INTERNET LAW LIBRARY INC, POS AM, 2000-10-25

INTERNET LAW LIBRARY INC
POS AM, 2000-10-25
COMPUTER PROGRAMMING, DATA PROCESSING, ETC.

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As filed with the Securities and Exchange Commission on October 25, 2000

Registration No. 333-39514
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

POST EFFECTIVE AMENDMENT NO. 1
TO
FORM S-1

REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
Internet Law Library, Inc.
(Exact Name of Registrant as specified in charter)

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Delaware 7370 82-0277987
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
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4301 Windfern Road, Suite 200
Houston, Texas 77041
(281) 600-6000
(Address, including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)

K. Charles Peterson
General Counsel
4301 Windfern Road, Suite 200
Houston, Texas 77041
(281) 600-6000
(Name and Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)

Please send copies of communications to:
Stephen L. Sapp
Locke Liddell & Sapp LLP
2200 Ross Avenue, Suite 2200
Dallas, Texas 75201
(214) 740-8000

Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]

If this Form is filed to register additional securities for an offering
pursuant to 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 pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment specifically stating that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of the Securities
Act of 1933 or until the Registration Statement shall become effective on such
date as the Commission, acting pursuant to said Section 8(a), may determine.

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PROSPECTUS

INTERNET LAW LIBRARY, INC.
4,806,477 Shares of Common Stock

The selling stockholders identified in this prospectus may offer and resell
up to 4,806,477 shares of our common stock under this prospectus. These shares
have been, or will be, acquired by the selling stockholders pursuant to:

. the conversion of shares of our Series A Convertible Preferred Stock
and the exercise of warrants to purchase shares by Cootes Drive LLC in
accordance with the terms of that certain Convertible Preferred Stock
Purchase Agreement dated May 11, 2000, by and between Cootes Drive and
us, and Warrant of the same date;

. the exercise of warrants to purchase 200,000 shares by Aspen Capital
Partners, Inc. in accordance with the terms of that certain Warrant
dated May 19, 2000;

. the Contract for Sale of Stock dated November 8, 1999, by and between
John R. Marsh, Ronald W. Hogan, Charles E. Bowen, Jr., and us; and

. the Contract for Sale of Stock dated December 8, 1999, by and between
David P. Harriman, Andrew Wyszkowski, Eugene Meyung, Suzanne Meyung,
Christina Brown, and us.

We will not receive any proceeds from the sales of shares by the selling
stockholders. The selling stockholders may sell their shares of common stock
through public or private transactions, in the over-the-counter market with
buyers, or otherwise. They may sell their shares at prevailing market prices or
at prices privately negotiated with buyers. The selling stockholders will be
responsible for any commissions or discounts due brokers or dealers. The amount
of those commissions will be negotiated before the sales. We have agreed to pay
all other offering expenses, excluding fees and expenses of counsel for the
selling stockholders.

Our common stock is quoted on the over-the-counter bulletin board under the
symbol "ELAW." The closing price of our common stock on October 18, 2000, was
$1.0625 per share.

An investment in our common stock involves a high degree of risk. You
should carefully consider the matters set forth under "Risk Factors" starting on
page 1 of this prospectus.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.

The date of this prospectus is October 25, 2000.
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TABLE OF CONTENTS

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PROSPECTUS SUMMARY..................................................................... 4
RISK FACTORS........................................................................... 5
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS............................. 14
USE OF PROCEEDS........................................................................ 14
SELLING STOCKHOLDERS................................................................... 14
PLAN OF DISTRIBUTION................................................................... 17
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION................................... 17
DESCRIPTION OF SECURITIES TO BE REGISTERED............................................. 18
MARKET INFORMATION..................................................................... 20
SELECTED CONSOLIDATED FINANCIAL DATA................................................... 20
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.. 21
BUSINESS............................................................................... 27
PROPERTIES............................................................................. 37
LEGAL PROCEEDINGS...................................................................... 38
MANAGEMENT............................................................................. 38
CERTAIN TRANSACTIONS................................................................... 47
PRINCIPAL STOCKHOLDERS................................................................. 49
SHARES ELIGIBLE FOR FUTURE SALE........................................................ 49
EXPERTS................................................................................ 50
OTHER INFORMATION...................................................................... 41
LEGAL MATTERS.......................................................................... 51
WHERE YOU CAN FIND MORE INFORMATION.................................................... 51
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PROSPECTUS SUMMARY

This summary sets forth the material highlights of the information
contained elsewhere in this prospectus. It does not contain all of the
information that you should consider before investing in Internet Law Library,
Inc., and you should read the entire prospectus carefully, especially the
discussion of Risk Factors. The terms "Internet Law," "we," "our" and "us" refer
to Internet Law Library, Inc. and its subsidiaries unless the context suggests
otherwise. The term "you" refers to a prospective investor.

Internet Law Library

We are a Delaware corporation that provides electronic publishing services
and database content through CD-Rom media and Internet sites with subscription
access, licenses and transaction fees for databases through our wholly owned
subsidiaries, National Law Library, Inc., GoverNet Affairs, Inc., Brief
Reporter, LLC and Compass Data Systems, Inc., as well as training and support
with federal regulations through our wholly owned subsidiary, Venco Compliance
Inc., and database content, software, hardware and other support through its
subsidiary, ITIS, Inc. The content of the databases consists of pending
legislation, statutory law, rules and case law at the federal and state levels.
Legal briefs from certain important cases before federal and state courts are
also available, as are litigation forms. This material can be useful to
legislators, corporate regulatory personnel, lobbyists, individual lawyers,
judges, law firms, corporate legal departments, government agencies, and
businesses and individuals involved in legislative efforts, litigation, and
corporate legal planning. Interfacing with these databases are retrieval engines
that are owned by us or our subsidiaries. Customers using these Internet sites
pay subscription fees to the operating subsidiaries under monthly, quarterly or
annual subscription agreements or per-use licenses.

Our principal executive offices are located at 4301 Windfern Road, Suite
200, Houston, Texas, 77041, and our telephone number is 281-600-6000.

The Offering

Common stock offered by us.................... 0 shares

Common stock offered by the
selling stockholders......................... A maximum of 4,806,477
shares

Common stock outstanding as of
October 18, 2000............................. 33,366,555* shares

Offering Price................................ Determined at the time of sale.

Use of proceeds............................... We will not receive any proceeds
from the sale of common stock by
the selling stockholders.

OTC Bulletin Board symbol..................... ELAW

The shares outstanding as of October 18, 2000 do not include shares
issuable upon conversion of our convertible preferred stock or upon exercise of
any outstanding stock options and warrants.

Cootes Drive LLC currently has the right to acquire approximately 1,755,765
shares of our common stock upon the conversion of shares of preferred stock and
the exercise of outstanding warrants. However, pursuant to a registration rights
agreement with Cootes, we have registered a total of 5,467,193 shares which it
may be able to acquire based on the fluctuation of the conversion price of our
convertible preferred stock, of which it has sold 1,003,500 shares of common
stock. Cootes, together with any of its affiliates, may not beneficially own
shares of our common stock in excess of 4.999% and 9.999%, respectively, of the
outstanding shares of our common stock following a conversion of preferred stock
and/or exercise of warrants. Such restrictions may be waived by the holders of
these securities as to themselves upon not less than 61 days' notice to us.

*This does not include 284,123 additional shares to be issued to Jack Ben Ezra
in connection with the acquisition of Compass Data Systems, Inc.

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RISK FACTORS

This section discusses the most significant factors that make an investment
in our common stock risky or speculative. You should carefully consider this
information along with the other information contained or incorporated by
reference in this prospectus before making a decision to invest in our common
stock.

Risks Particular to Internet Law

We have operated at a loss in recent periods and anticipate that losses will
continue.

At June 30, 2000, we had an accumulated deficit of $5,417,955. We had net
operating losses of $2,138,001 during the period from November 30, 1998, the
date of our inception, to December 31, 1999, the end of our fiscal year, and
$3,279,954 for the 6 months ended June 30, 2000. We expect operating losses and
negative cash flows to continue for the foreseeable future as we continue to
incur significant operating expenses and make capital investments in our
business. We may never generate sufficient revenues to achieve profitability.
Even if we do become profitable, we may not be able to sustain or increase
profitability on a quarterly or annual basis.

The competition in our industry is intense, our principal competitors have
significantly greater resources than we do, and this competition may cause us to
lose customers and prevent us from attracting new customers.

The market for electronic legal information is currently dominated by West
Group, a division of The Thomson Corporation, a Canadian corporation, and LEXIS-
NEXIS, which is owned by Reed-Elsevier, an Anglo-Dutch corporation. These
competitors are both large, well-established companies. They offer databases
that are similar to and larger than the databases that we offer. While we have
provided legal information for approximately 18 months, West has been in
operation for over 100 years and LEXIS has been in operation for over 25 years.
Our competitors also have greater name recognition, larger customer bases and
significantly greater financial, technical and marketing resources than we do.
They can thus undertake more extensive marketing campaigns, respond more quickly
to new or emerging technologies and changes in customer requirements and devote
greater resources to the development, promotion and sale of their products than
we can. West and LEXIS have significant penetration in the large law firm
market, a market in which we intend to compete. Also, both West and LEXIS
maintain web sites that offer access to their legal databases. Although all of
our legal information is in hypertext mark-up language, which is the standard
format language used on the Internet, West and LEXIS are in the process of
converting their legal information into hypertext mark-up language, which may
enable them to better serve their customers.

We also compete with other companies that offer fee-based access to
selected legal databases over the Internet. These companies may be more
successful than we may be in capturing market share.

Availability of free information from Internet portal companies may lessen the
demand for our products because we charge subscription fees for our products.

While we are not a portal company, we compete with Internet portal
companies that offer free access to government-sponsored and advertiser-
supported sites that provide some of the same information that we provide.
Substantial amounts of free legal information is also available over the
Internet and from other sources, such as courts and other government agencies.
This free information may lessen the demand for our products.

If we do not respond to rapid technological change and evolving industry
standards in the web-based legal information market, we will be at a competitive
disadvantage and we could lose potential customers to our competitors.

The market for web-based products and services is characterized by rapid
technological developments, evolving industry standards, changing customer
demands and frequent introductions of new products, services and enhancements.
As a result, our success depends upon our ability to improve the performance,
content and reliability of our products in response to both evolving demands of
the legal community and competitive product offerings. We cannot assure you
that we will be able to do so successfully or that any enhancements or new
products that we

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introduce will gain acceptance in the marketplace. If we are not successful or
if our products are not accepted, we could lose potential customers to our
competitors.

The large law firm market is currently dominated by West Group and LEXIS-NEXIS,
and we have significantly less experience in marketing online case law and
statutes to large law firms, corporate legal departments and consumer markets,
and our inability to penetrate these markets could impede our growth.

Substantially all of our revenues for our case law, statutory and legal
brief databases have been generated by sales of our products to individuals and
small law firms. Our business strategy calls for increased sales to large law
firms and legal departments of corporations. The large law firm market for
electronic legal information is dominated, and is likely to be dominated for the
near future, by West and LEXIS, our two principal competitors. West and LEXIS
offer comprehensive state law databases for all 50 states, while we presently
offer comprehensive state law databases for only six states. This could
adversely affect our ability to penetrate the large law firm and corporate legal
department markets. Moreover, we have significantly less experience designing
products and serving the needs of large law firms, legal departments of
corporations or consumers. Our inability to successfully market our products to
large law firms, legal departments of corporations or consumers could impede our
growth.

The loss of our relationships with courts and legislative bodies could adversely
affect our business by increasing the time and expense required to convert legal
information.

We maintain databases consisting of federal and state court decisions,
statutes, regulations, acts, administrative decisions, pending legislation,
articles, forms and other legal information that has been provided to us by
various entities. We have formal agreements with some, but not all, of these
data providers. Our ability to maintain our relationships with courts,
legislative bodies and our other data providers and to build new relationships
with additional data providers is critical to the success of our business. If
any of our sources significantly increase their fees, our costs of data
acquisition could increase significantly. The loss of any relationships with
data providers, or any significant increase in data acquisition costs, could
materially increase our operating expenses.

Our limited operating history makes evaluating our business difficult.

While Brief Reporter and ITIS have been in business for a number of years,
we only commenced revenue-producing operations in January 1999. Accordingly, in
the aggregate, we have a limited operating history upon which you can evaluate
our business and prospects. You must consider the risks, expenses and
difficulties frequently encountered by early-stage companies in new and rapidly
evolving markets, including web-based legal information companies.

Our quarterly results of operations fluctuate, which could result in a lower
price for our common stock.

Our quarterly results may be affected by a variety of factors, some of
which are beyond our control, including the following:

. introduction of new products or pricing programs by our competitors;

. difficulties in managing growth;

. technical difficulties or system downtime affecting our web-based
products;

. variations in spending patterns by lawyers;

. other business interruptions;

. increases in selling and marketing expenses, as well as other
operating expenses;

. the amount and timing of costs associated with the development and
maintenance of new database products;

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. economic conditions specific to the Internet or to the legal
profession, as well as general economic conditions; and

. costs and risks associated with potential acquisitions.

In addition, a substantial portion of our expenses, including most product
development and selling and marketing expenses, must be incurred in advance of
revenue generation. If our actual revenue does not meet our expectations, then
our operating profit, if any, may fall short of our expectations. Further, we
may change our pricing strategy for our products due to the rapidly evolving
market for electronic legal information, and this may affect our quarterly
results. Any one or more of these factors could affect our business, financial
condition and results of operations, and this makes the prediction of results of
operations on a quarterly basis unreliable. As a result, period-to-period
comparisons of our historical results of operations may not be meaningful and
you should not rely on them as an indication of our future performance. Also,
due to these and other factors, it is possible that our quarterly results of
operations may be below the expectations of public market analysts and
investors. This could adversely affect the price of our common stock.

We will require additional capital in the future, which may not be available to
us.

