE COMPENSATION

The following table shows the total compensation paid or accrued for the
year ended December 31, 1999 to our Chief Executive Officer and our three other
most highly compensated executive officers whose total compensation paid or
accrued for the year ended December 31, 1999 exceeded $100,000. These
individuals are collectively referred to below as the named executive officers.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARD
--------------------- ----------------------
SECURITIES
NAME AND PRINCIPAL POSITION SALARY BONUS UNDERLYING OPTIONS(#)
- ----------------------------------------------------------- ----------- ------- ----------------------
<S> <C> <C> <C>
Oscar L. Coen
President, Chief Executive Officer and Director ......... $122,189 $-- 754,977
Marlena Delgado-Coen
Executive Vice President, Managing Director ............. 116,529 -- 475,925
Carlos Cardona
Senior Vice President, Chief Technology Officer
and Director ............................................ 113,540 -- 195,592
Jackie O'Brien
Senior Vice President of Marketing ...................... 111,934 -- 239,480
</TABLE>

OPTION GRANTS

The following table shows each grant of stock options during 1999 to each
of our named executive officers. No stock appreciation rights were granted to
the named executive officers in 1999.

The figures representing percentages of total options granted to employees
in the last fiscal year are based on options for a total of 5,372,788 shares
granted to our employees during 1999.

The potential realizable value is calculated based on the term of the
option at the time of grant. Stock appreciation of 0%, 5% and 10% is assumed
according to rules of the Securities and Exchange Commission and does not
represent our prediction of our stock price performance.

OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES PRICE EXPIRATION
NAME GRANTED IN FISCAL YEAR ($/SHARE) DATE
- ------------------------------ ---------------------- ---------------- ----------- -----------
<S> <C> <C> <C> <C>
Oscar L. Coen ................ 754,977(1)(4) 14.2% 2.6400 5/13/09
Marlena Delgado-Coen ......... 75,925(2) 1.4 0.0001 1/1/02
354,786(1)(4) 6.7 2.6400 5/13/09
45,214(1)(4) 0.8 8.0000 12/6/09
Carlos Cardona ............... 195,592(1)(5) 3.7 2.6400 5/13/09
Jackie O'Brien ............... 239,480(1)(5) 4.5 2.6400 5/13/09

<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR

POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
FOR OPTION TERM(3)
-------------------------------------------
NAME 0% 5% 10%
- ------------------------------ ------------- -------------- --------------
<S> <C> <C> <C>
Oscar L. Coen ................ $8,576,539 $15,223,752 $25,421,883
Marlena Delgado-Coen ......... 1,062,942 1,230,490 1,414,779
4,030,369 7,154,091 11,946,494
271,284 669,372 1,280,117
Carlos Cardona ............... 2,221,925 3,944,020 6,586,051
Jackie O'Brien ............... 2,720,493 4,829,000 8,063,865
</TABLE>

- ----------------
(1) 28% of these options will vest on the one year anniversary of the date of
grant and 2% per month thereafter until fully vested.
(2) These options are fully vested.
(3) Amounts represent hypothetical gains that could be achieved for the options
if exercised at the end of the option term. These amounts represent
assumed rates of appreciation in the value of our common stock from an
assumed initial public offering price of $14.00. Actual gains, if any, on
stock option exercise depend on the future performance of the common
stock. The amounts reflected in the table may not necessarily be achieved.

45
<PAGE>

(4) 50% of the unvested portion of these options will become automatically
vested upon a change in control of Yupi. The remaining 50% of the unvested
portion of these options shall also become automatically vested unless the
(a) optionholder is offered a contract of employment by the surviving or
acquiring entity for a period of one year or more at equivalent
compensation and benefits and for a comparable position and (b) the
surviving or acquiring company provides for the assumption, substitution
or continuation of the remaining unvested options under a reasonably
equivalent economic value methodology.
(5) 100% of the unvested portion of these options will become automatically
vested upon a change in control of Yupi if (a) the surviving or acquiring
entity does not provide for the assumption, substitution or continuation
of the optionholder's remaining unvested options under a reasonably
equivalent economic value methodology or (b) if within one year following
the date of the consummation of such change in control of Yupi, the
optionholder's employment is terminated by the surviving or acquiring
entity for a reason other than for cause.

YEAR-END OPTION VALUES

The following table shows information regarding exercisable and
unexercisable stock options held as of December 31, 1999 by each named
executive officer. No options were exercised by these individuals during 1999.
There was no public trading market for our common stock as of December 31,
1999. The value of unexercised in-the-money options has been calculated by
multiplying the difference between the exercise price per share and an assumed
initial public offering price of $14.00 per share by the number of shares
underlying the options.

AGGREGATED FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT DECEMBER 31, 1999 AT DECEMBER 31, 1999
------------------------------- ------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------ ------------- --------------- ------------- --------------
<S> <C> <C> <C> <C>
Oscar L. Coen ................ 2,256,550 754,977 $31,537,543 $8,576,539
Marlena Delgado-Coen ......... 75,925 400,000 1,062,942 4,301,653
Carlos Cardona ............... 536,450 195,592 7,497,425 2,221,925
Jackie O'Brien ............... 64,075 239,480 897,044 2,720,493
</TABLE>

EMPLOYMENT AGREEMENTS

We have employment agreements with each of Oscar Coen, Marlena
Delgado-Coen, Carlos Cardona and Jackie O'Brien. Under the terms of these
employment agreements, the executive will receive a base salary and a
discretionary bonus to be awarded by the Board of Directors or the compensation
committee of the Board of Directors. In the event the executive is terminated
without cause, or decides to terminate his or her employment for good reason,
the executive is entitled to receive his or her salary for a one year period,
and in the case of Ms. O'Brien, a six month period, based on the executive's
base pay in effect on the last day of employment with Yupi. The executive shall
also continue to receive all other benefits under the executive's employment
agreement including life insurance and medical insurance for a one year period,
and in the case of Ms. O'Brien, a six month period. These benefits will
continue until the earlier of twelve months, and in the case of Ms. O'Brien,
six months, from the executive's final day of employment with Yupi or when the
executive obtains other employment which provides substantially similar
benefits and the executive becomes eligible to participate in the new
employer's medical and/or dental plan.

In the event that the executive's employment is terminated by Yupi in
anticipation of, in connection with or within one year after a change of
control of Yupi, we shall pay the executive his or her salary for a one year
period, and in the case of Ms. O'Brien, a six month period, at the executive's
base pay in effect on the last day of the executive's employment with Yupi. In
addition, the executive shall also continue to receive all other benefits under
the employment agreements for a one year period, and in the case of Ms.
O'Brien, a six month period. These benefits will continue until the earlier of
twelve months, and in the case of Ms. O'Brien, six months, from the executive's
final day of employment with Yupi or when the executive obtains other
employment that provides substantially similar benefits and the executive
becomes eligible to participate in the new employer's medical and/or dental
plan.

46
<PAGE>

EMPLOYEE BENEFIT PLANS

STOCK INCENTIVE PLAN

The Stock Incentive Plan provides for the grant of stock-based awards to
employees, officers and directors of, and consultants, distributors or other
persons who render valuable services to, Yupi and its subsidiaries, including
incentive stock options, non-qualified stock options and other equity-based
awards. Incentive stock options may be granted only to our employees. A total
of 10,000,000 shares of common stock may be issued upon exercise of options or
other awards granted under the Stock Incentive Plan. As of March 24, 2000,
there were outstanding options to purchase an aggregate of 9,979,052 shares of
common stock pursuant to the Stock Incentive Plan.

Our Stock Incentive Plan is administered by the Board of Directors and the
compensation committee. The Stock Incentive Plan provides that the Board of
Directors and the compensation committee each has the authority to select the
persons to whom awards are granted and determine the terms of each award,
including the number of shares of common stock to be granted. Subject to the
discretion of the Board of Directors and the compensation committee, payment of
the exercise price of an award may be made in cash, shares of common stock,
delivery of a promissory note representing the aggregate exercise price of the
award, or by any other method approved by the Board of Directors or the
compensation committee consistent with Section 422 of the Internal Revenue Code
and Rule 16b-3 under the Securities Exchange Act of 1934. Awards are not
assignable or transferable, except by will or the laws of descent and
distribution, and in the case of non-qualified stock options only, to a family
member of the optionholder or an entity established for the benefit of an
optionholder's family member.

2000 STOCK OPTION AND INCENTIVE PLAN

The 2000 Stock Option and Incentive Plan provides for the grant of
stock-based awards to employees, officers and directors of, and consultants or
advisors to, Yupi and its subsidiaries, including incentive stock options and
non-qualified stock options and other equity-based awards. Incentive stock
options may be granted only to our employees. A total of 4,000,000 shares of
common stock may be issued upon the exercise of options or other awards granted
under the 2000 Stock Option and Incentive Plan. No awards have been granted to
date under the 2000 Stock Option and Incentive Plan.

The 2000 Stock Option and Incentive Plan is administered by the Board of
Directors and the compensation committee. The 2000 Stock Option and Incentive
Plan provides that the Board of Directors and the compensation committee each
has the authority to select the persons to whom awards are granted and
determine the terms of each award, including the number of shares of common
stock to be granted. Payment of the exercise price of an award may be made in
cash, shares of common stock, a combination of cash and stock or by any other
method approved by the Board or compensation committee, consistent with Section
422 of the Internal Revenue Code and Rule 16b-3 under the Exchange Act. Options
granted under the 2000 Stock Option and Incentive Plan are not assignable or
transferable except by will or the laws of descent and distribution, and in the
case of non-qualified stock options only, to a family member of the
optionholder or an entity established for the benefit of an optionholder's
family member.

Each of the Board of Directors or compensation committee may, in its sole
discretion, amend, modify or terminate any award granted or made under the 2000
Stock Option and Incentive Plan, so long as such amendment, modification or
termination would not materially and adversely affect the participant. Each of
the Board of Directors or compensation committee may also, in its sole
discretion, accelerate or extend the date or dates on which all or any
particular option or options granted under the 2000 Stock Option and Incentive
Plan may be exercised.

2000 EMPLOYEE STOCK PURCHASE PLAN

The 2000 Employee Stock Purchase Plan provides for the issuance of a
maximum of 200,000 shares of common stock. The 2000 Employee Stock Purchase
Plan is administered by the Board of

47
<PAGE>

Directors and the compensation committee. All employees of Yupi whose customary
employment is for more than 20 hours per week and for more than three months in
any calendar year and who have completed more than 90 days of employment with
Yupi on or before the first day of any six-month payment period are eligible to
participate in the 2000 Employee Stock Purchase Plan. Outside directors and
employees who would own 5% or more of the total combined voting power of value
of Yupi's common stock immediately after the grant may not participate in the
2000 Employee Stock Purchase Plan.

To participate in the 2000 Employee Stock Purchase Plan, an employee must
authorize Yupi to deduct an amount not less than one percent nor more than 10
percent of a participant's total cash compensation from his or her pay during
six-month payment periods. The first payment period will commence on a date to
be determined by the Board of Directors and end on December 31, 2000.
Thereafter, the payment periods will commence on the first day of January and
July, and end on the last day of the following June and December, respectively,
of each year, but in no case shall an employee be entitled to purchase more
than 1,000 shares in any one payment period. The exercise price for the option
granted in each payment period is 85% of the lesser of the average market price
of the common stock on the first or last business day of the payment period, in
either event rounded up to the nearest cent. If an employee is not a
participant on the last day of the payment period, such employee is not
entitled to exercise his or her option, and the amount of his or her
accumulated payroll deductions will be refunded. Options granted under the 2000
Employee Stock Purchase Plan may not be transferred or assigned. An employee's
rights under the 2000 Employee Stock Purchase Plan terminate upon his or her
voluntary withdrawal from the plan at any time or upon termination of
employment. No options have been granted to date under the 2000 Employee Stock
Purchase Plan.

48
<PAGE>

CERTAIN TRANSACTIONS

On March 30, 1999, Yupi, IFX Corporation, an affiliate of IFX Online,
Inc., Oscar Coen, an executive officer and director of Yupi, Ariel Bentata, a
director of Yupi, Camilo Cruz, a director of Yupi, and Carlos Cardona, an
executive officer and director of Yupi, entered into an agreement under which
these four individuals granted IFX Corporation the right to purchase from them
an aggregate of 647,525 shares of our common stock at a price per share of
$0.9264. IFX Corporation can exercise this right at any time before March 30,
2001. Additionally, in connection with this agreement, we agreed to provide a
variety of services to IFX Corporation, including advertising banners with a
contract value of $200,000 and personalization home page services.

On April 23, 1999, we sold 45,620 shares of our Class A Convertible
Preferred Stock in a private financing to IFX Online, Inc. at $21.92 per share
and sold an aggregate of 223,500 shares of our Class A Convertible Preferred
Stock in a private financing to IFX Online, Inc. and Interprise Technology
Partners, L.P. at $31.32 per share. Between May 13, 1999 and August 2, 1999, we
sold an aggregate of 159,642 shares of our Class A Convertible Preferred Stock
in a series of private financings to Interprise Technology Partners, L.P. at
$31.32 per share.

On August 23, 1999, we borrowed $2.0 milllion from Interprise Technology
Partners, L.P. On September 9, 1999, we borrowed $1.0 million from Interprise
Technology Partners, L.P. Each loan was secured by certain assets of Yupi,
evidenced by a promissory note, and accrued interest at 8% per annum. On
November 5, 1999, these loans were discharged in exchange for 260,869 shares of
our Class C Convertible Preferred Stock and $44,274 for accrued but unpaid
interest on the promissory notes.

On October 27, 1999, we sold 2,955,016 shares of our Class B Convertible
Preferred Stock in a private financing to Sony Corporation of America at a
price of $11.60 per share for an aggregate purchase price of $34.3 million,
consisting of $5.0 million in cash and an agreement between Yupi and Sony
Corporation of America under which Sony agreed to provide services relating to
the marketing and promotion of our sites.

On November 5, 1999 and November 10, 1999, we sold an aggregate of
5,858,698 shares of our Class C Convertible Preferred Stock in a private
financing at a price of $11.50 per share to purchasers, including Interprise
Technology Partners, L.P.

On November 24, 1999, Victor Gutierrez, an executive officer of Yupi,
borrowed $75,000 from Yupi. On October 27, 1999 and November 30, 1999, Rudy
Vila, an executive officer of Yupi, borrowed $20,000 and $70,000, respectively,
from Yupi. Each of these loans is unsecured, is evidenced by a promissory note
and bears interest at 8% per annum. Each of these loans is due one year from
the date made.

We sold 2,362,475 shares of our common stock during 1998 to Ariel Bentata,
who subsequently became a member of our Board of Directors, for an aggregate
purchase price of $100,000. Mr. Bentata is an attorney at a law firm that
provides legal services to us. We paid this law firm, in part, by granting it
options to purchase an aggregate of 31,450 shares of our common stock at
$0.0025 per share for legal services rendered and related disbursements through
January 1999. For the year ended December 31, 1999, we paid this law firm
approximately $154,000 (including the estimated fair value of options on the
date of grant) for legal services rendered and related disbursements.

Pursuant to the terms of two sales and maintenance agreements between Yupi
and Netera, Inc., a company in which Interprise Technology Partners, L.P. has a
material interest, for the year ended December 31, 1999, we paid Netera
$649,187 for computer networking services. David Parker, a director of Yupi and
a Managing Principal of the general partner of the general partner of
Interprise Technology Partners, L.P., is a director of Netera.

We believe all transactions set forth above were made on terms no less
favorable to us than would have been obtained from unaffiliated third parties.
We have adopted a policy providing that all future transactions between Yupi
and our executive officers, directors, principal shareholders and their
affiliates shall be on terms no less favorable to Yupi than could be obtained
by Yupi from unrelated third parties, and such transactions shall be approved
by a majority of the outside independent and disinterested members of our Board
of Directors.

49
<PAGE>

PRINCIPAL SHAREHOLDERS

The following table shows information regarding beneficial ownership of
our common stock as of March 24, 2000, and as adjusted to reflect the sale of
the shares of common stock offered by this prospectus by:

/bullet/ our named executive officers;

/bullet/ each of our directors;

/bullet/ each person known by us to be the beneficial owner of more than 5%
of our common stock; and

/bullet/ all of our executive officers and directors as a group.

Unless otherwise noted below, the address of each person listed on the
table is c/o Yupi Internet Inc., 1688 Meridian Avenue, 10th Floor, Miami Beach,
Florida 33139 and, to our knowledge, each person has sole voting and investment
power over all shares indicated, except when authority is shared by spouses
under applicable law and except as set forth in the footnotes to the table.

For purposes of calculating the percentage beneficially owned, the number
of shares deemed outstanding before the offering includes:

/bullet/ 16,187,681 shares of common stock outstanding as of March 24,
2000; and

/bullet/ 19,558,460 shares of common stock issuable upon conversion of the
preferred stock, which will be automatically converted upon the
closing of this offering.

For purposes of calculating the percentage beneficially owned, the number
of shares deemed outstanding after the offering includes:

/bullet/ all shares deemed to be outstanding before the offering; and

/bullet/ 7,000,000 shares being sold in this offering, assuming no exercise
of the underwriters' over-allotment option.

In computing the number of shares beneficially owned by a person and the
percentage ownership by that person, shares of common stock issuable under
stock options exercisable within 60 days of March 24, 2000 are deemed
outstanding but are not deemed outstanding for computing the percentage
ownership of any other person.

