<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
</TABLE>
SMARTSOURCES.COM, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
SMARTSOURCES.COM, INC.
2030 MARINE DRIVE, SUITE 100
NORTH VANCOUVER, BRITISH COLUMBIA
CANADA V7P 1V7
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 21, 2000
To the Shareholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
SMARTSOURCES.COM, INC., a Colorado corporation (the "Company"), will be held on
Friday, July 21, 2000, at 9:00 a.m., local time, at the Hyatt Regency Hotel,
Plaza East Conference Room located at 655 Burrard Street, Vancouver, British
Columbia, Canada, for the following purposes:
1. To elect five directors to serve until the next annual meeting of
shareholders and until their successors are duly elected and
qualified.
2. To ratify the appointment of Moss Adams LLP, independent certified
public accountants, to serve as auditors of the Company for the fiscal
year ending September 30, 2000.
3. To increase the maximum number of shares of Common Stock subject to
the Company's 1999 Stock Incentive Compensation Plan to 4,000,000.
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on June 14, 2000 as
the record date for the determination of shareholders entitled to notice of and
to vote at this Annual Meeting.
By Order of the Board of Directors
/s/ NATHAN NIFCO
Nathan Nifco
Chairman and Chief Executive Officer
North Vancouver, British Columbia, Canada
July 5, 2000
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER
OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN
THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A RETURN ENVELOPE IS ENCLOSED FOR THAT PURPOSE.
EVEN IF YOU HAVE GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND
THE MEETING. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A
BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST
OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN YOUR NAME.
<PAGE> 3
SMARTSOURCES.COM, INC.
2030 MARINE DRIVE, SUITE 100
NORTH VANCOUVER, BRITISH COLUMBIA
CANADA V7P 1V7
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 21, 2000
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
SmartSources.com, Inc., a Colorado corporation (the "Company"), for use at the
Annual Meeting of Shareholders to be held on July 21, 2000, at 9:00 a.m., local
time (the "Annual Meeting"), or at any adjournment or postponement thereof, for
the purposes set forth herein and in the accompanying Notice of Annual Meeting.
The Annual Meeting will be held at the Hyatt Regency Hotel, Plaza East
Conference Room located at 655 Burrard Street, Vancouver, British Columbia,
Canada. The Company intends to mail this proxy statement and accompanying proxy
card on or about July 7, 2000 to all shareholders entitled to vote at the Annual
Meeting.
SOLICITATION
The Company will bear the entire cost of solicitation of proxies, including
preparation, assembly, printing and mailing of this proxy statement, the proxy
and any additional information furnished to shareholders. Copies of solicitation
materials will be furnished to banks, brokerage houses, fiduciaries and
custodians holding in their names shares of Common Stock beneficially owned by
others to forward to such beneficial owners. The Company may reimburse persons
representing beneficial owners of Common Stock for their costs of forwarding
solicitation materials to such beneficial owners. Original solicitation of
proxies by mail may be supplemented by telephone, telegram or personal
solicitation by directors, officers or other employees of the Company. No
additional compensation will be paid to directors, officers or other employees
for such services.
VOTING RIGHTS AND OUTSTANDING SHARES
Only holders of record of Common Stock at the close of business on June 14,
2000, will be entitled to notice of and to vote at the Annual Meeting. At the
close of business on June 14, 2000, the Company had 12,312,962 shares of Common
Stock outstanding and entitled to vote.
Each holder of record of Common Stock on such date will be entitled to one
vote for each share held on all matters to be voted upon at the Annual Meeting.
With respect to the election of directors, shareholders shall have the right to
vote their shares for as many directors as there are to be elected. Cumulative
voting shall not be permitted in the election of directors.