We will need to raise additional funds through public or private debt or
equity financing. If we raise additional funds by issuing equity securities,
you may suffer dilution in your holdings of our common stock. Also, adequate
funds may not be available to us when we need them, or may not be available to
us on favorable terms. In this case, we may be not be able to develop or
enhance our products or services, take advantage of business opportunities or
respond to competitive pressures, any of which could harm our business.

Our future capital requirements will depend upon many factors, including
the following:

. our costs to develop and maintain our legal databases;

. the rate at which we expand our operations;

. the extent to which we develop and upgrade our technology;

. the occurrence, timing, size and success of acquisitions; and

. the response of competitors to our service offerings.

As shown in the consolidated financial statements, we have incurred
significant losses from operations, maintain a working capital deficit and have
used significant cash in operations. Our future success is dependent upon
securing additional financing to fund operations and execute our business plan.
The inability to obtain additional financing will substantially impact our
ability to continue as a going concern. While we expect to obtain financing by
November 2000, we have been informed by Arthur Andersen LLP, our independent
public accountants, that if the conditions described in Note 1 to the
consolidated financial statements related to the need for additional financing
continue to exist at the time of their audit of the financial statements for the
year ended December 31, 2000, their report on those statements will include an
explanatory fourth paragraph expressing uncertainty regarding Internet Law's
ability to continue as going concern.

We could be exposed to legal liability for inaccuracies in the information we
provide because lawyers rely on the integrity of our databases when conducting
their legal research.

It is not possible for us to achieve 100% accuracy in the quality of the
information we include in our legal databases. As a result, we may be subject
to claims by our customers based on negligence or other theories relating to the
legal information we distribute. These types of claims could be time-consuming
and expensive to defend and could result in the diversion of our management's
time and attention. While we maintain liability insurance and have agreements
with our customers regarding these issues, we may not be fully protected against
these types of claims.

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Rapid growth in our business due to an increase in the number of customers
subscribing to our web-based products could strain our operational and financial
resources causing us to lose customers and increase our operating expenses.

Since we began delivering our legal information databases over the
Internet, we have experienced rapid growth in our operations. This growth has
placed a strain on our financial resources. Increases in the volume of users of
our computer system could strain the capacity of our software or hardware, which
could lead to slower response times or system failures. Any future growth may
require us, among other things, to:

. expand and upgrade our hardware and software systems;

. expand and improve our operational and financial procedures, systems
and controls;

. improve our financial and management information systems;

. expand, train and manage a larger workforce; and

. improve the coordination among our product development, sales and
marketing, financial, accounting and management personnel.

We cannot assure you that our personnel, systems and controls will be
adequate to support future growth. Our inability to manage growth effectively
or to maintain the quality of our products and services could cause us to lose
customers and could materially increase our operating expenses.

If we do not increase awareness of our brand name, our ability to reach new
customers will be limited.

Our future success will depend, in part, on our ability to increase
awareness of our brand name and our web site. To do so, we must succeed in our
marketing efforts, provide high-quality products and services and increase
traffic to our web site. If our marketing efforts are unsuccessful or if we
cannot increase our brand awareness, we may not be able to attract new customers
and increase our revenues.

System failures could be harmful to our reputation by interrupting our ability
to provide services through our web site.

The continued and uninterrupted performance of our computer system is
critical to our success. Any system failure that causes interruptions in our
ability to deliver our products to our customers, including failures that affect
our ability to collect information from our data providers, could reduce
customer satisfaction and, if sustained or repeated, would reduce the
attractiveness of our services. We also face the risk of a security breach of
our computer system, which could disrupt the distribution of our legal
information. The number of visits to our web site has been increasing, and
further increases in traffic on our web site could strain our systems and
increase the likelihood of system failures. Damage to our computer system could
delay or prevent delivery of our products and result in the loss of our
customers. Our operations are dependent on our ability to protect our computer
system against damage from computer viruses, fire, power loss,
telecommunications failures, vandalism and other malicious acts, and similar
unexpected adverse events. In addition, a failure of our telecommunication
providers to provide the data communications capacity in the time frame required
by us for any reason could cause interruptions in the delivery of our products.
Our computer and communications hardware is located at several facilities, and
the loss of any of this hardware or the data it contains could cause us not to
be able to operate our business for a substantial period of time. Our business,
results of operations and financial condition could be materially adversely
affected by any event that interrupts or delays our operations.

Unanticipated problems could interrupt or delay access to our web-based
products.

As noted above, our insurance may not cover any claims by dissatisfied
subscribers or may not be adequate to indemnify us for any liability we may
incur if we are sued. Any system failure, security breach or other damage could
interrupt or delay our operations, damage our reputation and cause us to lose
customers. Our ability to expand our product offerings depends upon the
simultaneous expansion of our legal databases. Any interruption or termination
of our arrangements with courts and other content providers could result in
increased costs to us or a

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slow-down in our expansion and product introduction plans while we locate
alternative sources for the data conversion or increase our own conversion
capabilities.

We depend heavily on our management team, most of which has little experience
working together or managing a public company.

Our success depends, to a significant extent, upon the efforts and
abilities of Hunter M.A. Carr, our Chairman of the Board, President and Chief
Executive Officer. Loss of Mr. Carr's services could materially and adversely
affect our business, results of operations and financial condition. Also, our
management team has worked together for less than two years. The short period
of time that our senior officers have worked together, or their potential
inability to work successfully together, may adversely affect our ability to
manage growth. Moreover, our officers generally have limited experience in
managing a public company. The ability of our management team to manage future
growth, if any, or the demands of successfully operating a public company is
currently unproven.

There is intense competition for qualified computer technicians, programmers and
sales and marketing personnel, and our failure to attract and retain these
people could affect our ability to respond to rapid technological change and to
increase our sales.

Our future success also depends upon our ability to attract and retain
qualified computer programmers, other technical personnel and sales and
marketing personnel. Competition for talented personnel, particularly technical
personnel, is intense. This competition could increase the costs of hiring and
retaining personnel. We do not have employment agreements with any of our
employees. We may not be able to attract, retain and adequately motivate our
personnel or to integrate new personnel into our operations successfully.

If our software becomes defective, it could be costly for us to correct.

Complex software such as the software we develop for our services may
contain errors or defects, especially when first implemented, that may be costly
to correct. Defects or errors also could result in downtime and our business
could suffer significantly from potential adverse customer reaction, negative
publicity and harm to our reputation.

We may not be able to protect our proprietary technology, including our search
and retrieval software, and we may infringe the proprietary rights of others.

Our services are highly dependent upon proprietary technology, including,
for example, our proprietary search and retrieval software, which allows us to
mark some of the information contained in our databases to enable users to
search our databases. We rely on contracts, confidentiality agreements and
copyright, trademark and trade secrecy laws to protect our proprietary rights in
our technology. We have also obtained trademark registrations for our various
product names. The protective steps we have taken may not be adequate to deter
misappropriation of our proprietary information. In addition, some end-user
license provisions protecting against unauthorized use, copying, transfer and
disclosure of the licensed program may be unenforceable under the laws of
certain jurisdictions and foreign countries. In addition, the laws of some
foreign countries do not protect proprietary rights to the same extent as the
laws of the United States. Failure to adequately protect our intellectual
property could harm our brand, devalue our proprietary content and affect our
ability to compete effectively. Furthermore, defending our intellectual
property rights could result in the expenditure of significant financial and
managerial resources, which could materially adversely affect our business,
results of operations and financial condition. Also, it is possible that our
competitors or others will adopt product or service brands similar to ours,
possibly leading to customer confusion.

Many of our software programs, including our proprietary search and
retrieval software, interact with and perform numerous functions similar to
software available from third parties. Therefore, we could be subject to claims
that our technology infringes the proprietary rights of third parties. In
addition, we have agreed, and may agree in the future, to indemnify some of our
customers against claims that our products infringe upon the intellectual
property rights of others. Claims against us or these customers, even if
without merit, could subject us to costly litigation and could divert the time
and attention of our technical and management teams. A claim of infringement
may require us and our customers to obtain one or more licenses from third
parties. We cannot assure you that we or our customers will be able to obtain
necessary licenses from third parties at a reasonable cost or at all.

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Any failure to obtain a required license could have a material adverse effect on
our business, results of operations and financial condition.

We may be unable to make attractive acquisitions or integrate acquired
companies, and our inability to do so may disrupt our business.

Our recent growth is attributable in significant part to acquisitions of
other providers of legal research materials over the Internet. We expect to
continue to evaluate and, where appropriate, pursue acquisition opportunities in
legal and other areas on terms we consider favorable. We cannot assure you that
we will be able to identify attractive acquisition opportunities. Even if we do
identify attractive candidates, we cannot assure you that we will be able to
complete the acquisition of them on commercially acceptable terms. If we
acquire another business, we could have difficulty integrating its operations,
systems, management and other personnel and technology with our own. These
difficulties could disrupt our ongoing business, distract our management and
employees, increase our expenses and adversely affect our results of operations.
Even if these difficulties could be overcome, we cannot assure you that the
anticipated benefits of any acquisition would be realized. In addition, we may
incur debt or issue equity securities to pay for any future acquisitions. The
issuance of equity securities could be dilutive to our existing stockholders.

Risks Related to Our Industry

The market for web-based legal information is new and rapidly evolving, and we
may not be able to accurately predict and respond to market developments, which
could prevent our products from being accepted.

The market for web-based distribution of electronic legal information has
only recently begun to develop and it is rapidly evolving. This makes it
difficult to predict demand and market acceptance for our products as well as an
appropriate pricing strategy for our products. We cannot guarantee you that the
market for our products will grow, that our products will become widely accepted
or that our pricing strategy will be successful. If the market for our products
does not develop as quickly as we expect, if our products are not accepted by
customers or if our pricing strategy is not successful, our future revenues will
be adversely affected.

A downturn in the legal industry could cause our revenues to decrease.

Our business depends on the continued demand for legal information in
electronic format. Therefore, any downturn in business for the legal profession
could cause our revenues to decrease, which will adversely affect our results of
operations.

The failure of the Internet to grow or remain a viable commercial medium could
harm our growth.

Our success depends in large part on the maintenance of the Internet
infrastructure as a reliable network backbone that provides adequate speed, data
capacity and security. Sales of our web-based products are tied to the adequacy
of the Internet infrastructure and the continued growth and commercial viability
of the Internet. Our success also depends on the timely development of
products, such as high-speed modems, that enable reliable Internet access and
services. The Internet may continue to experience significant growth in the
number of users, frequency of use and amount of data transmitted. The Internet
infrastructure may not be able to support the demands placed on it and the
performance or reliability of the Internet may be adversely affected by this
continued growth. In addition, the Internet could lose its commercial viability
if the number of people who use the Internet does not continue to grow. A
number of factors, including unreliable service, unavailability of cost-
effective, high-speed access to the Internet or concerns about security, could
impede this growth. The infrastructure or complementary products and services
necessary to maintain the Internet as a viable commercial medium may not be
developed, and the Internet may not continue to be a viable commercial medium
for us.

Government action could increase the cost of our services.

There are currently few laws or regulations that specifically regulate
communications or commerce on the Internet. However, laws and regulations may
be adopted that address issues such as pricing and the characteristics of
products and services. In addition, several telecommunications companies have
petitioned the Federal

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Communications Commission to regulate Internet and on-line service providers in
a manner similar to long-distance telephone carriers and to impose access fees
on them. This regulation, if imposed, could increase the cost of transmitting
data over the Internet. Moreover, it may take years to determine the extent to
which existing laws relating to issues such as intellectual property ownership
and infringement, libel, obscenity and personal privacy are applicable to the
Internet. Finally, state tax laws and regulations relating to the provision of
products and services over the Internet are still developing. A few states have
tried to impose taxes on products and services provided over the Internet. If
additional states try to do so, our operating costs may increase and we may not
be able to increase the price that we charge for our products to cover these
costs. Any new laws or regulations or new interpretations of existing laws and
regulations relating to the Internet could decrease the growth in the use of the
Internet, decrease the demand for our web site, increase our operating expenses
or otherwise adversely affect our business.

Risks Related to our Common Stock

Anti-takeover provisions could prevent or delay a change in control.

Provisions of our certificate of incorporation and bylaws and Delaware law
may make it more difficult for a third party to acquire us, even if so doing
would be beneficial to you. These include the following:

. our board of directors is authorized to issue up to 50 million shares
of preferred stock and to fix the rights, preferences, privileges and
restrictions of those shares without any further vote or action by the
stockholders, which may be used by the board to create voting
impediments or otherwise delay or prevent a change in control or to
modify the rights of holders of our common stock;

. our board of directors is divided into three classes of directors
serving staggered three-year terms, which will result in at least two
annual meetings of stockholders, instead of one, generally being
required to change the majority of the board;

. a prohibition on cumulative voting in the election of directors, which
would otherwise allow less than a majority of stockholders to elect
directors;

. limitations on who may call annual and special meetings of
stockholders;

. advance notice procedures with regard to stockholder proposals and the
nominations, other than by or at the direction of the board, of
candidates for election as directors;

. a requirement that vacancies on the board of directors, including
newly created directorships, be filled only by a majority of directors
then in office;

Control by officers and directors could have an adverse effect on our
stockholders.

As of October 18, 2000, our directors, executive officers and their
affiliates beneficially owned a total of approximately 68.4% of our outstanding
common stock. Hunter M.A. Carr, our Chairman of the Board, President and Chief
Executive Officer, beneficially owns approximately 49.2% of our outstanding
common stock. As a result,

11
<PAGE>

these stockholders, acting together, have the ability to control substantially
all matters submitted to our stockholders for approval, including the election
and removal of directors and any merger, consolidation, takeover or other
business combination involving us, and to control our management and affairs.
This may discourage a potential acquirer from making a tender offer or otherwise
attempting to obtain control of us, which could materially adversely affect the
market price of our common stock.

The volatility of our stock price could adversely affect our stockholders.

There currently is a public market for our common stock, but there is no
assurance that there will always be such a market. The trading price of our
common stock is highly volatile and could be subject to wide fluctuations in
response to factors such as:

. actual or anticipated variations in quarterly operating results;

. announcements of technological innovations;

. new sales formats, contracts, products or services by us or our
competitors;

. changes in financial estimates by securities analysts;

. announcements of significant acquisitions, strategic partnerships,
joint ventures or capital commitments;

. additions or departures of key personnel;

. sales of common stock; or

. other general economic or stock market conditions, many of which are
beyond our control.

