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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 (Name, address, including zip code, telephone number including area code, and telephone number including area of registrant's principal Executive code, of agent for service) offices)
Approximate date of As soon as practicable commencement of proposed sale on or after the to the public: 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. [ ]
Proposed Title of Each Maximum Proposed Class of Number of Offering Maximum Amount of Securities Shares Being Price Per Aggregate Registration Being Registered Registered Share Offering Price 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 May 31, 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..............................................................10 --------------- MANAGEMENT'S PLAN OF OPERATION...............................................10 ------------------------------ BUSINESS.....................................................................11 -------- MANAGEMENT...................................................................17 ---------- PRINCIPAL SHAREHOLDERS OF PLANET.............................................21 -------------------------------- CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...............................23 ---------------------------------------------- DESCRIPTION PLANET CAPITAL STOCK.............................................23 -------------------------------- SHARES ELIGIBLE FOR FUTURE SALE..............................................26 ------------------------------- LEGAL MATTERS................................................................26 ------------- EXPERTS......................................................................26 ------- WHERE YOU CAN FIND MORE INFORMATION..........................................26 ----------------------------------- INDEX TO FINANCIAL STATEMENTS...............................................F-1 -----------------------------
Type of security offered............Common stock, $0.001 par value per share. One share of Planet common stock will be distributed for each share of common stock of Internet Law, par value $0.001 per share, issued and outstanding on April 14, 1999, which was not received as a result of the reverse acquisition by National Law. This distribution is being completed to comply with the terms of the Agreement and Plan of Distribution, dated as of March 25, 1999, by and between Internet Law and Planet. Number of Outstanding Shares........None. Common Stock Outstanding after the Offering...............2,000,000 shares.
We have limited financial resources available to us at this time, which may impede our ability to implement a successful business plan.
Our chairman, chief executive officer and president, Mr. A.W. Dugan, has agreed to satisfy our cash operating requirements only over the next twelve months. There is no written agreement between Mr. Dugan and Planet for the provision of his financial support and Mr. Dugan could decide at any time to no longer continue to financially support our company. We have no other source of income at this time and there can be no assurance that we will develop alternative sources of income to fund our company, or that Mr. Dugan will extend his commitment to fund our company, beyond twelve months.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.
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 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 revenues and thus, could be considered a "shell" company.Because we have an obligation to indemnify Internet Law against any liabilities arising from its ownership of the mineral properties before the distribution, the value of your shares could be adversely affected should any claims be made against Internet Law relating to the mineral assets.
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 adversely affect the value of your shares. 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.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 and consequently, adversely impact our revenues from royalties.
Mining companies are subject to a number of risks and hazards including:--environmental hazards; --industrial accidents; --labor disputes; --unusual or unexpected geologic formations; --cave-ins; --rockbursts; and --flooding and periodic interruptions due to inclement or hazardous weather conditions.Such risks could result in:
--damage to or destruction of mineral properties or producing facilities; --personal injury; --environmental damage; --delays in mining; --monetary losses; and --legal liability.
Because certain officers and directors will hold a controlling interest in Planet, the ability of investors to influence our corporate activities after this offering will be very limited
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.
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.Regulations affecting Planet may make it more difficult for you to resell its shares.
Because of the low price of our common stock and the fact that it is not listed on The Nasdaq SmallCap Market(SM) or any exchange, the shares may be subject to a number of regulations which may affect the price of the shares and your ability to sell the shares in the secondary market.Actual as of Pro forma May 31, 2000 As Adjusted -------------- ------------- -------------- ------------- Stockholder's Equity: Preferred stock, par value $.001; $ -- $ -- 10,000 shares authorized, none issued or outstanding Common stock, par value $.001; 100 2,000 2,000,000 shares authorized, 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 ============== =============
--any breach, whether before or after the distribution date, by Internet Law of any provision of the distribution agreement, --liabilities related to the operation of Internet Law.The distribution agreement also provides that from and after the distribution date, Planet will indemnify, defend and hold harmless Internet Law and its subsidiaries, as well as the directors and officers of Internet Law and the various Internet Law subsidiaries from and against all losses arising out of or relating to:
--any breach, whether before or after the distribution date, by Planet of any provision of the distribution agreement, --any claims arising out of this prospectus or the registration statement pertaining to this prospectus, and --liabilities related to the operation of Planet.