All votes will be tabulated by the inspector of election appointed for the
meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. A plurality of the shares present in person or
represented by proxy and voting at the Annual Meeting is required to elect the
nominees to the Board of Directors. The affirmative vote of the holders of a
majority of the shares present, in person or represented by proxy, and voting at
the Annual Meeting will be required (i) to ratify the selection of Moss Adams
LLP and (ii) for the approval of an increase in the number of shares subject to
options under the Company's 1999 Stock Incentive Compensation Plan to 4,000,000
shares. For purposes of establishing a quorum, abstentions and broker non-votes
will count in determining whether a quorum is present at the Annual Meeting. For
purposes of proposal 1, the election of directors, neither abstentions nor
broker non-votes will have any effect on the outcome of the vote. For purposes
of the approval of proposals 2 and 3, the proposed ratification of the
appointment of Moss Adams LLP and an increase in the maximum number of shares
Page 1
<PAGE> 4
of Common Stock subject to the Company's 1999 Stock Incentive Compensation Plan,
abstentions will have the same effect as votes against the proposals and broker
non-votes will not have any effect on the outcome of the vote.
REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. It may be revoked by filing with the
Company at its principal executive office, 2030 Marine Drive, Suite 100, North
Vancouver, British Columbia, Canada V7P 1V7, a written notice of revocation or a
duly executed proxy bearing a later date, or it may be revoked by attending the
meeting and voting in person. Attendance at the meeting will not, by itself,
revoke a proxy.
PROPOSAL 1
ELECTION OF DIRECTORS
There are five nominees for election to the Board of Directors. Each
director to be elected will hold office until the next annual meeting of
shareholders and until his or her successor is duly elected and qualified.
Shares represented by executed proxies will be voted, if authority to do so
is not withheld, for the election of the five nominees named below. In the event
that any nominee should be unavailable for election as a result of an unexpected
occurrence, such shares will be voted for the election of such substitute
nominee as the Board of Directors may propose. Each person nominated for
election has agreed to serve if elected and management has no reason to believe
that any nominee will be unable to serve.
A plurality of the shares present in person or represented by proxy and
voting at the Annual Meeting is required to elect the nominees to the Board of
Directors.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF THE DIRECTOR NOMINEES.
DIRECTOR NOMINEES
The names of the director nominees and certain information about them are
set forth below:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION/ DIRECTOR
NAME AGE POSITION HELD WITH THE COMPANY SINCE
---- --- ------------------------------ --------
<S> <C> <C> <C>
Nathan Nifco 36 Chairman, Chief Executive Officer and Director 1998
Charles K. Kelly 51 Chairman of Canadian Public Affairs Consulting Group, Vista 1999
Strategic Management, Inc., North American Institute - Canada
and The Cascadia Institute; Director
Norman R. Miller 52 Attorney, Director 1999
Anna Stylianides 35 President, Owner of Uniglobe Vista Travel Ltd. and President,
kTravel Solutions Inc.
David C. Walker 53 President, founder of West-Can Consultants Ltd., Chairman of
Acsion Industries, a founding member of the Board of Directors
of the Canada Pension Plan Investment Board, and formerly a
member of Parliament from 1988-1997
</TABLE>
Page 2
<PAGE> 5
Nathan Nifco
Nathan Nifco founded Nifco Synergy Ltd. in 1991. In September 1998, Mr.
Nifco incorporated Nifco Investments Ltd. for the purposes of holding all
outstanding shares of Nifco Synergy Ltd. In December 1998, Nifco Investments
Ltd. and all of its subsidiaries were acquired by the Company (formerly Innovest
Capital Sources Corporation). In connection with the transaction, Mr. Nifco
obtained control of the Company. Mr. Nifco served as a member of the Canadian
Blue Ribbon Panel for Smart Communities (1991 to 1999), and currently serves as
a member of the Canadian National Selection Panel for Smart Communities (1999 -
present). Mr. Nifco was nominated for the British Columbia Entrepreneur of the
Year award in 1999. Mr. Nifco received his B.Sc. in computer science from the
Monterrey Institute of Technology in Mexico City (1986); an M.Sc. from the
Rosenbluth Foundation in artificial intelligence, also in Mexico City (1988); an
MBA with a concentration in International Business Management from Asia Pacific
International University (1994); and a diploma in executive leadership and
management from the Sloan School of Management, Massachusetts Institute of
Technology (1992). Mr. Nifco is currently taking Professional Development
courses at the John F. Kennedy School of Government at Harvard University.