In addition, the stock market in general, and the market for Internet-
related and technology companies in particular, has experienced extreme price
and volume fluctuations that have often been unrelated or disproportionate to
the operating performance of such companies. There can be no assurance that
these trading prices and price earnings predictions will be sustained. These
broad market and industry factors may materially and adversely affect the market
price of our common stock, regardless of our operating performance.
Historically, following periods of volatility in the market price of a company's
securities, securities class action litigation has often been instituted against
that company. The institution of similar litigation against us could result in
substantial costs and a diversion of management's attention and resources, which
could have a material adverse effect on our business, financial condition and
results of operations.

A large number of shares of our common stock is eligible for future sale, and
the sale of these shares may cause the price of our common stock to drop.

As of October 18, 2000 we had outstanding 33,366,555 shares of common
stock. This does not include up to 4,663,693 shares that may be acquired upon
the conversion of our preferred stock and the exercise of outstanding warrants
by Cootes Drive LLC and Aspen Capital Partners, Inc. which are being registered
in this offering. We believe that approximately 7,700,035 of our common shares
that are held by our non-affiliates are currently freely tradable under Rule 144
(subject to legal opinions), or are registered under the Securities Act of 1933.
In addition, as of October 18, 2000, we believe approximately 2,731,584 of our
unregistered shares held by our affiliates could be resold pursuant to, and
within the volume limitations of, Rule 144.

The market price of our common stock could drop due to sales of a large
number of shares of our common stock or the perception that they could occur.
These factors could also make it more difficult to raise funds through future
offerings of common stock. See "Shares Eligible for Future Sale" on page 49 for
more information.

You should not expect to receive dividends from us.

12
<PAGE>

We have never declared or paid dividends to our stockholders. We currently
intend to retain any future earnings for funding growth and therefore do not
expect to pay any dividends in the foreseeable future.

13
<PAGE>

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

We have made forward-looking statements in this prospectus and in the
documents incorporated by reference in this prospectus that are based upon the
beliefs and assumptions of, and on information available to, management, and are
subject to risks and uncertainties. Forward-looking statements include the
information concerning our possible or assumed future results of operations,
capital resources and portfolio performance, and those statements preceded by,
followed by or that include the words "may," "will," "could," "should,"
"believes," "expects," "plans," "seeks, "intends," "estimates," "anticipates" or
similar expressions, or by discussions of strategy, plans or intentions.

You should not rely on forward-looking statements because they are subject
to known and unknown risks, uncertainties and other factors that may cause our
actual results to differ materially from those contemplated by the forward-
looking statements. These include the following:

. general economic and business conditions, both nationally and in our
markets;

. assumed growth in usage of the Internet;

. assumed growth in the number of lawyers;

. our expectations and estimates concerning future financial
performance, financing plans and the impact of competition;

. anticipated trends in our business;

. existing and future regulations affecting our business;

. our acquisition opportunities; and

. other risk factors set forth under "Risk Factors" on pages 2 through 9
in this prospectus.

You are cautioned not to place undue reliance on forward-looking
statements, which reflect management's analysis only as of the date of this
prospectus. We assume no obligation to update forward-looking statements.

USE OF PROCEEDS

The shares of common stock offered by this reoffer prospectus are being
registered for the account of the selling stockholders, and we will not receive
any proceeds from the sale of common stock by the selling stockholders.

SELLING STOCKHOLDERS

. the exercise of warrants to purchase 200,000 shares by Aspen Capital
Partners, Inc. in accordance with the terms of that certain Warrant
dated May 19, 2000;

. the Contract for Sale of Stock dated November 8, 1999, by and between
John R. Marsh, Ronald W. Hogan, Charles E. Bowen, Jr., and us; and

. the Contract for Sale of Stock dated December 8, 1999, by and between
David P. Harriman, Andrew Wyszkowski, Eugene Meyung, Suzanne Meyung,
Christina Brown, and us.

14
<PAGE>

Each of the above documents is attached as an exhibit to the registration
statement of which this prospectus is a part. Each selling stockholder will
receive all of the net proceeds from the sale of his respective shares of common
stock.

Cootes Drive LLC purchased an aggregate of $3 million worth of our
convertible preferred stock and warrants from us in a private placement
transaction which closed on May 11, 2000. As part of that private placement,
Cootes was issued shares of preferred stock that may be converted into our
common stock and warrants to acquire our common stock. The preferred stock and
the warrants are described in more detail in pages 18 and 29 of this prospectus.
Holders of this preferred stock and these warrants are prohibited from using
them to convert into and acquire shares of our common stock to the extent that
such conversion or acquisition would result in such holder, together with any of
its affiliates, beneficially owning in excess of 4.999% and 9.999%,
respectively, of the outstanding shares of our common stock following such
conversion or acquisition. This restriction may be waived by Internet Law on
not less than 61 days' notice to us. Since the number of shares of our common
stock issuable upon conversion of the preferred stock will change based upon
fluctuations of the market price of our common stock prior to a conversion, the
actual number of shares of our common stock that will be issued under the
preferred stock, and consequently the number of shares of our common stock that
will be beneficially owned by Cootes, cannot be determined at this time.
Because of this fluctuating characteristic, we have agreed to register a number
of shares of our common stock that exceeds the number of shares beneficially
owned by Cootes. The number of shares of our common stock listed in the table
below as being beneficially owned by Cootes includes the shares of our common
stock that are issuable to them, subject to the 4.999% and 9.999%, respectively,
limitation, upon conversion of their preferred stock and exercise of their
warrants. However, the 4.999% and 9.999%, respectively, limitation would not
prevent Cootes from acquiring and selling in excess of 4.999% and 9.999%,
respectively, of our common stock through a series of conversions and sales
under the preferred stock and acquisitions and sales under the warrants.

15
<PAGE>

The following table sets forth information regarding shares of our common
stock beneficially owned by each selling stockholder as of October 18, 2000.
This offering of our common shares began when the original registration
statement on Form S-1 was declared effective on July 5, 2000, and as of
October 18, 2000, an aggregate of 1,648,498 shares had been sold under this
registration statement. Since the selling stockholders may sell all, some or
none of their shares, no estimate can be made of the total number of shares
that are to be offered by the selling stockholders under this prospectus or
that will be beneficially owned by each selling stockholder upon the completion
of the offering to which this prospectus relates.

<TABLE>
<CAPTION>
Name Number of Shares of Shares Owned After
Common Stock Maximum Number of Offering Assuming the Percentage of
Beneficially Owned Shares of Common Stock Maximum Common Stock Owned
Before Registration Offered Hereby Are Sold After Offering (2)
------------------------- ---------------------- ----------------------- --------------------
<S> <C> <C> <C> <C>
Cootes Drive LLC 1,755,765(1) 4,463,693 0 *
John R. Marsh 8,422 1,263 7,159 *
Charles E. Bowen, Jr. 137,942 20,691 117,251 *
Aspen Capital Partners, Inc. 200,000 200,000 0 *
David P. Harriman 205,280 45,070 160,210 *
Eugene Meyung 79,265 19,816 59,449 *
Suzanne Meyung 33,833 8,458 25,375 *
Andrew Wyszkowski 180,280 45,070 135,210 *
Christina Brown 9,667 2,416 7,251 *
--------- --------- -------
Total 2,522,683 4,806,477 511,905
========= ========= =======
</TABLE>
____________

*Less than 1%

(1) This number reflects the number of common shares that Cootes Drive LLC
could acquire upon the conversion of our preferred stock and outstanding
warrants as of October 18, 2000, which number is less than the number of
shares we have agreed to register under the registration rights agreement
with Cootes Drive LLC.

(2) The percentage ownership column assumes that Cootes Drive and Aspen Capital
acquired the maximum amount of our common shares possible offered hereunder
and sold all of such shares under this prospectus.

16
<PAGE>

PLAN OF DISTRIBUTION

The selling stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The selling stockholders may use any one or more of the
following methods when selling shares:

. ordinary brokerage transactions and transactions in which the broker-
dealer solicits purchasers;

. block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;

. purchases by a broker-dealer as principal and resale by the broker-
dealer for its account;

. an exchange distribution in accordance with the rules of the
applicable exchange;

. privately negotiated transactions;

. short sales;

. broker-dealers may agree with the selling stockholders to sell a
specified number of such shares at a stipulated price per share;

. a combination of any such methods of sale; and

. any other method permitted pursuant to applicable law.

The selling stockholders may also sell shares under Rule 144 under the
Securities Act of 1933, if available, rather than under this prospectus.

Subject to certain restrictions, the selling stockholders may also engage
in short sales against the box, puts and calls and other transactions in our
securities or derivatives of our securities and may sell or deliver shares in
connection with these trades. The selling stockholders may pledge their shares
to their brokers under the margin provisions of customer agreements. If a
selling stockholder defaults on a margin loan, the broker may, from time to
time, offer and sell the pledged shares.

Broker-dealers engaged by the selling stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling stockholders (of, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.

The selling stockholders and any broker-dealers or agents that are involved
in selling the shares may be deemed to be "underwriters" within the meaning of
the Securities Act of 1933 in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act of 1933.

We are required to pay all fees and expenses incident to the registration
of the shares, excluding fees and disbursements of counsel to the selling
stockholders. We have agreed to indemnify the selling stockholders against
certain losses, claims, damages and liabilities, including liabilities under the
Securities Act of 1933.

SEC POSITION ON INDEMNIFICATION

Our directors and officers are to be indemnified against certain causes of
action. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the SEC,

17
<PAGE>

such indemnification is against public policy as expressed in the Securities Act
of 1933 and is therefore unenforceable.

DESCRIPTION OF CAPITAL STOCK

Our authorized capital stock consists of 100 million shares of common
stock, $.001 par value per share, of which 33,366,555 were issued and
outstanding as of October 18, 2000, and 50 million shares of preferred stock,
$.001 par value per share, of which 198.5 were issued and outstanding as of
October 18, 2000. The outstanding shares of capital stock were validly issued,
fully paid, and non-assessable.

Voting Rights
-------------

Holders of shares of common stock are entitled to one vote per share on all
matters submitted to a vote of the shareholders. Shares of common stock do not
have cumulative voting rights. Accordingly, the holders of a majority of the
shareholder votes eligible to vote and voting for the election of the board of
directors can elect all members of the board of directors.

Dividend Rights
---------------

Holders of record of shares of common stock are entitled to receive
dividends when and if declared by our board of directors out of our funds
legally available for dividends.

Liquidation Rights
-------------------

Upon our liquidation, dissolution or winding up, holders of shares of
common stock are entitled to receive prorata all of our assets available for
distribution to shareholders after distributions are made to any creditors and
to the holders of our preferred stock.

Preemptive Rights
-----------------

Holders of common stock do not have any preemptive rights to subscribe for
or to purchase any of our stock, obligations or other securities.

Preferred Stock
---------------

We are also authorized to issue 50 million shares of preferred stock of
which 198.5 shares are presently outstanding and are designated as Series A
Convertible Preferred Shares. The preferred stock or any series thereof shall
have such designations, preferences and relative, participating, optional or
special rights and qualifications, limitations or restrictions thereof as shall
be expressed in the resolution providing for the issue of such stock adopted by
the board of directors and may depend upon facts ascertainable outside such
board resolutions, provided that the manner in which such facts shall operate
upon such designations, preferences, rights and qualifications, limitations or
restrictions of such class or series of stock is clearly and expressly set forth
in such resolutions.

The Series A Convertible Preferred Shares have a par value of $.001 per
share and a stated value per share of $10,000 plus all unpaid and accrued
dividends. The holders of the shares shall have the right to receive a 5%
cumulative dividend per year. The holders of the shares have the right to
convert their shares to common stock at any time at a price per share of common
stock of the lesser of: (i) $3.2375 or (ii) 80% of the average closing price for
the twenty days preceding the conversion date. Holders of Series A Preferred
Stock have no voting rights except as to any action to (a) alter or change
adversely the powers, preferences or rights given to the Series A holders, (b)
authorize a class of stock with a liquidation preference senior to the Series A
Stock, (c) alter or amend its charter documents so as to adversely effect the
rights of the holders, (d) increase the authorized number of shares of preferred
stock, or (e) enter into any agreement with respect to the foregoing. Upon
liquidation, the holders of the Series A Preferred Shares shall be entitled to a
distribution equal to the stated value of each share held by each holder before
the holders of junior securities may receive any distribution. The Series A
Shares are more fully described in the Certificate of the Powers, Designations
Preferences and Rights of the 5% Series A Convertible Preferred Stock filed with
the Delaware Secretary of State on May 11, 2000.

18
<PAGE>

As of October 18, 2000, holders of 101.5 shares of the Series A Convertible
Preferred Stock had converted their shares to 1,361,573 shares of our common
stock.

Transfer Agent and Registrar
----------------------------

Atlas Stock Transfer Corporation is the registrar and transfer agent for
our common stock and receives fees from us for serving in those capacities.

Limitations on Change of Control
--------------------------------

In addition to the anti-takeover provisions in our charter documents, noted
in the section entitled "Risk Factors" on page 8 of this prospectus, we are
subject to Section 203 of the Delaware General Corporation Law. In general, the
statute prohibits a publicly held Delaware corporation from engaging in any
business combination with any interested stockholder for a period of three years
following the date that the stockholder became an interested stockholder unless:
prior to the date, the board of directors of the corporation approved either the
business combination or the transaction that resulted in the stockholder
becoming an interested stockholder; upon consummation of the transaction that
resulted in the stockholder's becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced, excluding those shares owned
by persons who are directors and also officers, and employee stock plans in
which employee participants do not have the right to determine confidentially
whether shares held subject to the plan will be tendered in a tender or exchange
offer; or on or subsequent to the date, the business combination is approved by
the board of directors and authorized at an annual or special meeting of
stockholders, and not by written consent, by the affirmative vote of at least
two-thirds of the outstanding voting stock that is not owned by the interested
stockholder.