-- 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. -- Initial discussions with those potential mining company partners as determined from our investigation. We do not expect this cost to exceed $5,000. -- 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:
-- we will be able to identify and negotiate an arrangement with a mining company within the next twelve months, -- our mining properties will be found attractive to a prospective mining company partner, or -- 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.
-- 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. -- 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. -- 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. -- 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 such as, LEXIS/NEXIS(R), which is owned by Reed-Elsevier, and West Group, a division of The Thomson Corporation, offer similar services at significantly higher prices. 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 Planet Resources, Inc.'s unregistered common stock and Internet Law's original stockholders currently hold 2,000,000 shares of Planet Resources' common stock. Under the terms of the agreement, the majority of Planet Resources' original board of directors resigned. They were replaced with directors elected by the new stockholders of Internet Law.
Name Age Position with the Class Director's ---- --- ------------------ Remaining Term Company (In Years) ------- ---------- A.W. Dugan 71 Chairman of the III 2 Board of Directors, Chief Executive Officer and President Jacque N. York 53 Secretary and II 1 Director Michael K. 46 Director I 0* Branstetter*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. 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. 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 Compensation Annual Compensation Awards Payouts ------------------------------ ------------------ ------------------ ------------ ------ -------- -------- -------- ------------------ Name and Year Salary Bonus Other RestrictedSecuritiesLTIP All principal annual stock underlyi other position compensatioawards options ngpayouts 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. 1999 $-0- $-0- $-0- $-0- $-0- $-0- $-0- York, 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-
-- to select the employees to be granted awards under the stock incentive plan, -- to determine the type, size and terms of the awards to be made, -- to determine the time when awards will be granted, and -- to prescribe the form of instruments evidencing awards made under the stock incentive plan.The board will be authorized to establish, amend and rescind any rules and regulations relating to the stock incentive plan as may be necessary for efficient administration of the stock incentive plan. Any board action will require a majority vote of the members of the board. Three types of awards are available under the stock incentive plan:
* nonqualified stock options or incentive stock, * stock appreciation rights and * restricted stock.An aggregate of 2,500,000 shares of Planet common stock have been reserved and may be issued under the stock incentive plan. This number could be adjusted to prevent dilution due to merger, consolidation, stock split or other recapitalization of Planet.
* each person known by us to own beneficially five percent (5%) or more of the outstanding common stock, * each of our directors, * each of our executive officers, and * our directors and officers as a group.
Number of Shares Percentage Name and Address of Beneficial of Common Stock Beneficially Owners Beneficially Owned 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%
* 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. * 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 provisions of our certificate of incorporation may have the effect of preventing or delaying an acquisition or tender offer, which might be viewed by the stockholders to be in their best interests.
