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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 2002

OR

For the transition period from              to            

Commission File Number: 0-25565

quepasa.com, inc.

(Exact name of registrant as specified in its charter)

(602) 716-0100

Registrant’s telephone number, including area code:

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to section 12(g) of the Act:

Common Stock, par value $.001 per share

(Title of Class)

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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 219.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

The aggregate market value of the voting stock held by non-affiliates of the registrant was approximately $413,526, based upon the closing price of the common stock on the over-the-counter Pink Sheets, on April 30, 2003 of $.018 per share.

The aggregate market value of the voting stock held by non-affiliates of the registrant was approximately $643,932, based upon the closing price of the common stock on the over-the-counter Pink Sheets, on June 30, 2002 of $.04 per share.

The number of outstanding shares of the registrant’s common stock as of December 31, 2002 was 29,521,291 shares.

Documents incorporated by reference.

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CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K and the information incorporated by reference includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. In particular, we direct your attention to Item 1. Business and Item 6. Management’s Discussion and Analysis of Financial Condition and Results of Operation. We intend the forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in these sections. All statements regarding our expected financial position and operating results, our business strategy, our future business operations, and the outcome of any contingencies are forward-looking statements. These statements can sometimes be identified by our use of forward-looking words such as “may,” “believe,” “plan,” “will,” “anticipate,” “estimate,” “expect,” “intend” and other phrases of similar meaning. Known and unknown risks, uncertainties and other factors could cause the actual results to differ materially from those contemplated by the statements. The forward-looking information is based on various factors and was derived using numerous assumptions. Although we believe that our expectations expressed in these forward-looking statements are reasonable, we cannot promise that our expectations will turn out to be correct. Our actual results could be materially different from our expectations.

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PART I

Item 1. BUSINESS

Historical Background

We are a Nevada corporation, initially formed in June 1997 as a media company focused on the national and international Hispanic marketplace. Since 1998 we have operated a bilingual (Spanish/English) Internet portal and online community aimed at the United States Hispanic market and have spent over $50 million developing our brand. Our quepasa.com Web site provides users with information and content centered around the Spanish language and offers traditional portal services including search and pay for placement capabilities through Vayala Corporation, our wholly-owned subsidiary, e-mail and news in Spanish and English. The quepasa.com Web site is operated and managed by our wholly-owned Sonora, Mexico-based subsidiary, Quepasa.com de Mexico, S.A. de C.V.

On October 30, 2002 we acquired Vayala Corporation (“Vayala”), which was formerly controlled by Messrs. Peterson and Silberman, two of our directors. Through Vayala, we are developing information retrieval and management software technology products, along with pay for placement capabilities, which we intend to provide to a diverse clientele within the information technology sector including publishers of interactive, online content offerings, certain specialized online communities, online virtual product exchanges and online advertisers. We intend to initially target online content providers typically servicing 10,000 to 1,000,000 end-users, for our retrieval technologies. We intend to price our retrieval and information technology services at a price point below the price points currently being charged by larger information retrieval companies, such as Inktomi and Google.

quepasa.com

We have invested over $50 million in the development and promotion of the quepasa.com Web site, including (i) retaining the services of Gloria Estefan in 2000 to be our Web site and corporate spokeswoman, and (ii) developing marketing relationships with Sony Corporation of Japan and Gateway Computer Company. Partly as a result of our promotion, in 2000 the quepasa.com Web site was one of the most recognized online brand names to the Hispanic population. During 2002, we reactivated the Web site because we continue to believe in the power of the quepasa brand and the relevance of the statistical information set forth below.

Hispanic population growth and concentration.

According to the U.S. Census Bureau and published sources, the Hispanic population:

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We believe the relative youth of the Hispanic population will furnish growth opportunities for products and services that appeal to a younger market, such as that found on the Internet. In addition, 70% of all U.S. Hispanics live in 12 metropolitan areas, which makes U.S. Hispanics an attractive demographic group for advertisers, enabling them to cost effectively deliver messages to a highly targeted audience.

Increasing Hispanic purchasing power.

Total U.S. Hispanic purchasing power:

Continuing use of the Spanish-language by U.S. Hispanics.

According to published sources, approximately 90% of U.S. Hispanic adults speak Spanish at home. Moreover, U.S. Hispanics are expected to continue to speak Spanish because:

The quepasa.com Community

Our strategy has been to establish quepasa.com as a bilingual (Spanish/English) Internet portal and online community, offering our content to Hispanic Internet users primarily in the U.S. In November 1998, we launched the quepasa.com Web site that allowed individuals to quickly access content and features which appeal to Hispanic Internet users. Although our content is directed toward Spanish-speaking users, to better serve the U.S. Hispanic population, quepasa.com is also offered in English.