Section 203 defines "business combination" to include: any merger or
consolidation involving the corporation and the interested stockholder; any
sale, transfer, pledge or other disposition involving the interested stockholder
of 10% or more of the assets of the corporation; subject to exceptions, any
transaction that results in the issuance or transfer by the corporation of any
stock of the corporation to the interested stockholder; or the receipt by the
interested stockholder of the benefit of any loans, advances, guarantees,
pledges or other financial benefits provided by or through the corporation. In
general, Section 203 defines an interested stockholder as any entity or person
beneficially owning 15% or more of the outstanding voting stock of the
corporation and any entity or person affiliated with or controlling or
controlled by the entity or person.

19
<PAGE>

MARKET INFORMATION

Our common stock trades on the over-the-counter Bulletin Board under the
symbol "ELAW." The following table shows the high and low of closing bid prices
for our common stock as reported by the over-the-counter Bulletin Board. The
closing bid price quotations reflect inter-dealer prices, without retail mark-
up, markdown or commission and may not necessarily represent actual
transactions. The closing price as of October 18, 2000 was $1.0625.

<TABLE>
<CAPTION>
High Low
---------- ----------
<S> <C> <C>
Six months ended June 30, 1998
Third quarter...................................................................... $ 0.75 $ 0.50
Fourth quarter..................................................................... $ 0.50 $ 0.25
Fiscal year ended June 30, 1999
First quarter...................................................................... $0.125 $0.125
Second quarter..................................................................... $ 0.25 $0.063
Third quarter...................................................................... $0.875 $0.063
Fourth quarter..................................................................... $ 7.00 $0.469
Transition six months ended December 31, 1999
Third quarter...................................................................... $5.125 $ 1.75
Fourth quarter..................................................................... $4.063 $1.625
Fiscal year ended December 31, 2000
First quarter ending March 31, 2000................................................ $7.875 $3.187
Second quarter ending June 30, 2000................................................ $5.938 $ 1.75
Third quarter ending September 30, 2000............................................ $1.875 $.9062
</TABLE>

We have not paid dividends since our inception and do not intend to do so
in the near future. As of October 18, 2000, there were 1,504 total record
holders of our common stock.

SELECTED CONSOLIDATED FINANCIAL DATA

Under the terms of an Agreement and Plan of Reorganization dated effective
March 30, 1999, among National Law, the then stockholders of National Law and
Internet Law, the stockholders of National Law became beneficial owners of 90%
of our outstanding common stock, a majority slate of new directors were elected
by the new stockholders, and our name was changed from Planet Resources, Inc. to
Internet Law Library, Inc. In return, our original stockholders, who once owned
100% of a company with no operations and some mining assets, became ten percent
(10%) owners of National Law's parent company. Because of these fundamental
changes in the control and in the operations of us, the selected financial data
shown below and the consolidated financial statements contained in this
registration statement are presented as if National Law had acquired us.
Accordingly, the selected financial data and the consolidated financial
statements for the period from inception (November 30, 1998) through June 30,
1999, and the six-month transition period ended December 31, 1999, reflect the
consolidated financial information of the business conducted by National Law for
those periods and by our new subsidiary, New Planet, from the date of the
reverse acquisition through June 30, 1999, and through the six months ended
December 31, 1999.

The historical financial data presented in the table below are derived from
the Consolidated Financial Statements of Internet Law. See Note 2 of the
Consolidated Financial Statements regarding restatement of the financial
statements as of June 30, 1999. The financial results do not necessarily
indicate Internet Law's future operations or financial results. The data
presented below should be read in conjunction with Internet Law's Consolidated
Financial Statements and notes in the section "Management's Discussion and
Analysis of Financial Condition and Results of Operations." The statement of
operations data for the six months ended June 30, 2000 and 1999, and the balance
sheet data as of June 30, 2000, are derived from our unaudited financial
statements but have been prepared on a basis consistent with our audited
financial statements and the notes thereto and include all adjustments
(consisting only of normal recurring adjustments) that we consider necessary for
a fair presentation of the information. We have been informed by Arthur
Andersen LLP, our independent public accountants, that if the conditions
described in Note 1 to the consolidated financial statements related to the need
for additional financing continue to exist at the time of their audit of the
financial statements for the year ended December 31, 2000, their report on those
statements will include

20
<PAGE>

an explanatory fourth paragraph expressing uncertainty regarding Internet Law's
ability to continue as a going concern. Historical results are not necessarily
indicative of future results.

Period from
Inception
Six Months Six Months (November 30,
Ended Ended Six Months Ended 1998)
June 30, 2000 June 30, 1999 December 31, 1999 to June 30, 1999
--------------- --------------- ----------------- ------------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Consolidated Statement of Operations Data:
Revenues................................. $ 459,580 $ 53,520 $ 222,697 $ 53,520
Operating expenses:
Selling and marketing.................. 521,750 244,775 372,324 244,775
General and administrative............. 2,336,819 211,891 1,108,645 211,891
Production and computer service........ 231,365 65,073 73,628 65,073
Amortization and depreciation.......... 611,349 142,783 197,037 142,783
----------- ----------- ------------ ----------
Interest income (expense)................ (38,251) (1,212) 3,150 (1,212 )
----------- ----------- ------------ ----------
Net loss................................. $(3,279,954) $ (612,214) (1,525,787) (612,214)
=========== =========== ============ ==========
Net loss per share-basic and diluted..... $(0.12) $(0.03) $(0.07) $(0.06)
=========== =========== ============ ==========

<CAPTION>
December 31,
June 30, 2000 1999 June 30, 1999
-------------- ---------------- -----------------
(unaudited) (restated)
<S> <C> <C> <C>
Consolidated Balance Sheet Data:
Cash and cash equivalents(1)............. $ 164,143 $ 78,544 $ 54,629
Working capital(1)....................... (494,192) 341,745 118,409
Total assets............................. 20,213,783 5,920,651 2,424,070
Redeemable common stock.................. 125,000 125,000 -
Stockholders' equity..................... $17,613,690 $ 5,454,130 $2,140,807
</TABLE>
___________

(1) At December 31 and June 30, 1999, cash includes $20,235 and $32,515,
respectively, that is to be distributed to New Planet's stockholders under
the distribution agreement with them. In addition, at December 31 and June
30, 1999, working capital includes recorded mining assets of $10,000 that
will also be distributed under this agreement. At October 18, 2000, these
mining assets may not have any realizable value. At December 31 and June
30, 1999, Internet Law has recorded a current liability in the amount of
$30,235 and $42,515, respectively, representing its total obligation under
the distribution agreement.

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

The following discussion should be read in conjunction with the
consolidated financial statements of Internet Law Library, Inc., which are
included elsewhere in this statement. Included in this discussion are certain
forward-looking statements regarding Internet Law's expectations for its
business and its capital resources. These expectations are subject to various
uncertainties and risks that may cause actual results to differ significantly
from these forward-looking statements.

We are a Delaware corporation that provides electronic publishing services
and database content through CD-Rom media and Internet sites with subscription
access, licenses and transaction fees for databases through our wholly owned
subsidiaries, National Law Library, Inc., GoverNet Affairs, Inc., Brief
Reporter, LLC and Compass Data Systems, Inc., as well as training and support
with federal regulations through our wholly owned subsidiary, Venco Compliance
Inc., and database content, software, hardware and other support through our
subsidiary, ITIS, Inc. The content of the databases consists of pending
legislation, statutory law, rules and case law at the federal and state levels.
Legal briefs from certain important cases before federal and state courts are
also available, as are litigation forms. This material can be useful to
legislators, corporate regulatory personnel, lobbyists, individual lawyers,
judges, law firms, corporate legal departments, government agencies, and
businesses and individuals involved in legislative efforts, litigation, and
corporate legal planning. Interfacing with these databases are retrieval
engines that are owned by us or

21
<PAGE>

our subsidiaries. Customers using these Internet sites pay subscription fees to
the operating subsidiaries under monthly, quarterly or annual subscription
agreements or per-use licenses.

We were originally incorporated as Allied Silver-Lead Company in the State
of Idaho in 1967 and, until 1992, operated as an exploratory mining company. In
January 1996, we were reincorporated in Delaware as a result of a merger and,
among other shareholder actions taken at that time, changed our name to Planet
Resources, Inc. Between 1992 and our reverse acquisition by National Law in
March of 1999, we had no operations; however, we maintained certain mining
properties that are to be indirectly distributed to those stockholders who were
our stockholders prior to the reverse acquisition by National Law. To effect
this distribution, New Planet Resources, Inc., a Delaware corporation whose name
was changed to Planet Resources, Inc. and is presently a wholly owned subsidiary
of us will, under the terms of an Agreement and Plan of Distribution dated March
25, 1999, succeed to our interests in these mining and related properties and a
remainder cash balance at such time as the common stock of New Planet is
registered under the Securities Act. New Planet has filed a registration
statement with the United States Securities and Exchange Commission to register
such stock.

National Law, a Texas corporation, was formed in November 1998 for the
purpose of developing and marketing an Internet destination to be used for legal
research. After 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 the Litidex(R)
search, 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, the same month in
which National Law agreed in principle to be acquired by Internet Law.

Preliminary funding for these operations occurred in December 1998 with an
investor's purchase of a $200,000, 2% subordinated convertible debenture. In
February 1999, this debenture was converted into 500,000 shares of National
Law's common stock. Also in February 1999, National Law issued and sold
2,337,500 shares of its common stock for approximately $406,000 in cash. Issued
and outstanding National Law common stock amounted to 18 million shares just
prior to the reverse acquisition of Planet Resources on March 30, 1999.

Under the agreement and plan of reorganization, each share of National Law
common stock was exchanged for one share of our unregistered common stock. In
contemplation of this transaction, our original stockholders agreed to a one-
for-two reverse stock split, which resulted in 2 million shares of our common
stock being outstanding immediately prior to the merger. After giving effect to
these transactions, former National Law stockholders owned 18 million shares of
our unregistered common stock and our original stockholders owned 2 million
shares of our common stock. Following the transaction, the stockholders voted
to change the name of Planet Resources, Inc. to "Internet Law Library, Inc."
Under the terms of the agreement and plan of reorganization, the majority of our
original board of directors resigned and were replaced with directors elected by
our new stockholders.

Internet Law and ITIS, a company wholly owned by Mr. Carr until January
2000, signed certain agreements under which ITIS provides database content and
various management, staffing and procurement services and office space to
National Law. In addition, Mr. Carr provided executive management and marketing
services to National Law under a personal service contract. Apart from the
content agreement with ITIS, the service agreements were put in place to provide
National Law with an interim infrastructure until such time as additional
financing and cash from operations became available. Effective July 1, 1999,
the personal service contract with Mr. Carr was terminated when he became one of
our salaried officers. In addition, certain individuals whose salaries and
benefits were allocated to National Law by ITIS also became full-time officers
and employees of National Law on July 1, 1999.

On April 30, 2000, Internet Law acquired all of the outstanding stock of
ITIS, a company once wholly owned by Hunter M.A. Carr, Internet Law's Chairman
of the Board, President, Chief Executive Officer, and largest stockholder. See
the section entitled "Certain Transactions" on page 37. According to the terms
of the Stock Exchange Agreement, Internet Law Library exchanged 5,044,903
unregistered shares of Internet Law's common stock for all of the outstanding
common stock of ITIS. While serving as one of Internet Law's primary vendors of
case law content, ITIS also provides various executive, sales, production, and
administrative services including programming, hardware and software support and
product development to Internet Law. Internet Law expects to use ITIS' expertise
in the future to provide similar products and services in other industries.

22
<PAGE>

In the six months ended December 31, 1999, we issued 2,207,526 shares of
unregistered common stock at an average price per share of $1.02, yielding cash
proceeds of $2,245,675, net of $42,250 in commissions.

We may experience high volatility in operating results, net income and cash
flows from quarter to quarter and from year to year. Our revenues depend on our
ability to attract and retain customers. Most of the customers of National Law,
our largest operating subsidiary, have the option of discontinuing their service
at the end of their monthly subscription period for any reason. Our expense
levels are based, in part, on its expectations as to future revenues. Also, we
expect that our operations often will require up-front expenses, but will result
in trailing revenues. To the extent that revenues are below expectations, we
may be unable or unwilling to reduce expenses proportionately, and operating
results, net income and cash flows are likely to be adversely affected.

RESULTS OF OPERATIONS

Comparison of Results for the six-month period ended June 30, 2000, and the
six months ended June 30, 1999

Revenue. Revenue increased by $406,060 to $459,580 during the six months ended
June 30, 2000, from $53,520 recorded for the six months ended June 30, 1999.
Revenues also increased by $206,906 for the quarter ended June 30, 2000, to
$251,198, as compared to revenues of $44,292 for the quarter ended June 30,
1999. The increases are due to a greater number of subscribers in National
Law's databases, 2,090 at June 30, 2000, compared to 719 at June 30, 1999, and
1851 subscribers at March 31, 2000, compared to 144 at March 31, 1999. A
substantial portion of the new subscriptions are due to the addition of more
single-state packages available with statutes and extended case law, as opposed
to the bundled service, where subscribers gain access to the databases of
several states and federal courts for one rate. Internet Law's expanded content
databases by state have enabled these sales of state-by-state packages. In
addition, average monthly subscription rates increased to $50.44 at June 30,
2000 from $43.65 at June 30, 1999. Consolidated revenues for the six months
ended June 30, 2000, and the three months ended June 30, 2000, increased by
$27,390 and $35,000, respectively, due to GoverNet and Brief Reporter, which
were acquired during the last calendar quarter of 1999, and by $13,538 in the
quarter ended June 30, 2000, due to ITIS, which was acquired at April 30, 2000.

