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Previous: WHITMAN CORP/NEW/, S-8 POS, EX-23.1, 2000-12-21 |
Next: PLANET RESOURCES INC /DE/, SB-2/A, EX-1, 2000-12-21 |
Delaware 1041 76-0600966
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
A.W. Dugan, President and CEO
Planet Resources, Inc. A.W. Dugan
1415 Louisiana, Suite 3100 1415 Louisiana, Suite 3100
Houston, Texas 77002 Houston, Texas 77002
(713) 658-1142 (713) 658-1142
(Address, including zip code, and telephone number (Name, address, including zip code, and telephone
including area code, of registrant's principal Executive number including area code, of agent for service)
offices)
Copies to:
Robert L. Sonfield, Jr., Esq.
Sonfield and Sonfield
770 S. Post Oak Lane
Houston, Texas 77056
(713) 877-8333
Facsimile: (713) 877-1547
Approximate date of commencement of As soon as practicable on
proposed sale to the public: or after the registration
statement becomes effective.
If this form is filed to register additional securities for an offering under Rule
462(b) under the Securities Act, please 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 under 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 under Rule 462(d) under the Securities
Act, check the following box and list the Securities Act registration number of the earlier
effective registration statement for the same offering. [ ]..................................
If any securities being registered on this form are to be offered on a delayed or
continuous basis under Rule 415 under the Securities Act of 1933, check the following box:
[x]...........................................................................................
If delivery of the prospectus is expected to be made under Rule 434, please check the
following box. [ ]
Calculation of Registration Fee
Title of Each Class of Number of Proposed Maximum Proposed Maximum
Securities Shares Being Offering Price Per Aggregate Offering Amount of
Being Registered Registered Share Price Registration Fee (1)
------------------------- ---------------------- --------------------- ------------------------ ----------------------
------------------------- ---------------------- --------------------- ------------------------ ----------------------
Common Stock 2,000,000 $.0046(1) $9,197.00 $2.76
------------------------- ---------------------- --------------------- ------------------------ ----------------------
(1) Estimated solely for purposes of calculating the registration fee under Rule 457 based
upon the book value of the common stock as of June 30, 2000.
The registrant amends this registration statement on the 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 become effective under
Section 8(a) of the Securities Act of 1933 or until this registration statement shall become
effective on the date as the Commission acting under said Section 8(a), may determine.
PROSPECTUS SUMMARY...........................................................................1 ------------------ RISK FACTORS.................................................................................2 ------------ CAUTIONARY STATEMENTS........................................................................5 --------------------- USE OF PROCEEDS..............................................................................6 --------------- CAPITALIZATION...............................................................................6 -------------- THE DISTRIBUTION.............................................................................7 ---------------- DIVIDEND POLICY..............................................................................9 --------------- MANAGEMENT'S PLAN OF OPERATION..............................................................10 ------------------------------ BUSINESS....................................................................................11 -------- MANAGEMENT..................................................................................16 ---------- PRINCIPAL SHAREHOLDERS OF PLANET............................................................20 -------------------------------- CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..............................................21 ---------------------------------------------- DESCRIPTION PLANET CAPITAL STOCK............................................................22 -------------------------------- SHARES ELIGIBLE FOR FUTURE SALE.............................................................24 ------------------------------- LEGAL MATTERS...............................................................................24 ------------- EXPERTS.....................................................................................24 ------- WHERE YOU CAN FIND MORE INFORMATION.........................................................25 ----------------------------------- INDEX TO FINANCIAL STATEMENTS..............................................................F-1 -----------------------------------
Type of security offered.............................Common stock, $0.001 par value per share.
Number of outstanding shares.........................100,000.(1)
Common stock outstanding
after the offering..............................2,000,000 shares.
(1) Currently 100,000 shares of our common stock are held by Internet Law. With this
distribution, those shares will be cancelled resulting in 2,000,000 shares of our common
stock being outstanding after this offering.
Because we will be entirely dependent on finding a third party mining partner to exploit and develop our mineral leases, we will have little control over the development process. Consequently, we may not realize the revenues and corresponding earnings to the extent we may have otherwise received had we had greater control of the development process.
We currently do not have the financial resources to independently develop our mining properties, nor do we anticipate having such financial resources in the future. Therefore, the success in mining our mineral assets will we will be entirely dependent upon the financial resources and operations expertise of third parties with whom we may contract, partner or enter into a joint venture arrangement.If we are unable to attract a joint venture partner for the development and exploitation of our mineral assets, we will have minimal operations with no source of revenues and may be considered a “shell” company.
Generally, a company is considered a "shell" company if does not pursue nor has the financial capacity to pursue a business plan or purpose. If we are unable to identify and negotiate an arrangement with a joint venture partner, we will have little prospect for expanding our operations and generating revenues and earnings, and thus, could be considered a "shell" company.We are obligated to provide certain indemnifications to Internet Law, which, if we are required to fulfill, could make it difficult for us to remain financially viable.
The distribution agreement and the indemnification agreement, which is part of the distribution agreement, indemnify Internet Law with respect to any losses, damages, claims and liabilities, financial or otherwise, which may arise from its ownership of the mineral properties before the distribution. Should such a claim or claims be made, we would have to incur the liability of defending such claims on behalf of Internet Law.Because the volatility of metals prices may adversely affect our ability to attract a joint venture mining partner for development and exploration efforts, we may not realize any potential revenues and subsequent potential earnings from our mineral assets, which, consequently, may have a negative impact on the value of your shares.