In general, the anti-takeover provisions in Delaware law and our certificate of incorporation are designed to minimize our susceptibility to sudden acquisitions of control, which have not been negotiated with and approved by our board of directors. As a result, these provisions may tend to make it more difficult to remove the incumbent members of the board of directors. These provisions would not prohibit an acquisition of control or a tender offer for all of our capital stock. However, to the extent these provisions successfully discourage the acquisition of control of us or tender offers for all or part of our capital stock without approval of the board of directors, they may have the effect of preventing or delaying an acquisition or tender offer which might be viewed by stockholders to be in their best interests. Authorized shares of capital stock. Our certificate of incorporation authorizes the issuance of up to 10,000 shares of serial preferred stock and 2,000,000 shares of common stock. Shares of our preferred stock with voting rights could be issued and would then represent an additional class of stock required to approve any proposed acquisition. This preferred stock, together with authorized but unissued shares of common stock, could represent additional capital stock, which would be required to be purchased by a prospective acquirer. Issuance of additional shares may dilute the voting interests of our stockholders. Stockholder meetings. Our certificate of incorporation provides that only our board of directors or a duly designated committee of the board may call annual stockholder meetings. Our certificate of incorporation also provides that stockholder action may be taken only at a special or annual stockholder meeting and not by written consent. These provisions may discourage hostile takeover attempts by making it more difficult to address shareholders between annual meetings called by the board of directors. Classified board of directors and removal of directors. Planet's certificate of incorporation provides that Planet's board of directors is to be divided into three classes which shall be as nearly equal in number as possible. The directors in each class serve for terms of three years, with the terms of one class expiring each year. Each class currently consists of approximately one-third of the number of directors. Each director will serve until his successor is elected and qualified. A classified board of directors could make it more difficult for stockholders, including those holding a majority of Planet's outstanding stock, to force an immediate change in the composition of a majority of the board of directors. Since the terms of only one-third of the incumbent directors expire each year, it requires at least two annual elections for the stockholders to change a majority. In contrast, the majority of a non-classified board may be changed in one year. In the absence of the provisions of Planet's certificate of incorporation classifying the board, all of the directors would be elected each year. The provision for a staggered board of directors affects every election of directors and is not triggered by the occurrence of a particular event like a hostile takeover. Thus a staggered board of directors makes it more difficult for stockholders to change the majority of directors even when the reason for the change would be unrelated to a takeover. Stockholder vote required to approve business combinations with related persons. Our certificate of incorporation generally requires the approval of the holders of 75% of our outstanding voting stock, including any class or series entitled to vote separately, and a majority of the outstanding stock not beneficially owned by a related person, up to a maximum requirement of 85% of the outstanding voting stock, to approve business combinations, as defined, involving the related person, except in cases where the business combination has been approved in advance by two-thirds of those members of our board of directors who were directors prior to the time when the related person became a related person. The supermajority stockholder vote requirements under the Delaware Certificate and Delaware law may have the effect of foreclosing mergers and other business combinations, which the holders of a majority of our stock deem desirable, and place the power to prevent those types of transactions in the hands of a minority of our stockholders. Advance notice requirements for nomination of directors and proposal of new business at annual stockholder meetings. Our certificate of incorporation generally provides that any stockholder desiring to make a nomination for the election of directors or a proposal for new business at a stockholder meeting must submit written notice not less than 30 or more than 60 days in advance of the meeting. Making the period for nomination of directors and introducing new business a period not less than 10 days prior to notice of a stockholder meeting may tend to discourage persons from bringing up matters disclosed in the proxy materials furnished by Planet and could inhibit the ability of stockholders to bring up new business in response to recent developments. Supermajority voting requirement for amendment of some provisions of the certificate of incorporation. Our certificate of incorporation provides that specified provisions contained in the certificate of incorporation may not be repealed or amended except upon the affirmative vote of the holders of not less than 75% percent of the outstanding stock entitled to vote. This requirement exceeds the majority vote that would otherwise be required by Delaware law for the repeal or amendment of the certificate of incorporation. Specific provisions affected by the supermajority vote requirement are:* the calling of stockholder meetings and the requirement that stockholder action be taken only at annual or special meetings, * written notice to Planet of nominations for the election of directors and new business proposals, * the number and terms of Planet's directors, * the removal of directors, * approval of business combinations involving related persons, * the consideration of various factors in the evaluation of business combinations, * indemnification of directors, officers, employees and agents, * limiting directors; liability, and * the required stockholder vote for amending the by-laws and certificate of incorporation.
Page ---- Independent Auditor's Report.............................................. F-2 Balance Sheet as of May 31, 2000.......................................... F-3 Statement of Operations for the Eleven Months Ended May 31, 2000.......... F-4 Statement of Changes in Stockholder's Equity for the Eleven Months Ended May 31, 2000..................................................... F-5 Statement of Cash Flows for the Eleven Months Ended May 31, 2000.......... F-6 Notes to Financial Statements............................................. F-7
We have audited the accompanying balance sheet of Planet Resources, Inc. (formerly New Planet Resources, Inc.) as of May 31, 2000, and the related statements of operations, changes in stockholders equity and cash flows for the eleven months then ended. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit 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 audit provides 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 May 31, 2000, and the results of its operations and its cash flows for the eleven months then ended in conformity with generally accepted accounting principles.