Sales and Marketing Expense. Sales and marketing expense increased by $276,975
to $521,750 during the six months ended June 30, 2000, from $244,775 during the
corresponding period ended June 30, 1999. Sales and marketing expense also
increased by $24,804 during the quarter ended June 30, 2000, to $205,498, from
$180,694 for the quarter ended June 30, 1999. During 1999, National Law was
planning and developing a sales and marketing program, which it began to
implement in April 1999 with contract telemarketing personnel. Sales and
marketing expense for the six months ended June 30, 1999, also consisted of
consulting services provided by Internet Law's President under a personal
services contract that was in effect prior to when Mr. Carr became an employee
of Internet Law on July 1, 1999. During 2000, Internet Law has continued to
expand its telemarketing force and has also engaged a field sales force.
Additionally, increased sales and marketing expense has been incurred in placing
banner ads on Internet sites, increased print advertising in legal publications,
and participation in major legal industry meetings and conferences.

General and Administrative Expense. During the six months ended June 30, 2000,
general and administrative expense totaled $2,336,819, resulting in an increase
of $2,124,928 over the $211,891 recorded during the six months ended June 30,
1999. For the quarter ended June 30, 2000, general and administrative expenses
increased by $954,131 from $75,541 for the quarter ended June 30, 1999, to
$1,029,672 for the quarter ended June 30, 2000. In connection with Internet
Law's internal expansion and through acquisitions, payroll and related costs at
the administrative and management level have increased by about $900,000 for the
six months ended June 30, 2000, as compared to the six months ended June 30,
1999, and by about $250,000 for the quarter ended June 30, 2000, as compared to
the quarter ended June 30, 1999. In addition, professional consulting and
contract services, as well as legal and accounting expenses, have increased by
$212,000 for the six months ended June 30, 2000, over the six months ended June
30, 1999. During the three-month period ended June 30, 2000, these same expenses
increased $137,000 as compared to the three-month period ended June 30, 1999.
As a result of Internet Law Library's acquisitions of GoverNet, Brief Reporter,
and ITIS, general and administrative expenses increased by $237,000 for the six
months ended June 30, 2000, and by $159,000 for the three months ended June 30,
2000, as compared to the corresponding periods in 1999.

Production and Computer Service Expense. Production and computer service expense
of $231,365 for the six

23
<PAGE>

months ended June 30, 2000, and $76,602 for the three months ended June 30,
2000, reflects increases of $166,292 and $23,529 over the respective periods
ended June 30, 1999. These increased expenses were primarily due to increased
production staffing to facilitate the building and expansion of individual state
statute databases.

Amortization and Depreciation Expense. During the six months ended June 30,
2000, amortization and depreciation expense amounted to $611,349, compared to
$142,783 for the six months ended June 30, 1999. For the three months ended June
30, 2000, amortization and depreciation expense amounted to $403,871, compared
to $79,643 for the three months ended June 30, 1999. The resulting increases of
$468,566 and $324,228 are primarily attributable to amortization relating to
estimated intangible assets acquired by Internet Law in the acquisitions of
GoverNet, Brief Reporter and ITIS, while $65,000 for the six months ended June
30, 2000, and $40,000 for the three months ended June 30, 2000, relate to
depreciation of fixed-asset acquisitions occurring during the respective
periods.

Interest Expense. Interest expense of $47,574 incurred by Internet Law for the
six months ended June 30, 2000, includes accrued interest payable to Mr. Carr in
the amount of $44,682, of which $37,858 was accrued during the three months
ended June 30, 2000. Internet Law calculates the interest based on the terms of
ten unsecured promissory notes payable in the total amount of $1,400,000
extended to Mr. Carr. There was no interest expense incurred in 1999.

Comparison of Results for the six-month transition period ended December 31,
1999, and the period from inception of National Law on November 30, 1998 to June
30, 1999 ("Inception to June 30, 1999")

Revenues. Total revenues increased 316% to $222,697 for the six months ended
December 31, 1999, from $53,520 for the period Inception to June 30, 1999. This
increase is primarily due to an increase in the number of subscribers to
National Law's databases. At December 31, 1999, National Law had 1,485
subscribers who were paying an average monthly subscription rate of $47.03.
This contrasts with 719 subscribers at June 30, 1999, who paid an average
monthly rate of $43.65. Primarily, the increase in revenues is attributable to
a growing subscriber base. The increase in revenue between periods is also due
to the increased number of months during which subscriptions to National Law's
databases were sold. During the Inception to June 30, 1999 period, National Law
was in a start-up mode until early March 1999, allowing for only four months of
sales activity during the earlier period versus six full months of activity
ended December 31, 1999. Revenues from GoverNet Affairs for two months
amounting to $6,838, and from Brief Reporter for one month amounting to $3,640
were not significant elements of consolidated revenues during the six months
ended December 31, 1999.

Sales and Marketing Expense. Selling and marketing expense increased by
$127,549 or 52% to $372,324 for the six months ended December 31, 1999, from
$244,775 for the period Inception to June 30, 1999. Included within this
expense category are the hourly wages and salaries of telemarketing personnel
and management directly involved in National Law's selling and marketing
efforts. During the six months ended December 31, 1999, hourly wages and
salaries of these personnel increased by $181,090 over the preceding period due
primarily to : (1) an increase in the average monthly number of telemarketing
personnel from 12 persons during the Inception to June 30, 1999 period to 20
persons during the six-month period, and (2) during the earlier period, the
services of telemarketing personnel were employed for only three months versus a
full six months during the latter period. This increase in telemarketing and
sales management was partially offset by a decrease of $75,400 related to the
termination on June 30, 1999, of a personal service contract with Mr. Carr,
National Law's President, during the period Inception to June 30, 1999.
Effective July 1, 1999, Mr. Carr became a salaried officer of Internet Law and
the related payroll expenses have been included in general and administrative
expense for the six months ended December 31, 1999. During the earlier period,
substantially all of Mr. Carr's efforts were dedicated to building and directing
National Law's early sales infrastructure. Also, during the six months ended
December 31, 1999, Internet Law's consolidated selling and marketing expense
increased by $21,660 due to consolidating two months of GoverNet Affairs'
selling and marketing expense.

General and Administrative Expense. General and administrative expense
increased by $896,755 from $211,891 during the period Inception to June 30,
1999, to $1,108,645 during the six months ended December 31, 1999. This four-
fold increase is due to several factors. Additional payroll and allocated
expenses from ITIS for accounting and administrative personnel performing
services on behalf of Internet Law amounted to $297,778. During the six months
ended December 31, 1999, Internet Law employed several new officers and
employees including Mr. Carr as Internet Law's President and Chief Executive
Officer, a new corporate secretary, a new chief financial officer, and a new
vice president of mergers and acquisitions. In addition, two months of
compensation expenses related to GoverNet Affairs are included in consolidated
general and administrative expense during the six months ended December 31,
1999.

24
<PAGE>

Professional fees covering auditing and tax services, legal and compliance
services, financial consulting and media relations increased by $265,322 in the
six months ended December 31, 1999, over the period Inception to June 30, 1999.
The principal reason for this increase is Internet Law's expanded financial
reporting obligations as a full reporting company under the SEC rules and
regulations. In addition, Internet Law's acquisitions of GoverNet Affairs and
Brief Reporter resulted in additional consulting and auditing expenses related
to due diligence and financial reporting related to our decision to change our
fiscal year end from June 30 to December 31, requiring an additional audit of
the transition period. During the six months ended December 31, 1999, Internet
Law also incurred stock compensation expense amounting to $124,579, representing
awards of restricted stock and options to purchase restricted stock to certain
officers and employees of Internet Law and its subsidiaries.

Amortization and Depreciation Expense. During the six months ended December 31,
1999, amortization and depreciation expense increased by $54,254, or 38%, to
$197,037 from $142,783 for the period from Inception to June 30, 1999. During
the six-month period, Internet Law recognized $55,602 of amortization expense
related to specific intangible assets recorded in connection with its
acquisitions of GoverNet Affairs and Brief Reporter. In addition, depreciation
expense increased by $12,500 as a result of purchases of furniture and equipment
by National Law and the inclusion of depreciation expense for acquired
subsidiaries. Despite an increase of $987,594 in capitalized database content
during the six months ended December 31, 1999, related amortization expense
decreased from that of the preceding period because most of these additions
occurred late in the last quarter of the calendar year and because the preceding
period includes seven months of amortization of the original content and
software contributed at inception of National Law.

LIQUIDITY AND CAPITAL RESOURCES

Internet Law's ability to execute its business strategy depends to a
significant degree on its ability to attract additional capital. Internet Law's
principal demands for liquidity are cash for operations and funds for investment
in new database content.

During the six months ended December 31, 1999, cash increased by $23,915,
consisting of $954,997 of cash used in operations, $1,513,767 of cash used in
investment activities, and $2,492,679 of cash provided from financing
activities.

During the six months ended December 31, 1999, cash used in operations
increased by $567,435 to $954,997 from $387,562 during the period Inception to
June 30, 1999. Major non-cash items included in net loss for the period
included $226,157 of stock-based compensation for officers, employees and
consultants to Internet Law and $197,037 of amortization and depreciation.
During the period Inception to June 30, 1999, Internet Law's stock-based
compensation consisted only of $29,300 paid to consultants in lieu of cash. An
increase in accounts receivable resulting in a use of cash of $84,131 is due to
primarily to GoverNet Affairs which has typically billed its customers annually
in December for the legislative sessions to be tracked during the following
year. Likewise, the increase in deferred revenue due to GoverNet Affairs'
billing method is the principal offsetting component in the $74,061 source of
cash.

During the six months ended December 31, 1999, cash used in investment
activities increased by $1,479,591 to $1,513,767 due primarily to increased
purchases by National Law of database content and software. Purchases of
additional state and federal case law content amounted to $987,594, accounting
for 96% of total additions to database content and software. With this
additional content, National Law's library at December 31, 1999, contained case
law for 34 states, three federal circuit courts and the United States Supreme
Court. During the six-month transition period, we invested $750,000 and
redeemed $300,000 in short-term investments for a net use of cash of $450,000.
These excess funds resulted from Internet Law's private offering of common stock
during the six-month period ending December 31, 1999. These uses of cash for
investment activities were offset in part by $35,166 of cash acquired in the
acquisitions of GoverNet Affairs and Brief Reporter.

Cash provided by financing activities increased by $2,016,312 to $2,492,679
during the six months ended December 31, 1999, due primarily from Internet Law's
private offering in which 2,207,526 shares of common stock were sold for
$2,245,675, net of commissions amounting to $42,250. This contrasts with the
sale of 2,467,550 shares for net proceeds of $432,090 in a private offering
undertaken by National Law during the period Inception to June 30, 1999. Cash
from financing activities during the six-month transition period also includes
$180,000 representing proceeds from the exercise of stock options. Amounts due
from affiliated company decreased by $269,004 during the

25
<PAGE>

six months ended December 31, 1999, because charges billed to National Law by
ITIS for delivered content and management services exceeded cumulative payments
by National Law to ITIS. Offsetting cash from financing activities during the
six-month transition period are note payments totaling $202,000. Of these notes,
one for $180,000 was originally funded in June 1999 and used for working capital
purposes, and two other notes totaling $22,000 were assumed by Internet Law with
its acquisition of GoverNet Affairs in November 1999.

For the six months ended June 30, 2000, Internet Law's cash and cash
equivalents increased by $85,599 from the December 31,1999 balance of $78,544 to
$164,143 at June 30, 2000. Cash used in operating and investing activities was
$2,006,121 and $2,291,103, respectively. These uses were funded by advances
from a related party and issuances of convertible preferred stock. Mr. Carr,
Internet Law's Chairman, President, and Chief Executive Officer, made advances
to Internet Law amounting to $1,400,000 during the six months ended June 30,
2000. These advances are represented by notes payable extended by Internet Law
to Mr. Carr, and Mr. Carr has provided a written commitment to Internet Law to
provide forbearance and extend the due date on such notes, if to demand payment
would impair Internet Law's ability to meet its other existing liabilities and
commitments. This commitment is effective for notes between Internet Law and Mr.
Carr with maturity dates through March 2001.

On May 11, 2000, Internet Law entered into an intermediate financing
agreement with a private capital fund, and privately placed 300 shares of 5%
Series A Convertible Preferred Stock for $3 million. This preferred stock is
convertible into shares of Internet Law's common stock based on a price equal
to the lesser of (i) $3.2375 or (ii) 80% of the average of the three lowest
closing bid prices during a 20-day trading period prior to the date of
conversion. Internet Law is entitled to redeem the convertible preferred stock
at a cash price equal to 120% of the issue price, provided there is an effective
registration statement for the underlying shares of common stock. On July 5,
2000, the SEC declared effective the registration statement filed by Internet
Law, which registered an amount of shares of its common stock sufficient to
satisfy any conversion, warrant exercise, and dividend requirements under the
terms of this financing agreement. As part of this financing agreement and in
consideration for negotiating a $25 million equity line currently under
negotiation, Internet Law issued a five-year warrant to the investor for the
purchase of 500,000 shares of its common stock at an exercise price of $3.56 per
share. The estimated fair value of this warrant totaled $1,114,500 and has been
recorded in stockholders' equity. The convertible preferred stock purchased by
the investor is also subject to mandatory redemption by Internet Law upon the
occurrence of a change in control or certain other events. Additionally,
Internet Law agreed to issue a five-year warrant to a third party for the
purchase of 200,000 common shares at an exercise price of $3.3994 per share. The
estimated fair value of this warrant totaled $493,600 and has been recorded in
stockholders' equity. A commission of $100,000 and legal fees of $30,000 related
to acquiring this financing arrangement were recorded in stockholders' equity.

In addition to negotiating and attempting to close an equity line for $25
million with a private funding source, Internet Law is actively pursuing other
financing alternatives. It is anticipated that the additional funds will be used
for operations, production of new database content, and increased marketing of
our products.