Our ability to attract a joint venture partner for the mining of our properties is directly related to the prices of the metals that may be found in our property. If prices for these metals decline, it may not be economically feasible for a mining company to develop commercial production on our property. Consequently, we may not realize any economic benefit derived from such development and the value of your shares could be greatly affected. The mineral and metal exploration of our property may not be successful which could lead to our inability to meet our financial obligations at that time. Mineral and metal exploration, particularly for gold and silver, is highly speculative. It involves many risks and is often non-productive. Even if valuable deposits of minerals or metals are found on our property, it may be several years before production is possible. During that time, it may become economically infeasible to produce those minerals or metals. As a result of these costs and uncertainties, we may not be able to realize any revenues from the development of our property for some time, if at all, while having incurred significant expenses in the exploration process. Should this occur, it is unlikely that we will be able to meet our financial obligations at that time.Our potential joint venture mining company partners may be adversely affected by risks and hazards associated with the mining industry, which may limit their ability to exploit our mineral assets. Should any such event occur, to the extent that any royalty payments due us are delayed or eliminated, it may become difficult for us to meet our financial obligations at that time.
Mining companies are subject to a number of risks and hazards including: o environmental hazards; o industrial accidents; o labor disputes; o unusual or unexpected geologic formations; o cave-ins; o rockbursts; and o flooding and periodic interruptions due to inclement or hazardous weather conditions. Such risks could result in: o damage to or destruction of mineral properties or producing facilities; o personal injury; o environmental damage; o delays in mining; o monetary losses; and o legal liability. Retained control of Planet by our principal stockholder will reduce the influence of other stockholders and may lower the trading price of our stock. Upon completion of this distribution, Mr. A.W. Dugan, our chairman, chief executive officer and president will beneficially own approximately 79.92% of our fully diluted outstanding common stock. Accordingly, Mr. Dugan will be able to approve major corporate transactions including those involving amendments to our Certificate of Incorporation or By-laws. As a result, Mr. Dugan will have the ability to control all matters submitted to stockholders for approval, including the election and removal of directors, the consideration of any merger, consolidation or sale of all or substantially all of our assets, and control of our management and affairs through the elections of all of our directors. Such concentration of ownership may have the effect of delaying, deferring or preventing a change in control of our company, impeding a merger, consolidation, takeover or other business combination involving us or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could have an adverse effect on the market price of the our common stock.The loss of services of Mr. Dugan would have a detrimental effect on Planet, as he is currently our only executive with significant natural resource executive management operations experience, as well as currently, our single source of financial support.
Our current and future operations are dependent on the efforts, ability and experience of A.W. Dugan. The loss of his services could have a material adverse impact on our future results of operations. In addition to Mr. Dugan's management expertise, he will provide, at no cost, the office space and administrative support necessary to maintain our mineral properties until such time as we can provide these services for ourselves. Mr. Dugan will also provide us with the necessary working capital over the next twelve months to support our operations, including the costs associated with the identification of a mining company partner to exploit our mineral assets. This may be funded through the exercise of options that Mr. Dugan owns to purchase common stock.Because there is no trading market for our common stock, you may have difficulty valuing and selling your shares.
There is no existing trading market for our common stock to be received by you in the distribution and there can be no assurance as to the establishment of an active trading market. Our common stock does not now, and may never qualify for listing on the Nasdaq SmallCap Market (sm) or any securities exchange. We intend to qualify our common stock for quotation on the Over-The-Counter Bulletin Board ("OTCBB") under the trading symbol "PLRS", however, there is no assurance that this will be achieved. In the absence of an over-the-counter market in our common stock, or listing on an exchange, holders of our common stock will be unable to sell their shares through normal brokerage channels and may be unable to determine the value of their securities accurately. Consequently, selling our shares will probably be more difficult because, for example, smaller quantities of shares could be bought or sold, and transactions could be delayed.
Actual as of Pro forma
June 30, 2000 As Adjusted
------------------ ------------------
------------------ ------------------
Stockholder's Equity:
Preferred stock, par value $.001; 10,000 shares $ -- $ --
authorized, none issued or outstanding
Common stock, par value $.001; 2,000,000 shares authorized, 100 2,000
100,000 actual and 2,000,000 pro forma shares issued and
outstanding
Additional paid-in capital 36,175 34,275
Retained earnings (deficit) (27,078) (27,078)
------------------ ------------------
------------------ ------------------
Total stockholder's equity $9,197 $9,197
================== ==================
o An investigation of mining companies, which are currently operating in the general area of our properties. This investigation may include the use of industry databases, as well as the investigation of governmental records and industry experts. We do not expect this cost to exceed $2,500.
o Initial discussions with those potential mining company partners as determined from our investigation. We do not expect this cost to exceed $5,000.
o Contract negotiations with an interested mining partner. We do not expect the costs, legal or otherwise, to exceed $10,000.