CURRENT ASSETS $ 9,197 --------- Cash TOTAL ASSETS $ 9,197 ========= 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) (27,078) -------- Total stockholder's equity 9,197 --------- TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 9,197 ========
REVENUE $ -0- EXPENSES Professional Fees 22,796 Other 522 -------- Total expenses 23,318 ------ NET LOSS $ (23,318) ---------- BASIC LOSS PER SHARE OUTSTANDING $ (.23) ============ WEIGHTED AVERAGE SHARES OUTSTANDING 100,000 ==========
Common Additional Retained Shares Common Paid-In Earnings Issued Stock Capital (Deficit) Total ---------- ----------- ---------- ---------- ----------- ---------- ----------- ---------- ---------- ----------- BALANCE, 100,000 $ 100 $ 36,175 $(3,760) $32,515 JUNE 30, 1999 NET LOSS -0- -0- -0- (23,318) (23,318) ---------- ----------- ---------- ---------- ----------- ---------- ----------- ---------- ---------- ----------- BALANCE, MAY 31, 2000 100,000 $ 100 $ 36,175 $ $ 9,197 (27,078) ========== =========== ========== ========== ===========
CASH FLOWS FROM OPERATING ACTIVITIES Net loss $(23,318) Cash used by operating activities (23,318) CASH FLOWS FROM FINANCING ACTIVITIES -0- CASH FLOWS FROM INVESTING ACTIVITIES -0- NET DECREASE IN CASH (23,318) CASH AT BEGINNING OF PERIOD 32,515 ----------- ----------- CASH AT END OF PERIOD $ 9,197 ===========
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.
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 May 31, 2000, Planet had accumulated net operating loss carryforwards for income tax purposes of approximately $27,000. 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 Planets 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. Since Planet has had net operating loss carryforwards since inception and there is no assurance of future taxable income, a valuation allowance has been established to fully offset the deferred tax assets of approximately $9,000.
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. On May 15, 2000, the Company filed with the Secretary of State of Delaware a Certificate of Correction (the Certificate) to correct an error in the Certificate of Incorporation of Planet Resources, Inc. filed in the Office of the Secretary of State of Delaware on March 26, 1999. This Certificate corrected the previous Certificate of Incorporation as follows: the aggregate number of shares of all classes of capital stock which the Corporation has the authority to issue is 2,010,000 of which 2,000,000 are to be shares of common stock, $.001 par value per share, and of which 10,000 are to be shares of serial preferred stock, $.001 par value per share. The original Certificate of Incorporation authorized the Company to issue 26,000,000 of all classes of capital stock of which 25,000,000 were shares of common stock, $.001 par value per share, and of which 1,000,000 were shares of serial preferred stock, $.001 par value per share all of which have been disclosed in previously issued financial statements.
Contemporaneously with the filing of the Certificate, the Board of Directors of the Company authorized an increase in the number of outstanding common shares from 1,000 to 100,000 in order to effectuate what is generally referred to as a forward split.
Actual Proforma ------ -------- ASSETS ------ 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 actual and 2,000,000 proforma 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 - At May 31, ------------------------------------------------------------------------------- 2000, the Board evaluated these assets and wrote the value down to zero to reflect the current fair value of the mineral interests. 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*..................15,000 Accounting Fees and Expenses*........... 2,500 Financial Printing*..................... 5,000 Transfer Agent Fees*.................... 1,500 Blue Sky Fees and Expenses*............. 3,000 Miscellaneous*.......................... 2,500 -------- -------- TOTAL**................................. $29,530 ========__________________ * Estimated. ** A significant portion of these expenses was paid prior to December 31, 1999. 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 reverse acquisition 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 ----------- ------------------------- 1.1 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** 10.6 Indemnification 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.*________________________ * Filed herewith ** Previously filed
(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.Signatures Pursuant to the requirements of the Securities Act, the registrant has duly caused this amendment number 3 to the registration statement on Form SB-2 to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Houston, State of Texas, on the 27th day of July, 2000. PLANET RESOURCES, INC. By:./s/A.W. Dugan............................ A.W. Dugan, Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed on the dates indicated by the following persons in the capacities indicated.