Internet Law is actively pursuing acquisition of information companies that
will assist and complement our commitment to provide superior access to and use
of all types of information resources for increasing business, services and
knowledge. By expanding our information resource capabilities beyond the legal
industry and through the use of our powerful search engines, we intend to become
one of the world's most favored information source for data retrieval of all
types. It is expected that increased industry exposure to our products through
advertising, publications, and participation in major legal industry meetings
and conferences will cause our sales to continue to increase at a minimum of 20
percent per quarter, and additional sales increases of 25 percent or more are
expected through merger and acquisition activity. We anticipate that major
content additions, including the addition of statutes and case law for all
states and large portions of federal law, will have been completed by December
31, 2000, at a minimum average monthly cost of $150,000, which represents a
significant cost savings due to the acquisition of ITIS. While the concentration
of our content building activities in the near term are in increased content
additions related to the legal industry, future plans include branching out our
information resource capabilities into other areas. Capital expenditures for the
balance of 2000 are expected to be insignificant.

Our future success is dependent upon securing additional financing to fund
operations and execute our business plan. The inability to obtain additional
financing will substantially impact our ability to continue as a going concern.
To provide interim financing to fund our operations until the $25 million equity
line is completed or an alternative source of long-term financing becomes
available, we plan to utilize additional loans from Mr. Carr and other directors
and investors. We continue to actively pursue other financing alternatives. It
is anticipated that the

26
<PAGE>

additional funds will be used for operations, production of new database
content, and increased marketing of our products. While we expect to obtain
financing by November 2000, we have been informed by Arthur Andersen LLP, our
independent public accountants, that if the conditions described in Note 1 to
the consolidated financial statements related to the need for additional
financing continue to exist at the time of their audit of the financial
statements for the year ended December 31, 2000, their report on those
statements will include an explanatory fourth paragraph expressing uncertainty
regarding our ability to continue as going concern.

Quantitative and Qualitative Disclosure About Market Risk

During the six months ended June 30, 2000, Internet Law's short-term
investments consisted of corporate debt securities supported by letters of
credit which are classified as "securities available for sale" and are reported
at their fair value with accrued interest expense and income recorded when such
securities are purchased and sold, respectively. As of June 30, 2000, Internet
Law held $1,650,000 in such investments. Internet Law is exposed to interest
rate risk, as additional financing may be needed due to the operating losses and
capital expenditures associated with establishing and expanding Internet Law's
business. The interest rate that Internet Law will be able to obtain on debt
financing will depend on market conditions at the time such financing is
arranged.

BUSINESS

General

We are a Delaware corporation that operates Internet sites that provide
subscription access to databases through its wholly owned subsidiaries, National
Law Library, GoverNet Affairs and Brief Reporter, and database content,
software, hardware and other support through its subsidiary, ITIS. The content
of these databases consists of pending legislation, statutory law, rules and
case law at the federal and state levels. Legal briefs from certain important
cases before federal and state courts are also available, as are articles and
litigation forms. This material can be useful to legislators, corporate
regulatory personnel, lobbyists, individual lawyers, judges, law firms,
corporate legal departments, government agencies, and businesses and individuals
involved in legislative efforts, litigation, and corporate legal planning.
Interfacing with these databases are retrieval engines that are owned by us or
our subsidiaries. Customers using these Internet sites pay subscription fees to
the operating subsidiaries under monthly, quarterly or annual subscription
agreements.

Our common stock is traded on the over-the-counter Bulletin Board under the
symbol "ELAW."

Corporate History

We were originally incorporated as Allied Silver-Lead Company in the State
of Idaho in 1967 and, until 1992, operated as an exploratory mining company. In
January 1996, we reincorporated in Delaware as a result of a merger and, among
other shareholder actions taken at that time, changed our name to Planet
Resources, Inc. Between 1992 and our reverse acquisition by National Law in
March of 1999, we had no operations. However, we have maintained certain mining
properties which are to be indirectly distributed to those stockholders who were
our stockholders prior to the reverse acquisition by National Law. To effect
this distribution, New Planet Resources, Inc., a Delaware corporation whose name
was changed to Planet Resources, Inc. and is presently a wholly owned subsidiary
of us, will, under the terms of an agreement and plan of distribution dated
March 25, 1999, succeed to our interests in these mining and related properties
and a remainder cash balance at such time as the common stock of New Planet is
registered under the Securities Act of 1933. New Planet has filed a
registration statement to register such stock with the SEC that is pending
effectiveness.

National Law, a Texas corporation, was formed in November 1998 for the
purpose of developing and marketing an Internet destination to be used for legal
research. Following its formation, National Law's then sole stockholder, and
the current President, Chief Executive Officer and Chairman of Internet Law,
contributed to National Law all of his rights and interests in the Litidex(R)
search, 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, the same month in
which National Law agreed in principle to be acquired by Internet Law.

27
<PAGE>

Under the agreement and plan of reorganization, each share of National Law
common stock was exchanged for one share of our unregistered common stock. In
contemplation of this transaction, our original stockholders agreed to a one-
for-two reverse stock split, which resulted in 2,000,000 shares of our common
stock being outstanding immediately prior to the merger. After giving effect to
these transactions, former National Law stockholders owned 18,000,000 shares of
our unregistered common stock and our original stockholders owned 2,000,000
shares of our common stock. Following the transaction, the stockholders voted
to change the name of Planet Resources, Inc. to "Internet Law Library, Inc."
Under the terms of the agreement and plan of reorganization, the majority of our
original board of directors resigned and were replaced with directors elected by
our new stockholders.

Recent Transactions

On November 15, 1999, our board of directors approved the purchase of all
of the outstanding stock of GoverNet Affairs, Inc., a Georgia corporation, in
exchange for 446,352 shares of our common stock valued at $1,300,000, and the
assumption of certain notes payable and other debt totaling approximately
$41,000. The outstanding stock of GoverNet Affairs was purchased directly from
Ronald W. Hogan, Charles E. Bowen, Jr., and John R. Marsh. In addition, these
persons were collectively granted options for the purchase of up to 320,000
shares of our common stock. These options are exercisable over a five-year
period beginning August 31, 2000, provided certain financial results are
achieved by GoverNet Affairs during the 32 months ending June 30, 2002. In
addition, these persons have the right to piggyback 15% of the 446,352 common
shares that were issued in this transaction onto any registration statement for
the purpose of registering newly issued shares of our common stock.

GoverNet Affairs owns and operates an Internet site and connected databases
that provide subscribers with a federal and state legislative tracking and
monitoring system. From its web site (www.govaffairs.com), GoverNet Affairs
serves as a "virtual" legislative assistant using customizable reporting tools
that can search for and report on pending legislation and provide abstracts and
comparisons of pending legislation to law firms, lobbyists and other interested
parties.

On December 10, 1999, our board of directors approved our purchase of all
of the outstanding interests of Brief Reporter, LLC, a Virginia limited
liability company, in exchange for 483,325 shares of our common stock valued at
$1,000,000. The outstanding interests of Brief Reporter were purchased directly
from David P. Harriman, Andrew Wyszkowski, Eugene Meyung, Suzanne Meyung, and
Christina Brown. 120,830 of the 483,325 shares received by these individuals in
this transaction are being registered for resale by this prospectus.

Brief Reporter owns and operates an Internet site (www.briefreporter.com)
---------------------
and a connected database containing appellate briefs and trial memoranda written
by attorneys for certain significant cases in all federal and state
jurisdictions.

On March 23, 2000, our board of directors approved the purchase of ITIS,
Inc., a company once wholly owned by Hunter M.A. Carr, our Chairman of the
Board, Chief Executive Officer and President. The board's approval was subject
to certain final reviews and negotiations that were concluded on April 30, 2000.
According to the terms of the Stock Exchange Agreement dated April 30, 2000, we
exchanged 5,044,903 unregistered shares of our common stock for all of the
outstanding common stock of ITIS. The closing price of our common stock at
April 28, 2000 was $4.25 per share.

28
<PAGE>

Since National Law's inception on November 30, 1998, ITIS has served as its
primary vendor of new case law content while also providing to National Law
various executive, sales, production, software, hardware, and administrative
services. During the period from National Law's inception to December 31, 1999,
Mr. Carr was the sole stockholder of ITIS. Then, during the three months ended
March 31, 2000, Mr. Carr sold or otherwise conveyed most of his stock in ITIS to
various individuals and entities, some of whom are either directors or officers
of Internet Law (or its subsidiaries) or are entities controlled by our
directors. Of the 5,044,903 shares to be issued to ITIS' stockholders,
1,721,003 shares were issued to five of our directors or their beneficiaries and
332,300 shares were issued to four officers of Internet Law as shown below:

<TABLE>
<CAPTION>
Number of
Name of Director/Officer Position Shares
------------------------ -------- ---------
<S> <C> <C>
Hunter M.A. Carr............................................. Director and officer 196,003
W. Paul Thayer (Thayer Investment Co.)....................... Director 750,000
Kelley V. Kirker............................................. Director and officer 500,000
Eugene A. Cernan............................................. Director 25,000
George A. Roberts, Trustee................................... Director 250,000
Edward P. Stevens............................................ Officer 150,000
Donald H. Kellam............................................. Officer 150,000
David P. Harriman............................................ Officer 25,000
Robert Sarlay................................................ Officer 3,300
K. Charles Peterson.......................................... Officer 4,000
---------
Total..................................................... 2,053,303
=========
</TABLE>

It is expected that ITIS will continue to be a primary vendor of case law
content to National Law. In addition, ITIS will attempt to leverage its
experience in the legal data conversion field by entering and competing in other
content conversion markets found over the Internet or other media.

On May 11, 2000, we entered into an intermediate financing agreement with a
private capital fund, and privately placed 300 shares of 5% Series A Convertible
Preferred Stock for $3 million. This preferred stock is convertible into shares
of our common stock at any time after August 8, 2000, based on a price equal to
the lesser of (i) $3.2375, or (ii) 80% of the average of the three lowest
closing bid prices during a 20-day trading period prior to the date of
conversion. We are entitled to redeem the convertible preferred stock at a cash
price equal to 120% of the issue price, provided there is an effective
registration statement for the underlying shares of common stock. On July 5,
2000, the SEC declared effective the registration statement filed by Internet
Law, which registered an amount of shares of its common stock sufficient to
satisfy any conversion, warrant exercise, and dividend requirements under the
terms of this financing agreement. As part of this financing agreement and in
consideration for negotiation of a $25 million equity line currently in the
process of negotiation, we agreed to issue a five-year warrant to the investor
for the purchase of 500,000 shares of our common stock at an exercise price of
$3.56 per share. Additionally, we agreed to issue a five-year warrant to a
third party for the purchase of 200,000 shares of common stock at an exercise
price of $3.3994 per share, and pay $100,000 as a commission related to this
financing arrangement. As of October 18, 2000, the holders of the Series A
shares had converted 101.5 shares in exchange for a total of 1,361,573 shares of
our common stock.

On July 27, 2000, Internet Law's board of directors approved the purchase
of a controlling interest of Compass Data Systems, Inc., a private Nevada
corporation, for up to $2.5 million in unregistered shares of Internet Law's
common stock. Counsel for the sellers subsequently approved the form of a Stock
Purchase Agreement to be entered into with certain individuals for the purchase
of their stock. Certain final reviews and negotiations were concluded on August
17, 2000, and the definitive agreements were signed with each of the sellers
effective as of October 1, 2000. Under the terms of the Stock Purchase
Agreements, Internet Law is to issue an aggregate of 1,676,105 unregistered
shares of its common stock, valued at approximately $2.3 million, for
approximately 63% of the total outstanding shares of Compass Data Systems common
stock owned by Jeremiah Kane, John McHugh, and Jack Ben Ezra. These issuances
were made in reliance upon the Section 4(2) private placement exemption from
registration. None of these sellers received registration rights for the
Internet Law shares they received in this transaction.

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<PAGE>

Compass Data Systems provides electronic information publishing services in
a completely searchable infobase to a wide variety of industries and
organizations. Compass Data Systems hosts an Internet site at
www.compassdata.com. Using Internet and CD technology, clients can search
-------------------
computer files in seconds through what could represent significant piles of
paper. These infobases are quickly accessed through a hard drive, CD-ROM or
over the Internet.

On September 28, 2000, Internet Law's Board of Directors approved the
purchase of all of the stock of Venco Compliance, Inc., a private Texas
corporation, from Donald E. Tull and Cathryn V. Tull. Internet Law issued an
aggregate of 100,000 unregistered shares of Internet Law's common stock at
closing on October 1, 2000, valued then at $90,600. Internet Law may issue an
additional 25,000 unregistered shares each to Donald Tull and Cathryn Tull in
the future with the last issuance occurring in the year 2003. Venco Compliance
has also entered into a consulting agreement with Cathryn Tull that pays her
$72,000 per year for one year, with a renewal right for a one-year term on each
anniversary of the agreement. In addition, Ms. Tull is eligible to receive a
cash bonus based on Venco Compliance's revenues. These issuances were made in
reliance upon Section 4(2) private placement exemption from registration.
Neither of the two sellers received registration rights for the Internet Law
shares they received in this transaction.

Venco Compliance is in the business of selling compliance and safety
training and information to businesses such as dry cleaners and others that deal
with hazardous chemicals, bio materials and other regulated substances.

Products and Services

Brief Reporter offers more than 6,000 legal briefs on its web site
(www.briefreporter.com), making it one of the largest brief banks on the
-----------------------
Internet. Subscribers and transactional users can search among legal briefs
from real cases. The site offers featured briefs as well as notification of new
materials. Brief Reporter also earns some of its revenue from advertising.

GoverNet Affairs offers subscribers a cost-effective legislative
information management service that uses the Internet to save time and money by
monitoring and reporting the progress of pending legislation in all 50 states
and the U.S. Congress. Using GoverNet Affairs' Internet site, subscribers may
sign up for the following services:

. customized daily, weekly or monthly reports showing the status of
targeted legislation that may be summarized by topic or by legislator,
and may be downloaded for internal use;

. e-mail alerts that can be sent when pending bills are revised;

. legislative tracking teams comprised of management, lobbyists and
attorneys who may communicate with one another with password-protected
privacy; and

. behind-the-scenes commentaries on pending bills that are available
from a network of political consultants.