Though no formal agreement exists between Mr. Dugan, and us Mr. Dugan has agreed to fund the costs of such plan to the extent that these costs do not exceed $30,000. If we are able to contract with a mining company, we anticipate that all expenses for exploration and exploitation of our mineral properties will be borne by the mining company and not by us. In return, we would receive a royalty fee based on a percentage of the proceeds from the sale of those minerals the mining company may recover from our properties. We are unable to make any guarantees that: o we will be able to identify and negotiate an arrangement with a mining company within the next twelve months,o our mining properties will be found attractive to a prospective mining company partner, or o if mined, our properties will produce any saleable minerals or metals that would result in Planet
receiving any income. While we believe that such opportunities can be investigated, reviewed and consummated for minimal costs, we cannot give any assurances that related costs will be minimal. We have no employees. Our officers and directors serve our company without receiving a salary. However, from time to time as appropriate, they may receive expense reimbursements and stock options. Though we have no formal written agreement in place, our office space and administrative support is provided by Mr. Dugan. Other than those costs and expenses previously discussed, we do not plan any significant expenditures for new projects of any sort within the next twelve months.(1) shares of common stock of Allied being converted into the right to receive one share of common stock of Planet Resources for each five shares of common stock of Allied as of the date of reincorporation,
(2) elimination of the right to cumulative voting for the election of directors, (3) persons serving as officers and directors of Allied continuing to serve in their respective capacities, and (4) the Articles of Incorporation of Allied being changed to: a. reduce the par value of the common stock from $.01 to $.001, b. reduce the number of shares of common stock the Company is authorized to issue from 50,000,000 to 10,000,000, and c. authorize the Company to issue 1,000,000 preferred shares with a par value of $.001 per share. Between 1992 and the date of its reverse acquisition by National Law in March of 1999, the company had no operations. However, our company maintained title to its mining properties and related assets. In January 1999, Planet Resources, Inc. agreed in principal to acquire National Law and change its name to Internet Law Library, Inc.o The Internet is an increasingly significant global medium for online commerce. According to Forrester Research, the total value of goods and services purchased over the Web was $43 billion in 1998 and is expected to increase to $1.3 trillion in 2003.
o Industry sources estimate the market for on-line legal information was $1.7 billion in 1998, and is projected to grow to $2.7 billion by 2002.
o With the growth in litigation and the increase in the number of lawyers, Internet Law believes the projected increase in the market for on-line legal information is reasonable. From 1984 to 1997, civil lawsuits increased 28% and criminal cases increased 55%. The number of lawyers in the United States as of December 1998 was approximately 980,000 and is expected to grow to approximately 1.06 million by 2002.
o The increased popularity of the Internet, both domestically and internationally, and the movement towards conservation of natural resources by using less paper, further strengthens this belief.
Internet Law's industry competitors include such as, LEXIS/NEXIS(R), which is owned by Reed-Elsevier, and West Group, a division of The Thomson Corporation. As a result of these factors, among others, as well as the successful negotiation of a merger agreement, Planet Resources, Inc. elected to merge with National Law in March 1999, in an attempt to enhance shareholder value. Internet Law Library, Inc. operates an Internet portal that provides subscription access to databases used for legal research through its wholly owned, operating subsidiary, National Law Library, Inc. The content of these databases consists of federal and state case law, statutory law and regulatory materials that can be useful to individual lawyers, judges, law firms, corporate legal departments, government agencies, businesses, and individuals involved in litigation, legislative efforts, and corporate legal planning. Interfacing with these databases is a software retrieval engine that is also owned and operated by National Law. Customers using the Internet portal pay subscription fees to National Law for monthly or longer-term service. National Law, a Texas corporation, was formed in November 1998 for the purpose of developing and marketing an Internet portal to be used for legal research. Following its formation, National Law's then sole stockholder, the current President, Chief Executive Officer and Chairman of Internet Law, contributed to National Law all of his rights and interests in certain retrieval and database software and database content valued at $934,000 and $1,096,000, respectively, in exchange for 15,152,500 shares of common stock of National Law. Commercial operations began in January 1999. Under the terms of the agreement and plan of reorganization, dated March 25, 1999, including subsequent amendments, among the Company, National Law and the stockholders of National Law, and effective as of March 30, 1999, each share of National Law common stock was exchanged for one share of Planet Resources' unregistered common stock. In contemplation of this transaction, Planet Resources, Inc.'s original stockholders agreed to a one-for-two reverse stock split, which resulted in 2,000,000 shares of Internet Law's common stock being outstanding immediately prior to the merger. Following the transaction, the stockholders voted to change the name of Planet Resources, Inc. to "Internet Law Library, Inc." As a result of these transactions, former National Law stockholders currently hold 18,000,000 shares of Internet Law's unregistered common stock and Internet Law's original stockholders currently hold 2,000,000 shares of Internet Law's common stock. Under the terms of the agreement, the majority of Internet Law's original board of directors resigned. They were replaced with directors elected by the new stockholders of Internet Law.
Director's
Remaining Term
Name Age Position with the Company Class (In Years)
---- --- ------------------------- ----------
A.W. Dugan 72 Chairman of the Board of III 2
Directors, Chief
Executive Officer and
President
Jacque N. York 54 Secretary and Director II 1
Michael K. Branstetter 47 Director I 0*
*As per our articles of incorporation, each director whose term expires at each succeeding annual
stockholders meeting will continue to serve until such time as his/her successor has been duly elected and has
been qualified, unless his/her position on the board of directors has been abolished by action taken to reduce
the size of the board of directors prior to the annual stockholders meeting.