Charles K. Kelly
Charles Kelly has been the Chairman and Chief Executive Officer of Vista
Strategic Management, Inc. (1990-Present), Chairman of the Canadian Public
Affairs Consulting Group, Inc. (1978-Present) and the Chairman of Resortport
Development Corporation Ltd. (Present). Mr. Kelly has served as the Chairman of
two not-for-profit public policy organizations: The Cascadia Institute and North
American Institute-Canada since 1991 and 1994, respectively. Mr. Kelly received
his B.A. degree from Queen's University in 1971.
Norman R. Miller
Norman R. Miller is a founding partner of Wolin, Ridley & Miller LLP, a law
firm based in Dallas, Texas. Mr. Miller has practiced corporate and securities
law for more than 25 years. Mr. Miller received his J.D. from Harvard Law School
in 1973 and his B.A. degree, with distinction, from Northwestern University in
1970.
Anna Stylianides
In October 1997, Anna Stylianides purchased Uniglobe Vista Travel Ltd.
("Uniglobe Vista"), a travel agency in Vancouver, British Columbia, and serves
as its President. In addition Ms. Stylianides is President of kTravel Solutions
Inc., which was formed to provide domain expertise to the Company. See "Certain
Transactions." In 1992, Ms. Stylianides was named special counsel to Investec
Merchant Bank Ltd., a major investment bank in South Africa and from 1992 to
1997 was a member of its corporate finance division where she was involved in
multi-million dollar international transactions assisting her clients with tax
structuring, acquisitions and securities offerings. Ms. Stylianides served on
the Bank's Risk Management Committee and Credit Committee. Ms. Stylianides
graduated from the University of the Witwatersrand in Johannesburg, South Africa
with a post graduate law degree in 1989 and obtained her B.A. degree in 1986.
David C. Walker
Dr. David Walker is the President and founder of West-Can Consultants Ltd.
(1978 - Present), Chairman of Acsion Industries (2000-Present), and a founding
member of the Board of Directors of the Canada Pension Plan Investment Board.
Dr. Walker served as a Member of Parliament from 1988-1997. During that time, he
served from 1993-1996 as Parliamentary Secretary to the Minister of Finance
after which he became Chair of the House of Commons Industry Committee. From
1974-1988, Dr. Walker was a Professor of Political Science at the University of
Winnipeg. Currently, Dr. Walker serves on the Board of Directors of St. Boniface
Hospital, the Manitoba Theatre Center, the Canada-U.S. Fulbright Program and the
Carleton University's Arthur Kroeger College of Public Affairs Advisory
Committee. In December of 1998, Dr. Walker was appointed Honorary Consul General
for the Republic of Korea.
Directors are elected for a term of one year and serve until their
successors are duly elected and qualified.
Page 3
<PAGE> 6
PROPOSAL 2
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has approved the selection of Moss Adams LLP,
independent certified public accountants, as the Company's auditors for the
fiscal year ending September 30, 2000, and has directed that management submit
the selection of auditors for ratification by the shareholders at the Annual
Meeting.
Shareholder ratification of the selection of Moss Adams LLP as the
Company's auditors is not required by the Company's Bylaws. However, the Board
is submitting the selection of Moss Adams LLP to the shareholders for
ratification as a matter of corporate policy. If the shareholders fail to ratify
the selection, the Board will reconsider whether or not to retain that firm.
Even if the selection is ratified, the Board in its discretion may direct the
appointment of different auditors at any time during the year if they determine
that such a change would be in the best interests of the Company and its
shareholders.
The affirmative vote of the holders of a majority of the shares present, in
person or represented by proxy, and voting at the Annual Meeting will be
required to ratify the selection of Moss Adams LLP as the Company's auditors for
the fiscal year ending September 30, 2000.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 2.