../s/A.W. Dugan.................... ../s/Jacque N. York................... A.W. Dugan, Chief Executive Officer, Jacque N. York, Secretary and Director President and Director
This opinion is based principally on the fact that the immensely productive Lucky Friday mine is adjacent to the subject property on the east and near it on the north. The geologic features in the subject property and in the Lucky Friday property are closely related and very similar. My judgment in this subject comes from 17 years of full-time geological work in the Couer dAlene district and my subsequent 20 years of occasional consulting work in the district.
All of the hundreds of millions of ounces of ore found in the last 50 years in the Coeur dAlene mining district had no surface manifestation of its existence and was found only by underground exploration guided by a few general geologic principles. It is in this manner that I expect ore to be developed, in due time, in the subject property and probably by the Hecla Mining Company which owns the Lucky Friday mine.
/s/Frank J. Frankovich ------------------------------1. Engagement. Effective upon execution hereof, the Corporation hereby engages the Consultant to render to it assistance in the preparation of certain sections of the SB-2 Registration Statement for the Corporation (currently, a wholly-owned subsidiary of Internet Law Library, Inc.) (formerly Planet Resources, Inc.), as well as preparation of responses to comments on the initial SB-2 Registration Statement for the Corporation received from the United States Securities and Exchange Commission (the SEC) in its letter to the Corporation dated May 20, 1999. (the Project). This Agreement shall remain in effect for a period of the earlier of twelve months from the date hereof or the approval of said registration statement by the SEC (the Term). The Term hereof may be extended or renewed upon the written agreement of the Corporation and the Consultant prior to expiration of the Term hereof upon such terms as the parties hereto may negotiate at the time of such extension or renewal. |
LEON SONFIELD (1865-1934) ATTORNEYS AT LAW NEW YORK GEORGE M. SONFIELD (1899-1967) LOS ANGELES ROBERT L. SONFIELD (1893-1972) WASHINGTON, D.C. ____________________ 770 SOUTH POST OAK LANE HOUSTON, TEXAS 77056 FRANKLIN D. ROOSEVELT, JR. (1914-1988) www.sonfield.com Telecopier (713) ROBERT L. SONFIELD, JR. 877-1547 Managing Director ____ Telephone (713) 877-8333
(2) Upon effectiveness of the registration statement the Company will have taken all requisite corporate action and all action required by the laws of the State of Delaware with respect to the authorization, issuance and sale of the Company common stock, the Company options and the shares of the Company common stock issuable upon exercise of the Company options to be issued pursuant to the registration statement; |
(3) The 1,605,818 shares of the Company common stock, when issued and distributed pursuant to the registration statement, will be validly issued, fully paid and nonassessable shares of common stock of the Company; |
(4) The 405,00 Company options, when issued and distributed pursuant to the registration statement, will be validly issued options to purchase fully paid and nonassessable shares of common stock of the Company; |
(5) The 405,000 shares of the Company common stock, issuable upon exercise of the Company options when issued and distributed pursuant to the registration statement, will be validly issued, fully paid and nonassessable shares of common stock of the Company; |
(6) Based upon the current provisions of federal income tax laws and regulations, and on current authoritative interpretations thereof, we are of the opinion that the discussion in the prospectus under the caption Federal Income Tax Consequences of the federal income tax laws relevant to the prospective investors, although necessarily general, considers each material federal income tax issue of significance to Internet Law stockholders and the result which, more likely than not, would obtain under the laws and regulations in effect as of the date hereof. |
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