50
<PAGE>

<TABLE>
<CAPTION>
PERCENTAGE OF SHARES
BENEFICIALLY OWNED
NUMBER OF SHARES -----------------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED BEFORE OFFERING AFTER OFFERING
- ---------------------------------------------- ------------------- ----------------- ---------------
<S> <C> <C> <C>
Oscar Coen(1) ................................ 2,787,580 7.3% 6.1%
Carlos Cardona(2) ............................ 5,353,716 14.7 12.4
Marlena Delgado-Coen(3) ...................... 230,702 * *
Jackie O'Brien(4) ............................ 139,129 * *
Ariel Bentata(5) ............................. 1,629,475 4.5 3.8
Juan Carlos Campuzano ........................ -- -- --
Camilo Cruz(6) ............................... 4,128,881 11.4 9.5
Fred Ehrlich(7) .............................. 2,980,712 8.3 7.0
David R. Parker(8) ........................... 8,329,951 23.3 19.5
Armando M. Codina ............................ -- -- --
Sony Corporation of America .................. 2,980,712 8.3 7.0
550 Madison Avenue
New York, NY 10022
Interprise Technology Partners, L.P. ......... 8,329,951 23.3 19.5
1001 Brickell Bay Drive, 30th Floor
Miami, FL 33131
IFX Online, Inc.(9) .......................... 3,554,700 9.8 8.2
17701 Biscayne Blvd., 3rd Floor
Aventura, FL 33160
All executive officers and directors
as a group (17 persons)(10) ................ 25,688,426 63.3 53.9
</TABLE>

- ----------------
* Less than 1%
(1) Includes 15,975 shares of common stock held jointly with Ms. Delgado-Coen,
48,036 shares of common stock held by a trust of which Mr. Coen is the
trustee, and 2,467,944 shares of common stock issuable upon exercise of
stock options. Also includes the right to purchase 225,650 shares of
common stock from Mr. Cruz.
(2) Includes 591,216 shares issuable upon exercise of stock options.
(3) Includes 15,975 shares of common stock held jointly with Mr. Coen, 16,012
shares of common stock held by a trust of which Ms. Delgado-Coen is the
trustee, and 175,265 shares of common stock issuable upon exercise of
stock options.
(4) Includes 131,129 shares of common stock issuable upon exercise of stock
options.
(5) Includes 376,400 shares of common stock issuable upon exercise of stock
options. Also includes the right to purchase 245,275 shares of common
stock from Mr. Cardona and the right to purchase 19,625 shares of common
stock from Mr. Cruz. Also includes an aggregate of 884,575 shares of
common stock held by two revocable trusts established by Mr. Bentata.
(6) Includes 3,335,875 shares of common stock held by a revocable trust of
which Mr. Cruz is the trustee and 566,381 shares of common stock issuable
upon exercise of stock options.
(7) Includes 2,980,712 shares of common stock beneficially owned by Sony
Corporation of America. Mr. Ehrlich is the President of New Technology &
Business Development of Sony Music Entertainment Inc., an affiliate of
Sony Corporation of America. Mr. Ehrlich disclaims benefical ownership of
these shares.
(8) Includes 8,329,951 shares of common stock beneficially owned by Interprise
Technology Partners, L.P. Mr. Parker is the Managing Principal of the
general partner of the general partner of Interprise Technology Partners,
L.P. Mr. Parker disclaims beneficial ownership of these shares, except to
the extent of his pecuniary interest therein.
(9) Includes the right of IFX Corporation, an affiliate of IFX Online, Inc.,
to purchase an aggregate of 647,525 shares of common stock from the
following individuals: 226,625 shares of common stock from each of Messrs.
Cruz and Cardona, 90,675 shares of common stock from Mr. Coen, and 103,600
shares of common stock from Mr. Bentata. Also includes 170,250 shares of
common stock owned by IFX Inc., an affiliate of IFX Corporation and IFX
Online, Inc.
(10) Includes 4,387,065 shares issuable upon exercise of stock options. Also
includes those shares of common stock referenced in footnotes 7 and 8.
Also includes Mr. Coen's right to acquire 225,650 shares of common stock
from Mr. Cruz, Mr. Bentata's right to acquire 245,275 shares of common
stock from Mr. Cardona and Mr. Bentata's right to acquire 19,625 shares of
common stock from Mr. Cruz.

51
<PAGE>

DESCRIPTION OF CAPITAL STOCK

Following this offering, our authorized capital stock will consist of
300,000,000 shares of common stock, par value $.0001 per share, and 5,000,000
shares of preferred stock, par value $.01 per share.

The following summary of the material provisions of our securities and
various provisions of our Fourth Amended and Restated Articles of Incorporation
and our Amended and Restated By-Laws is not intended to be complete and is
qualified by reference to the provisions of applicable law and to our Fourth
Amended and Restated Articles of Incorporation and Amended and Restated By-Laws
included as exhibits to the Registration Statement of which this prospectus is
a part. See "Additional Information."

COMMON STOCK

At March 24, 2000, there were 16,187,681 shares of common stock
outstanding, which were held of record by 84 shareholders, and 9,242,476 shares
of preferred stock outstanding, which were held of record by 22 shareholders.
All outstanding shares of preferred stock will be automatically converted into
an aggregate of 19,558,460 shares of common stock upon the closing of this
offering. In addition, as of March 24, 2000, there were outstanding stock
options for the purchase of a total of 9,979,052 shares of common stock. Based
upon the number of shares outstanding as of March 24, 2000 and giving effect to
the issuance of the shares of common stock offered by Yupi hereby and the
conversion of the preferred stock into common stock, there will be 42,746,141
shares of common stock outstanding upon the closing of this offering.

Holders of common stock are entitled to one vote per share for each share
held of record on all matters submitted to a vote of shareholders. The holders
of common stock are entitled to receive ratably lawful dividends as declared by
the Board of Directors. However, these dividends are subject to preferences of
holders of any outstanding shares of preferred stock. In the event of a
liquidation, dissolution or winding up of the affairs of Yupi, whether
voluntary or involuntary, the holders of common stock will be entitled to
receive pro rata all of the remaining assets of Yupi available for distribution
to its shareholders. The pro rata distribution would be junior to the rights of
the holders of any outstanding shares of preferred stock. The common stock has
no preemptive, redemption, conversion or subscription rights. The rights,
powers, preferences and privileges of holders of common stock are junior to,
and may be adversely affected by, the rights of the holders of shares of any
series of preferred stock which Yupi may designate and issue in the future.

PREFERRED STOCK

The Board of Directors is authorized, subject to any limitations
prescribed by Florida law, without further shareholder approval, to issue from
time to time up to 5,000,000 shares of preferred stock, in one or more series.
The Board of Directors is also authorized, subject to the limitations of
Florida law, to establish the number of shares to be included in each series
and to fix the voting powers, preferences, qualifications and special or
relative rights or privileges of each series. The Board of Directors is
authorized to issue preferred stock with voting, conversion and other rights
and preferences that could adversely affect the voting power or other rights of
the holders of common stock.

We have no current plans to issue any preferred stock. However, if we do
so, the issuance of preferred stock or of rights to purchase preferred stock
could have the effect of making it more difficult for a third party to acquire,
or of discouraging a third party from attempting to acquire, a majority of the
outstanding voting stock of Yupi.

CONVERSION OF OUTSTANDING PREFERRED STOCK

Our outstanding preferred stock automatically converts into common stock
upon the closing of this offering. The conversion ratio for the Class A
Convertible Preferred Stock is 25-for-1. The

52
<PAGE>

outstanding shares of Class A Convertible Preferred Stock are convertible into
an aggregate of 10,719,050 shares common stock. The conversion ratio for the
Class B Convertible Preferred Stock is approximately 1.009-for-1 and the
conversion ratio for the Class C Convertible Preferred Stock is 1-for-1. The
outstanding shares of Class B Convertible Preferred Stock are convertible into
an aggregate of 2,980,712 shares of common stock, and the outstanding shares of
Class C Convertible Preferred Stock are convertible into an aggregate of
5,858,698 shares of common stock. If the initial public offering price per
share is less than $15.295, the conversion ratio of the Class C Convertible
Preferred Stock will be adjusted so that the initial public offering price per
share is equal to 133% of the price per share of the shares of common stock
issued upon conversion of the Class C Convertible Preferred Stock. A similar
adjustment will also be made to the conversion ratio of the Class B Convertible
Preferred Stock. At an assumed initial public offering price of $14.00, these
adjustments would result in the issuance of an additional 541,930 shares of
common stock upon the conversion of the Class C Convertible Preferred Stock,
and an additional 40,538 shares upon the conversion of the Class B Convertible
Preferred Stock. In connection with the sale of the Class B Convertible
Preferred Stock and Class C Convertible Preferred Stock, upon the closing of
this offering we will record a deemed dividend on these shares equal to
approximately $23.9 million.

ANTI-TAKEOVER EFFECTS OF PROVISIONS OF THE FLORIDA BUSINESS CORPORATION ACT,
OUR CHARTER AND OUR BY-LAWS

The following provisions of the Florida Business Corporation Act, our
Fourth Amended and Restated Articles of Incorporation and our Amended and
Restated By-Laws could have the effect of preventing or delaying a person from
acquiring or seeking to acquire a substantial interest in, or control of, Yupi.

ELECTION AND REMOVAL OF DIRECTORS

Our Amended and Restated By-Laws provide that directors shall be elected
annually, at the annual meeting of shareholders, by a plurality of the votes
cast by the shares entitled to vote at the annual meeting on such matters.

In addition, our Amended and Restated By-Laws provide that newly created
directorships resulting from either an increase in the authorized number of
directors or vacancies may be filled only by:

/bullet/ a majority of the directors then in office, though less than a
quorum is then in office; or

/bullet/ by the sole remaining director.

Our Fourth Amended and Restated Articles of Incorporation and our Amended
and Restated By-Laws provide that a director may be removed without cause only
by the holders of at least 75% of the shares entitled to vote at an election of
directors. A director may be removed with cause only by the holders of at least
a majority of the shares entitled to vote at an election of directors.

SHAREHOLDER MEETINGS

Under our Fourth Amended and Restated Articles of Incorporation and our
Amended and Restated By-Laws, only our chairman of the board, our president, or
the holders of at least a majority of our outstanding capital stock may call
special meetings of shareholders.

REQUIREMENTS FOR ADVANCE NOTIFICATION OF SHAREHOLDER NOMINATIONS AND PROPOSALS

Our Amended and Restated By-Laws provide for advanced notice procedures
with respect to shareholder proposals and the nomination of candidates for
election as directors, other than nominations made by or at the direction of
our Board of Directors or committee of the Board of Directors.

53
<PAGE>

ELIMINATION OF SHAREHOLDER ACTION BY WRITTEN CONSENT

Our Fourth Amended and Restated Articles of Incorporation and our Amended
and Restated By-Laws eliminate the right of shareholders to act by written
consent.

NO CUMULATIVE VOTING

Our Fourth Amended and Restated Articles of Incorporation do not provide
for cumulative voting.

FLORIDA ANTI-TAKEOVER LAW

We are subject to anti-takeover provisions under the Florida Business
Corporation Act that apply to public corporations organized under Florida law
unless the corporation has elected to opt out of those provisions in its
articles of incorporation or bylaws. We have not chosen to opt-out of these
provisions.

These provisions prohibit the voting of shares in a publicly-held Florida
corporation that are acquired in a "control share acquisition" unless:

/bullet/ the board of directors gives its prior approval of the control
share acquisition;

/bullet/ the corporation amends its articles of incorporation or bylaws to
make the statute inapplicable before a control share acquisition;
or

/bullet/ the holders of a majority of the corporation's voting shares,
excluding "interested" shares, approve the granting of voting
rights to the acquiring party.

A "control share acquisition" is defined as an acquisition that immediately
thereafter entitles the acquiring party, directly or indirectly, to vote or
direct the vote in the election of directors within any of the following ranges
of voting power:

/bullet/ 1/5 or more but less than 1/3;

/bullet/ 1/3 or more but less than a majority; or

/bullet/ a majority or more.

There are some exceptions to the "control share acquisition" provisions of the
Florida Business Corporation Act.

The Florida Business Corporation Act also contains an "affiliated
transaction" provision that prohibits a publicly-held Florida corporation from
engaging in a broad range of business combinations or other extraordinary
corporate transactions with an "interested shareholder" unless:

/bullet/ the transaction is approved by a majority of disinterested
directors before the person becomes an interested shareholder;

/bullet/ the corporation has not had more than 300 stockholders of record
during the past three years;

/bullet/ the interested shareholder has owned at least 80% of the
corporation's outstanding voting shares for at least five years;

/bullet/ the interested shareholder is the beneficial owner of at least 90%
of the voting shares, excluding shares acquired directly from the
corporation in a transaction not approved by a majority of the
disinterested directors;

54
<PAGE>

/bullet/ consideration is paid to the corporation's shareholders equal to
the highest amount per share calculated under a complex formula,
and other specified conditions are met; or

/bullet/ the transaction is approved by the holders of two-thirds of the
corporation's voting shares other than those owned by the
interested shareholder.

An "interested shareholder" is defined as a person who, together with
affiliates and associates, beneficially owns more than 10% of a corporation's
outstanding voting shares. The Florida Business Corporation Act defines
"beneficial ownership" in more detail.

The Florida Business Corporation Act also contains "general standards for
directors" provisions. These provisions state that in discharging his or her
duties and in determining what is in our best interest, a director may consider
factors that the director deems relevant, including:

/bullet/ the long term prospects and interests of Yupi and our
shareholders; and

/bullet/ the social, economic, legal or other effects of any proposed
actions on our employees, suppliers or customers, the community in
which we operate and the economy in general.

Therefore, directors who consider these other factors may make decisions which
are less beneficial to some, or a majority, of our shareholders than if the law
did not permit our directors to consider these factors.

INDEMNIFICATION AND LIMITATION OF LIABILITY

The Florida Business Corporation Act authorizes Florida corporations to
indemnify any person who was or is a party to any proceeding other than an
action by, or in the right of, the corporation, by reason of the fact that he
is or was a director, officer, employee, or agent of the corporation. The
indemnity also applies to any person who is or was serving at the request of
the corporation as a director, officer, employee, or agent of another
corporation or other entity. The indemnification applies against liability
incurred in connection with such a proceeding, including any appeal thereof, if
the person acted in good faith and in a manner he reasonably believed to be in,
or not opposed to, the best interests of the corporation. To be eligible for
indemnity with respect to any criminal action or proceeding, the person must
have had no reasonable cause to believe his conduct was unlawful.

In the case of an action by or on behalf of a corporation, indemnification
may not be made if the person seeking indemnification is found liable, unless
the court in which the action was brought determines such person is fairly and
reasonably entitled to indemnification.

Under the Florida Business Corporation Act, a director is not personally
liable for monetary damages to a corporation or other person for any statement,
vote, decision, or failure to act unless:

/bullet/ the director breached or failed to perform his duties as a
director; and

/bullet/ the director's breach of, or failure to perform, those duties
constitutes:

-- a violation of criminal law, unless the director had reasonable
cause to believe his conduct was lawful or had no reasonable
cause to believe his conduct was unlawful;

-- a transaction from which the director derived an improper
personal benefit, either directly or indirectly;

-- a circumstance under which an unlawful dividend, redemption or
other distribution is made;

-- in a derivative or shareholder proceeding, conscious disregard
for the best interest of the corporation or willful misconduct;
or

55
<PAGE>

-- in a proceeding by another third party, recklessness or an act
or omission which was committed in bad faith or with malicious
purpose or in a manner exhibiting wanton and willful disregard
of human rights, safety or property.

A corporation may purchase and maintain insurance for its directors or
officers against liabilities asserted against them and incurred by them in
their capacity, whether or not the corporation would have the power to
indemnify them against this liability under the Florida Business Corporation
Act.

Our Fourth Amended and Restated Articles of Incorporation and our Amended
and Restated By-Laws require us, to the fullest extent permitted by law, to
indemnify all our directors and officers, as well as other employees to whom we
have granted indemnification.

STOCK TRANSFER AGENT

The transfer agent and registrar for the common stock is American Stock
Transfer & Trust Company.

56
<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no market for our common stock.
Future sales of substantial amounts of our common stock in the public market
could adversely affect prevailing market prices from time to time. Furthermore,
since only a limited number of shares will be available for sale shortly after
this offering, because of contractual and legal restrictions on resale
described below, sales of substantial amounts of our common stock in the public
market after the restrictions lapse could adversely affect the prevailing
market price and our ability to raise equity capital in the future.

Based on shares outstanding at March 24, 2000, upon completion of this
offering we will have outstanding an aggregate of 42,746,141 shares of common
stock, assuming no exercise of the underwriters' over-allotment option and no
exercise of outstanding options. If the underwriters exercise their
over-allotment option in full, we will have 43,796,141 shares of common stock
outstanding. The shares sold in this offering will be freely tradable without
restrictions or further registration under the Securities Act, unless such
shares are purchased by an existing affiliate of Yupi as that term is defined
in Rule 144 under the Securities Act.

The remaining 35,746,141 shares of common stock outstanding after this
offering are restricted shares or are subject to the contractual restrictions
described below. Restricted shares may be sold in the public market only if
registered or if they qualify for an exception from registration under Rules
144, 144(k) or 701 under the Securities Act, which are summarized below.
Subject to the lock-up agreements described below, these restricted shares will
be available for resale in the public market as follows:

<TABLE>
<CAPTION>
NUMBER OF SHARES DATE OF FIRST AVAILABILITY FOR RESALE
- ------------------ -----------------------------------------------------------------------------------------
<S> <C>
12,973,500 Immediately after the date of this prospectus, substantially all of which shares are
subject to lock-up agreements
12,610,750 90 days after the date of this prospectus, substantially all of which shares are subject
to lock-up agreements
10,161,891 At various times 180 days after the date of the prospectus
</TABLE>

RULE 144

In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this prospectus, a person who has beneficially owned restricted
shares for at least one year would be entitled to sell within any three-month
period a number of shares that does not exceed the greater of:

/bullet/ one percent of the number of shares of common stock then
outstanding, which will equal 427,461 shares immediately after the
offering, or

/bullet/ the average weekly trading volume of the common stock on the
Nasdaq National Market during the four calendar weeks preceding
the sale.

Sales under Rule 144 are also subject to certain manner of sale
provisions, notice requirements and the availability of current public
information about Yupi. Rule 144 also provides that affiliates of Yupi who are
selling shares of common stock that are not restricted shares must nonetheless
comply with the same restrictions applicable to restricted shares with the
exception of the holding period requirement.

Under Rule 144(k), a person who is not deemed to have been an affiliate of
Yupi at any time during the 90 days preceding a sale, and who has beneficially
owned the shares proposed to be sold for at least two years, is entitled to
sell such shares without complying with the manner of sale, public information,
volume limitation or notice provisions of Rule 144.