PROPOSAL 3
APPROVAL OF INCREASE IN THE NUMBER
OF SHARES SUBJECT TO OPTIONS
UNDER THE COMPANY'S 1999 STOCK
INCENTIVE COMPENSATION PLAN
TO 4,000,000
The Company's 1999 Stock Incentive Compensation Plan (the "Plan")
authorized 550,000 shares of Common Stock subject to options, which have been
granted under the Plan. At the recommendation of the Compensation Committee, the
Board of Directors has approved an increase in the number of shares subject to
options under the Plan to 4,000,000 shares. This amendment to the Plan will
enable the Company to attract and retain its employees, directors, officers and
consultants.
The affirmative vote of the holders of the majority of the shares present,
in person or represented by proxy, and voting at the Annual Meeting will be
required for the approval of an increase in the maximum number of shares subject
to options under the Plan to 4,000,000 shares.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 3.
BOARD COMMITTEES AND MEETINGS
During the fiscal year ended September 30, 1999, the Board of Directors had
three meetings. Each director attended 100% of the meetings of the Board of
Directors held during the period for which he was a Director. The Board's Audit
Committee held two telephone conference meetings during the calendar year 1999,
and the Compensation Committee did not hold any meetings during the fiscal year
ended September 30, 1999 or for the calendar year 1999.
Audit Committee. The Committee meets with the Company's auditors to review
the results of the annual audit and discuss the financial statements of the
Company. The Committee currently consists of two directors, Norman R. Miller
(Chairman) and Charles K. Kelly.
Page 4
<PAGE> 7
Compensation Committee. The Committee considers and makes recommendations
concerning salaries and incentive compensation awards; stock options to
employees and consultants under the Company's stock option plans; determines
compensation levels; and performs such other functions regarding compensation as
the Board may delegate. The Committee currently consists of two directors,
Charles K. Kelly (Chairman) and Norman R. Miller.
COMPENSATION OF DIRECTORS
The members of the Board of Directors of the Company do not receive cash
compensation for their services as directors but are reimbursed for their
reasonable expenses incurred in connection with attendance at meetings of the
Board, pursuant to Company policy.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors is composed of
non-employee directors named below. The Committee considers and approves the
salaries and bonuses of the executive officers and key employees, reviews and
approves incentive compensation plans for executive officers and key employees,
administers the Company's stock option plan and approves stock option grants.
PHILOSOPHY
The compensation philosophy of the Company is to develop and implement
policies that will encourage and reward outstanding financial performance, and
thereby increase shareholder value. The Company believes stock ownership by
employees strengthens the mutual interest of the Company and its shareholders,
and therefore, it has implemented an incentive stock option plan for its
officers and key employees. The Company has valued and rewarded sustained
performance and has designed its compensation programs to achieve this goal.
Maintaining competitive compensation levels in order to attract and retain
executives who bring valued experience and skills to the Company is a
fundamental consideration within the overall compensation philosophy.
COMPENSATION STRUCTURE
The annual compensation of the executive officers consists of an annual
salary and participation in a cash bonus plan based on sales and earnings in
relation to predetermined targets approved by the Committee. Discretionary cash
bonuses will be considered for executive officers based on performance in
relation to other objectives.
Long-term compensation of executive officers consists of options granted
under an incentive stock option plan in which executive officers and key
employees participate. The options are granted periodically to reward sustained
performance, to motivate officers and key employees to continue to build
shareholder value, and to increase employee stock ownership.
In setting the salary and stock option grants to the Company's executive
officers and key employees, the Committee considers the Company's degree of
success in achieving the Company's goals and objectives and the performance of
its executive officers and key employees.