We completed an initial public offering of our securities in June 1999, raising approximately $55 million, having previously completed a number of private placements of our securities. Using the public proceeds, we rapidly expanded our operations in the latter part of 1999 through the first half of 2000. From the second half of 2000 through the first half of 2002, we reduced the products and content we offered in order to conserve our cash. In the first quarter of 2001 we sold all of our internal computer and server equipment and outsourced the hosting and administration of the quepasa.com Web site. At the end of 2000 and throughout 2001, we ceased marketing our Web site, terminated most of our co-branding and marketing arrangements with content providers and significantly reduced the services and content we provide. In the spring of 2002 our original founder acquired control of our Company and in the fall of 2002 we reorganized our Web site operations under our wholly owned Mexican subsidiary and relocated our facilities to Sonora, Mexico. We currently manage the

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quepasa.com Web site from a 3,500 square foot office facility where we employ approximately 20 individuals.

By relocating to Mexico and imposing stringent financial controls over our Web site operations, we have reduced our fixed operating expenses to approximately $35,000 per month. We believe that within the next 12 months we can generate sufficient revenue to offset these expenses.

Competition

The market for Internet products, services, advertising and commerce is intensely competitive, and we expect that competition will continue to intensify. We believe that the principal competitive factors in these markets are name recognition, distribution arrangements, functionality, performance, ease of use, the number of value-added services and features, and quality of support. Our primary competitors for the quepasa.com Web site are other companies providing portal and online community services, especially to the Spanish-language Internet users, such as Yahoo!Español, America Online Latin America and Terra Lycos.

In addition, a number of companies offering Internet products and services, including our direct competitors, recently began integrating multiple features within the products and services they offer to users. Integration of Internet products and services is occurring through development of competing products and through acquisitions of, or entering into joint ventures and/or licensing arrangements involving other, Internet companies and our competitors.

Many large media companies have developed or are developing Internet navigation services to become “gateway” sites for Web users. As these companies develop such portal or community sites, we could lose a substantial portion of our user traffic. Further, entities that sponsor or maintain high-traffic Web sites or that provide an initial point of entry for Internet viewers, such as the Regional Bell Operating Companies or Internet service providers, such as Microsoft and America Online, currently offer and can be expected to consider further development, acquisition or licensing of Internet search and navigation functions. These functions may be competitive with those that we offer.

Most of our existing competitors, as well as new competitors such as Spanish-language media companies, other portals, communities and Internet industry consolidators, have significantly greater financial, technical and marketing resources than we do. Many of our competitors offer Internet products and services that are superior to ours and achieve greater market acceptance. There can be no assurance that we will be able to compete successfully against current or future competitors or that competition will not have a material adverse affect on our business.

Our Vayala online search and retrieval subsidiary will compete with a number of information retrieval services, most of whom have operated in the market longer, and have greater financial resources and marketing relationships than we. These competitors include Google, Inktomi, Ask Jeeves, Convera and FindWhat.

The stored value debit card processing business is in its infancy, but we expect competition from a number of sources, including multinational banks, funds transfer companies and credit and debit card providers.

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Vayala

We are developing Vayala to offer (i) Internet search and retrieval capacities, and (ii) pay for placement capabilities. Our intended search and retrieval services represent a new business model in that we intend to offer these services to smaller end users (such as publishers of online content offerings and online communities) at rates substantially below those of our competitors. Moreover, by offering pay for placement capabilities, we believe we can attract advertisers to the Web sites of our search and retrieval customers while generating additional revenue for ourselves from the pay for placement advertisers. Using pay for placement software, which we intend to develop, when queried, our Vayala search engine will display a selection of Web sites related to that query. Our advertisers will be able to determine exactly where on Vayala’s search results their Web site link will appear for any given query through an open, automated bidding process. Advertisers will submit bids to us for the amount they will pay for each consumer who clicks through to their Web sites. Advertisers can change their bids at any time. The highest bidder receives the first Vayala search listing, with all other bidders listed in descending bid order. Consumers will be able to access Vayala’s search results on the Vayala Web site and on the Web sites or our search and retrieval customers.