RULE 701

Subject to certain limitations on the aggregate offering price of a
transaction and other conditions, Rule 701 may be relied upon with respect to
the resale of securities originally purchased

57
<PAGE>

from Yupi by its employees, directors, officers, consultants or advisors prior
to the date we become subject to the reporting requirements of the Exchange
Act. To be eligible for resale under Rule 701, shares must have been issued in
connection with written compensatory benefit plans or written contracts
relating to the compensation of such persons. In addition, the Securities and
Exchange Commission has indicated that Rule 701 will apply to typical stock
options granted by an issuer before it becomes subject to the reporting
requirements of the Exchange Act, along with the shares acquired upon exercise
of such options, including exercises after the date of this offering.
Securities issued in reliance on Rule 701 are restricted securities and,
subject to the contractual restrictions described below, beginning 90 days
after the date of this prospectus, may be sold by persons other than
affiliates, subject only to the manner of sale provisions of Rule 144, and by
affiliates, under Rule 144 without compliance with its one-year minimum holding
period requirements.

LOCK-UP AGREEMENTS

Yupi, its officers and directors and substantially all of its shareholders
and optionholders have agreed that they will not offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, or in the case of Yupi,
file with the Securities and Exchange Commission a registration statement under
the Securities Act relating to, any shares of common stock or any securities
convertible into or exercisable or exchangeable for any shares of common stock,
or publicly disclose the intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of Credit Suisse First
Boston Corporation, for a period of 180 days after the date of this prospectus,
except under certain circumstances. Credit Suisse First Boston Corporation
currently has no plans to release any portion of the securities subject to
lock-up agreements. When determining whether or not to release shares from the
lock-up agreements, Credit Suisse First Boston Corporation will consider, among
other factors, the shareholder's reasons for requesting the release, the number
of shares for which the release is being requested and market conditions at the
time.

COMMON STOCK AND OPTIONS ISSUABLE UNDER OUR EMPLOYEE BENEFIT PLANS

Following this offering, we intend to file one or more registration
statements under the Securities Act covering approximately 14,200,000 shares of
common stock issuable upon the exercise of stock options, subject to
outstanding options or reserved for issuance under our Stock Incentive Plan,
our 2000 Stock Option and Incentive Plan and our 2000 Employee Stock Purchase
Plan. Accordingly, shares registered under such registration statements will,
subject to Rule 144 provisions applicable to affiliates, be available for sale
in the open market, except when such shares are subject to vesting restrictions
and the lock-up agreements described above. See "Management--Employee Benefit
Plans."

REGISTRATION RIGHTS

After this offering, the holders of approximately 19,558,460 shares of
common stock will be entitled to rights with respect to the registration of
these shares under the Securities Act. If we propose to register any of our
securities under the Securities Act, either for our own account or for the
account of other securityholders exercising registration rights, these holders
are entitled to notice of such registration and are entitled to include shares
of common stock. Additionally, these holders have demand registration rights to
require us on up to three occasions to file a registration statement under the
Securities Act at our expense. We are required to use our best efforts to
effect any such registration. Further, holders may require us to file two
additional registration statements on Form S-2 or Form S-3 at our expense.
Under these registration rights, the underwriters of an offering can limit the
number of shares included in the registration, and we have the right not to
effect a requested registration within 180 days following an offering of our
securities on a Form S-1, including this offering.

58
<PAGE>

UNDERWRITING

Under the terms and subject to the conditions contained in an underwriting
agreement dated , 2000, the underwriters named below, for whom Credit
Suisse First Boston Corporation, Donaldson, Lufkin & Jenrette Securities
Corporation, Banc of America Securities LLC and SG Cowen Securities Corporation
are acting as representatives, have agreed to purchase from Yupi the following
respective number of shares of common stock:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
- ---------------------------------------------------------------- ----------
<S> <C>
Credit Suisse First Boston Corporation ......................
Donaldson, Lufkin & Jenrette Securities Corporation .........
Banc of America Securities LLC ..............................
SG Cowen Securities Corporation .............................

Total ...................................................... 7,000,000
=========
</TABLE>

The underwriting agreement provides that the underwriters are obligated to
purchase all the shares of common stock in this offering if any are purchased,
other than those shares covered by the over-allotment option described below.
The underwriting agreement also provides that if an underwriter defaults, the
purchase commitments of non-defaulting underwriters may be increased or the
offering of common stock may be terminated.

We have granted to the underwriters a 30-day option to purchase on a pro
rata basis up to 1,050,000 additional shares of common stock at the initial
public offering price, less the underwriting discounts and commissions. This
option may be exercised only to cover over-allotments of common stock.

The underwriters propose to offer the common stock initially at the public
offering price on the cover page of this prospectus and to selling group
members at that price less a concession of $ per share. The underwriters
and the selling group members may allow a discount of $ per share on sales
to other broker/dealers. After the offering, the public offering price and
concession and discount to broker/dealers may be changed by the
representatives.

The following table summarizes the compensation to be paid to the
underwriters by us and the expenses payable by us.

<TABLE>
<CAPTION>
PER SHARE TOTAL
----------------------------------- ----------------------------------
WITHOUT WITH WITHOUT WITH
OVER-ALLOTMENT OVER-ALLOTMENT OVER-ALLOTMENT OVER-ALLOTMENT
---------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Underwriting discounts and commissions
paid by us ......................... $ $ $ $
Expenses payable by us ............... $ $ $ $
</TABLE>

The underwriters have informed us that they do not expect discretionary
sales by them to exceed 5% of the shares being offered.

59
<PAGE>

under certain circumstances, including in the case of Yupi, for grants of
employee stock and stock options pursuant to the terms of our stock plans in
effect on the date hereof or issuances of securities pursuant to the exercise
of any such stock options.

The underwriters have reserved for sale, at the initial public offering
price, up to 490,000 shares of the common stock for employees, directors and
other persons associated with Yupi who have expressed an interest in purchasing
common stock in the offering. The number of shares of common stock available
for sale to the general public in this offering will be reduced to the extent
the persons purchase the reserved shares. Any reserved shares not so purchased
will be offered by the underwriters to the general public on the same terms as
the other shares.

We have agreed to indemnify the underwriters against liabilities under the
Securities Act, or to contribute to payments which the underwriters may be
required to make in that respect.

We have applied to list our common stock on the Nasdaq National Market
under the symbol "YUPI."

Prior to the offering, there has been no public market for our common
stock. The initial public offering price will be determined by negotiation
between Yupi and the representatives. The principal factors considered in
determining the public offering price will include:

/bullet/ the information set forth in this prospectus and otherwise
available to the representatives;

/bullet/ the history of, and the prospects for, Yupi and the industry in
which it competes;

/bullet/ an assessment of our management;

/bullet/ the prospects for, and the timing of, our future earnings;

/bullet/ our present state of development and our current financial
condition;

/bullet/ our past and present earnings and operations;

/bullet/ the general condition of the securities markets at the time of the
offering;

/bullet/ the recent market prices of, and the demand for, publicly-traded
common stock of companies in businesses similar to those of Yupi;

/bullet/ market conditions for initial public offerings; and

/bullet/ other relevant factors.

We can offer no assurances that an active trading market will develop for
our common stock or that our common stock will trade in the public market
subsequent to the offering at or above the initial public offering price.

A prospectus in electronic format will be made available on the Web sites
maintained by one or more of the underwriters participating in this offering.
The underwriters may agree to allocate a number of shares to underwriters for
sale to their online brokerage account holders. Internet distributions will be
allocated by the representatives of the underwriters to underwriters that may
make Internet distributions on the same basis as other allocations.

The representatives may engage in over-allotment, stabilizing
transactions, syndicate covering transactions and penalty bids in accordance
with Regulation M under the Exchange Act.

/bullet/ Over-allotment involves syndicate sales in excess of the offering
size, which creates a syndicate short position.

60
<PAGE>

/bullet/ Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specified
maximum.

/bullet/ Syndicate covering transactions involve purchases of common stock
in the open market after the distribution has been completed in
order to cover syndicate short positions.

/bullet/ Penalty bids permit the representatives to reclaim a selling
concession from a syndicate member when the common stock
originally sold by such syndicate member is purchased in a
stabilizing or a syndicate covering transaction to cover syndicate
short positions.

These stabilizing transactions, syndicate covering transactions and penalty bids
may cause the price of the common stock to be higher than it would otherwise be
in the absence of these transactions. These transactions may be effected on the
Nasdaq National Market or otherwise and, if commenced, may be discontinued at
any time. Syndicate sales in excess of the offering size comply with Section 5
of the Securities Act as the short position is covered with shares purchased
pursuant to the underwriters' over-allotment option. All investors who purchase
shares in the offering, including shares in excess of the offering size, will
receive a confirmation from the underwriters and a copy of the final prospectus.

In November 1999, an affiliate of Credit Suisse First Boston Corporation
purchased 86,956 shares of our Class C Convertible Preferred Stock for
approximately $1.0 million and an affiliate of Banc of America Securities LLC
purchased 260,870 shares of our Class C Convertible Preferred Stock for
approximately $3.0 million. The difference between the amount that these
affiliates paid for the Class C Convertible Preferred Stock and the maximum
initial public offering price is presumed to be underwriting compensation
pursuant to the rules of the National Assocation of Securities Dealers, Inc.
These securities may not be sold, transferred, assigned, pledged or
hypothecated for a period of one year from the date of this offering, subject
to certain exceptions.

NOTICE TO CANADIAN RESIDENTS

RESALE RESTRICTIONS

The distribution of our common stock in Canada is being made only on a
private placement basis exempt from the requirement that we prepare and file a
prospectus with the securities regulatory authorities in each province where
trades of our common stock are effected. Accordingly, any resale of our common
stock in Canada must be made in accordance with applicable securities laws
which will vary depending on the relevant jurisdiction, and which may require
resales to be made in accordance with available statutory exemptions or
pursuant to a discretionary exemption granted by applicable Canadian securities
regulatory authority. Purchasers are advised to seek legal advice prior to any
resale of our common stock.

REPRESENTATIONS OF PURCHASERS

Each purchaser of our common stock in Canada who receives a purchase
confirmation will be deemed to represent to us and the dealer from whom such
purchase confirmation is received that:

/bullet/ such purchaser is entitled under applicable provincial securities
laws to purchase such common stock without the benefit of a
prospectus qualified under such securities laws;
/bullet/ where required by law, that such purchaser is purchasing as
principal and not as agent; and
/bullet/ such purchaser has reviewed the text above under "Resale
Restrictions."

RIGHTS OF ACTION (ONTARIO PURCHASERS)

The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
Ontario securities law. As a result, Ontario purchasers

61
<PAGE>

must rely on other remedies that may be readily available, including common law
rights of action for damages or recision or rights of action under the civil
liability provisions of the U.S. federal securities laws.

ENFORCEMENT OF LEGAL RIGHTS

All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be
possible for Canadian purchasers to effect service of process within Canada
upon the issuer or such persons. All or a substantial portion of the assets of
the issuer and such persons may be located outside of Canada and, as a result,
it may not be possible to satisfy a judgment against the issuer or such persons
in Canada or to enforce a judgment obtained in Canadian courts against such
issuer or persons outside of Canada.

NOTICE TO BRITISH COLUMBIA RESIDENTS

A purchaser of our common stock to whom the SECURITIES ACT (British
Columbia) applies is advised that such purchaser is required to file with the
British Columbia Securities Commission a report within ten days of the sale of
any common stock acquired by such purchaser pursuant to this offering. Such
report must be in the form attached to British Columbia Securities Commission
Blanket Order BOR #95/17, a copy of which may be obtained from us. Only one
such report must be filed in respect of common stock acquired on the same date
and under the same prospectus exemption.

TAXATION AND ELIGIBILITY FOR INVESTMENT

Canadian purchasers of our common stock should consult their own legal and
tax advisors with respect to the tax consequences of an investment in our
common stock in their particular circumstances and with respect to the
eligibility of our common stock for investment by the purchaser under relevant
Canadian legislation.

LEGAL MATTERS

Certain legal matters will be passed upon for Yupi by Testa, Hurwitz &
Thibeault, LLP, Boston, Massachusetts. The validity of shares of common stock
offered hereby and certain other legal matters, including matters relating to
Florida law, will be passed upon for Yupi by Steel Hector & Davis LLP, Miami,
Florida. Certain legal matters will be passed upon for the underwriters by
Piper Marbury Rudnick & Wolfe LLP, Reston, Virginia.

EXPERTS

The financial statements of Yupi as of December 31, 1998 and 1999 and for
the period from October 20, 1997 (date of incorporation) to December 31, 1997
and the years ended December 31, 1998 and 1999, all of which are included in
this prospectus, have been so included in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.

The combined financial statements of Planificacion y Estrategia en
Internet, S.L. and Illimited, S.L. as of December 31, 1997 and 1998 and for the
years ended December 31, 1997 and 1998, all of which are included in this
prospectus, have been so included in reliance on the report of
PricewaterhouseCoopers Auditores, S.L., independent accountants, given on the
authority of said firm as experts in auditing and accounting.

The financial statements of Proveedora de Servicios para Red Bogota.com
Ltda., as of December 31, 1997, December 31, 1998 and June 30, 1999 and for the
period from November 27, 1997

62
<PAGE>

(inception) through December 31, 1997, the year ended December 31, 1998 and the
six month period ended June 30, 1999, all of which are included in this
prospectus, have been so included in reliance on the report of Price
Waterhouse, independent accountants, given on the authority of said firm as
experts on auditing and accounting.

ADDITIONAL INFORMATION

We have filed with the Securities and Exchange Commission a registration
statement on Form S-1 under the Securities Act. This prospectus does not
contain all of the information set forth in the registration statement. For
further information with respect to Yupi and our common stock, reference is
made to the registration statement. Statements contained in this prospectus as
to the contents of any contract or any other document referred to are not
necessarily complete, and, in each instance, reference is made to the copy of
the contract or document filed as an exhibit to the registration statement, and
each such statement is qualified in all respects by reference to such exhibit.
Copies of all or any portion of the registration statement may be obtained from
the Public Reference Section of the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, or by calling the Commission at
1-800-SEC- 0330, at prescribed rates. The Commission also maintains a Internet
site at http://www.sec.gov that contains registration statements, reports,
proxy and information statements and other information regarding registrants.

We intend to furnish to our shareholders annual reports containing
financial statements audited by an independent public accounting firm.

63
<PAGE>

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
YUPI INTERNET INC.
Report of Independent Certified Public Accountants .................. F-2
Financial Statements:
Consolidated Balance Sheets ........................................ F-3
Consolidated Statements of Operations .............................. F-4
Consolidated Statements of Changes in Shareholders' Equity ......... F-5
Consolidated Statements of Cash Flows .............................. F-6
Notes to Consolidated Financial Statements ......................... F-7

PROVEEDORA DE SERVICIOS PARA RED BOGOTA.COM LTDA.
Report of Independent Accountants ................................... F-22
Financial Statements:
Balance Sheets ..................................................... F-23
Statements of Operations and Comprehensive Loss .................... F-24
Statements of Changes in Partners' Capital ......................... F-25
Statements of Cash Flows ........................................... F-26
Notes to the Financial Statements .................................. F-27

PLANIFICACION Y ESTRATEGIA EN INTERNET, S.L. AND ILLIMITED, S.L.
Report of Independent Accountants ................................... F-30
Financial Statements:
Combined Balance Sheets ............................................ F-31
Combined Statements of Operations and Comprehensive Loss ........... F-32
Combined Statements of Changes in Stockholders' Equity ............. F-33
Combined Statements of Cash Flows .................................. F-34
Notes to Combined Financial Statements ............................. F-35
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders of
Yupi Internet Inc.

In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of operations, of changes in shareholders'
equity and of cash flows present fairly, in all material respects, the
financial position of Yupi Internet Inc. and its subsidiaries at December 31,
1998 and 1999, and the results of their operations and their cash flows for the
period from October 20, 1997 (date of incorporation) through December 31, 1997
and for the years ended December 31, 1998 and 1999, in conformity with
accounting principles generally accepted in the United States. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States, which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.

PricewaterhouseCoopers LLP

Miami, Florida
March 2, 2000

F-2
<PAGE>

YUPI INTERNET INC.

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
PRO FORMA
SHAREHOLDERS'
DECEMBER 31, EQUITY AS OF
---------------------------------- DECEMBER 31,
1998 1999 1999
--------------- ---------------- ----------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents .............................................. $ 106,425 $ 48,611,519
Accounts receivable .................................................... 14,642 2,585,297
Prepaid expenses ....................................................... 1,947 660,540
Notes receivable from employees ........................................ -- 460,000
Other current assets ................................................... 1,745 272,684
------------ -------------
Total current assets ................................................ 124,759 52,590,040
Property and equipment, net ............................................. 16,554 2,225,507
Intangible assets, net of accumulated amortization of $19 and
$1,971,669 as of December 31, 1998 and 1999, respectively .............. 40,274 12,897,846
Other assets ............................................................ 29,587 438,162
------------ -------------
$ 211,174 $ 68,151,555
============ =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt ...................................... $ 5,154 $ --
Amounts due to sellers of acquired companies ........................... 60,000 4,247,850
Accounts payable and accrued expenses .................................. 29,756 3,785,726
Due to principal shareholders .......................................... 19,512 --
------------ -------------
Total current liabilities ........................................... 114,422 8,033,576
------------ -------------
Long-term debt .......................................................... 23,637 --
------------ -------------
Shareholders' equity:
Class A convertible preferred stock, $0.01 par value, 428,762 shares
authorized, 428,762 issued and outstanding at December 31, 1999,
stated at liquidation value, net of related costs; no shares
authorized, issued or outstanding on a pro forma basis ............... -- 13,160,468 --
Class B convertible preferred stock, $0.01 par value, 4,924,229 shares
authorized, 2,955,016 issued and outstanding at December 31,
1999, stated at liquidation value, net of related costs; no shares
authorized, issued or outstanding on a pro forma basis ............... -- 33,898,805 --
Class C convertible preferred stock, $0.01 par value, 6,000,000 shares
authorized, 5,858,698 issued and outstanding at December 31,
1999, stated at liquidation value, net of related costs; no shares
authorized, issued or outstanding on a pro forma basis ............... -- 63,613,129 --
Common stock, $0.0001 par value, 60,000,000 shares authorized,
16,143,650 shares and 16,187,681 shares issued and outstanding at
December 31, 1998 and 1999, respectively; and 35,746,141 shares
issued and outstanding on a pro forma basis .......................... 16,144 1,619 3,575
Additional paid-in capital ............................................. 1,961,739 20,250,113 154,804,318
Deferred marketing costs ............................................... -- (19,305,000) (19,305,000)
Deferred stock-based compensation ...................................... -- (6,681,716) (6,681,716)
Accumulated other comprehensive income ................................. -- (12,718) (12,718)
Accumulated deficit .................................................... (1,904,768) (44,806,721) (68,690,480)
------------ ------------- -----------
Total shareholders' equity .......................................... 73,115 60,117,979 60,117,979
------------ ------------- -----------
Total liabilities and shareholders' equity .......................... $ 211,174 $ 68,151,555 $ 68,151,555
============ ============= =============
</TABLE>

The accompanying notes are an integral part of these financial
statements.