A.W. Dugan, chairman of the board, chief executive officer and president, organized Planet as the promoter,
as that term is defined in the Securities Act of 1933, and joined the board in 1999. Mr. Dugan also served as
the President and Chief Executive Officer of Planet Resources, Inc., the predecessor corporation of Internet
Law. Mr. Dugan's principal occupation and five year business history is as oil and gas operator.
For the past five years, Mr. Dugan has been the chief executive officer of Nortex Corporation, a privately
held company in the business of oil and gas exploration and production. In addition to his responsibilities at
Nortex and Planet, Mr. Dugan serves as the President of Anglo Exploration Corporation and Houston Resources
Corporation. Anglo Exploration Corporation is an affiliated company that has a limited portfolio of passive
investments, which Mr. Dugan manages. Mr. Dugan has been associated with the company for 25 years. Mr. Dugan
and his family are the sole stockholders of Anglo Exploration. Houston Resources Corporation is an affiliated
company, which operates oil properties for Mr. Dugan's interest as well as for the interests of others. Mr.
Dugan has been associated with Houston Resources Corporation for 25 years. Houston Resources Corporation is a
passive investor in Planet and Mr. Dugan and his family are the sole stockholders.
Jacque N. York, secretary and director, joined the board in 1999. Ms. York's principal occupation and five
year business history is as corporate officer. For the past five years, Ms. York has been the corporate
secretary of Nortex Corporation, a privately held company in the business of oil and gas exploration and
production. In addition, Ms. York also served as secretary and director of Planet Resources, Inc., the
predecessor corporation of Internet Law.
Michael K. Branstetter, director, joined the board in 1999. Mr. Branstetter's principal occupation and five
year business history is as attorney at law. He is a shareholder and Managing Director of the law firm of Hull,
Branstetter and Simpson Chartered. Mr. Branstetter is an officer and director of the following public companies:
Pilot Silver Lead, Inc., Idaho General Mines, Inc., and Lucky Friday Extension Mining Company. Mr. Branstetter
also served as director of Planet Resources, Inc., the predecessor corporation of Internet Law.
There are no employment agreements between the officers of Planet and Planet. Furthermore, we do not carry
key-man insurance policies on any of the officers or directors of Planet. Mr. Dugan, in his role as an officer
and director will devote approximately 15 hours per month to Planet.
Long Term
Annual Compensation Compensation Awards Payouts
-------------------------------------------- -------------------------- -------------------------
------ -- ------- ------- ------------ ----------- ----------- -------- -- -------------
Name and Year Salary Bonus Other Restricted Securities LTIP All other
principal annual stock underlying
position compensation awards options payouts compensation
------------------ ------ ------- ------- ------------ ----------- ----------- -------- -------------
------------------ ------ ------- ------- ------------ ----------- ----------- --------
A.W. Dugan 1999 $-0- $-0- $-0- $405 405,000 $-0- $-0-
Chairman, chief
executive
officer and
president
1998 $-0- $-0- $-0- $-0- $-0- $-0- $-0-
1997 $-0- $-0- $-0- $-0- $-0- $-0- $-0-
Jacque N. York, 1999 $-0- $-0- $-0- $-0- $-0- $-0- $-0-
secretary and
director
1998 $-0- $-0- $-0- $-0- $-0- $-0- $-0-
1997 $-0- $-0- $-0- $-0- $-0- $-0- $-0-
Michael K. 1999 $-0- $-0- $-0- $-0- $-0- $-0- $-0-
Branstetter,
director
1998 $-0- $-0- $-0- $-0- $-0- $-0- $-0-
1997 $-0- $-0- $-0- $-0- $-0- $-0- $-0-
Number of Shares of
Common Stock Beneficially Percentage
Name and Address of Beneficial Owners Owned Beneficially Owned
-------------------------------------------------- --------------------------- ---------------------
-------------------------------------------------- --------------------------- ---------------------
A.W. Dugan 1,922,092 79.92%
1415 Louisiana, Suite 3100
Houston, Texas 77002
Houston Resources Corp.
1415 Louisiana, Suite 3100
Houston, Texas 77002 200,000 10.00%
Anglo Exploration Corp.
1415 Louisiana, Suite
Houston, Texas 77002 120,000 6.00%
Jacque N. York
1415 Louisiana, Suite
Houston, Texas 77002 -0- 0.00%
Michael K. Branstetter
416 River Street
Wallace, Idaho 83873-0709 7,500 0.38%
Executive officers and directors as a group (2
persons) 1,929,592 80.238%
--------------------------------------------------------------------------------
In the preceding table:
o A person is deemed to be the beneficial owner of securities that he or she can acquire within 60 days from the date of this prospectus upon the exercise of options. Furthermore, unless otherwise indicated below and under applicable community property laws, each shareholder named in the table above has sole voting and investment power with respect to the shares set forth opposite his or her name.