Charles K. Kelly - Chairman Norman R. Miller
Page 5
<PAGE> 8
MANAGEMENT CONSULTING AND EMPLOYMENT AGREEMENTS
The Company has management consulting and employment agreements with the
executive officers and key employees named below:
<TABLE>
<CAPTION>
ANNUAL
NAME DATE OF AGREEMENT COMPENSATION EXPIRATION DATE
---- ----------------- ------------ ---------------
<S> <C> <C> <C>
Nathan Nifco (Nifco Investment Ltd.)(1) November 30, 1998 $ 145,706 2003
Darryl Cardey September 1, 1999 $ 72,853 90-day notice
Carol Beaul (2) January 1, 1996 $ 55,633 Open
</TABLE>
----------
* All figures are shown in U.S. dollars.
(1) In addition, it is entitled to a bonus, to be determined at the discretion
of the Board of Directors, which shall not be less than ten (10%) percent
of annual compensation.
(2) Ms. Beaul is President of Intelli Trade, Inc.
EXECUTIVE COMPENSATION
The following table shows compensation awarded or paid to, or earned by the
Company's Chief Executive Officer ("Named Executive Officer") for the fiscal
year ended September 30, 1999. The Company had no other executive officers whose
compensation exceeded $100,000 for such year.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
AWARDS
------
NAME AND OTHER SECURITIES
PRINCIPAL ANNUAL RESTRICTED UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION STOCK AWARD OPTIONS COMPENSATION
-------- ---- ------- ----- ------------ ----------- ---------- ------------
($) ($)
<S> <C> <C> <C> <C> <C> <C> <C>
Nathan Nifco, 1998 57,951 -0- $ 92,049(1) -0- -0- -0-
Chief Executive 1999 109,280 -0- 142,395 -0- 200,000 -0-
Officer, Chairman
and Director
</TABLE>
----------
* All figures are shown in U.S. dollars.
(1) Nathan Nifco received other compensation in 1998 in the amount of $92,049,
which was earned but not paid in fiscal 1997.
(2) Compensation was paid pursuant to a management consulting agreement with
the Company.
Page 6
<PAGE> 9
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
AT ASSUMED
ANNUAL RATES ALTERNATE
OF STOCK PRICE TO (f) AND
APPRECIATION (g): GRANT
INDIVIDUAL GRANTS FOR OPTION TERM DATE VALUE
------------------------------------------------------------------------------------ ---------------- ----------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS/ EXERCISE OR GRANT DATE
NAME UNDERLYING SARS GRANTED BASE PRICE EXPIRATION 5% ($) 10% ($) PRESENT
OPTIONS/SARS TO EMPLOYEES ($/Sh) DATE VALUE $
GRANTED (#) IN FISCAL YEAR
(a) (b) (c) (d) (e) (f) (g) (f)
------------------ ------------ --------------- ----------- ----------------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Nathan Nifco(1) 200,000 23% 5.50 June 22, 2004 ....... ...... 0.71
Michael Forster(1) 150,000 17.2% 5.50 August 1, 2004 ....... ...... 0.71
Darryl Cardey(1) 100,000 11.5% 5.50 September 1, 2004 ....... ...... 0.71
Sokhie Puar(1) 100,000 11.5% 5.50 June 22, 2004 ....... ...... 0.71
Carol Beaul 100,000 11.5% 5.50 June 22, 2004 ....... ...... 0.71
Peter Rive 40,000 .05% 5.50 June 22, 2004 ....... ...... 0.71
-------------------- --------------- --------------- ------------- ------------------- --------- -------- ------------
</TABLE>
(1) The individuals entered into a management consulting agreements with the
Company and received Non-Qualified Stock Options.
* Total number of options granted to employees and directors during fiscal
year 1999 was 929,000.
* We use the Black-Scholes option-pricing model to compute estimated fair
value, based on the following assumptions:
<TABLE>
<CAPTION>
1999
----
<S> <C>
Risk free interest rate 6.0%
Dividend yield rate -0-%
Price volatility 27.7%
Weighted average expected life of options 4.5 years
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
For the fiscal year ended September 30, 1999, there were no options
exercised by the Named Executive Officers.