F-3
<PAGE>

YUPI INTERNET INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
OCTOBER 20, 1997
(DATE OF
INCORPORATION) YEAR ENDED DECEMBER 31,
TO DECEMBER 31, ----------------------------------
1997 1998 1999
----------------- --------------- ----------------
<S> <C> <C> <C>
Revenues ............................................... $ 2,095 $ 77,147 $ 3,206,932
----------- ------------ -------------
Operating expenses:
Product and technology development (excluding
stock-based compensation of $28,354 in 1998 and
$188,121 in 1999).................................... 6,053 36,164 4,812,909
Sales and marketing (excluding stock-based
compensation of $34,619 in 1998 and
$108,705 in 1999).................................... 300 14,221 25,867,625
General and administrative (excluding stock-based
compensation of $244,093 in 1999) ................... 16,477 1,832,944 4,560,499
Depreciation and amortization ......................... 742 2,197 2,262,752
Stock-based compensation .............................. -- 62,973 540,919
----------- ------------ -------------
Total operating expenses ........................... 23,572 1,948,499 38,044,704
----------- ------------ -------------
Loss from operations ................................... (21,477) (1,871,352) (34,837,772)
----------- ------------ -------------
Other income (expense):
Interest income ....................................... -- -- 379,021
Interest expense ...................................... -- (1,739) (859,444)
Other ................................................. -- -- (2,639)
----------- ------------ -------------
-- (1,739) (483,062)
----------- ------------ -------------
Loss before income taxes ............................... (21,477) (1,873,091) (35,320,834)
Income taxes ........................................... -- -- --
----------- ------------ -------------
Net loss ............................................... (21,477) (1,873,091) (35,320,834)
Deemed dividend on convertible preferred stock ......... -- -- (7,581,119)
----------- ------------ -------------
Net loss available to common shareholders .............. $ (21,477) $ (1,873,091) $ (42,901,953)
=========== ============ =============
Basic and diluted net loss per common share ............ $ (0.00) $ (0.16) $ (2.64)
=========== ============ =============
Weighted average number of shares used in computing
basic and diluted net loss per common share .......... 10,625,000 11,903,777 16,269,836
=========== ============ =============
</TABLE>

The accompanying notes are an integral part of these financial
statements.

F-4
<PAGE>

YUPI INTERNET INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
PREFERRED STOCK
------------------------------------------------------------------------------
CLASS A CONVERTIBLE CLASS B CONVERTIBLE CLASS C CONVERTIBLE
------------------------ -------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------- ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Balance at October 20, 1997
(date of incorporation) .................. -- $ -- -- $ -- -- $ --
Sale of common stock to
founders ................................. -- -- -- -- -- --
Net loss .................................. -- -- -- -- -- --
-- ----------- -- ----------- -- -----------
Balance at December 31, 1997 .............. -- -- -- -- -- --
Issuance of common stock in
connection with settlement ............... -- -- -- -- -- --
Stock options issued for services ......... -- -- -- -- -- --
Stock-based compensation .................. -- -- -- -- -- --
Amortization of deferred
compensation ............................. -- -- -- -- -- --
Sale of common stock (Note 7) ............. -- -- -- -- -- --
Net loss .................................. -- -- -- -- -- --
-- ----------- -- ----------- -- -----------
Balance at December 31, 1998 .............. -- -- -- -- -- --
Adjustment to reflect change
in par value ............................. -- -- -- -- -- --
Stock options issued
for services ............................. -- -- -- -- -- --
Stock-based compensation .................. -- -- -- -- -- --
Amortization of deferred
compensation ............................. -- -- -- -- -- --
Sale of common stock, including
271,725 shares to officers and
directors ................................ -- -- -- -- -- --
Repurchase of common stock ................ -- -- -- -- -- --
Issuance of shares in connection
with an acquisition ...................... -- -- -- -- -- --
Issuance of Class A
Preferred stock .......................... 428,762 13,160,468 -- -- -- --
Issuance of Class B
Preferred stock .......................... -- -- 2,955,016 33,898,805 -- --
Issuance of Class C
Preferred stock .......................... -- -- -- -- 5,858,698 63,613,129
Deemed dividend on convertible
preferred stock .......................... -- -- -- -- -- --
Amortization of deferred
marketing costs .......................... -- -- -- -- -- --
Net loss .................................. -- -- -- -- -- --
Translation adjustment .................... -- -- -- -- -- --
------- ----------- --------- ----------- --------- -----------
Balance at December 31, 1999 .............. 428,762 $13,160,468 2,955,016 $33,898,805 5,858,698 $63,613,129
======= =========== ========= =========== ========= ===========

<PAGE>

<CAPTION>
COMMON STOCK
---------------------------- ADDITIONAL DEFERRED
PAID-IN ACCUMULATED MARKETING
SHARES AMOUNT CAPITAL DEFICIT COSTS
--------------- ------------ --------------- ----------------- ----------------
<S> <C> <C> <C> <C> <C>
Balance at October 20, 1997
(date of incorporation) .................. -- $ -- $ -- $ -- $ --
Sale of common stock to
founders ................................. 10,625,000 10,625 -- (10,200) --
Net loss .................................. -- -- -- (21,477) --
---------- ------- ----------- ------------ ------------
Balance at December 31, 1997 .............. 10,625,000 10,625 -- (31,677) --
Issuance of common stock in
connection with settlement ............... 2,981,250 2,981 1,609,875 -- --
Stock options issued for services ......... -- -- 77,739 -- --
Stock-based compensation .................. -- -- 62,973 -- --
Amortization of deferred
compensation ............................. -- -- -- -- --
Sale of common stock (Note 7) ............. 2,537,400 2,538 211,152 -- --
Net loss .................................. -- -- -- (1,873,091) --
---------- ------- ----------- ------------ ------------
Balance at December 31, 1998 .............. 16,143,650 16,144 1,961,739 (1,904,768) --
Adjustment to reflect change
in par value ............................. -- (14,530) 14,530 -- --
Stock options issued
for services ............................. -- -- 640,668 -- --
Stock-based compensation .................. -- -- 7,399,794 -- --
Amortization of deferred
compensation ............................. -- -- -- -- --
Sale of common stock, including
271,725 shares to officers and
directors ................................ 756,675 76 659,285 -- --
Repurchase of common stock ................ (1,013,750) (101) (174,899) -- --
Issuance of shares in connection
with an acquisition ...................... 301,106 30 2,167,877 -- --
Issuance of Class A
Preferred stock .......................... -- -- -- -- --
Issuance of Class B
Preferred stock .......................... -- -- -- -- (29,300,000)
Issuance of Class C
Preferred stock .......................... -- -- -- -- --
Deemed dividend on convertible
preferred stock .......................... -- -- 7,581,119 (7,581,119) --
Amortization of deferred
marketing costs .......................... -- -- -- -- 9,995,000
Net loss .................................. -- -- -- (35,320,834) --
Translation adjustment .................... -- -- -- -- --
---------- ------- ----------- ------------ ------------
Balance at December 31, 1999 .............. 16,187,681 $ 1,619 $20,250,113 $(44,806,721) $(19,305,000)
========== ======= =========== ============ ============

<PAGE>

<CAPTION>
OTHER
DEFERRED COMPREHENSIVE
COMPENSATION INCOME TOTAL
---------------- -------------- ----------------
<S> <C> <C> <C>
Balance at October 20, 1997
(date of incorporation) .................. $ -- $ -- $ --
Sale of common stock to
founders ................................. -- -- 425
Net loss .................................. -- -- (21,477)
----------- --------- -----------
Balance at December 31, 1997 .............. -- -- (21,052)
Issuance of common stock in
connection with settlement ............... -- -- 1,612,856
Stock options issued for services ......... -- -- 77,739
Stock-based compensation .................. (62,973) -- --
Amortization of deferred
compensation ............................. 62,973 -- 62,973
Sale of common stock (Note 7) ............. -- -- 213,690
Net loss .................................. -- -- (1,873,091)
----------- --------- -----------
Balance at December 31, 1998 .............. -- -- 73,115
Adjustment to reflect change
in par value ............................. -- -- --
Stock options issued
for services ............................. -- -- 640,668
Stock-based compensation .................. (7,222,635) -- 177,159
Amortization of deferred
compensation ............................. 540,919 -- 540,919
Sale of common stock, including
271,725 shares to officers and
directors ................................ -- -- 659,361
Repurchase of common stock ................ -- -- (175,000)
Issuance of shares in connection
with an acquisition ...................... -- -- 2,167,907
Issuance of Class A
Preferred stock .......................... -- -- 13,160,468
Issuance of Class B
Preferred stock .......................... -- -- 4,598,805
Issuance of Class C
Preferred stock .......................... -- -- 63,613,129
Deemed dividend on convertible
preferred stock .......................... -- -- --
Amortization of deferred
marketing costs .......................... -- -- 9,995,000
Net loss .................................. -- -- (35,320,834)
Translation adjustment .................... -- (12,718) (12,718)
----------- --------- -----------
Balance at December 31, 1999 .............. $(6,681,716) $ (12,718) $60,117,979
=========== ========= ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-5
<PAGE>

YUPI INTERNET INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
OCTOBER 20, 1997
(DATE OF
INCORPORATION) YEAR ENDED DECEMBER 31,
TO DECEMBER 31, ------------------------------------
1997 1998 1999
----------------- ---------------- -----------------
<S> <C> <C> <C>
Operating activities:
Net loss .............................................. $ (21,477) $ (1,873,091) $ (35,320,834)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization ........................ 742 2,197 2,262,752
Non-cash marketing expenses .......................... -- -- 9,995,000
Issuance of common stock in connection
with settlement .................................... -- 1,609,875 --
Stock options issued for services .................... -- 77,739 640,668
Stock-based compensation ............................. -- 62,973 540,919
Non-cash interest charges ............................ -- -- 668,828
Changes in operating assets and liabilities:
Accounts receivable ................................. -- (14,642) (2,570,655)
Prepaid expenses .................................... -- (1,947) (658,593)
Other assets ........................................ -- (11,332) (679,514)
Accounts payable and accrued expenses ............... 1,500 28,256 3,755,970
--------- ------------ -------------
Net cash used in operating activities .............. (19,235) (119,972) (21,365,459)
--------- ------------ -------------
Investing activities:
Purchases of property and equipment ................... (3,640) (15,780) (2,486,042)
Acquisition of businesses ............................. -- -- (8,550,319)
Other ................................................. (347) -- --
--------- ------------ -------------
Net cash used in investing activities .............. (3,987) (15,780) (11,036,361)
--------- ------------ -------------
Financing activities:
Issuance of common stock .............................. 425 216,671 659,361
Repurchase of common stock ............................ -- -- (175,000)
Issuance of convertible preferred stock, net of
related expenses .................................... -- -- 80,943,574
(Repayment of) proceeds from advances
from shareholders ................................... 19,212 300 (19,512)
Advances to employees ................................. -- -- (460,000)
Proceeds from issuance of debt ........................ 15,000 30,000 22,742
Repayment of long-term debt ........................... (202) (16,007) (51,533)
--------- ------------ -------------
Net cash provided by financing activities .......... 34,435 230,964 80,919,632
--------- ------------ -------------
Effect of exchange rate changes on cash and
cash equivalents ...................................... -- -- (12,718)
--------- ------------ -------------
Net increase in cash and cash equivalents .............. 11,213 95,212 48,505,094
Cash and cash equivalents, beginning of period ......... -- 11,213 106,425
--------- ------------ -------------
Cash and cash equivalents, end of period ............... $ 11,213 $ 106,425 $ 48,611,519
========= ============ =============
Supplemental disclosure of cash flow information:
Interest paid ......................................... $ -- $ 1,739 $ 45,630
========= ============ =============
Supplemental disclosure of non-cash investing and financing activities:
During 1999, the Company acquired the assets of CiudadFutura.com, Bogota.com, Claqueta.com and
La Cosa Interactive for aggregate consideration of approximately $15.0 million, of which $8.6 million
was paid in cash, $2.2 million was in stock and $4.2 million was in notes and deferred payments. Since
no liabilities were assumed, the Company allocated the aggregate purchase price as follows: $14.9
million to intangible assets and $100,000 to other assets.
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-6
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

NATURE OF OPERATIONS

Yupi Internet Inc. was incorporated under the laws of the State of Florida
in October 1997. Yupi develops and maintains www.yupi.com, a branded Internet
site located on the World Wide Web (the "Web"). Additionally, Yupi operates a
number of other sites that provide chat, e-mail services and country-specific
information. Yupi and its network of sites provide a gateway for Spanish users
to the Web.

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of
Yupi Internet Inc. and its wholly-owned subsidiaries (collectively, "Yupi" or
the "Company"). All significant intercompany account balances and transactions
have been eliminated in consolidation.

INITIAL PUBLIC OFFERING AND UNAUDITED PRO FORMA SHAREHOLDERS' EQUITY

In January 2000, the Board of Directors of the Company (the "Board")
authorized the filing of a registration statement with the Securities and
Exchange Commission ("SEC") that would permit the Company to sell shares of the
Company's common stock in connection with a proposed initial public offering
("IPO"). Upon the closing of the IPO, all of the then outstanding shares of the
Company's convertible preferred stock (Class A, Class B and Class C--see Note
6) will be converted into shares of common stock.

The unaudited pro forma shareholders' equity as of December 31, 1999
reflects the conversion of all outstanding shares of preferred stock into
19,558,460 shares of common stock upon the closing of the proposed IPO and a
deemed dividend on convertible preferred stock of approximately $23.9 million,
representing the beneficial conversion feature embedded in the Class B and
Class C convertible preferred stock on the date of their issuance, which
dividend will be recognized upon conversion.

FOREIGN CURRENCY TRANSLATION

For purposes of preparation of its financial statements, the Company uses
the local currency of its foreign subsidiaries as the functional currency.
Assets and liabilities of such subsidiaries are translated into United States
dollars at the exchange rate in effect at the end of the period, while revenues
and expenses of these subsidiaries are translated at the average exchange rate
during the period. Resulting translation adjustments are recorded in a separate
component of shareholders' equity, accumulated other comprehensive income.
Revenues of the Company's foreign subsidiaries and assets of the foreign
subsidiaries were not significant for all periods presented.

CASH AND CASH EQUIVALENTS

All highly liquid investments purchased with an original maturity of three
months or less are considered to be cash equivalents. Such amounts are stated
at cost which approximates market value.

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost. Depreciation and amortization is
provided using the straight line method over the estimated useful lives of the
assets, which range from three to five years.

F-7
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES:--(CONTINUED)

The cost of maintenance and repairs is charged to expense as incurred. The cost
of major repairs and improvements which extend the lives of the related assets
are capitalized and depreciated.

INTANGIBLE ASSETS

Intangible assets consist mainly of property rights to the trade names and
Internet domain names of companies acquired. These property rights are
amortized using the straight line method over a period of five years. The
Company evaluates the realizability of its intangible assets when an event
occurs that indicates that impairment may have occurred. The Company determines
potential impairment by comparing the carrying amount to the undiscounted
future cash flows of the related assets. Cash flow forecasts are based on
trends of historical performance and management's estimate of future
performance.

OFFERING COSTS

As of December 31, 1999, other assets include approximately $214,000 of
transaction costs relating to the proposed IPO. Upon the closing of such IPO,
these costs will be deducted from the proceeds.

INCOME TAXES

The Company uses the liability method of accounting for income taxes,
whereby deferred tax assets and liabilities are determined based on the
difference between the financial statement and tax bases of assets and
liabilities as measured by the current enacted tax rates which will be in
effect when these temporary differences are expected to be recovered or
settled. Deferred tax expense is the result of changes in deferred tax assets
and liabilities. Valuation allowances are provided when the expected
realization of tax assets does not meet a "more likely than not" criteria.

REVENUE RECOGNITION

The Company derives revenue principally from the sale of advertisements.
Advertising revenues are recognized in the period in which the advertisement is
displayed. Company obligations under advertising contracts typically include
guarantees of minimum number of impressions, or times that an advertisement
appears in pages viewed by users on the Company's sites. Revenue for
impressions invoiced but not delivered is deferred until the commitment is met.
The Company is also involved in revenue sharing arrangements with certain
parties ("partners") under which the Company principally hosts co-branded
sites. Revenue is allocated to each partner based on the percentage of
impressions at each site. The allocated revenue is shared according to
distribution agreements. Revenue is recorded net of the payments under these
revenue sharing arrangements.

Revenues from barter transactions, which are transactions in which the
Company exchanges advertisements on its sites for promotions with its
advertisers, are recognized during the period in which the advertisements are
displayed on the Company's sites. Barter transactions are recorded at fair
value, only if the fair value of the advertising surrendered in the transaction
is determinable based on the Company's own history of receiving cash for
similar advertising from customers unrelated to the counterparty in the barter
transaction. Advertising surrendered for cash is considered similar to the
advertising being surrendered in the barter transaction if both are in the same
media and within

F-8
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES:--(CONTINUED)

the same advertising vehicle and both have reasonably similar characteristics
with respect to circulation, prominence, duration, demographics and timing. For
the period from inception through December 31, 1999, the Company did not have
sufficient revenues from similar cash-only advertising sales to establish a
basis of value for its barter transactions. Accordingly, the Company did not
record the revenue or the expense portion of these transactions in the
accompanying financial statements. Barter transactions entered into during the
year ended December 31, 1999 included 195.7 million impressions displayed on
the Company's sites.