o Mr. Dugan is deemed to be the beneficial owner of 405,000 shares of common stock that can be acquired within 60 days from the date of this prospectus upon the exercise of options. Mr. Dugan's shares also include 120,000 shares beneficially owned by Anglo Exploration Corp. Anglo Exploration Corp. is a private company owned and controlled by Mr. Dugan. Furthermore, Mr. Dugan's shares include 200,000 shares owned by Houston Resources Corp. Houston Resources Corp. is a company beneficially owned by a trust for the benefit of Mr. Dugan's family, and to which he disclaims any beneficial interest. Mr. Dugan does, however, have dispositive and voting control over these shares. Certain Relationships and Related Transactions
Page
Independent Auditor's Report.............................................................F-2
Balance Sheet as at November 30, 2000....................................................F-3
Statement of Operations for the five months ended November 30, 2000......................F-4
Statement of Cash Flows for the five months ended November 30, 2000......................F-5
Notes to Financial Statements as at November 30, 2000....................................F-6
Balance Sheet as at June 30, 2000 and 1999...............................................F-9
Statements of Operations for year ended June 30, 2000 and period ended June 30, 1999.....F-10
Statements of Changes in Stockholder's Equity for year ended June 30, 2000 and
period ended June 30, 1999............................................................F-11
Statements of Cash Flows for year ended June 30, 2000 and period ended June 30, 1999.....F-12
Notes to Financial Statements............................................................F-13
We have audited the accompanying balance sheets of Planet Resources, Inc. (formerly New Planet Resources, Inc.) as of June 30, 2000 and 1999, and the related statements of operations, changes in stockholder’s equity and cash flows for the year ended June 30, 2000 and for the period March 25, 1999 (date of inception) through 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. 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 referred to above present fairly, in all material respects, the financial position of Planet Resources, Inc. at June 30, 2000 and 1999, and the results of its operations and its cash flows for the year ended June 30, 2000 and for the period March 25, 1999 (date of inception) through June 30, 1999, in conformity with generally accepted accounting principles.
/S/ Harper and Pearson Company Houston, Texas August 24, 2000
CURRENT ASSETS
Cash $ 1,775
---------
TOTAL ASSETS $ 1,775
=========
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER'S EQUITY
Preferred stock - par value $.001; 10,000 shares
authorized, none issued or outstanding $ -0-
Common stock - par value $.001; 2,000,000 shares
authorized, 100,000 shares issued and outstanding 100
Additional paid-in capital 36,175
Retained earnings (deficit) (34,500)
-------
Total stockholder's equity 1,775
----------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 1,775
=========
See accompanying notes.
REVENUE $ -0-
--------------
EXPENSES
Professional fees 7,087
Other 335
-------------
Total expenses 7,422
-----------
NET LOSS $ (7,422)
==========
BASIC LOSS PER SHARE OUTSTANDING $ (.07)
==============
WEIGHTED AVERAGE SHARES OUTSTANDING 100,000
===========
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (7,422)
----------
Cash used by operating activities (7,422)
----------
CASH FLOWS FROM FINANCING ACTIVITIES -0-
----------
CASH FLOWS FROM INVESTING ACTIVITIES -0-
----------
NET DECREASE IN CASH (7,422)
CASH AT BEGINNING OF PERIOD 9,197
----------
CASH AT END OF PERIOD $ 1,775
============
1. ORGANIZATION AND BUSINESS
Planet Resources, Inc. ("Planet") was incorporated in the State of
Delaware on March 26, 1999, as a wholly owned subsidiary of
Internet Law Library, Inc. ("Internet Law"). Planet was formed in
connection with the execution of an Agreement and Plan of
Distribution (the `Distribution Agreement') by and between Internet
Law and Planet dated March 25, 1999. Under terms of the
Distribution Agreement, Internet Law will transfer certain of its
assets to Planet including mineral rights and related
equipment and shares and options of Planet will be distributed to the
Internet Law stockholders in a tax-free exchange. Planet
intends to become a public company upon the effectiveness of a registration
statement.
Planet has no commercial operations although management is evaluating
various future operating strategies, including the merger
of Planet with operating entities. Planet has incurred minimal
expenses for professional and other costs, which have been
reflected on the accompanying statement of operations. The Company
has adopted June 30 as its fiscal year end. The statements
of operations and cash flows at November 30, 2000 are for the five
months then ended.
In the opinion of management, the unaudited financial statements
reflect all adjustments, consisting only of normal and
recurring adjustments, necessary to present fairly the Company's
financial position at November 30, 2000, results of operations
for the five months ended November 30, 2000 and cash flows for the five
months ended November 30, 2000. Interim period results
are not necessarily indicative of results of operations or cash
flows for a full year period. These unaudited financial
statements do not include all disclosures required to be in compliance
with generally accepted accounting principles. These
financial statements and the notes thereto should be read in conjunction
with the Company's financial statements for the year
ended June 30, 2000.
Basic Loss Per Share - Basis loss per share of common stock is based
on the weighted average number of shares outstanding
---------------------
during the period.
Income Taxes - Planet has had losses since inception and therefore has
not been subject to federal income taxes. As of November
------------
30, 2000, Planet had accumulated net operating loss carryforwards for
income tax purposes of $34,500. These carryforwards begin
to expire in 2019. The Tax Reform Act of 1986 provided for an annual
limitation on the use of net operating loss and tax credit
carryforwards following certain ownership changes that limit Planet's
ability to utilize these carryforwards. Additionally,
because U.S. tax laws limit the time during which net operating loss and
tax credit carryforwards may be applied against future
taxable income and tax liabilities, Planet may not be able to take full
advantage of its net operating loss and tax credits for
federal income tax purposes. Planet has had net operating loss
carryforwards since inception and there is no assurance of
future taxable income; therefore, a valuation allowance has been
established to fully offset the deferred tax assets of
approximately $12,000.