Page 7
<PAGE> 10
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership
of the Company's Common Stock as of June 14, 2000 by: (i) each director and
nominee for director; (ii) each of the executive officers named in the Executive
Compensation table; (iii) all executive officers and directors of the Company as
a group; and (iv) all those known by the Company to be beneficial owners of more
than five percent of its Common Stock.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP (1)
------------------------------------
BENEFICIAL OWNER NUMBER OF SHARES PERCENT OF TOTAL
---------------- ---------------- ----------------
<S> <C> <C>
Nathan Nifco(3) ..................................... 3,003,070(2) 24.38%
Michael J. Forster(4) ..................................... 100,000 *
Dr. Gerald J. Wittenberg ..................................... 0 *
Charles K. Kelly ..................................... 0 *
Norman R. Miller ..................................... 0 *
Darryl Cardey ..................................... 50,000 *
Carol Beaul ..................................... 0 *
Anna Stylianides ..................................... 0 *
David C. Walker ..................................... 0 *
Dina Nifco(3) ..................................... 2,991,355(2) 24.29%
All executive officers and directors as a group (9 persons) 6,194,425 48.67%
</TABLE>
----------
* The number of beneficial shares owned includes options that the person has
the right to acquire beneficial ownership within a sixty day period.
** Less than one percent.
(1) This table is based upon information supplied by officers, directors and
principal shareholders and Schedules 13D and 13G filed with the Securities
and Exchange Commission ("SEC"). Unless otherwise indicated in the
footnotes to this table and subject to community property laws where
applicable, the Company believes that each of the shareholders named in
this table has sole voting and investment power with respect to the shares
indicated as beneficially owned. Applicable percentages are based on
12,312,962 shares of Common Stock outstanding on June 14, 2000.
(2) This does not include 5,575 shares of Common Stock beneficially owned by
the Nifco Family Trust, of which Nathan Nifco is the trustee and Dina Nifco
is a beneficiary.
(3) Dina Nifco is the wife of Nathan Nifco.
(4) Resigned as of July 1, 2000.
Page 8
<PAGE> 11
ADDITIONAL INFORMATION
MANAGEMENT
Executive officers are appointed by the Board of Directors and serve at its
discretion. Set forth below is information regarding executive officers of the
Company who are not directors:
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION/POSITION HELD WITH THE COMPANY
---- --- ---------------------------------------------------
<S> <C> <C>
Jack Michaan 40 Chief Technology Officer
Darryl Cardey 32 Chief Financial Officer
Carol Beaul 47 President, Intelli Trade, Inc., a wholly-owned subsidiary
</TABLE>
Jack Michaan, Chief Technology Officer
Jack Michaan has been Senior Software Engineer of the Company since
December 1999. From April 1999 to November 1999, Mr. Michaan was a Project
Engineer at Catouzer Electronic Publishing and Consulting, Inc. and Systems
Analyst with MacDonald Dettwiler and Associates. From 1990 to 1999, Mr. Michaan
was a Development Manager/Owner with Memory Systems, Ltd., in Sao Paulo, Brazil.
Mr. Michaan received his B.Sc., in Electronics Engineering in 1983 from the
University of Sao Paulo, Polytechnic School, Sao Paulo, Brazil.
Darryl Cardey, Chief Financial Officer
Darryl Cardey has been Chief Financial Officer of the Company since
September 1999. From 1996 to 1999 and 1994 to 1996, Mr. Cardey was the Chief
Financial Officer for Mercury Scheduling Systems Inc. and Kirkton Holdings Ltd.,
respectively. Mr. Cardey received his B. Comm. degree (equivalent to B.S. degree
in Finance) from the University of British Columbia in 1990 and became a
Chartered Accountant in 1993.
Carol Beaul, President, Intelli Trade, Inc.
Carol Beaul has served as the President of Intelli Trade since 1994. She
has been a member of the board of directors of the Canadian Industrial
Transportation League since 1995. Ms. Beaul received her B.A. degree from
Windsor University in 1975.