PRODUCT DEVELOPMENT

Costs incurred in the classification and organization of listings within
the Company's sites and the development of new products and enhancements to
existing products are charged to expense as incurred.

ADVERTISING COSTS

Advertising costs are expensed as incurred. Advertising and marketing
expenditures reflected in the accompanying consolidated statements of
operations amounted to approximately $300, $8,400 and $24.3 million, for the
period from October 20, 1997 (date of incorporation) to December 31, 1997, and
the years ended December 31, 1998, and 1999, respectively.

USE OF ESTIMATES

In preparing financial statements, management is required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and revenues and expenses during the reported
period. Actual results could differ from those estimates.

STOCK-BASED COMPENSATION

The Company accounts for employee stock-based compensation using the
intrinsic value method. Stock-based compensation to non-employees is accounted
for using the fair value method. The Company also provides disclosure of
certain pro forma information as if the Company accounted for its employee
stock-based compensation using the minimum value method.

When options are granted to employees, a non-cash charge representing the
difference, if any, between the exercise price and the estimated fair value of
the common stock underlying the vested options on the date of grant is recorded
as stock-based compensation expense and the balance is deferred and amortized
over the remaining vesting period.

COMPUTATION OF HISTORICAL NET LOSS PER SHARE

Basic loss per common share is computed by dividing net losses available
to common shareholders for the period by the weighted average number of common
shares outstanding. Diluted loss per common share has not been presented as the
effect of the issuance of common equivalent shares is anti-dilutive. Common
equivalent shares consist of the incremental common shares issuable upon the
conversion of the preferred stock (using the if-converted method) and shares
issuable upon the exercise of stock options (using the treasury stock method).

F-9
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES:--(CONTINUED)

STOCK SPLITS

On May 12, 1999, the Board approved a 25-for-1 stock split. On December
28, 1998, the Board approved a 1,000-for-1 stock split. All share information
has been restated to reflect all stock splits.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts reflected in the consolidated balance sheets for cash
and cash equivalents, accounts receivables, current portion of long-term debt,
accounts payable and amounts due to sellers of acquired companies approximate
fair value due to the short maturities of these instruments. The estimated fair
value of long-term debt approximated the carrying value for all periods
presented.

CONCENTRATIONS OF CREDIT RISK

Financial instruments which potentially subject the Company to credit risk
consist primarily of cash and cash equivalents and accounts receivables. The
Company maintains its cash and cash equivalents with several financial
institutions. The Company's sales are primarily to companies located in the
United States. The Company performs ongoing credit evaluations of customers and
generally does not require collateral. Accounts receivable are due principally
from large U.S. companies under stated contract terms and the Company provides
for estimated credit losses at the time of sale. Such losses have not been
significant to date.

COMPREHENSIVE INCOME

As reflected in the consolidated statements of changes in shareholders'
equity, comprehensive income is a measure of net income and all other changes
in equity of the Company that result in transactions other than with
shareholders. Comprehensive income (loss) consists of net loss and foreign
currency translation adjustments.

SEGMENT INFORMATION

As of and for the periods presented, substantially all of the Company's
assets were located in the U.S., and the Company derived substantially all of
its revenue from businesses located in the U.S. The disclosure of segment
information was not required as the Company operates in only one business
segment.

NEW ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "ACCOUNTING FOR DERIVATIVE INSTRUMENTS
AND HEDGING ACTIVITIES." This statement establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as derivatives), and for
hedging activities. It requires that an entity recognize all derivatives as
either assets or liabilities in the statement of financial position and measure
those instruments at fair value. Historically, the Company has not entered into
derivative contracts to hedge existing risks or for speculative purposes.
Accordingly, the Company does not expect the adoption of the new standard on
January 1, 2001 to affect its financial statements.

F-10
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

2. ACQUISITIONS:

In March 1999, the Company acquired certain assets and assumed certain
liabilities from Planificacion y Estrategia en Internet, S.L. and Illimited,
S.L. ("CiudadFutura.com"), entities which had ownership rights to the Internet
domain CiudadFutura.com. The purchase price for CiudadFutura.com of
approximately $10.1 million, including transaction costs incurred by the
Company, was substantially allocated to property rights of trade names and
Internet domain names. The purchase price was payable in cash of $6.0 million
and the remainder payable at the sellers' option in (i) cash of $4.0 million or
(ii) shares of the Company's common stock at a 25% discount of the per share
value assigned in the next investment round completed by the Company. In August
1999, the sellers exercised their option to be paid in the form of cash, and
the Company issued to the sellers a $4.0 million note payable due March 15,
2000, bearing interest at 9% per year. The acquisition has been accounted for
under the purchase method and, accordingly, the results of CiudadFutura.com
have been included in the accompanying consolidated statements of operations
since the date of acquisition.

In August 1999, the Company completed the acquisition of Proveedora de
Servicios Para Red Bogota.com ("Bogota.com"). Bogota.com is a Web site
originally established in Colombia and targeting a Colombian audience. The
purchase price for Bogota.com was $2.0 million in cash and 261,765 shares of
the Company's common stock. The fair value assigned to the shares issued in
connection with the acquisition of Bogota.com was approximately $1.8 million.
The acquisition of Bogota.com has been accounted for under the purchase method
and, accordingly, the results of Bogota.com have been included in the
consolidated operating results since the date of acquisition. The purchase
price of approximately $3.9 million, including transaction costs incurred by
the Company, was substantially allocated to property rights of trade names and
Internet domain names.

In October 1999, the Company acquired Claqueta.com, a Web site in Spain.
The acquisition of Claqueta.com was considered not to be significant.

In November 1999, the Company acquired La Cosa Interactive S.R.L. ("La
Cosa"), a Web site in Argentina, for $500,000 in cash and 37,397 shares of
common stock of the Company. The fair value assigned to the shares issued in
connection with the acquisition of La Cosa was approximately $324,000. The
acquisition of La Cosa has been accounted for under the purchase method and,
accordingly, the results of La Cosa have been included in the consolidated
operating results since the date of acquisition. The purchase price of
approximately $836,000, including transaction costs incurred by the Company,
was substantially allocated to property rights of trade names and Internet
domain names.

The following unaudited pro forma consolidated results of operations for
the years ended December 31, 1998 and 1999 assume the CiudadFutura.com and
Bogota.com acquisitions occurred as of January 1, 1998.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1998 1999
---------------- -----------------
<S> <C> <C>
Revenues .......................................... $ 255,553 $ 3,403,093
Net loss .......................................... $ (4,550,808) $ (36,159,889)
Net loss available to common shareholders ......... $ (4,550,808) $ (43,741,008)
Basic and diluted loss per common share ........... $ (0.37) $ (2.66)
</TABLE>

F-11
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

3. PROPERTY AND EQUIPMENT:

Property and equipment consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1998 1999
---------- -------------
<S> <C> <C>
Computer equipment and software ......... $ 11,333 $2,288,215
Furniture and fixtures .................. 8,070 213,188
-------- ----------
19,403 2,501,403
Less: accumulated depreciation .......... (2,849) (275,896)
-------- ----------
$ 16,554 $2,225,507
======== ==========
</TABLE>

4. DEBT:

In September 1998, the Company issued a $30,000 bank note, collateralized
by a certificate of deposit from a shareholder, bearing interest of 8.5% per
year, with monthly payments of principal and interest of $617 from October 1998
through September 2003. In July 1999, the Company repaid the debt outstanding.

On February 13, 1999, the Company executed a $3.0 million line of credit
agreement bearing no interest. Pursuant to this agreement, the Company granted
the lender the right to acquire up to $3.0 million of the Company's equity
securities. In the event a Private Investment, as defined, was completed by the
Company prior to March 15, 1999, the lender had the right to invest at an
equivalent value to that contemplated in the Private Investment provided that
$1.0 million of the total investment would be at a 30% discount. Absent a
Private Investment prior to March 15, 1999, the lender would have the right to
acquire a 15% equity interest in the Company for $3.0 million. The $1.0 million
investment at a 30% discount and the right to acquire a 15% equity interest in
the Company for $3.0 million are referred hereafter as "acquisition rights."
Because the Company expected to consummate a Private Investment prior to March
15, 1999, it valued the acquisition rights granted to the lender at
approximately $428,000, the value of the discount to be granted to the lender
upon its investment.

The Company borrowed $3.0 million under the line of credit and on March
15, 1999 offered to repay the outstanding balance to the lender. On March 30,
1999, the parties agreed to discharge the note in exchange for $3.0 million of
Class A convertible preferred stock, of which 63,857 shares were sold at a
price of $31.32 per share and 45,620 shares were sold at a 30% discount, or
$21.92 per share. This transaction closed on April 23, 1999. Further, the
Company's then principal shareholders granted the lender options to purchase an
aggregate of 647,525 shares of their common stock in the Company at a per share
price of $0.93. Management has estimated the fair value of these options at
approximately $240,000.

In connection with the agreement, the Company has recognized an aggregate
of $668,828 of interest charges representing the estimated value of the
acquisition rights on the date of the line of credit agreement and the
estimated fair value of the options provided by the Company's then principal
shareholders to the lender.

During August and September 1999, the Company borrowed an aggregate of
$3.0 million from a holder of its Class A convertible preferred stock. This
debt bears interest at 8% per year, and was payable upon demand. The principal
amount of this debt was discharged in exchange for shares of Class C
convertible preferred stock (Note 6).

F-12
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

5. INCOME TAXES:

The Company did not record an income tax provision during the period from
October 20, 1997 (date of incorporation) through December 31, 1997 and for the
year ended December 31, 1998 because it was operating as an S Corporation.
Effective January 1, 1999, the Company ceased to operate as an S Corporation
for U.S. income tax purposes. As of January 1, 1999, the differences between
the financial statement and the tax bases of the Company's assets and
liabilities were insignificant. For the year ended December 31, 1999, the
Company is subject to federal, state and foreign income taxes but has not
incurred a liability for such as a result of losses incurred.

The components of losses before income taxes consists of the following:

<TABLE>
<CAPTION>
OCTOBER 20, 1997
(DATE OF
INCORPORATION) YEAR ENDED DECEMBER 31,
TO DECEMBER 31, ------------------------------------
1997 1998 1999
----------------- ---------------- -----------------
<S> <C> <C> <C>
Domestic ......... $ (21,477) $ (1,873,091) $ (34,058,856)
Foreign .......... -- -- (1,261,978)
--------- ------------ -------------
$ (21,477) $ (1,873,091) $ (35,320,834)
========= ============ =============
</TABLE>

Significant components of the Company's deferred tax assets are as
follows:

<TABLE>
<CAPTION>
DECEMBER 31,
1999
----------------
<S> <C>
Net operating loss carryforwards ......... 12,666,159
Depreciation and amortization ............ 428,473
Stock-based compensation ................. 208,254
----------
13,302,886
Valuation allowance ...................... (13,302,886)
-----------
$ --
=============
</TABLE>

The effective income tax rate differs from the statutory rate as follows:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1999
-----------------
<S> <C>
Income taxes at the United States statutory rate ......... $ (12,362,291)
State income taxes ....................................... (1,181,935)
Effect of foreign taxes .................................. 21,635
Permanent differences .................................... 219,705
Valuation allowance ...................................... 13,302,886
-------------
Income taxes at effective tax rate ....................... $ --
=============
</TABLE>

For federal income tax purposes at December 31, 1999, the Company had net
operating loss carryforwards of approximately $33.1 million which expire from
2004 through 2019. The net operating loss carryforwards may be subject to
limitations on their utilization. The deferred tax assets have been fully
offset by a valuation allowance resulting from the uncertainty surrounding the
future realization of these net operating loss carryforwards. Subsequently
recognized tax benefits relating to the valuation allowance for deferred tax
assets as of December 31, 1999 will be allocated to income from continuing
operations.

F-13
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

6. SHAREHOLDERS' EQUITY:

CLASS A CONVERTIBLE PREFERRED STOCK

In April 1999, the Board of Directors of the Company authorized the
issuance and sale of up to 428,762 shares of Class A convertible preferred
stock, par value $0.01 per share. From April 1999 to August 1999, the Company
issued 428,762 shares of the Class A convertible preferred stock, for aggregate
consideration of approximately $13.0 million at prices of $21.92 (see Note 4)
and $31.32 per share. The holders of Class A convertible preferred stock are
entitled to receive, if and when declared, cash dividends. Further, the Class A
convertible preferred stock had a liquidation value equal to the greater of
market value plus accrued and unpaid dividends, or $31.32 per share. The Class
A convertible preferred stock was redeemable upon the occurrence of certain
events, including a change in control or a fundamental change, as defined.

The previously described sale of Class A convertible preferred stock was
completed pursuant to the terms of a preferred stock purchase agreement dated
April 23, 1999. Of the total shares of Class A convertible preferred stock
sold, a portion of the shares were sold during May, July and August 1999 for
aggregate consideration of approximately $5.0 million. Because on the date of
issuance of such shares, the estimated fair market value of the Company's
common stock exceeded the conversion price, the Company has treated as a
preferred stock dividend an amount of approximately $7.6 million related to
these transactions.

In November 1999, the holders of Class A convertible preferred stock
elected to eliminate their redemption rights and amend their liquidation rights
to a liquidation value equal to $31.32 per share. As a result, since that date,
all of the Class A convertible preferred stock has been reflected within
shareholders' equity. The holders of Class A convertible preferred stock may
convert at any time all or any portion of the Class A convertible preferred
stock into common stock at a rate of 25 shares of common stock per share of
Class A convertible preferred stock, subject to certain anti-dilution
adjustments. The Class A convertible preferred stock is automatically converted
into common stock upon the completion of a qualified IPO, as defined. The
holders of the Class A convertible preferred stock are entitled to the number
of votes equal to the number of common shares that could be obtained upon
conversion on the date of the vote.

CLASS B CONVERTIBLE PREFERRED STOCK

In August 1999, the Board of Directors of the Company authorized the
issuance and sale of up to 4,924,229 shares of Class B convertible preferred
stock, par value $0.01 per share. In October 1999, the Company issued 2,955,016
shares of Class B convertible preferred stock in exchange for $5.0 million in
cash and $29.3 million in services to be performed by Sony Corporation of
America ("Sony") over a three-year term pursuant to a contract entered into by
Sony and the Company.

The services to be provided by Sony have negotiated values agreed to
between Sony and the Company which the Company will use as a basis to expense
these services over the term of the agreement. Certain of the services to be
provided by Sony were deemed delivered on the date of the agreement and since
an amortization period for such services can not be estimated reliably, the
Company immediately recorded such services as sales and marketing expense. The
agreement provides for a significant cash penalty in the event of cancellation
or non-performance by Sony. As of December 31, 1999, the total amount of
services to be provided by Sony over the remaining life of the agreement
amounted to approximately $19.3 million.

F-14
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

6. SHAREHOLDERS' EQUITY:--(CONTINUED)

The holders of Class B convertible preferred stock are entitled to
receive, if and when declared, cash dividends. The Class B convertible
preferred stock has a liquidation value equal to $11.60 per share. The holders
of Class B convertible preferred stock may convert at any time all or any
portion of the Class B convertible preferred stock into common stock at the
rate of 1.009 shares of common stock per share of Class B convertible preferred
stock, subject to certain anti-dilution provisions and conversion ratio
adjustments. The Class B convertible preferred stock will automatically convert
into common stock upon completion of a qualified IPO, as defined. The holders
of the Class B convertible preferred stock are entitled to the number of votes
equal to the number of common shares that could be obtained upon conversion on
the date of the vote.

CLASS C CONVERTIBLE PREFERRED STOCK

In November 1999, the Board of Directors of the Company authorized the
issuance and sale of up to 6,000,000 shares of Class C convertible preferred
stock, par value $0.01 per share. The Company issued 5,858,698 shares of Class
C convertible preferred stock in exchange for approximately $67.4 million. The
holders of Class C convertible preferred stock are entitled to receive, if and
when declared, cash dividends. The Class C convertible preferred stock has a
liquidation value equal to $11.50 per share. The holders of the Class C
convertible preferred stock may at any time convert all or any portion of the
Class C convertible preferred stock into shares of common stock on a 1-for-1
basis, subject to certain anti-dilution provisions and conversion ratio
adjustments. The Class C convertible preferred stock will automatically convert
into common stock in the event of a qualified IPO, as defined. In the event the
IPO price per share is less than $15.295, the conversion ratio of the Class C
convertible preferred stock will be adjusted so that the initial public
offering price per share is equal to 133% of the price per share of the shares
of common stock issued upon conversion of the Class C convertible preferred
stock. A similar adjustment will also be made to the conversion ratio of the
Class B convertible preferred stock. Assuming a current estimated offering
price of $14.00 per share, and the corresponding adjustments to the Class B
convertible preferred stock and Class C convertible preferred stock conversion
ratios, the Class B convertible preferred and Class C convertible preferred
would convert into 3,021,250 shares and 6,400,628 shares of the Company's
common stock, respectively. The holders of the Class C convertible preferred
stock are entitled to the number of votes equal to the number of common shares
that could be obtained upon conversion on the date of the vote.

PREFERRED STOCK DIVIDENDS AND ISSUANCE COSTS

No preferred stock dividends have been declared or paid as of December 31,
1999.

The Company has recorded issuance costs incurred in connection with the
preferred shares as a reduction in the proceeds from the issuance of the
preferred shares.

COMMON STOCK

During 1997, the Company issued 10,625,000 shares of common stock in
exchange for $425. During 1998, the Company issued 2,537,400 shares of common
stock in exchange for $216,671. During 1999, the Company issued 756,675 shares
of common stock for $659,361.