GoverNet Affairs was built to be one of the most powerful online search
tools on the Internet for state legislation. Using a multiple-matrix database,
nightly searches are conducted of every source of state and federal legislation
available on the Internet, and then this data is stored for retrieval and
processing. With this system, GoverNet Affairs performs text comparisons and
attaches information such as user notes and other user-specific fields to any
pending bill that is described over an Internet site. The system is monitored
to provide maximum coverage by jurisdiction and by topic. GoverNet Affairs'
legislative information is available at its web site, www.govaffs.com.
---------------

ITIS hosts a web site at www.itisinc.com. With its predecessors, it has
---------------
been in business for 15 years, offering litigation support, data conversion and
Internet-related services. At present, it is concentrating its efforts on
assisting National Law.

National Law provides a "virtual" law library that is designed for
performing legal research from offices, homes, or portable laptops. We believe
that National Law attracts people who need to conduct legal research, and prefer
to do so quickly, easily and inexpensively over the Internet. Built upon a web-
based architecture, National Law's virtual library enables users to access a
database providing core legal information at an attractive price. National Law

30
<PAGE>

endeavors to grow by continuing to improve its search engine, publishing
accurate and current databases, adding to its forms and legal articles
libraries, maintaining its low cost, and developing Internet-oriented editorial
features, among other legal products.

The Litidex(R) search engine used by National Law's subscribers provides
for high-speed data retrieval using Boolean, proximity and citation search
criteria. National Law's primary products are the case law and statutory law
databases that contained the following content at October 18, 2000:

. case law from 1950 to 2000;

. decisions of the United States Supreme Court, Volumes 1 to 509 and
current decisions;

. case law of the United States Circuit Courts of Appeals from 1950
to 2000;

. statutes for 12 states;

. more than 6,000 briefs written by attorneys used in certain
significant cases in state and Federal courts (abstracts and full
topical indexing are available for all briefs)

. Rules of the U.S. Supreme Court, Federal Rules of Civil Procedure,
Federal Rules of Appellate Procedure, and rules of procedure for Texas
and Ohio appellate courts; and

. plain language forms.

National Law's legal information is available through its web site at
www.itislaw.com and can be searched, downloaded and printed.
---------------

In addition to National Law's existing products and services, Internet Law
expects to provide a number of additional services in the future, which may
include the following:

. database content for medical, real estate, business and other
areas;

. database inquiry, retrieval, and review of all state and federal
case law;

. database inquiry and retrieval of all state and federal statutes,
codes, constitutions, and rules and regulations;

. database inquiry and retrieval of all state and federal agency
rules and regulations;

. fast and frequent updating of all data;

. linking statutes to proposed and pending legislation;

. extensive linking of citations among databases;

. linking cases and briefs;

. citation service;

. additional forms;

. topical classification of legal information; and

. other such related legal research tools as needed by customers.

Our ability to provide additional services and expand its market depends
upon a number of factors, many of which are beyond our control. These factors
include the rates of and costs associated with new customer acquisition,

31
<PAGE>

customer retention, capital expenditures and other costs relating to the
expansion of operations, the timing of new product and service announcements,
changes in our pricing policies and those of our competitors, market acceptance
of our services, changes in operating expenses, strategy and personnel,
increased competition, and general economic factors. There can be no assurance
that we will be successful in selling our services or achieving or maintaining
profitability or positive cash flow in the future.

Agreements with ITIS

ITIS was founded by Mr. Carr in 1994 as a document management firm
specializing in litigation support. The databases used by National Law's
subscribers can be accessed and searched through a software retrieval engine
known as Litidex(R) which was developed by Mr. Carr through ITIS and other
programmers. The exclusive rights to use Litidex(R) were sold to Mr. Carr in
November 1998 while Mr. Carr was the sole stockholder of ITIS. Mr. Carr then
contributed these rights, together with certain database content consisting
primarily of Texas case law, to National Law upon its formation on November 30,
1998. Following National Law's formation, ITIS provided it with needed
infrastructure pursuant to certain agreements with ITIS, the material terms of
which are described below.

Under a Continuing Services Agreement dated effective December 1, 1998,
between National Law and ITIS, ITIS agreed to provide National Law with data
files containing case law and statutes as are in the public domain, together
with coding and proprietary editing services covering these data files.
National Law is charged $0.65 per 1,000 characters for those data files that
satisfy certain prescribed quality control requirements. Under this continuing
service agreement, National Law agreed for a three-year period to provide ITIS
with minimum orders for data files containing an aggregate of 750 million
characters per month. Despite the contract rate of $0.65 per 1,000 characters,
during the six months ended December 31, 1999, National Law revised its
accounting for its purchases of content from ITIS due to the common control
exercised over both entities by Mr. Carr. During this period, 10,332,200,000
bytes of case law content were delivered by ITIS to National Law at a contract
value of $6,722,000. National Law, however, recorded this content at ITIS'
estimated cost of $987,594.

Under a Management and Financial Services Agreement dated effective March
1, 1999, between National Law and ITIS, ITIS provides accounting, staffing and
procurement services and office space to National Law. National Law pays ITIS a
monthly management fee of $3,600, plus $85 per hour for accounting services,
125% of the cost of staffing services, 120% of the cost of office supplies,
equipment and telephone services and 115% of the cost of office space rental.

Under a separate agreement dated effective March 23, 1999, between National
Law and ITIS, ITIS also agreed to provide National Law with software development
and consulting services for National Law's database and retrieval software. We
now provide all of these aforementioned services ourselves as ITIS became one of
our wholly owned subsidiaries on April 30, 2000.

Raw Materials

Pending legislation, court opinions, and statutes are public information
that is not protectable by copyright law. There are other vendors for this type
of information. National Law obtains content for its databases from ITIS,
another of our subsidiaries, which also formats and uploads the content to
National Law's web site. New content, including new or pending legislation and
recently decided case law, is acquired electronically at no charge or purchased
directly from the respective legislatures and courts or other third parties.

Customers

At October 18, 2000, we had total database subscribers of 2,258 to our web-
based products and services. Not included in this total are approximately 1,000
registered active users of Brief Reporter's databases. Because Texas and New
York legal materials comprised the first databases National Law made available
to customers, most of its customers are located in Texas and New York. National
Law has historically targeted its sales to small law firms and solo
practitioners who may find competitors' products too expensive. Small firms and
solo practitioners typically require legal information for the states in which
they practice. National Law intends to continue to increase the number of state
law databases available through its web-site, and also intends to continue to
aggressively market its products and services to additional small law firms and
solo practitioners, as well as larger law firms and corporate legal departments.
There can, however, be no assurance that National Law will be successful in
these efforts.

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<PAGE>

Business Strategy

Our objective is to become one of the leading and most affordable providers
of database content resources. Our strategy to accomplish this objective is to
gain market share by:

. the innovative use of the Internet and other technology;

. offering our products and services at extremely competitive prices;

. the use of various media to attract and retain customers;

. enriching core legal information with Internet-focused editorial
enhancements;

. providing excellent customer service and technical support; and

. adding content databases in several industries.

GoverNet Affairs seeks to become a premier provider of legislative
information management systems with market penetration among corporations,
lobbyists, law firms and trade associations. Each of these segments is comprised
of potential clients with either national or state and regional needs for
legislative information. In addition, partnerships and alliances with Internet-
based political entities will be explored with the aim of expanding and
enhancing customer access and name recognition.

Internet and Technology

We expect to remain competitive in the market for legal research through
the continued use of the Internet and other forms of technology. We believe that
National Law, GoverNet Affairs, and Brief Reporter are at the forefront in the
use of technology in the legal and legislative research industry. In the case of
National Law, this belief stems from the portability of National Law's products
and services, and because of the speed of National Law's search engine,
Litidex(R), that is not available to our competitors. We believe that Litidex(R)
is a superior product to those used by our competitors.

National Law strives to be at the forefront of cutting-edge technology in
both hardware and software as it relates to the needs of the legal profession,
and to document automation, data search and retrieval methods. Specifically,
National Law intends to:

. keep its database current with immediate updates to case law,
statutes, and rules and regulations online;

. provide enhanced search capabilities including additional fielded
and multiple database searching;

. retain staff who are experienced legal researchers;

. retain staff who are proficient in all phases of the Internet, not
just from a user point of view, but also as an Internet provider and
purveyor;

. develop extensive linking across databases and websites to
facilitate legal research;

. strengthen its Litidex(R) search engine by remaining current in
software and hardware development; and

. combine word search and subject indexing to enhance search
efficiency; and

. offer online sign-up for its products and services.

GoverNet Affairs has developed a technology capable of crossing state and
federal jurisdictions and integrating related legislation in a manner that is
neither easily replicated nor available through a competitor. While

33
<PAGE>

there are other single-state vendors of legislative tracking and reporting
services, we believe that GoverNet Affairs is without peer on a national basis.

GoverNet Affairs intends to maintain its technological advantage by:

. hiring and retaining experienced staff with successful backgrounds
in technology development; and

. maintaining system reliability by continually upgrading servers,
data lines, and redundancy components.

However, there can be no assurance that we will be successful in hiring the
necessary personnel who are qualified to use these new technologies effectively,
develop new services or enhance existing services on a timely basis or that such
new technologies or enhancements will achieve market acceptance. In addition,
there can be no assurance that services or technologies developed by others will
not render our services or technology non-competitive or obsolete.

In addition, the market for Internet services is in an early stage of growth.
Our services will depend upon the continuing development and expansion of the
market for Internet services. If the demand for Internet services fails to
continue to grow, grows more slowly than anticipated or becomes saturated with
competitors, we will be materially adversely affected.

We are also at risk to fundamental changes in the way Internet access is
delivered. As the Internet becomes accessible through other devices and
services, we will have to develop new technology or modify our existing
technology to accommodate these developments. There can be no assurance that we
will succeed in adapting our Internet access business to alternative devices and
conduits.

Competitive Pricing

We expect to achieve our business strategy in part through competitive
pricing. Unlike some competitors, National Law currently does not, and has no
plans to charge its customers a "per-use" fee or hourly transaction fees.
Rather, National Law charges its customers a monthly fee for its services. Upon
payment of that fee, National Law offers an unlimited search and retrieval of
its services and related products. Presently, aside from promotional and
introductory discounts, National Law's basic monthly fee is $34.00 for one state
database and $75.00 for all the states and the federal databases offered by
National Law. Monthly pricing will change as additional databases and enhanced
features are included in the National Law's library.

We believe the fees charged by National Law are significantly less than most
of our competitors. National Law expects to be able to maintain this price
advantage over its competitors because we believe that it has relatively low
overhead and infrastructure expenses relative to the competition. National
Law's goal is to remain substantially less expensive than its major competitors.

National Law's customers have the option of discontinuing their service at the
end of any month for any reason. If a significant number of customers so elect,
and we are unable to attract new customers, our financial results will be
materially adversely affected.

GoverNet Affairs prices its services on an annual basis, and typically bills
its customers in December for the legislative sessions beginning in January of
the next year. Annual subscription amounts are based on the number of
legislative bodies covered, the number of legislative issues profiled, the
nature of this profiling and the extent and number of customer users requiring
access to the database. Annual fees can range from $600 for access to the
database with no downloading, tracking or reporting capability, to several
thousand dollars for access to profiled data that is tracked and reported daily
for one or more states and the U.S. Congress.

Brief Reporter charges its customers on both a subscription and single
transaction basis.

34
<PAGE>

Sales and Marketing

One of the ways National Law expects to gain market share is to identify
potential customers for its products and services, and employ a marketing
strategy to change potential customers into customers. There are nearly one
million active lawyers practicing in the United States. National Law intends to
focus on a very broad and expansive market, including:

. solo legal practitioners;

. local, state and national law firms;

. public libraries;

. judges and court personnel;

. legal assistants and paralegals; and

. other companies.

In addition, in order to sell its products and services to lawyers and other
market participants, National Law plans to use a marketing strategy that has
several elements:

. telemarketing directly to licensed attorneys;

. trade show exhibits;

. mailings, flyers, and electronic mail distributions;

. advertising with displays in target market magazines;

. Internet affiliate marketing programs;

. advertising on the World Wide Web and Internet; and

. direct selling via National Law's website; and

. writing and publishing a regular monthly newsletter to current and
interested customers.

National Law has added a field sales staff in certain major metropolitan areas
to direct sell to medium to large law firms. The field staff will concentrate
on opportunities to sell multi-user subscriptions. Solo and small firm accounts
will continue to be sold by telephone. Brief Reporter and National Law offer
their services to each other's customers, and intend to conduct their sales and
marketing efforts on a mutual basis.

GoverNet Affairs expects to gain sales in several significant markets,
including:

. corporate regulatory and governmental affairs departments;

. the lobbyist and legal communities;

. trade, professional and nonprofit associations;

. county and municipal governments and educational institutions; and

. the legislative community itself.

GoverNet Affairs presently employs outside sales professionals who call
directly on potential customers and inside telephone sales professionals who
make presentations through phone call demonstrations. Additionally, our

35
<PAGE>

sales representatives and executives appear at trade shows and present live
demonstrations. We do not anticipate that any significant amount of marketing
will be done by mail, flyers, or direct print media campaigns.

Customer Service and Technical Support

National Law strives to retain its customers and obtain new customers through
its dedication to customer service and technical support. National Law employs
customer service technicians whose primary job is to help customers when they
have questions or problems with its products or services. One of National Law's
goals is to keep customers informed of coming enhancements to assure customers
that they are staying current with its products or services. Customer support
is available 24 hours a day, 7 days a week.

GoverNet Affairs maintains a customer service and technical support staff
adequate to meet current customer needs. Based on experience, such service and
support is usually needed only when customers undergo staff turnover and
retraining is necessary.

Intellectual Property Rights

We regard our search engines, software technologies, databases and database
management software as proprietary. We depend on trade secrets for protection
of our software. We have entered into confidentiality agreements with our
management and key employees covering this software, and limit access to this
software and other proprietary information. There can be no assurance that the
steps taken by us will be adequate to prevent misappropriation of our technology
or that competitors will not independently develop technologies that are
equivalent or superior to our services or technologies.