We believe that Vayala’s search and retrieval software can be differentiated from existing information retrieval and management software for the following reasons:

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Notwithstanding the significant reduction in the market values of technology related companies and the substantial operating losses incurred by many of them, the information retrieval and management software sector of the information technology industry continues to grow at a substantial rate. According to IDC, information retrieval revenue exceeded $1.2 billion in 2000 and is forecast to continue its growth in 2001 and 2002. A September 2001 report from IDC stated that the information retrieval market would continue to grow despite the current downturn, although at a slower rate than in 2000.

We believe that the private label segment of the information retrieval market, which is still in the beginning of its anticipated growth curve, offers a model, which provides for continued revenue growth and profitability. A number of start-up retrieval software companies have been organized in the last few years, including Teoma, which commenced operations in June 2000 and had less than ten employees and no revenue when it was sold to Ask Jeeves for approximately $5 million. The emergence of companies such as Teoma, Wisenut and other new retrieval technologies illustrates the demand for more creative and robust information retrieval technologies.

We also believe that information retrieval companies which now offer retrieval resources target primarily the largest customers (often having over 1,000,000 end-users) and are too costly to be used by a more diverse clientele, which would otherwise offer retrieval services to their end-users. Vayala intends to fill this void by presenting a more competitive pricing structure consisting of less retrieval service sign up fees and inquiry charges to its customers, initially targeting providers of online content offerings and online communities with 10,000 to 1,000,000 users.

Employees

We currently employ approximately 20 individuals in Sonora, Mexico and six individuals, including our executive officers, in Phoenix, Arizona.

Risk Factors

Investors should consider the following risks before investing in our securities.

Under Prior Management We Incurred Substantial Operating Losses and Our Auditors Have Issued a “Going Concern” Audit Opinion.

As a result of our operations under prior management, the independent auditors’ reports on our consolidated financial statements as of December 31, 2001 and December 31, 2002, included an emphasis paragraph that we may be unable to continue as a going concern.

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We Failed to Execute Our Original Business Plan, are Not Currently Generating New Revenue and Expect Future Losses.

Under prior management we were not profitable and we failed to execute our original business plan. As a result, we incurred losses and experienced negative operating cash flow. As of December 31, 2002, we had an accumulated deficit of approximately $103.4 million, $101 million of which was incurred through December 31, 2001. Our prior operating history and the general downturn of the Internet market in which we operate our business makes predictions of our future results of operations difficult or impossible. While we are optimistic about our new business plan and our recent restructuring activities, we are not currently generating revenue nor can there be any assurance that we will generate revenue in the foreseeable future.

In 2000 and 2001 We Substantially Reduced Our Operations and Terminated Most of Our Employees.

Under prior management, between December 31, 2000 and December 31, 2001, we substantially reduced the extent and scope of our operations in order to conserve our cash. In this regard, we terminated most of our then strategic relationships with third-party content service providers, outsourced the hosting and administration of the quepasa.com Web site and sold most of our personal property. Although we have since revamped our operations, hired over 30 new employees and recommenced hosting the quepasa.com Web site at our facilities in Sonora, Mexico, we have not generated revenue from the Web site and cannot assure we will do so in the future.

Competition for Internet Users May Limit Traffic on, and the Value of, Our Website.

The market for Internet products and services and the market for Internet advertising and electronic commerce arrangements are extremely competitive, and we expect that competition will continue to intensify for the limited number of customers in our market. There are many companies that provide Web sites and online destinations targeted to Spanish-language Internet users. Competition for visitors and advertisers is intense and is expected to increase significantly in the future because there are no substantial barriers to entry in our market. We believe that the principal competitive factors in these markets are name recognition, distribution arrangements, functionality, performance, ease of use, the number of services and features provided and the quality of support. Our primary competitors are other companies providing portal or other online services, especially to Spanish-language Internet users such as StarMedia, Terra Lycos, El Sitio, and Yahoo! Español, America Online Latin America, MSN and Univision online. Most of our competitors, as well as a number of potential new competitors, have significantly greater financial, technical and marketing resources than we do. Our competitors may offer Internet products and services that are superior to ours or that achieve greater market acceptance. There can be no assurance that competition will not limit traffic on, and the value of, our Web site.

We May Face Liability for Information Content and Commerce-Related Activities.

Because materials may be downloaded by the services that we operate or facilitate and the materials may subsequently be distributed to others, we could face claims for errors, defamation, negligence, or copyright or trademark infringement based on the nature and content of such materials. Even to the extent that claims made against us do not result in liability, we may incur substantial costs in investigating and defending such claims.