In November 1998, the Company issued 2,981,250 shares of common stock in
connection with a settlement agreement to satisfy outstanding claims by an
individual against the Company. The

F-15
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

6. SHAREHOLDERS' EQUITY:--(CONTINUED)

Company recognized approximately a $1.6 million charge within general and
administrative expenses, related to the aggregate estimated fair value of such
shares of common stock. As part of the agreement, the Company had an option to
repurchase 1,013,750 shares for an aggregate price of $175,000. In 1999, the
Company exercised its option to repurchase such shares.

The Company is required to reserve and keep available out of its
authorized but unissued shares, a sufficient number of shares for the
conversion of convertible preferred shares.

From October 1997 to November 1999, the Company increased its authorized
common shares from 1,000 shares to 60,000,000 shares. In November 1999, the
Company changed the par value of the Company's common share from $0.001 per
share to $0.0001 per share.

7. RELATED PARTY TRANSACTIONS:

In November 1999, the Company entered into an agreement with one of its
investors to purchase $12.5 million of advertising over a 30 month period
beginning on January 1, 2000. The Company purchased approximately $891,000 of
advertising from this investor during the year ended December 31, 1999.

The Company sold 2,362,475 shares of common stock during 1998 to an
individual who subsequently became a member of the Company's Board, for an
aggregate purchase price of $100,000. Said individual is an attorney at a law
firm that provides legal services to the Company. The Company paid this law
firm, in part, by granting it options to purchase 31,450 shares of the
Company's common stock at $0.0025 per share for services rendered through
January 1999. Since February 1999, the Company has paid cash for all services
rendered by this law firm. Total legal fees paid by the Company to this law
firm, including the estimated fair value of options granted, amounted to
approximately $154,000 for the year ended December 31, 1999.

During the year ended December 31, 1999, the Company loaned an aggregate
of $460,000 to several key employees of the Company. The promissory notes bear
interest of 8% per year. All notes are for one year term and mature in various
dates during 2000.

The Company leases certain office space from an advertising company, the
owner of which is a shareholder and officer of the Company. The lease agreement
requires monthly base rent payments of $2,100 and other expenses. Total rent
expense paid by the Company to such advertising company amounted to
approximately $4,800 and $27,000 for the years ended December 31, 1998 and
1999, respectively.

Pursuant to the terms of two sales and maintenance agreements between the
Company and Netera, Inc., a company in which a holder of the Company's Class A
convertible preferred stock has a material interest, the Company paid Netera,
Inc. $649,187 for computer networking services during the year ended December
31, 1999.

F-16
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

8. LOSS PER SHARE:

The following table sets forth the computation of basic and diluted net
loss per common share:

Diluted loss per common share has not been presented separately from basic
loss per common share, as the outstanding stock options and preferred shares
are anti-dilutive for each period presented. Securities that could potentially
dilute basic earnings per common share in the future that were not included in
the computation of diluted loss per common share because their effect on
periods presented was anti-dilutive amount to 0, 3,955,450 and 9,288,439
options to purchase shares of common stock for the period from October 20, 1997
(date of incorporation) to December 31, 1997 and for the years ended December
31, 1998 and 1999, respectively, and 19,558,460 shares of common stock for the
year ended December 31, 1999 issuable upon the conversion of Preferred Stock on
an "as if converted" basis.

F-17
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

8. LOSS PER SHARE:--(CONTINUED)

The following table sets forth the computation of the unaudited pro forma
basic and diluted net loss per common share, assuming conversion of the
Preferred Stock upon issuance, and excluding the impact, if any, of dilution
that may result in the proposed IPO:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1998 1999
---------------- -----------------
<S> <C> <C>
Numerator:
Net loss ..................................................... $ (1,873,091) $ (35,320,834)
Deemed dividend on convertible preferred stock ............... -- (7,581,119)
------------ -------------
Numerator for pro forma net loss available
to common shareholders ....................................... $ (1,873,091) $ (42,901,953)
============ =============
Denominator:
Weighted average number of common shares ..................... 11,903,777 16,269,836
Assumed conversion of preferred stock to common shares (if
converted method) .......................................... -- 7,972,731
------------ -------------
Denominator for pro forma basic and diluted net loss
per common share ............................................. 11,903,777 24,242,567
============ =============
Pro forma basic and diluted net loss per common share ......... $ (0.16) $ (1.77)
============ =============
</TABLE>

9. STOCK OPTIONS:

In February 1999, the Company adopted a stock option plan (the "Plan") to
provide directors, officers, employees, consultants, distributors and others
with the opportunity to receive grants of incentive stock options,
non-qualified stock options and stock awards. The maximum number of shares
issuable under the Plan is 10,000,000. Certain of the grants made eligible to
participants are intended to qualify as incentive stock options or
non-qualified stock options to purchase common stock. Under the terms of the
Company's stock option agreements, options have a maximum term of ten years
from the date of grant. The option vesting periods vary from full vesting upon
issuance to vesting over a period of four years.

For the period from October 20, 1997 (date of incorporation) through
December 31, 1997, and the years ended December 31, 1998 and 1999, the Company
recognized approximately $0, $62,973 and $540,919, respectively, of employee
related stock-based compensation expense and expects to recognize an additional
expense of approximately $6.7 million over the remaining vesting period of the
options.

F-18
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

9. STOCK OPTIONS:--(CONTINUED)

The following transactions occurred with respect to the Plan:

<TABLE>
<CAPTION>
WEIGHTED AVERAGE
SHARES EXERCISE PRICE
------------ -----------------
<S> <C> <C>
Balance at October 20, 1997 (date of incorporation) ......... -- $ --
Granted ..................................................... -- --
Canceled .................................................... -- --
-- -------
Outstanding, December 31, 1997 .............................. -- --
Granted ..................................................... 3,955,450 $0.0225
Canceled .................................................... -- --
Exercised ................................................... -- --
--------- -------
Outstanding, December 31, 1998 .............................. 3,955,450 $0.0225
--------- -------
Granted ..................................................... 5,372,778 $2.9255
Canceled .................................................... -- --
Forfeited ................................................... (39,789) 2.9022
Exercised ................................................... -- --
--------- -------
Outstanding, December 31, 1999 .............................. 9,288,439 $1.4872
========= =======
</TABLE>

The following table summarizes information concerning outstanding options
as of December 31, 1999:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
- -------------------------------------------- ----------------------------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE REMAINING EXERCISE EXERCISE
PRICE NUMBER CONTRACTUAL PRICE NUMBER PRICE
($/SHARE) OUTSTANDING LIFE (YEARS) ($/SHARE) OUTSTANDING ($/SHARE)
- ----------- ------------- -------------- ----------- ------------- ----------
<S> <C> <C> <C> <C> <C>
$0.0001 362,550 2.0 $0.0001 362,550 $0.0001
$0.0010 146,250 1.0 $0.0010 6,750 $0.0010
$0.0100 33,725 2.1 $0.0100 33,725 $0.0100
$0.0240 3,704,425 7.7 $0.0240 3,704,425 $0.0240
$2.6400 4,275,019 9.4 $2.6400 17,700 $2.6400
$5.0000 605,870 9.8 $5.0000 30,257 $5.0000
$8.0000 160,600 9.9 $8.0000 -- $8.0000
</TABLE>

Included in the preceding table are options to purchase an aggregate of
2,184,050 shares, of which options to purchase an aggregate of 433,282 shares
are exercisable at December 31, 1999, with a weighted average exercise price of
$3.03 per share and a weighted average remaining contractual life of 7.9 years.
The exercise price of such stock options was less than the grant date fair
value of the underlying common stock. In addition, the preceding table includes
options to purchase an aggregate of 3,704,425 shares, of which options to
purchase an aggregate of 3,704,425 shares are exercisable at December 31, 1999,
with a weighted exercise price of $0.024 per share and a weighted average
remaining contractual life of 7.7 years. The exercise price of such stock
options was greater than the grant date fair value of the underlying common
stock.

F-19
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

9. STOCK OPTIONS:--(CONTINUED)

The Company accounts for its stock options using the intrinsic value
method. Had compensation expense for the Company stock-based compensation been
determined based on the fair value method, the Company's net loss would have
been increased to the pro forma amounts presented below:

<TABLE>
<CAPTION>
OCTOBER 20, 1997
(DATE OF
INCORPORATION) YEAR ENDED DECEMBER 31,
TO DECEMBER 31, ------------------------------------
1997 1998 1999
----------------- ---------------- -----------------
<S> <C> <C> <C>
Pro forma net loss available to
common shareholders ........... $ (21,477) $ (1,995,903) $ (57,409,152)
Pro forma basic and diluted loss
per common share .............. $ (0.00) $ (0.17) $ (3.53)
</TABLE>

The fair value for these options was estimated at the date of grant using
the minimum value method with the following assumptions:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER
31,
--------------------
ASSUMPTIONS 1998 1999
- -------------------------------------------- --------- --------
<S> <C> <C>
Average risk-free interest rate ......... 7.0% 7.0%
Dividend yield .......................... 0.0% 0.0%
Average life ............................ 8 years 8 years
</TABLE>

Because the determination of fair value of all options granted after such
time as the Company becomes a public entity will include an expected volatility
factor in addition to the factors described in the preceding paragraph, the
above results may not be representative of future periods.

10. COMMITMENTS:

The Company leases equipment and office space under noncancelable
operating lease agreements. The minimum annual rental commitments under such
operating leases that have remaining terms in excess of one year are as
follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- -----------------------------------------
<S> <C>
2000 ........................ $ 727,700
2001 ........................ 636,500
2002 ........................ 628,600
2003 ........................ 583,200
2004 ........................ 570,600
2005 and thereafter ......... 1,070,100
----------
$4,216,700
==========
</TABLE>

Rent expense amounted to approximately $8,700, $13,300 and $253,000 for
the period from October 20, 1997 (date of incorporation) through December 1997,
and the years ended December 31, 1998 and 1999, respectively.

See Note 7.

F-20
<PAGE>

YUPI INTERNET INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

11. SIGNIFICANT CUSTOMERS AND GEOGRAPHIC CONCENTRATION:

For the year ended December 31, 1998, one customer accounted for
approximately 17% of the Company's total revenues. For the year ended December
31, 1999, the three largest customers accounted for approximately 20.5%, 15.6%,
and 14.5% of the Company's total revenues, respectively.

12. SUBSEQUENT EVENTS:

In February 2000, the Board of Directors approved the 2000 Stock Option
and Incentive Plan and the 2000 Employee Stock Purchase Plan. A total of
4,000,000 shares of common stock may be issued upon the exercise of options or
other awards granted under the 2000 Stock Option and Incentive Plan. The 2000
Employee Stock Purchase Plan provides for the issuance of up to 200,000 shares
of common stock. The Company intends to submit the plans to their shareholders
for approval during March 2000.

F-21
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Partners of
Proveedora de Servicios para Red Bogota.Com Ltda.

We have audited the balance sheets of Proveedora de Servicios para Red
Bogota.Com Ltda. as of December 31, 1997 and 1998 and June 30, 1999 and the
related statements of operations and comprehensive loss, of changes in
partners' capital, and of cash flows for the period from November 27
(inception) through December 31, 1997, the year ended December 31, 1998 and the
six month period ended June 30, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements audited by us present fairly, in
all material respects, the financial position of Proveedora de Servicios para
Red Bogota.Com Ltda. at December 31, 1997 and 1998 and June 30, 1999 and the
results of its operations and its cash flows for the period from November 27,
1997 (inception) through December 31, 1997, the year ended December 31, 1998
and the six month period ended June 30, 1999, in conformity with accounting
principles generally accepted in the United States of America.

Price Waterhouse

Bogota, Colombia
August 23, 1999

F-22
<PAGE>

PROVEEDORA DE SERVICIOS PARA RED BOGOTA.COM LTDA.

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------- JUNE 30,
1997 1998 1999
---------- ---------- ---------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ......................... $12,430 $36,188 $12,757
Accounts receivable, net .......................... -- 20,114 23,244
Prepaid expenses and other assets ................. -- 1,003 759
------- ------- -------
Total current assets ............................ 12,430 57,305 36,760
Equipment, net ...................................... 5,283 29,316 27,359
------- ------- -------
$17,713 $86,621 $64,119
======= ======= =======
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Account payable and accrued expenses .............. $ 553 $25,134 $12,961
Due to partners ................................... 4,992 28,438 29,519
Deferred income ................................... -- 47 7,019
------- ------- -------
Total liabilities ............................... 5,545 53,619 49,499
Partners' capital ................................... 12,168 33,002 14,620
------- ------- -------
Total liabilities and partners' capital ......... $17,713 $86,621 $64,119
======= ======= =======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-23
<PAGE>

PROVEEDORA DE SERVICIOS PARA RED BOGOTA.COM LTDA.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

<TABLE>
<CAPTION>
PERIOD FROM
NOVEMBER 27 SIX MONTH
(INCEPTION) TO YEAR ENDED PERIOD ENDED
DECEMBER 31, DECEMBER 31, JUNE 30,
1997 1998 1999
---------------- -------------- -------------
<S> <C> <C> <C>
Revenues ......................................... $ -- $ 104,869 $ 133,547
Operating expenses:
General and administrative ..................... 9,838 150,131 97,910
Sales and marketing ............................ -- 37,410 53,592
Depreciation and amortization .................. 74 1,834 2,914
--------- --------- ---------
Total operating expenses ..................... 9,912 189,375 154,416
--------- --------- ---------
Loss from operations ............................. (9,912) (84,506) (20,869)
Other income (expenses):
Interest income ................................ -- 172 1,477
Interest expense ............................... -- (848) (1,921)
Other .......................................... -- 375 1,241
--------- --------- ---------
Loss before provision for income tax ......... (9,912) (84,807) (20,072)
Provision for income tax ......................... -- -- (719)
--------- --------- ---------
Net loss during the period ................... $ (9,912) $ (84,807) $ (20,791)
Translation adjustment ........................... (3,119) (8,085) 2,409
--------- --------- ---------
Comprehensive loss during the period ......... $ (13,031) $ (92,892) $ (18,382)
========= ========= =========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-24
<PAGE>

PROVEEDORA DE SERVICIOS PARA RED BOGOTA.COM LTDA.

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

<TABLE>
<CAPTION>
CUMULATIVE
PARTNERS' TRANSLATION
CAPITAL ADJUSTMENT TOTAL
----------- ------------ -----------
<S> <C> <C> <C>
Balance, November 27, 1997 ......... $ -- $ -- $ --
Partner contributions .............. 25,199 -- 25,199
Translation adjustment ............. -- (3,119) (3,119)
Net loss ........................... (9,912) -- (9,912)
--------- --------- ---------
Balance, December 31, 1997 ......... 15,287 (3,119) 12,168
Partner contributions .............. 113,726 -- 113,726
Translation adjustment ............. -- (8,085) (8,085)
Net loss ........................... (84,807) -- (84,807)
--------- --------- ---------
Balance, December 31, 1998 ......... 44,206 (11,204) 33,002
Translation adjustment ............. -- 2,409 2,409
Net loss ........................... (20,791) -- (20,791)
--------- --------- ---------
Balance, June 30, 1999 ............. $ 23,415 $ (8,795) $ 14,620
========= ========= =========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-25
<PAGE>

PROVEEDORA DE SERVICIOS PARA RED BOGOTA.COM LTDA.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED SIX MONTH
DECEMBER 31, PERIOD ENDED
---------------------------- JUNE 30,
1997 1998 1999
------------ ------------- -------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss for the period ............................................. $ (9,912) $ (84,807) $ (20,791)
Adjustment to reconcile net loss for the period to net cash
used in operating activities:
Depreciation and amortization ..................................... 74 1,834 2,914
In-kind services contributed by a partner ......................... -- 113,726 --
Changes in operating assets and liabilities:
Accounts receivable ............................................. -- (20,114) (3,130)
Prepaid expenses ................................................ -- (1,003) 244
Account payable and accrued expenses ............................ 553 24,581 (12,173)
Due to partners ................................................. 4,992 23,446 1,081
Deferred income ................................................. -- 47 6,972
-------- --------- ---------
Net cash used in operating activities ................................. (4,293) 57,710 (24,883)
-------- --------- ---------
Cash flows from investing activities:
Purchase of equipment ............................................... (5,357) (25,867) (957)
-------- --------- ---------
Cash flows from financing activities:
Contribution by partners ............................................ 25,199 -- --
-------- --------- ---------
Effects of exchange rate changes on cash and cash equivalents ......... (3,119) (8,085) 2,409
-------- --------- ---------
Net (decrease) increase in cash and cash equivalents .................. 12,430 23,758 (23,431)
Cash and cash equivalents, beginning of period ........................ -- 12,430 36,188
-------- --------- ---------
Cash and cash equivalents, end of period .............................. $ 12,430 $ 36,188 $ 12,757
======== ========= =========
</TABLE>

SUPPLEMENTAL INFORMATION OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

During the year ending December 31, 1998, the Company issued 384 shares to a
partner in exchange for in kind services valued at $113,726. See note 3.

The accompanying notes are an integral part of these financial statements.

F-26
<PAGE>

PROVEEDORA DE SERVICIOS PARA RED BOGOTA.COM LTDA.

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 1997 AND 1998, JUNE 30, 1999
(IN U.S. DOLLARS)

1. NATURE OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES

Proveedora de Servicios para Red Bogota.Com Ltda. (the Company) is a
limited liability partnership incorporated in Colombia on November 27, 1997,
for a 10-year life-term. Its principal office is in the city of Bogota.

The Company develops and maintains www.bogota.com, a branded Internet
online site located on the World Wide Web.

The Company owns the domain name Bogota.com, which was donated by one of
the partners.

A summary of the significant accounting policies followed in the
preparation of the accompanying financial statements is presented below:

ACCOUNTING ESTIMATES

The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

Cash equivalents include investments with original maturities of three
months or less and are stated at cost, which approximates market value.

PROVISION FOR BAD DEBTS ACCOUNTS

The provision for bad debt accounts is reviewed and updated at the end of
the period based on the aging analysis of balances and evaluation of the
account collections made by management.

EQUIPMENT

Equipment is recorded at cost. Depreciation and amortization are computed
using the straight-line method over the estimated useful lives of the
respective assets. Repairs and maintenance are charged to expense as incurred,
while expenditures, which extend the useful lives of the assets, are
capitalized.