2. PROFORMA EFFECTS OF DISTRIBUTION AGREEMENT
The following table reflects the current financial position of
Planet as reflected on the accompanying balance sheet at
November 30, 2000 and the proforma effects on Planet's financial
position following the execution of the Distribution
Agreement. Upon completion of the Distribution, there will be a
total of 2,000,000 shares of Planet Stock outstanding and
405,000 options each to purchase one share of Planet Common Stock
for a price of $.15 per share. Shares of the Company's
Common Stock have been reserved for issuance upon exercise of Planet
Options. The Company has adopted a Stock Incentive Plan
(the Plan) and has reserved 250,000 shares of the Company's Common
Stock under the Plan. Additional common shares will be
authorized to accommodate these and other option and Plan agreements.
ASSETS
------
2000 Proforma
-------- ---------
CURRENT ASSETS
Cash $ 1,775 $ 1,775
--------- ---------
Total current assets 1,775 1,775
MINERAL RIGHTS N/A -0-
--------- -----------
TOTAL ASSETS $ 1,775 $ 1,775
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock - par value $.001; 10,000 shares
authorized, none issued or outstanding $ -0- $ -0-
Common stock - par value $.001; 2,000,000 shares
authorized, 100,000 and 2,000,000 shares issued
and outstanding 100 2,000
Additional paid-in capital 36,175 34,275
Retained earnings (deficit) (34,500) (34,500)
--------- --------
Total stockholders' equity 1,775 1,775
------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 1,775 $ 1,775
========= =========
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FOR PROFORMA EFFECTS OF
DISTRIBUTION AGREEMENT
Realization of the Carrying Cost of Mining Property and
Exploration Costs - These assets are shown on the accompanying
-----------------------------------------------------------------------
balance sheets at a zero value which reflects the current fair value
of the mineral interests at November 30, 2000. The
ultimate realization of Planet's original costs in these assets is
dependent upon the discovery and the ability of Planet to
finance successful exploration and development of commercial ore
deposits, if any, in the mining properties in sufficient
quantity for Planet to recover its original investment.
Property - Mineral Rights And Leases - Pursuant to the Distribution
Agreement, Planet will become the owner of subsurface
-------------------------------------
mineral rights on approximately 190 acres located in the City of
Mullan, Idaho. Title was acquired by issuance to real
property owners of one share of capital stock for each 25 square feet
of surface owned.
Leases - A subsurface mining agreement dated May 1, 1981, with the City
of Mullan, whereby Planet, as lessee, will have the
------
right to mine subsurface minerals on approximately 200 acres owned
by the City north of the Osburn Fault for a period of 25
years will also be distributed pursuant to the Distribution Agreement.
The City, as lessor, will receive 20% of all royalty
payments or other consideration received by Planet from Hecla. In the
event Planet enters into a lease agreement for the
exploration and development of "City Property" south of the Osburn
Fault, the City shall receive 15% of the royalties
received. No royalties have been received or paid on "City Property'
south of the fault.
2000 1999
ASSETS
CURRENT ASSETS
Cash $ 9,197 $ 32,515
TOTAL ASSETS $ 9,197 $ 32,515
LIABILITIES AND STOCKHOLDER'S EQUITY
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER'S EQUITY
Preferred stock - par value $.001; 10,000 shares
authorized, none issued or outstanding $ -0- $ -0-
Common stock - par value $.001; 2,000,000 shares
authorized, 100,000 shares issued and outstanding 100 100
Additional paid-in capital 36,175 36,175
Retained earnings (deficit) (27,078) (3,760)
Total stockholder's equity 9,197 32,515
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 9,197 $ 32,515
PLANET RESOURCES, INC.
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 2000 AND THE PERIOD ENDED JUNE 30, 1999
2000 1999
REVENUE $ -0- $ -0-
EXPENSES
Professional fees 22,796 3,581
Other 522 179
Total expenses 23,318 3,760
NET LOSS $ (23,318) $ (3,760)
BASIC LOSS PER SHARE OUTSTANDING $ (.23) $ (.04)
WEIGHTED AVERAGE SHARES OUTSTANDING 100,000 100,000
Number Additional Retained
of Shares Common Paid-In Earnings
Issued Stock Capital (Deficit) Total
BALANCE,
MARCH 25, 1999 -0- $ -0- $ -0- $ -0- $ -0-
SHARES ISSUED
FOR CASH 100,000 100 36,175 -0- 36,275
NET LOSS FOR THE
PERIOD MARCH 25,
1999 THROUGH
JUNE 30, 1999 -0- -0- -0- (3,760) (3,760)
BALANCE,
JUNE 30, 1999 100,000 100 36,175 (3,760) 32,515
NET LOSS -0- -0- -0- (23,318) (23,318)
BALANCE,
JUNE 30, 2000 100,000 $ 100 $ 36,175 $ (27,078) $ 9,197
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (23,318) $ (3,760)
Cash used by operating activities (23,318) (3,760)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of common stock -0- 36,275
Cash provided by financing activities -0- 36,275
CASH FLOWS FROM INVESTING ACTIVITIES -0- -0-
NET (DECREASE) INCREASE IN CASH (23,318) 32,515
CASH AT BEGINNING OF PERIOD 32,515 -0-
CASH AT END OF PERIOD $ 9,197 $ 32,515
1. ORGANIZATION AND BUSINESS
Planet Resources, Inc. ("Planet") was incorporated in the State of Delaware on March
26, 1999, as a wholly owned subsidiary of Internet Law Library, Inc. ("Internet Law").