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 liabilities that may be imposed. Any imposition of liability that is not covered by insurance or is in excess of insurance coverage could have a material adverse affect on our financial condition, results of operations and liquidity. In

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addition, the increased attention focused on liability issues as a result of these lawsuits and legislative proposals could impact the overall growth of Internet use.

There Can Be No Assurance That Vayala’s Information Retrieval Services Will Generate Revenue.

Vayala has not completed the development of its information retrieval services and has not generated any revenue to date. Revenue from Vayala’s information retrieval and management software technology is expected to result primarily from the number of end-user data retrieval requests processed by its software. Vayala’s future agreements with customers do not require them to direct end-users to its retrieval services. Accordingly, revenue from such services is highly dependent upon the willingness of customers to use the retrieval and related services Vayala provides, the ability of its customers to attract end-users to their online services, the volume of end-user inquiries that are processed by Vayala’s retrieval software, and the ability of customers to generate revenue from traffic through their Web site retrieval request pages. Vayala’s future customers (if any) may also use competing query and directory services to operate in combination with its services, which will reduce the number of queries available for Vayala to service and may erode revenue growth opportunities. The technological barriers for customers to implement additional services or to replace Vayala’s services are not substantial. The market for Internet retrieval services is maturing and many smaller and medium size portals are not profitable, suffer from declining revenue growth and have limited access to capital to fund operational needs. In order for Vayala to generate revenue from its information retrieval and software business, it will need to attract customers, develop and deliver new retrieval services, products and features to future customers and establish strategic relationships with its customers.

Competition to Provide Information Retrieval Services.

Vayala will compete with a number of companies who provide information retrieval services, most of which have operated retrieval services in the market for a longer period, are better known, have greater financial resources, have established marketing relationships with leading online services and advertisers, and have secured greater presence in distribution channels.

The Legal Environment in Which Vayala Operates is Uncertain and Claims Against It Could Cause Its Business to Suffer.

Vayala’s information retrieval services make copies of material available on the Internet and other networks and offer this material to end-users. This creates the potential for claims to be made against Vayala (either directly or through contractual indemnification provisions with customers) for defamation, negligence, copyright or trademark infringement, personal injury, invasion of privacy or under other legal theories based on the nature, content, copying, dissemination, collection or use of these materials. It is also possible that if any information provided through its retrieval services contains errors, third parties could make claims against Vayala for losses incurred in reliance on this information. Although Vayala expects to carry general liability insurance, its insurance may not cover potential claims of this type or be inadequate to protect Vayala from all liability that may be imposed.

Risks Associated With Internet Information Retrieval Services.

Vayala is required to provide information retrieval services in accordance with certain specifications as to the functionality and performance of the information retrieval results, the size of the Internet database maintained, the frequency of refreshing the retrieval query database, reliability of the service

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and retrieval response speeds. Failure of Vayala to perform in accordance with these specifications could result in the cancellation of customer contracts. Vayala expects it will be required to expand the capacity of its existing Phoenix data center or add additional data center space to adequately provide service. These activities require highly specialized personnel and involve many difficult installation, tuning and optimization tasks, and will require Vayala to expend substantial financial and management resources. Vayala could experience difficulties and delays in expanding and stabilizing the cluster of workstations in its existing data center. As a result, there can be no assurance that Vayala will be able to expand its infrastructure to meet any increased customer demand on a timely basis. Vayala houses its data centers at hosting facilities operated by independent third parties who take certain precautions to protect Vayala’s equipment against damage from fire, earthquakes, floods, power and telecommunications failures, sabotage, intentional acts of vandalism and similar events. Despite such precautions, the occurrence of a natural disaster, terrorist activities or other unanticipated problems at Vayala’s current and future data centers could result in interruptions in the search services provided by it. Such interruptions could result in reductions in, or terminations of, service provided to Vayala’s customers, which could have a material adverse affect on its business, financial condition and results of operations.

We Rely on Our Intellectual Property Rights and May be Limited by the Intellectual Property Rights of Others.

Our success and ability to compete are substantially dependent upon internally developed software technology, which we are developing in connection with the quepasa.com Web site, Vayala’s retrieval services and our recently organized debit card processing business. While we rely on copyright, trade secret and trademark law to protect our technology, we believe that factors such as the technological and creative skills of our personnel, new product developments, frequent product enhancements and reliable product maintenance are more essential to establishing a technology leadership position. There can be no assurance that others will not develop technologies that are similar or superior to our technology. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy or otherwise obtain and use our technology. Moreover, Vayala may be unable to develop the pay for placement portion of its search and retrieval business due to the existence of certain patents, which have been applied for by others who offer pay for placement search results to advertisers.