REVENUE RECOGNITION

Revenues are derived principally from the sale of banner advertisements
and sponsorships. Advertising revenues on both banner and sponsorship
contracts, are recognized ratably in the period in which the advertisement is
displayed. A number of the agreements provide for the Company to receive a
percentage of revenues from electronic commerce transactions conducted by
advertisers who are selling goods or services to users of the Network. These
revenues are recognized by the Company upon notification from the advertiser of
its share of revenues earned by the Company.

F-27
<PAGE>

PROVEEDORA DE SERVICIOS PARA RED BOGOTA.COM LTDA.

NOTES TO THE FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997 AND 1998, JUNE 30, 1999
(IN U.S. DOLLARS)

1. NATURE OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES--(CONTINUED)
COMPREHENSIVE INCOME (LOSS)

Comprehensive income is a measure of net income and all other changes in
equity of the Company that result from transactions other than with partners.
Comprehensive income (loss) consists of net income (loss) and foreign currency
translation adjustments.

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to significant
concentrations of credit risk consists primarily of cash and cash equivalents,
and accounts receivable. The Company maintains the majority of its cash and
cash equivalents in various financial institutions. The Company's sales are
primarily to companies located in Colombia. The Company performs periodic
credit evaluations of its customers' financial condition and does not require
collateral.

FOREIGN CURRENCY

The functional currency of the Company is the Colombian peso. The
financial statements of the Company are translated to U.S. dollars using
period-end rates of exchange for assets and liabilities, and average rates for
the period for revenues, costs, and expenses. Translation gains and losses are
deferred and accumulated as a component of partners' capital. Operations are
generally translated at the weighted average exchange rate in effect during the
period. The resulting foreign exchange gains and losses are recorded as a
component of partners' capital.

INCOME TAXES

The Company uses the liability method of accounting for income taxes,
whereby deferred income taxes are provided on items recognized for financial
reporting purposes over different periods than for income tax purposes.
Valuation allowances are provided when the expected realization of the tax
assets does not meet a more likely than not criteria.

2. EQUIPMENT

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
------------------------ -----------
1997 1998 1999
---------- ----------- -----------
<S> <C> <C> <C>
Office equipment ............................. $ 771 $ 1,571 $ 2,104
Computer and communication equipment ......... 4,586 29,653 30,077
------ -------- --------
5,357 31,224 32,181
LESS--Accumulated depreciation ............... (74) (1,908) (4,822)
------ -------- --------
Equipment, net ............................ $5,283 $ 29,316 $ 27,359
====== ======== ========
</TABLE>

F-28
<PAGE>

PROVEEDORA DE SERVICIOS PARA RED BOGOTA.COM LTDA.

NOTES TO THE FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997 AND 1998, JUNE 30, 1999
(IN U.S. DOLLARS)

3. PARTNERS' CAPITAL

At June 30, 1999 the partners' capital consisted of 400 shares with a
value of Colombian pesos $5,000,000 each. By means of Public Deed No. 2992
dated November 23, 1999, 384 shares correspond to a partner's contribution in
kind of $113,726 whose valuation was agreed to by the partners in a general
meeting.

4. INCOME TAX

The Company is subject to taxes in Colombia at a rate of 35% of the
taxable income as long as such income is greater than the presumptive income,
which is defined as the greater of 5% of partners' equity or 1.5% of the
preceding year's assets. For the years ended December 31, 1997 and 1998 and the
six-month period ended June 30, 1999, the Company determined the income tax
based on the presumptive income described above. A valuation allowance had been
recognized to fully offset the deferred tax asset resulting from net operating
loss carry forwards due to the uncertainty surrounding its realization. As of
June 30, 1999 net operating loss carry forward amounting to approximately
Colombian pesos $29,393,000 (US$16,270) could be used to offset future taxable
income and expire in 2003.

5. SUBSEQUENT EVENTS

On August 26, 1999, the Company was sold to a third party.

F-29
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Stockholders and the Boards of Directors of
Planificacion y Estrategia en Internet, S.L. and Illimited, S.L.

In our opinion, the accompanying combined balance sheets and the related
combined statements of operations and comprehensive loss, of changes in
stockholder's equity and of cash flows present fairly, in all material
respects, the financial position of Planificacion y Estrategia en Internet,
S.L. and Illimited, S.L. ("the Entities") at December 31, 1998 and 1997, and
the results of their operations and their cash flows for the years then ended
in conformity with accounting principles generally accepted in the United
States of America. These combined financial statements are the responsibility
of the Entities' management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of
these statements in accordance with auditing standards generally accepted in
the United States of America, which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.

The Entities, as described in Note 3, have extensive transactions with
their stockholders. Because of these relationships, it is possible that the
terms of these transactions are not the same as those that would result from
transactions among wholly unrelated parties.

PricewaterhouseCoopers Auditores, S.L.

Madrid, Spain
July 27, 1999

F-30
<PAGE>

PLANIFICACION Y ESTRATEGIA EN INTERNET, S.L.
ILLIMITED, S.L.

COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------
1997 1998
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ........................................ $ 36,741 $ 43,803
Accounts receivable, net ......................................... 6,570 9,754
Short-term investments ........................................... 102,105 --
Other ............................................................ 57 --
--------- ---------
Total current assets ............................................... 145,473 53,557
Property and equipment, net ........................................ 8,125 5,707
--------- ---------
$ 153,598 $ 59,264
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ................................................. $ 3,668 $ 17,191
Due to stockholders .............................................. -- 26,660
--------- ---------
Total current liabilities .......................................... 3,668 43,851
--------- ---------
Contingencies (Note 5) ............................................. -- --
--------- ---------
Stockholders' equity:
Common stock, no par value, 100 shares authorized, issued and
outstanding and 575 shares authorized, issued and outstanding at
December 31, 1997 and December 31, 1998, respectively .......... 19,045 17,803
Additional paid-in capital ....................................... 31,200 62,400
Retained earnings (deficit) ...................................... 125,339 (64,954)
Cumulative translation adjustment ................................ (25,654) 164
--------- ---------
Total Stockholders' equity ......................................... 149,930 15,413
--------- ---------
$ 153,598 $ 59,264
========= =========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-31
<PAGE>

PLANIFICACION Y ESTRATEGIA EN INTERNET, S.L.
ILLIMITED, S.L.

COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1997 1998
------------ ------------
<S> <C> <C>
Revenues ......................................................... $ 2,547 $ 73,537
Operating expenses:
Product and technology development .............................. -- 1,864
Sales and marketing ............................................. -- 2,364
General and administrative ...................................... 44,229 113,378
Depreciation and amortization ................................... 7,332 7,543
--------- ---------
Total operating expenses ......................................... 51,561 125,149
--------- ---------
Loss from operations ............................................. (49,014) (51,612)
Other income (expense):
Interest income ................................................. 1,665 2,254
Interest expense ................................................ (5) (29)
Gain on sale of investments ..................................... -- 46,789
Other ........................................................... -- 20
--------- ---------
Loss before provision for income tax ............................. (47,354) (2,578)
Provision for income tax ......................................... -- (4,434)
--------- ---------
Net loss for the year ............................................ (47,354) (7,012)
Change in cumulative translation adjustment for the year ......... (25,196) 164
--------- ---------
Comprehensive loss for the year .................................. $ (72,550) $ (6,848)
========= =========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-32
<PAGE>

PLANIFICACION Y ESTRATEGIA EN INTERNET, S.L.
ILLIMITED, S.L.

COMBINED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1997 AND 1998

<TABLE>
<CAPTION>
ADDITIONAL RETAINED CUMULATIVE
COMMON PAID-IN EARNINGS TRANSLATION
STOCK CAPITAL (DEFICIT) ADJUSTMENT TOTAL
---------- ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1997 ................... $ 19,045 $ -- $ 172,693 $ (458) $ 191,280
Net loss ..................................... -- -- (47,354) -- (47,354)
Services contributed by shareholders ......... -- 31,200 -- -- 31,200
Cumulative translation adjustment ............ -- -- -- (25,196) (25,196)
-------- ------- ---------- --------- ----------
Balance at December 31, 1997 ................. 19,045 31,200 125,339 (25,654) 149,930
Purchase and retirement of common stock
(Note 3) .................................... (1,242) -- (183,281) 25,654 (158,869)
Net loss ..................................... -- -- (7,012) -- (7,012)
Services contributed by shareholders ......... -- 31,200 -- -- 31,200
Cumulative translation adjustment ............ -- -- -- 164 164
-------- ------- ---------- --------- ----------
Balance at December 31, 1998 ................. $ 17,803 $62,400 $ (64,954) $ 164 $ 15,413
======== ======= ========== ========= ==========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-33
<PAGE>

PLANIFICACION Y ESTRATEGIA EN INTERNET, S.L.
ILLIMITED, S.L.

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1997 1998
------------- ------------
<S> <C> <C>
Cash flows from operating activities:
Net loss ................................................................ $ (47,354) $ (7,012)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation and amortization ........................................... 7,332 7,543
Services contributed by shareholders .................................... 31,200 31,200
Gain on sale of investments ............................................. -- (46,789)
Changes in operating assets and liabilities:
Accounts receivable .................................................... 924 (2,603)
Other current assets ................................................... (59) 57
Accounts payable ....................................................... 1,249 37,973
--------- ----------
Net cash (used in) provided by operating activities ................... (6,708) 20,369
--------- ----------
Cash flows from investing activities:
Sale of short-term investments ......................................... -- 150,467
Purchase of property and equipment ..................................... -- (4,719)
--------- ----------
Net cash provided by investing activities ............................. -- 145,748
--------- ----------
Cash flows from financing activities:
Repurchase of shares from stockholders ................................. -- (158,869)
Repayment of advances from stockholders ................................ -- (2,902)
--------- ----------
Net cash used in financing activities ................................. -- (161,771)
--------- ----------
Effects of exchange rate changes on cash and cash equivalents ........... (6,491) 2,716
--------- ----------
Net (decrease) increase in cash and cash equivalents .................... (13,199) 7,062
Cash and cash equivalents, beginning of year ............................ 49,940 36,741
--------- ----------
Cash and cash equivalents, end of year .................................. $ 36,741 $ 43,803
========= ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for interest ................................. $ 5 $ 24
========= ==========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F-34
<PAGE>

PLANIFICACION Y ESTRATEGIA EN INTERNET, S.L. AND ILLIMITED, S.L.

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1997 AND 1998

1. NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Planificacion y Estrategia en Internet, S.L. and Illimited, S.L. (the
"Entities") were incorporated in Spain on March 18, 1998 and August 12, 1987,
respectively. The Entities are 100% owned by a single individual and his wife
(the "Stockholders").

These combined financial statements were prepared to assist the Entities
to comply with certain requirements of a purchase agreement (see Note 6). The
combined financial statements were prepared under accounting principles
generally accepted in the United States of America and include the historical
basis of the accounts of Illimited, S.L. and Planificacion y Estrategia en
Internet, S.L. The equity accounts and share data in these combined financial
statements represent the sum of the corresponding equity accounts and share
data of the Entities, including 75 shares of Illimited, S.L., and 500 shares of
Planificacion y Estrategia en Internet, S.L. as of December 31, 1998. All
significant intercompany transaction and accounts are eliminated in
combination.

The Entities principally develop and maintain www.ciudadfutura.com, a
branded Internet online network (the "Network") located on the World Wide Web
(the "Web"). The Network is organized around interest specific channels,
community features, search capabilities and online shopping in Spanish.

A summary of the significant accounting policies followed in the
preparation of the accompanying combined financial statements is presented
below:

ACCOUNTING ESTIMATES

REVENUE RECOGNITION

The Entities' revenues are derived principally from the sale of banner
advertisements and sponsorships. Advertising revenues on both banner and
sponsorship contracts are recognized ratably in the period in which the
advertisement is displayed. A number of the Entities' agreements provide for
the Entities to receive a percentage of revenues from electronic commerce
transactions conducted by advertisers who are selling goods or services to
users of the Network. These revenues are recognized by the entities upon
notification from the advertiser of its share of revenues earned by the
Entities and, to date, have not been significant.

COMPREHENSIVE INCOME (LOSS)

Comprehensive income is a measure of net income and all other changes in
equity of the Entities that result from transactions other than with
stockholders. Comprehensive income (loss) consists of net income (loss) and
foreign currency translation adjustments.

CASH AND CASH EQUIVALENTS

Cash equivalents include investments with original maturities of three
months or less and are stated at cost which approximates market value.

F-35
<PAGE>

PLANIFICACION Y ESTRATEGIA EN INTERNET, S.L. AND ILLIMITED, S.L.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997 AND 1998

1. NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES--(CONTINUED)

SHORT-TERM INVESTMENTS

Short-term investments are comprised of marketable debt which are
categorized as available for sale and, accordingly, are stated at their fair
values.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost. Depreciation and amortization
are computed using the straight line method over the estimated useful lives of
the respective assets. Repairs and maintenance are charged to expense as
incurred, while expenditures which extend the useful lives of the assets are
capitalized.

CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Entities to significant
concentrations of credit risk consist principally of cash and cash equivalents,
short-term investments and accounts receivable. The Entities maintain the
majority of their cash and cash equivalents with various financial
institutions. Short-term investments consist of government debt of Spain. The
Entities' sales are primarily to companies located in the United States and
Spain. The Entities perform periodic credit evaluations of their customers'
financial condition and do not require collateral.

FOREIGN CURRENCY

The functional currency of the Entities is the Spanish peseta. The
financial statements of these Entities are translated to U.S. dollars using
year-end rates of exchange for assets and liabilities, and average rates for
the year for revenues, costs, and expenses. Translation gains and losses are
deferred and accumulated as a component of stockholders' equity. Operations are
generally translated at the weighted average exchange rate in effect during the
period. The resulting foreign exchange gains and losses are recorded in the
combined statement of operations.

INCOME TAXES

The Entities use the liability method of accounting for income taxes,
whereby deferred income taxes are provided on items recognized for financial
reporting purposes over different periods than for income tax purposes.
Valuation allowances are provided when the expected realization of tax assets
does not meet a more likely than not criteria.

F-36
<PAGE>

PLANIFICACION Y ESTRATEGIA EN INTERNET, S.L. AND ILLIMITED, S.L.

NOTES TO COMBINED FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997 AND 1998

2. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1997 1998
--------- ---------
<S> <C> <C>
Computer equipment ...................................... $ 9,188 $ 4,362
Furniture and fixtures .................................. 69,102 74,461
Other ................................................... -- 704
------- -------
78,290 79,527
Less: accumulated depreciation and amortization ......... 70,165 73,820
------- -------
$ 8,125 $ 5,707
======= =======
</TABLE>

3. RELATED PARTY TRANSACTIONS

The Entities, as described hereafter, have extensive transactions and
relationships with their two Stockholders. Because of these relationships, it
is possible that the terms of these transactions are not the same as those that
would result from transactions among wholly unrelated parties.

One of the Stockholders is the general manager of the Entities. The other
Stockholder provides certain maintenance services to the Network. The estimated
fair value of all of these services, amounting to $31,200 in each of the two
years ended December 31, 1998, has been recorded as additional paid-in capital.
In addition, the two Stockholders have provided financing and office space,
among other services.

On November 30, 1998, the Stockholders sold 25 shares of the Entities'
common stock to the Entities for an aggregate price of $158,869. On the same
date, the 25 shares were retired.

4. INCOME TAXES

The Entities are only subject to income tax in Spain. At December 31,
1997, the Entities had net operating losses carry forwards amounting to
approximately $15,000 which were used to partially offset taxable income for
the year ended December 31, 1998. A valuation allowance had been recognized to
fully offset the deferred tax asset resulting from the net operating loss carry
forwards due to the uncertainty surrounding its realization. Other than net
operating loss carry forwards and services contributed by shareholders, there
are no significant items recognized for financial reporting purposes over
different periods than for income tax purposes.

5. CONTINGENCIES

Under Spanish business law, a company is generally prohibited from buying
back its own shares when retained earnings are not sufficient to cover the
difference between the repurchase price of the shares and their nominal value.
As reflected in the statements of changes in stockholders' equity, the purchase
and retirement of the Entities' own shares resulted in a deficit of $2,554 at
December 31, 1998. Management believes that this matter will not have a
material impact on the Entities' financial condition and results of operations.

6. SUBSEQUENT EVENTS

On February 15, 1999, the Stockholders entered into a purchase agreement
with a third party to sell their Internet network business and related assets.

F-37
<PAGE>

Inside Back Cover:

The inside back cover is blue with the Yupi logo in the center. The URL
www.yupi.com is below the logo on the bottom of the page with the phrase, "El
mas facil" below it.

<PAGE>

[GRAPHIC OMITTED]

www.yupi.com

<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Estimated expenses (other than underwriting discounts and commissions)
payable in connection with the sale of the common stock offered hereby are as
follows:

<TABLE>
<S> <C>
SEC registration fee ................................... $ 45,540
NASD filing fee ........................................ 17,750
Nasdaq National Market listing fee ..................... 95,000
Printing and engraving expenses ........................ 225,000
Legal fees and expenses ................................ 775,000
Accounting fees and expenses ........................... 325,000
Transfer agent and registrar fees and expenses ......... 10,000
Miscellaneous .......................................... 546,710
----------
Total ................................................ $2,040,000
==========
</TABLE>

- ----------------
Yupi will bear all expenses shown above.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Florida Business Corporation Act and Yupi's Fourth Amended and
Restated Articles of Incorporation and Amended and Restated By-Laws provide for
indemnification of Yupi's directors and officers for liabilities and expenses
that they may incur in such capacities. In general, directors and officers are
indemnified with respect to actions taken in good faith in a manner reasonably
believed to be in, or not opposed to, the best interests of Yupi and, with
respect to any criminal action or proceeding, actions that the indemnitee had
no reasonable cause to believe were unlawful. Reference is made to Yupi's
Fourth Amended and Restated Articles of Incorporation and Amended and Restated
By-Laws filed as Exhibits 3.02 and 3.04 hereto, respectively.

The Underwriting Agreement provides that the underwriters are obligated,
under certain circumstances, to indemnify directors, officers and controlling
persons of Yupi against certain liabilities, including liabilities under the
Securities Act of 1933. Reference is made to the form of Underwriting Agreement
filed as Exhibit 1.01 hereto.