Planet was formed in connection with the execution of an Agreement and Plan of
Distribution (the `Distribution Agreement') by and between Internet Law and Planet
dated March 25, 1999. Under terms of the Distribution Agreement, Internet Law will
transfer certain of its assets to Planet including mineral rights and related equipment
and shares and options of Planet will be distributed to the Internet Law stockholders
in a tax-free exchange. Planet intends to become a public company upon the
effectiveness of a registration statement.
Planet has no commercial operations although management is evaluating various future
operating strategies, including the merger of Planet with operating entities. Planet
has incurred minimal expenses for professional and other costs, which have been
reflected on the accompanying statement of operations. The Company has adopted June 30
as its fiscal year end. The statements of operations, changes in stockholder's equity
and cash flows at June 30, 2000 and 1999 are for the year then ended and date of
inception (March 25, 1999) through June 30, 1999, respectively.
Basic Loss Per Share - Basis loss per share of common stock is based on the weighted
average number of shares outstanding during the period.
Income Taxes - Planet has had losses since inception and therefore has not been subject
to federal income taxes. As of June 30, 2000 and 1999, Planet had accumulated net
operating loss carryforwards for income tax purposes of $27,078 and $3,760,
respectively. These carryforwards begin to expire in 2019. The Tax Reform Act of 1986
provided for an annual limitation on the use of net operating loss and tax credit
carryforwards following certain ownership changes that limit Planet's ability to
utilize these carryforwards. Additionally, because U.S. tax laws limit the time during
which net operating loss and tax credit carryforwards may be applied against future
taxable income and tax liabilities, Planet may not be able to take full advantage of
its net operating loss and tax credits for federal income tax purposes. Planet has had
net operating loss carryforwards since inception and there is no assurance of future
taxable income; therefore, a valuation allowance has been established at June 30, 2000
and 1999 to fully offset the deferred tax assets of approximately $9,000 and $1,000,
respectively.
Estimates - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and 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.
Capital Stock - In May 2000, the Company amended retroactively to inception, its
certificate of incorporation to state that the aggregate number of shares of all
classes of capital stock which the Corporation has authority to issue is 2,010,000 of
which 2,000,000 are to be shares of common stock at $.001 par value per share and
10,000 shares are to be shares of serial preferred stock at $.001 par value per share.
1. ORGANIZATION AND BUSINESS (CONTINUED) Prior to this amendment, the Company had authorized to issue 25,000,000 shares of common stock at $.001 par value per share and 1,000,000 shares of serial preferred stock at $.001 par value per share. The financial statements at June 30, 1999 have been revised to reflect the changes resulting from this amendment. 2. PROFORMA EFFECTS OF DISTRIBUTION AGREEMENT The following table reflects the current financial position of Planet as reflected on the accompanying balance sheet at June 30, 2000 and the proforma effects on Planet's financial position following the execution of the Distribution Agreement. Upon completion of the Distribution, there will be a total of 2,000,000 shares of Planet Stock outstanding and 405,000 options each to purchase one share of Planet Common Stock for a price of $.15 per share. Shares of the Company's Common Stock have been reserved for issuance upon exercise of Planet Options. The Company has adopted a Stock Incentive Plan (the Plan) and has reserved 250,000 shares of the Company's Common Stock under the Plan. Additional common shares will be authorized to accommodate these and other option and Plan agreements.
ASSETS
2000 Proforma
CURRENT ASSETS
Cash $ 9,197 $ 9,197
Total current assets 9,197 9,197
MINERAL RIGHTS N/A -0-
TOTAL ASSETS $ 9,197 $ 9,197
LIABILITIES AND STOCKHOLDERS' EQUITY
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock - par value $.001; 10,000 shares
authorized, none issued or outstanding $ -0- $ -0-
Common stock - par value $.001; 2,000,000 shares
authorized, 100,000 and 2,000,000 shares issued
and outstanding 100 2,000
Additional paid-in capital 36,175 34,275
Retained earnings (deficit) (27,078) (27,078)
Total stockholders' equity 9,197 9,197
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 9,197 $ 9,197
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FOR PROFORMA EFFECTS OF DISTRIBUTION
AGREEMENT
Realization of the Carrying Cost of Mining Property and Exploration Costs - These
assets are shown on the accompanying balance sheets at a zero value, which reflects
the current fair value of the mineral interests at June 30, 2000, and 1999. The
ultimate realization of Planet's original costs in these assets is dependent upon the
discovery and the ability of Planet to finance successful exploration and development
of commercial ore deposits, if any, in the mining properties in sufficient quantity
for Planet to recover its original investment.