Risks Associated With New Versions of Software and New Products; Rapid Technological Change.

The markets for our quepasa.com Web site, our retrieval services and our debit card processing services are characterized by rapid technological change, frequent new product introductions, changes in customer demands and evolving industry standards. The introduction of products embodying new technologies and the emergence of new industry standards can render existing products obsolete and unmarketable. Our future success will depend upon our ability to address the increasingly sophisticated needs of our customers by developing and introducing, on a timely basis, enhancements to the software we use to operate our Web site, control our retrieval inquiries and process debit card transactions that keep pace with technological developments, emerging industry standards and customer requirements. There can be no assurance that we will be successful in developing and marketing enhancements to our software that respond to technological change, evolving industry standards or customer requirements.

Dependence on Key Personnel.

We depend upon the continued contributions of our executive officers. We do not have employment agreements with our executive officers and we do not carry key person life insurance on their lives.

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Need For Additional Capital; Uncertainty of Additional Financing.

We may need to raise additional funds through debt or equity financing in order to remain in business or to expand our operations. If additional funds are raised through the issuance of equity securities, the percentage ownership of our then current stockholders will be reduced and such equity securities may have rights, preferences or privileges senior to those of the holders of our common stock. There can be no assurance that additional financing will be available on terms favorable to us, or at all. If adequate funds are not available or are not available on acceptable terms, we will not be able to maintain our operations, and our business, operating results and financial condition could be materially adversely affected.

Our Stock Price is Highly Volatile.

In the past, our common stock has traded at volatile prices. We believe that our market price will continue to be subject to significant fluctuations due to various factors and events that may or may not be related to our performance. Our common stock is no longer traded on the Nasdaq National Market but is traded on the Pink Sheets. This makes it more difficult for investors to buy or sell our common stock.

Item 2. PROPERTIES

We lease 3,300 square feet of office space for our corporate headquarters at 410 N. 44th Street, Suite 450, Phoenix, AZ 85008, under a one-year lease, which expires July 2003, for $4,700 per month. We also lease 3,500 square feet of office space in Sonora, Mexico, from which we operate our quepasa.com Web site, under a two-year lease, which expires May 2004, for $2,000 per month. We locate the servers necessary to provide our Vayala search and retrieval services at the Level 3 Data Center in Phoenix, Arizona. We believe that our facilities are adequate for our current needs and that additional suitable space is available if required.

Item 3. LEGAL PROCEEDINGS

In April 2003, Merrill Communications, Inc. brought an action against us for printing fees in the amount of approximately $225,000 plus interest and costs (Merrill Communications, Inc. vs. quepasa.com, inc. filed in the Arizona Superior Court, civil action no. CV 2003-090706). We have denied that we are liable for the printing bill and plan to defend the action.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the quarter ended December 31, 2002.

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PART II

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

As of March 1, 2003, there were approximately 9,000 holders of our common stock. Our common stock traded on the Nasdaq National Market under the symbol “PASA” from June 24, 1999 until January 18, 2001. Subsequently, our common stock has traded first on the Electronic Bulletin Board and then the Pink Sheets, also under the symbol “PASA.”

The following table sets forth the high and low closing prices of our common stock for the calendar years indicated below.

Dividend Policy

We have never declared or paid any dividends on our common stock. We do not anticipate paying any cash dividends in the foreseeable future.

Sale of Unregistered Securities

Since December 31, 1997, we issued unregistered securities as set forth below:

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No underwriters were used in connection with these sales and issuances except for the issuance of the common stock in our public offering in 9. above. The sales and issuances of these securities, with the exception of those in 9. above, were exempt from registration under either (a) Rule 701 of the Securities Act of 1933 promulgated thereunder on the basis that these securities were offered and sold either pursuant to a written compensatory benefit plan or pursuant to written contracts relating to consideration, as provided by Rule 701, or (b) Section 4(2) of the Securities Act of 1933 on the basis that the transaction did not involve a public offering.

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Item 6. SELECTED FINANCIAL DATA

The following is a summary of selected financial data of quepasa.com as of and for each of the years in the five-year period ended December 31, 2002, 2001, 2000, 1999 and 1998. This data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our consolidated financial statements and the notes thereto appearing elsewhere in this document.