In addition, Yupi has a directors' and officers' liability insurance
policy.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Since its inception, the registrant has sold the following securities
(which have been adjusted to reflect the 1,000-for-1 stock split on December
28, 1998 and the 25-for-1 stock split effected in the form of a stock dividend
on May 12, 1999) that were not registered under the Securities Act. No
underwriters were involved in the following sales of securities:

1. On October 20, 1997, the registrant sold an aggregate of 10,625,000
shares of its common stock to Camilo Cruz and Carlos Cardona at a
price of $0.00004 per share for the aggregate purchase price of $425.
Such sales were made in reliance upon the exemption provided by
Section 4(2) of the Securities Act for transactions not involving a
public offering and/or Regulation D under the Securities Act.

2. On May 27, 1998, July 23, 1998 and November 15, 1998, the registrant
sold an aggregate of 2,287,500 shares of its common stock to Ariel
Bentata at a price of $0.022 per share for the aggregate purchase
price of $50,000. Such sales were made in reliance upon the exemption
provided by Section 4(2) of the Securities Act for transactions not
involving a public offering.

II-1
<PAGE>

3. On November 15, 1998, in connection with the execution of a settlement
agreement between the registrant, Craig Doriot, Camilo Cruz, Carlos
Cardona and Ariel Bentata, the registrant sold 2,981,250 shares of its
common stock to Mr. Doriot. Such sales were made in reliance upon the
exemption provided by Section 4(2) of the Securities Act for
transactions not involving a public offering.

4. During the period from November 6, 1998 to February 19, 1999, the
registrant sold an aggregate of 742,375 shares of its common stock to
18 investors, including executive officers and directors of the
registrant, at a price of $0.6668 per share for the aggregate purchase
price of approximately $495,209. Such sales were made in reliance upon
the exemption provided by Section 4(2) of the Securities Act for
transactions not involving a public offering and/or Regulation D under
the Securities Act.

5. In March 1999, the registrant sold an aggregate of 264,200 shares of
its common stock to 13 investors, including executive officers and
directors of the registrant, at a price of $1.2528 per share for the
aggregate purchase price of approximately $330,066. Such sales were
made in reliance upon the exemption provided by Section 4(2) of the
Securities Act for transactions not involving a public offering and/or
Regulation D under the Securities Act.

6. On April 23, 1999, the registrant sold (i) 45,620 shares of its Class
A Convertible Preferred Stock to IFX Online, Inc. at a price of $21.92
per share for the aggregate purchase price of approximately $999,990
and (ii) an aggregate of 223,500 shares of its Class A Convertible
Preferred Stock to IFX Online, Inc. and Interprise Technology
Partners, L.P. at a price of $31.32 per share for the aggregate
purchase price of approximately $7,000,020. Such sales were made in
reliance upon the exemption provided by Regulation D under the
Securities Act.

7. On May 13, 1999, the registrant sold 95,785 shares of its Class A
Convertible Preferred Stock to Interprise Technology Partners, L.P. at
a price of $31.32 per share for the aggregate purchase price of
approximately $3,000,000. Such sales were made in reliance upon the
exemption provided by Regulation D under the Securities Act.

8. On July 12, 1999 and July 28, 1999, the registrant sold an aggregate
of 31,928 shares of its Class A Convertible Preferred Stock to
Interprise Technology Partners, L.P. at a price of $31.32 per share
for the aggregate purchase price of approximately $1,000,000. Such
sales were made in reliance upon the exemption provided by Regulation
D under the Securities Act.

9. On August 2, 1999, the registrant sold 31,929 shares of its Class A
Convertible Preferred Stock to Interprise Technology Partners, L.P. at
a price of $31.32 per share for the aggregate purchase price of
approximately $1,000,000. Such sales were made in reliance upon the
exemption provided by Regulation D under the Securities Act.

10. On August 25, 1999, the registrant issued an aggregate of 261,765
shares of its common stock to the former shareholders of Proveedora de
Servicios para Red Bogota.com Ltda. as partial consideration for the
purchase of all of the outstanding share capital of such company. Such
sales were made in reliance upon the exemption provided by Section
4(2) of the Securities Act for transactions not involving a public
offering and/or Regulation S under the Securities Act.

11. On October 1, 1999, the registrant agreed to sell an aggregate of
1,944 shares of its common stock to the owners of certain assets
relating to the Internet domain www.claqueta.com as partial
consideration for the purchase of those assets. These shares were
subsequently issued on November 15, 1999. Such sales were made in
reliance upon the exemption provided by Section 4(2) of the Securities
Act for transactions not involving a public offering and/or Regulation
S under the Securities Act.

II-2
<PAGE>

12. On October 27, 1999, the registrant sold an aggregate of 2,955,016
shares of its Class B Convertible Preferred Stock to Sony Corporation
of America at a price of $11.60 per share for the aggregate purchase
price of $34,300,000, consisting of $5 million in cash and the
obligation to perform future services valued by the parties at
$29,300,000. Such sales were made in reliance upon the exemption
provided by Regulation D under the Securities Act.

13. On November 5, 1999 and November 10, 1999, the registrant sold an
aggregate of 5,858,698 shares of its Class C Convertible Preferred
Stock to 20 investors at a price of $11.50 per share for the aggregate
purchase price of approximately $67,375,044, consisting of $64,375,044
in cash and $3,000,000 in retired debt. Such sales were made in
reliance upon the exemption provided by Regulation D under the
Securities Act.

14. On November 29, 1999, the registrant issued an aggregate of 37,397
shares of its common stock to the shareholders of La Cosa Interactive
S.R.L. as partial consideration for the registrant's purchase of all
of the outstanding share capital of such company. Such sales were made
in reliance upon the exemption provided by Section 4(2) of the
Securities Act for transactions not involving a public offering and/or
Regulation S under the Securities Act.

15. During the period from June 1, 1998 to March 24, 2000, the registrant
granted, net of forfeited options, options to purchase an aggregate of
9,979,052 shares of the registrant's common stock with exercise prices
ranging from $0.0001 to $12.00 per share. Such grants were made in
reliance upon the exemption provided by Section 4(2) of the Securities
Act for transactions not involving a public offering and/or Rule 701
under the Securities Act.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits.

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ------------- ----------------------------------------------------------------------------------------
<S> <C>
1.01x Form of Underwriting Agreement.
3.01x Third Amended and Restated Articles of Incorporation of Yupi, as amended.
3.02x Form of Fourth Amended and Restated Articles of Incorporation of Yupi, to be filed
after the closing of this offering.
3.03x By-laws, as amended, of Yupi.
3.04x Form of Amended and Restated By-laws of Yupi, to be effective after the closing of this
offering.
4.01x Specimen Certificate for shares of Yupi's Common Stock.
5.01x Legal Opinion of Steel Hector & Davis LLP.
10.01x* Amended and Restated Stock Incentive Plan.
10.02 Reserved
10.03x Second Amended and Restated Registration Rights Agreement dated November 5, 1999.
10.04+x Letter Agreement dated October 27, 1999 by and between Yupi Internet Inc. and Sony
Corporation of America.
10.05x Lease dated October 11, 1999 by and between Yupi Internet Inc. and 1688 Partners Ltd.
10.06x Lease Agreement dated April 22, 1999 by and between Yupi Internet Inc. and South
Beach Tristar LLC.
10.07x+ Value-Added Link Agreement dated July 20, 1999 by and between AltaVista Equipment
Corporation and Yupi Internet Inc.
10.08x Unsecured Promissory Note dated April 28, 1999 by Jacqueline O'Brien to Yupi Internet
Inc.
10.09x Unsecured Promissory Note dated April 28, 1999 by Carlos Cardona to Yupi Internet Inc.
</TABLE>

II-3
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ------------- -----------------------------------------------------------------------------------------
<S> <C>
10.10x Unsecured Promissory Note dated April 28, 1999 by Marlena Delgado to Yupi Internet
Inc.
10.11x Unsecured Promissory Note dated April 28, 1999 by Oscar Coen to Yupi Internet Inc.
10.12x Unsecured Promissory Note dated October 27, 1999 by Rudy Vila to Yupi Internet Inc.
10.13x Unsecured Promissory Note dated November 24, 1999 by Victor Gutierrez to Yupi
Internet Inc.
10.14x Unsecured Promissory Note dated November 24, 1999 by Gustavo Morles to Yupi
Internet Inc.
10.15x Unsecured Promissory Note dated November 30, 1999 by Jose Luque to Yupi Internet
Inc.
10.16x Unsecured Promissory Note dated November 30, 1999 by Rodolfo Vila to Yupi Internet
Inc.
10.17x Unsecured Promissory Note dated December 23, 1999 by Damaris Valero to Yupi
Internet Inc.
10.18x Promissory Note dated August 6, 1999 by Yupi Internet Inc. to Planificacion y Estrategia
de Internet, S.L.
10.19+x Letter Agreement dated November 4, 1999 by and between Yupi Internet Inc. and News
America Incorporated.
10.20x* 2000 Stock Option and Incentive Plan.
10.21x* 2000 Employee Stock Purchase Plan.
10.22x Employment Agreement between Oscar Coen and Yupi Internet Inc.
10.23x Employment Agreement between Marlena Delgado and Yupi Internet Inc.
10.24x Employment Agreement between Carlos Cardona and Yupi Internet Inc.
10.25x Employment Agreement between Jacqueline O'Brien and Yupi Internet Inc.
10.26x Unsecured Promissory Note dated January 31, 2000 by Maria Elena Prio to Yupi Internet
Inc.
10.27x Form of Amendment No. 1 to Stock Option Grant Certificate to be executed by each of
Oscar Coen and Marlena Delgado-Coen.
10.28x Form of Amendment No. 1 to Stock Option Grant Certificate to be executed by each of
Carlos Cardona and Jackie O'Brien.
21.01x Subsidiaries.
23.01x Consent of Testa, Hurwitz & Thibeault, LLP.
23.02x Consent of Steel Hector & Davis LLP (contained in Exhibit 5.01)
23.03 Consent of PricewaterhouseCoopers LLP.
23.04 Consent of PricewaterhouseCoopers Auditores, S.L.
23.05 Consent of Price Waterhouse.
24.01x Power of Attorney.
27.01x Financial Data Schedule for the Period Ended December 31, 1997.
27.02x Financial Data Schedule for the Year Ended December 31, 1998.
27.03x Financial Data Schedule for the Year Ended December 31, 1999.
</TABLE>

- ----------------
* Indicates a management contract or any compensatory plan, contract or
arrangement.
/dagger/ To be filed by amendment.
+ Confidential treatment has been requested as to omitted portions
pursuant to Rule 406 promulgated under the Securities Act of 1933,
as amended.
x Previously filed.

II-4
<PAGE>

(b) Financial Statement Schedules.

All schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required under
the related instructions or are inapplicable, and therefore have been omitted.

ITEM 17. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 14 above, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes (1) to provide to the
underwriters at the closing specified in the underwriting agreement,
certificates in such denominations and registered in such names as required by
the underwriters to permit prompt delivery to each purchaser; (2) that for
purposes of determining any liability under the Securities Act, the information
omitted from the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form of prospectus
filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this registration statement as of
the time it was declared effective; and (3) that for the purpose of determining
any liability under the Securities Act, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.

II-5
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant has duly caused this Amendment to the Registration Statement
(File No. 333-94891) to be signed on its behalf by the undersigned, thereunto
duly authorized, in Miami Beach, Florida on April 11, 2000.

YUPI INTERNET INC.

By: /s/ LUIS E. SAN MIGUEL
----------------------------------------
Luis E. San Miguel
Senior Vice President,
Chief Financial Officer and Treasurer

Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE(S) DATE
- ------------------------------------ ---------------------------------------- ---------------
<S> <C> <C>
* President, Chief Executive Officer and April 11, 2000
- ------------------------------------ Director (Principal Executive Officer)
Oscar L. Coen

/s/ LUIS E. SAN MIGUEL Senior Vice President, Chief Financial April 11, 2000
- ------------------------------------ Officer and Treasurer (Principal
Luis E. San Miguel Financial and Accounting Officer)

* Director April 11, 2000
- -------------------------------------
Ariel Bentata

* Director April 11, 2000
- -------------------------------------
Carlos Cardona

* Director April 11, 2000
- -------------------------------------
Juan Carlos Campuzano

* Director April 11, 2000
- -------------------------------------
Camilo Cruz

* Director April 11, 2000
- -------------------------------------
Fred Ehrlich

* Director April 11, 2000
- -------------------------------------
David R. Parker

* Director April 11, 2000
- -------------------------------------
Armando M. Codina

* By: /s/ LUIS E. SAN MIGUEL
-------------------------------
Luis E. San Miguel
Attorney-in-Fact
</TABLE>

II-6
<PAGE>

================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

EXHIBITS

AMENDMENT NO. 5

TO
FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

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

YUPI INTERNET INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

================================================================================

<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ------------- -----------------------------------------------------------------------------------------
<S> <C>
1.01x Form of Underwriting Agreement.
3.01x Third Amended and Restated Articles of Incorporation of Yupi, as amended.
3.02x Form of Fourth Amended and Restated Articles of Incorporation of Yupi, to be filed
after the closing of this offering
3.03x By-laws, as amended, of Yupi.
3.04x Form of Amended and Restated By-laws of Yupi, to be effective after the closing of this
offering
4.01x Specimen Certificate for shares of Yupi's Common Stock.
5.01x Legal Opinion of Steel Hector & Davis LLP.
10.01x* Amended and Restated Stock Incentive Plan.
10.02 Reserved
10.03x Second Amended and Restated Registration Rights Agreement dated November 5, 1999.
10.04+x Letter Agreement dated October 27, 1999 by and between Yupi Internet Inc. and Sony
Corporation of America
10.05x Lease dated October 11, 1999 by and between Yupi Internet Inc. and 1688 Partners Ltd.
10.06x Lease Agreement dated April 22, 1999 by and between Yupi Internet Inc. and South
Beach Tristar LLC.
10.07x+ Value-Added Link Agreement dated July 20, 1999 by and between AltaVista Equipment
Corporation and Yupi Internet Inc.
10.08x Unsecured Promissory Note dated April 28, 1999 by Jacqueline O'Brien to Yupi Internet
Inc.
10.09x Unsecured Promissory Note dated April 28, 1999 by Carlos Cardona to Yupi Internet Inc.
10.10x Unsecured Promissory Note dated April 28, 1999 by Marlena Delgado to Yupi Internet
Inc.
10.11x Unsecured Promissory Note dated April 28, 1999 by Oscar Coen to Yupi Internet Inc.
10.12x Unsecured Promissory Note dated October 27, 1999 by Rudy Vila to Yupi Internet Inc.
10.13x Unsecured Promissory Note dated November 24, 1999 by Victor Gutierrez to Yupi
Internet Inc.
10.14x Unsecured Promissory Note dated November 24, 1999 by Gustavo Morles to Yupi
Internet Inc.
10.15x Unsecured Promissory Note dated November 30, 1999 by Jose Luque to Yupi Internet
Inc.
10.16x Unsecured Promissory Note dated November 30, 1999 by Rodolfo Vila to Yupi Internet
Inc.
10.17x Unsecured Promissory Note dated December 23, 1999 by Damaris Valero to Yupi
Internet Inc.
10.18x Promissory Note dated August 6, 1999 by Yupi Internet Inc. to Planificacion y Estrategia
de Internet, S.L.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ------------- --------------------------------------------------------------------------------------
<S> <C>
10.19+x Letter Agreement dated November 4, 1999 by and between Yupi Internet Inc. and News
America Incorporated.
10.20x* 2000 Stock Option and Incentive Plan.
10.21x* 2000 Employee Stock Purchase Plan.
10.22x Employment Agreement between Oscar Coen and Yupi Internet Inc.
10.23x Employment Agreement between Marlena Delgado and Yupi Internet Inc.
10.24x Employment Agreement between Carlos Cardona and Yupi Internet Inc.
10.25x Employment Agreement between Jacqueline O'Brien and Yupi Internet Inc.
10.26x Unsecured Promissory Note dated January 31, 2000 by Maria Elena Prio to Yupi Internet
Inc.
10.27x Form of Amendment No. 1 to Stock Option Grant Certificate to be executed by each of
Oscar Coen and Marlena Delgado-Coen.
10.28x Form of Amendment No. 1 to Stock Option Grant Certificate to be executed by each of
Carlos Cordana and Jackie O'Brien.
21.01x Subsidiaries.
23.01x Consent of Testa, Hurwitz & Thibeault, LLP.
23.02x Consent of Steel Hector & Davis LLP (contained in Exhibit 5.01)
23.03 Consent of PricewaterhouseCoopers LLP.
23.04 Consent of PricewaterhouseCoopers Auditores, S.L.
23.05 Consent of Price Waterhouse.
24.01x Power of Attorney.
27.01x Financial Data Schedule for the Period Ended December 31, 1997.
27.02x Financial Data Schedule for the Year Ended December 31, 1998.
27.03x Financial Data Schedule for the Year Ended December 31, 1999.
</TABLE>

EXHIBIT 23.03

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We hereby consent to the use in this Registration Statement on Form S-1 of our
report dated March 2, 2000, relating to the financial statements of Yupi
Internet Inc., which appear in such Registration Statement. We also consent to
the reference to us under the heading "Experts" in such Registration Statement.

PricewaterhouseCoopers LLP
Miami, FL
April 11, 2000

EXHIBIT 23.04

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in this Registration Statement on Form S-1 of our
report dated July 27, 1999, relating to the financial statements of
Planificacion y Estrategia en Internet, S.L. and Illimited, S.L., which appear
in such Registration Statement. We also consent to the reference to us under the
heading "Experts" in such Registration Statement.

PricewaterhouseCoopers Auditores, S.L.
Madrid, Spain
April 11, 2000

EXHIBIT 23.05

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in this Registration Statement on Form S-1 of our
report dated August 23, 1999, relating to the financial statements of Proveedora
de Servicios para Red Bogota.com Ltda., which appear in such Registration
Statement. We also consent to the reference to us under the heading "Experts" in
such Registration Statement.

Price Waterhouse
Bogota, Colombia
April 11, 2000