There are no family relationships among any of the Company's directors,
officers or key employees.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors and executive
officers, and persons who own more than ten percent of a registered class of our
equity securities, to file initial reports of ownership and reports of changes
in ownership of Common Stock and the Company's other equity securities with the
SEC. Officers, directors and greater than ten percent (10%) shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
Page 9
<PAGE> 12
To our knowledge, the following table sets forth the directors, officers
and beneficial owners of more than ten percent of any class of the Company's
equity securities registered pursuant to Section 12 of the Exchange Act that
failed to file on a timely basis:
<TABLE>
<CAPTION>
NO. OF TRANSACTIONS
INDIVIDUAL NO. OF LATE REPORTS NOT REPORTED TIMELY
---------- ------------------- -------------------
<S> <C> <C>
Carol Beaul 2 1
Darryl Cardey 1 1
Michael Forster 1 1
Lionel Prins 1 1
Charles K. Kelly 2 2
Nathan Nifco 1 1
Sokhie Puar 2 2
Gerald J. Wittenberg 1 1
</TABLE>
The number of late reports and transactions recorded above were related to
appointments of directors and the issuance of stock options. There were no
failures to file the required form.
CERTAIN TRANSACTIONS
The Company is affiliated through common ownership with Tradespace
Technologies Corporation ("Tradespace"), PMG Project Management Groupware Inc.
("PMG") and Synergy Strategy Inc. ("Synergy Strategy"). Tradespace is a Delaware
corporation operating in Vancouver, British Columbia. It develops software
applications related to electronic barter and trade. PMG is a British Columbia
corporation operating in Vancouver, British Columbia. It develops and markets
software applications to assist school districts with centralized purchasing and
inventory control. Synergy Strategy is a British Columbia corporation organized
to contract with a U.S. company to market financial information services
technology in Mexico.
Nathan Nifco, the Chairman, Chief Executive Officer and Director of the
Company owns approximately eighty percent (80%) interest in Tradespace, twenty
percent (20%) interest in PMG and fifteen percent (15%) interest in Synergy
Strategy, a company that is no longer in operation. Sales to these affiliates in
1998 and 1999 totaled $722,700 and $89,700, respectively.
On July 26, September 16 and November 16, 1999, the Company sold 200,000
shares of Common Stock for cash, at a price of $3.45 per share, to certain of
its Officers and Directors set forth below, in a private placement pursuant to
Rule 506, Regulation D, of the Securities Act:
<TABLE>
<CAPTION>
SHARES PRICE TOTAL
NAME TITLE(S) PURCHASED PER SHARE COST
---- -------- --------- --------- --------
<S> <C> <C> <C> <C>
Michael Forster President, Director 100,000 $3.45 $345,000
Sokhie Puar Vice President, Corporate Development 50,000 $3.45 $172,500
Darryl Cardey Chief Financial Officer 50,000 $3.45 $172,500
</TABLE>
In 1998, Nifco Synergy, Ltd., now known as SmartSources.com Technologies,
Inc., a wholly-owned subsidiary of the Company, entered into a non-interest
bearing, non-recourse note in the principal amount of $68,000 with Nathan Nifco
for additional working capital. Mr. Nifco is a Director, Officer and majority
shareholder of the Company. In fiscal year 1999, Mr. Nifco forgave $44,100 of
the related party debt. The balance on the note is $24,000.
In 1996, the Company acquired its Vancouver, Canada office space. There are
mortgage payables to a Canadian bank in the amount of $156,000, due in 2011, and
to two Canadian finance companies in the amount of $275,000, due in 2001 and
2002. The notes are guaranteed by Nathan Nifco, a Director, Officer and majority
shareholder of the Company.
Page 10
<PAGE> 13
Norman R. Miller serves on the Company's Board of Directors and is a
founding partner of Wolin, Ridley & Miller LLP, a law firm based in Dallas,
Texas. The firm acts as general counsel to the Company and is compensated for
its legal services.
Anna Stylianides, a director nominee, owns Uniglobe Vista Travel Ltd.