Property - Mineral Rights And Leases - Pursuant to the Distribution Agreement, Planet
will become the owner of subsurface mineral rights on approximately 190 acres located
in the City of Mullan, Idaho. Title was acquired by issuance to real property owners
of one share of capital stock for each 25 square feet of surface owned.
Leases - A subsurface mining agreement dated May 1, 1981, with the City of Mullan,
whereby Planet, as lessee, will have the right to mine subsurface minerals on
approximately 200 acres owned by the City north of the Osburn Fault for a period of 25
years will also be distributed pursuant to the Distribution Agreement. The City, as
lessor, will receive 20% of all royalty payments or other consideration received by
Planet from Hecla. In the event Planet enters into a lease agreement for the
exploration and development of "City Property" south of the Osburn Fault, the City
shall receive 15% of the royalties received. No royalties have been received or paid
on "City Property' south of the fault.
SEC Registration Fee*............................. $ 30
............................
Legal Fees and Expenses*.......................... 25,000
...................
Accounting Fees and Expenses*..................... 10,000
Financial Printing*............................... 5,000
Transfer Agent Fees*.............................. 1,500
Blue Sky Fees and Expenses*....................... 3,000
Miscellaneous*.................................... 2,500
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.........................................
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TOTAL............................................. $47,030
==============
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* Estimated.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
On March 26, 1999, Planet issued 1,000 shares of common stock to Internet Law Library,
Inc., a Delaware corporation for the cash sum of $1,000 in reliance on the exemption from
registration in Section 4(2) of the Securities Act.
In conjunction with the transaction with by National Law, the
previously remaining 405,000 unexercised options, which were to expire on July 28, 1999,
were cancelled. On August 12, 1999, Planet issued options to purchase 405,000 shares of its
common stock exercisable at anytime prior to 5:00 p.m. December 31, 2004 at an exercise
price of $0.15 per share.
ITEM 27. Exhibits and Financial Statement Schedules
Exhibit No. Description of Document
-------- --- -----------------------
..... Agreement and Plan of Distribution
1.2 Amended and Restated Agreement and Plan of
Distribution
3.1 Certification of Incorporation
3.1.1 Amendment of Certificate of Incorporation
changing name from New Planet to Planet.
3.2 By-Laws
4.1 Common Stock Option Agreement
4.2 Form of Common Stock Option Certificate (included as an
exhibit to Exhibit 4.1)
4.3 Form of Common Stock Certificate
5.1 Opinion of Sonfield and Sonfield
8.1 Opinion of Sonfield and Sonfield with respect to tax matters
(included as part of Exhibit 5.1)
10.1 Planet Incentive Stock Option Plan
10.2 Indemnification Agreement between Planet and
A.W. Dugan
10.3 Indemnification Agreement between Planet and
Jacque N. York
10.4 Indemnification Agreement between Planet and
Michael K. Branstetter
10.5 Indemnification Agreement between Planet and
Danyel Owens
10.6Indemnification Agreement between Planet and Internet Law
Library, Inc. under its former name
10.7 Lease Agreement with City of Mullan, Idaho (included as
an exhibit to Exhibit 10.8)
10.8 Form of Assignment of Mineral Lease
10.9 Form of Mineral Deed
10.10 Opinion of Geologist as to the Potential Value of the Planet Mineral
Property
23.1 Consent of Harper and Pearson Company
23.2 Consent of Sonfield and Sonfield
23.3 Consulting Agreement by and between Genesis Financial Group, L.L.C. and
Planet Resources, Inc.
23.4 Extension to Consulting Agreement by and between Genesis Financial
Group, L.L.C. and Planet Resources, Inc.
Financial Data Schedule
---------------
All exhibits are filed herewith.
ITEM 28. Undertakings
The undersigned Registrant undertakes to provide to participating broker-dealers, at the
closing, certificates in those denominations and registered in those names as required by
the participating broker-dealers, to permit prompt delivery to each purchaser.
The undersigned Registrant also undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of
the registration statement (or the most recent post-effective amendment to
the registration statement) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change
to that information in the registration statement; Provided, however, that
paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration
statement is on Form S-3 or Form S-8, and the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant punder section 13 or section
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered in that amendment, and the offering
of those securities at that time shall be deemed to be the initial bona fide
offering of those securities.
(3) To remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the
"Securities Act") may be permitted to directors, officers and controlling persons of the
registrant under the specified provisions, or otherwise, the Registrant has been advised
that in the opinion of the Securities and Exchange Commission (the "Commission") that
indemnification is against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for indemnification against those
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 preceding) is asserted by that 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
that issue.
The undersigned Registrant also undertakes that it will:
(1) For determining any liability under the Securities Act, treat the information omitted
from the form of prospectus filed as a part of this registration statement in
reliance upon Rule 430A and contained in a form of prospectus filed by the
Registrant under Rule 424(b)(1), or (4) or 497(h) under the Securities Act as
part of this registration statement as of the time the Commission declared it
effective.
(2) For determining any liability under the Securities Act, treat each post-effective
amendment that contains a form of prospectus as a new registration statement for
the securities offered in the registration statement, and that offering of the
securities at that time as the initial bona fide offering of those securities.
/s/A.W. Dugan...................... /s/Jacque N. York..................... A.W. Dugan, Chief Executive Officer, Jacque N. York, Secretary and Director President and Director
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