("Uniglobe Vista"), a travel agency. Sales made by Uniglobe Vista to
SmartSources.com, Inc. in fiscal year 1999 and through June 23, 2000 totaled
$12,427 and (Cdn) $270,789, respectively. Additionally, the Company entered into
a Master Relationship Agreement with kTravel Solutions Inc., on February 17,
2000. The Company has made no payments to kTravel Solutions Inc. to date.
RELATIONSHIP WITH INDEPENDENT AUDITORS
The Board of Directors selected Moss Adams LLP as independent accountants
to audit the financial statements of the Company for fiscal 2000. Moss Adams LLP
has served as the Company's independent accountants since 1998. A representative
of the firm is expected to be present at the Annual Meeting to answer questions
and will be afforded an opportunity to make a statement regarding its audit of
the Company's financial statements.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the Annual Meeting to
be held in April 2001 must be received by the Company at its principal executive
offices for inclusion in the proxy statement and form of proxy relating to that
meeting no later than October 28, 2000. If the Company does not receive notice
by January 12, 2001 of any other matter which a shareholder desires to bring
before the 2001 Annual Meeting which is not the subject of a proposal timely
submitted for inclusion in the proxy statement, then the proxies designated by
the Board of Directors for that meeting may vote in their discretion on any such
matter without mention of the matter in the Company's proxy statement of proxy
card for the meeting.
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters are properly brought
before the meeting, it is the intention of the persons named in the accompanying
proxy to vote on such matters in accordance with their best judgment.
By Order of the Board of Directors
/s/ NATHAN NIFCO
Nathan Nifco
Chairman and Chief Executive Officer
July 5, 2000
Page 11
<PAGE> 14
<TABLE>
<S> <C> <C>
SMARTSOURCES.COM, INC.
2030 MARINE DRIVE, SUITE 100
NORTH VANCOUVER, BRITISH COLUMBIA
CANADA V7P 1V7
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
FOR THE ANNUAL MEETING OF SHAREHOLDERS - JULY 21, 2000
The undersigned hereby constitutes and appoints Nathan Nifco and Norman R.
Miller, and each of them, his true and lawful agents and proxies with full power
of substitution in each, to represent the undersigned at the Annual Meeting of
Shareholders of SmartSources.com, Inc. to be held at the Hyatt Regency Hotel,
Plaza East Conference Room located at 655 Burrard Street, Vancouver, BC at 9:00
a.m., local time, and at any adjournment thereof, on all matters coming before
said meeting.
1. Election of Directors. Nominees: [ ] FOR all [ ] WITHHOLD vote [ ] FOR all nominees
nominees for all nominees except vote withheld for
those named below
Nathan Nifco
Charles K. Kelly
Norman R. Miller
Anna Stylianides
David C. Walker
(To withhold vote for any individual nominee, write the nominee's name below.)
2. Ratification of the appointment of Moss Adams LLP as independent auditors
of the Company for its fiscal year ending September 30, 2000.
[ ] FOR [ ] AGAINST [ ] WITHHELD
(Continued and to be signed on the other side.)
</TABLE>
<PAGE> 15
<TABLE>
<S> <C> <C> <C>
(Continued from other side.)
3. Approval of an increase in the number of shares subject to the Company's
Stock Incentive Compensation Plan to 4,000,000.
[ ] FOR [ ] AGAINST [ ] WITHHELD
4. In their discretion, upon such other business as may properly come before
the Annual Meeting.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. If no discretion is made, this proxy will
be voted "FOR" the election of the directors named in this proxy card and "FOR"
Proposal 2 and 3.
-----------------------------
-----------------------------
Signature of Shareholder(s)
Please sign your name exactly
as it appears hereon. Joint
owners must each sign. When
signing as attorney, executor,
administrator, trustee or
guardian, please give your
full title as it appears
thereon.
Date:_______________________'
PLEASE MARK, SIGN, DATE AND RETURN USING THE ENCLOSED ENVELOPE
</TABLE>