Market/Industry

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 (28% increase in civil lawsuits and 55% in criminal cases
from 1984-97) and the increase in the number of lawyers (980,000 in the United
States as of December 31, 1998 and 1.06 million projected by 2002), we believe
the projected increase in the market for on-line legal information is
reasonable. In addition, 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. Although
there can be no assurance of its success, we anticipate that in the immediate
future, we may be able to significantly increase our number of customers and
potentially generate substantial monthly gross revenues.

According to the Center for Responsive Politics in Washington, D.C., the
amount of money spent in 1999 by interest groups, primarily corporations, on
lobbying efforts in Washington, D.C., was more than $1.42 billion. Not included
in this amount are expenditures by unions and most trade associations for whom
rigid disclosure structures are not mandated. At the state level, there is
little consistent state-by-state publicly available information concerning
lobbying expenditures.

Competition

The competition in the legal research industry is intense. National Law's
principal competitors have significantly greater resources than it does, and
this competition may adversely affect Internet Law's consolidated results of
operations. The market for electronic legal information is currently dominated
by West Group, a division of The Thomson Corporation, a Canadian company, and
LEXIS/NEXIS(R), which is owned by Reed-Elsevier, an Anglo-Dutch company. These
competitors are both large, well-established companies. They offer databases
that are similar to and larger than the databases that National Law offers.
These competitors have longer operating histories, greater name recognition,
larger customer bases and significantly greater financial, technical and
marketing resources than us. They can thus undertake more extensive marketing
campaigns, respond more quickly to new or emerging technologies and changes in
customer requirements, and devote greater resources to the development,
promotion and sale of their products than we can. West and LEXIS have
significant penetration in the large law firm market, a market in which Internet
Law intends to compete.

National Law also competes with other companies that offer fee-based access to
selected legal databases over the Internet. These companies may be more
successful than National Law in capturing market share.

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<PAGE>

We believe that GoverNet Affairs has a significant technological lead over its
competitors. With one known exception, GoverNet Affairs' current competitors
are computer-based, not Internet-based. The perceived newness and unproven
stature of the Internet is expected to make it difficult, though not impossible,
for these competitors to switch to an Internet-based delivery model. However,
there can be no assurance that GoverNet Affairs' competitors will choose not to
recognize the value of the Internet and elect not to revise their business model
accordingly. Should some of these competitors become Internet-based, it is very
possible, given their existing customer and revenue bases, that they could
experience greater success than GoverNet Affairs in capturing market share.

Employees

Internet Law and its subsidiaries had 106 full-time employees and 4 contract
employees at October 18, 2000. Our employees are not represented by any
collective bargaining organization, and we have never experienced a work
stoppage and believe that our relationships with our employees are good.

PROPERTIES

Facilities

Our primary executive offices are at 4301 Windfern Road, Houston, Texas 77041.
Prior to our acquisition of ITIS, we sub-leased our office space from ITIS and
paid allocated monthly charges of approximately $3,100, which amount will
increase to at least $6,200 in July 2000 as ITIS' building lease increases from
approximately $9,400 per month to approximately $18,600 per month. Venco
Compliance's offices are now housed in this space. GoverNet Affairs maintains
its principal offices at 1600 Parkwood Circle, Atlanta, Georgia 30339, where its
monthly rent is approximately $3,500. Brief Reporter, a subsidiary of National
Law, maintains its principal offices at 408 East Market Street, Charlottesville,
Virginia 22902, where its monthly rent is approximately $1,800. Compass Data
maintains its principal offices at 1182 West 2400 South, Salt Lake City, Utah
84119, where monthly rent is approximately $4,412.

Management believes that our current facilities are adequate to meet its needs
through the next 12 months and that, if required, suitable additional space will
be available on commercially reasonable terms to accommodate expansion of our
operations.

Other Property

We are also the owner of subsurface mineral rights on approximately 190 acres
located in the City of Mullan, Idaho. Title was acquired by issuance to the
real property owners of one share of our common stock for each 25 square feet of
surface owned. In acquiring such mineral rights, we, through our predecessor,
issued 361,739 shares of common stock, as adjusted for subsequent stock splits
and the merger of Allied Silver-Lead Company ("Allied") with us. Conveyance of
title included all subsurface rights lying beneath adjacent streets and alleys
where ownership rested with the grantor. The acquisition of such mineral rights
was completed in November of 1985.

Through one of our predecessors, we entered into an agreement dated May 1,
1981, with the City of Mullan whereby we, as Lessee, have the right to mine
subsurface minerals on approximately 200 acres owned by the City north of Osburn
Fault for a period of 25 years (subject to a renewal option for an additional 25
years). The City of Mullan, as lessor, received 20% of all royalty payments or
other consideration received by Allied from Hecla Mining Company. If Allied
enters in to a lease agreement for the exploration and development of city
property south of the Osburn Fault, the City of Mullan will receive 15% of the
royalties received. No royalties have been paid on city property south of the
fault.

We have no competitive economic position in the mining industry as no mineral
production has ever been realized. Further, we have not received revenue from
our mineral rights for the last several years. Under the distribution
agreement, the foregoing mineral rights will be distributed to the shareholders
of Planet Resources (formerly New Planet) when its registration statement
becomes effective. At December 31 and June 30, 1999, we had recorded $10,000 as
other current assets related to these mineral rights. At October 18, 2000, these
mining assets may have no realizable value.

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LEGAL PROCEEDINGS

On September 9, 1999, Loislaw.com, Inc. filed a lawsuit in the District
Court of Harris County, Texas, 11th Judicial District (Case No. 1999-45563),
against us, National Law and ITIS. Loislaw.com, one of our competitors, alleged
that ITIS breached an agreement between Loislaw.com and ITIS by allegedly
providing certain materials to National Law for use on National Law's web site,
which allegations have been denied by us and our subsidiaries. The suit seeks,
among other things, to enjoin National Law from using such Texas materials,
actual damages equal to the value of its market position prior to defendants'
alleged tortuous interference with the contract, and actual damages for alleged
lost profits.

On October 3, 2000, the District Court granted a partial summary judgment
against ITIS. The partial summary judgment was with respect to the disputed
retainage under the contract being litigated, in an amount of $82,098.
Loislaw.com's claim for attorney's fees was denied. The partial summary judgment
is not final and will be timely appealed. At this juncture, written discovery
has been completed, and depositions are continuing. The case is now set for
trial in December 2000. Our management and counsel consider the suit to be
without merit, with the exception of partial summary judgment granted against
ITIS, and we intend to continue to vigorously defend the case.

MANAGEMENT

Our Directors and Executive Officers

Effective March 30, 1999, Planet Resources, our predecessor, entered into an
agreement and plan of reorganization with National Law Library and the
stockholders of National Law. Under this agreement, National Law and Planet
Resources were merged, and each share of National Law common stock was exchanged
for one share of Planet Resources common stock. In contemplation of this
transaction, Planet Resources' stockholders agreed to a one-for-two reverse
stock split, which resulted in 2 million shares of its common stock being
outstanding immediately prior to the merger. A majority of these shares were
owned by A.W. Dugan, our former chairman of the board and president, who may be
deemed to have controlled Planet Resources before the merger. Mr. Carr, our
current chairman of the board, president and chief executive officer, owned
15,152,500 shares of National Law Library's common stock, and received an equal
number of shares of Planet Resources' common stock in the merger. On July 8,
1999, we changed our name from Planet Resources, Inc. to Internet Law Library,
Inc.

Under the terms of this agreement, the majority of the members of Planet
Resources' Board of Directors resigned and were replaced by three of National
Law's designees, Mr. Carr, Kelley V. Kirker, and Jonathan C. Gilchrist. Mr.
Gilchrist resigned as a director on June 15, 1999. Except for this transaction,
no arrangement or understanding exists between any director or executive officer
or any other person under which any director or executive officer was selected
as a director or executive officer.

There are currently seven directors on our Board of Directors. The Board is
divided into three classes with staggered three-year terms.

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The following table sets forth certain information concerning our directors
and executive officers who were either serving or had been chosen to serve in
this capacity as of October 18, 2000:

<TABLE>
<CAPTION>
Name Age Position with Internet Law
---- --- --------------------------
<S> <C> <C>
Hunter M.A. Carr................................ 51 Chairman of the Board of Directors, President and Chief Executive Officer
Eugene A. Cernan, SUN (Ret.).................... 65 Director
W. Allyn Hoaglund............................... 52 Director, Chairman of Audit Committee
Kelley V. Kirker................................ 40 Director and Chief Operations Officer
George A. Roberts............................... 80 Director and member of Compensation Committee
Donald W. Sapaugh............................... 41 Director, Member of Audit Committee
W. Paul Thayer.................................. 80 Director and Chairman of Compensation Committee
David P. Harriman............................... 51 President of National Law Library
K. Charles Peterson............................. 56 General Counsel
Kara A. Kirker.................................. 37 Treasurer, and Chief Financial Officer and Treasurer of National Law Library
Joanna Hoover................................... 50 Chief Financial Officer
Robert Sarlay................................... 55 Vice President, Special Programs and Shareholder Relations
Edward P. Stevens............................... 51 Vice President, Business Development
Carol Ann Wilson................................ 58 Corporate Secretary
</TABLE>

Hunter M.A. Carr has been our chairman of the board of directors, president
and chief executive officer since March 30, 1999. Mr. Carr is the founder of
National Law and has served as chairman of the board and president of National
Law Library since its founding in November 1998. From April 1994 until October
1999, Mr. Carr served as chairman of the board and chief executive officer of
ITIS, one of our content providers and a company in which Mr. Carr was the sole
stockholder until January 2000. In October 1999, Mr. Carr resigned as chief
executive officer of ITIS, but continues to serve as its chairman of the board.
Mr. Carr has served as one of our directors since March 30, 1999. His current
term on the board began on February 28, 2000, and will expire on February 27,
2003.

Eugene A. Cernan, USN (Ret.), author of The Last Man on the Moon (St.
Martin's Press 1999), brings to us an unparalleled background of courage and
achievement. Mr. Cernan spent 20 years as a naval aviator, the last 13 of which
were with NASA. He served on three space missions, the last being as Commander
of Apollo XVII, and has received numerous decorations and honors for that
service. Mr. Cernan has served as chairman of Johnson Engineering Corporation,
which provides NASA with systems development for flight crews and crew station
design for the Space Shuttle, Spacelab, Space Station, Lunar Base and Mars
Outpost, since 1994. From 1986 to 1992, Mr. Cernan was the executive vice
president and director of Coral Petroleum, Inc., where he was in charge of
corporate development of a worldwide supply and marketing strategy. From 1986
to 1992, he was executive consultant for the government systems group of Digital
Equipment. He has been selected for enshrinement into the National Aviation
Hall of Fame in July 2000.

Mr. Cernan's many honors range from the Navy Distinguished Flying Cross to a
television Emmy. His membership in professional societies includes the Society
of Experimental Test Pilots, the American Space Institute, and the Golden
Eagles. His directorships include Up with People, the Lone Star Flight Museum,
First Bank, and Alaska Aerospace Development Corp. Mr. Cernan's term as a
director began on January 1, 2000, with his appointment by the board, and it
will expire on December 31, 2002.

W. Allyn Hoaglund, an experienced trial attorney in Houston, Texas, Mr.
Hoaglund concentrates his law practice on civil matters, including personal
injury, malpractice, products liability, condemnation law, and major commercial
litigation. He has been in solo practice since 1987, having previously been
associated with both Vinson & Elkins and Helm, Pletcher & Hogan. Mr. Hoaglund
holds a B.A. from Louisiana State University and a J.D. from the University of
Houston Law Center and is admitted to practice before the United States Supreme
Court. He is board certified in Civil Trial Law by the Texas Board of Legal
Specialization. He is a member of Phi Alpha Delta and the Order of the Barons,
and a Fellow of the Houston Bar Foundation.

Kelley V. Kirker has been our Chief Operating Officer since April 30, 2000,
and served as one of our vice presidents from June 15, 1999 until July 13, 1999.
Mr. Kirker has also served as a director of National Law since July 1, 1999. On
October 1, 1999, Mr. Kirker was appointed chief executive officer of ITIS.
Since April 1994 Mr. Kirker has served as president and chief operating officer
of ITIS. From 1987 until 1994, Mr. Kirker was employed by MLSI, Inc., a company
engaged in litigation support service and owned by Mr. Carr. Prior to 1987, Mr.
Kirker was

39
<PAGE>

employed for approximately five years by Texaco, Inc. in its computer
information service area. Mr. Kirker has served as one of our directors since
March 30, 1999. His current term on the board began on February 28, 2000, and
will expire on February 27, 2003.

George A. Roberts served Teledyne, Inc. in various positions from 1966 until
his retirement in 1993. He began his service as president, became chief
executive officer and president in 1986, was elected vice chairman of the board
and chief executive officer in 1991, and became chairman of the board in 1991.
Prior to that time, from 1941 until 1966, Dr. Roberts was employed by the Vasco
Metals Corporation, first as research metallurgist, as chief metallurgist in
1945, as vice president-technology in 1953, and was elected president in 1961.

Dr. Roberts is a member of the National Academy of Engineering, a fellow of
The American Society for Metals, The Metallurgical Society and The Society of
Manufacturing Engineers. He is also a life trustee of the Carnegie-Mellon
University. In 1980, he was awarded the Carnegie-Mellon University
Distinguished Achievement Award. In 1984, Dr. Roberts received an award from
the National Conference of Christians and Jews for distinguished service in the
field of human relations, and he also received the 1984 Americanism Award from
the Boy Scouts of America. Dr. Roberts was elected to the board on February 28,
2000, and his term will expire on February 27, 2003.

Donald W. Sapaugh has more than 20 years' health care management experience as
financial officer and President/Chief Executive Officer. From 1986 to 1996, he
led Rapha Treatment Centers, one of the largest psychiatric management service
organizations in the United States. In 1996, Mr. Sapaugh founded what is now
known as PremierCare, and he still serves as its President and CEO. He is a
member of many health-related organizations, including the National Association
of Private Health Systems and the American College of Hospital Administration.
He served on President Bush's Committee on Mental Retardation from 1990 to 1993
and as Chairman of the President & Mrs. Bush Community Impact Award. He holds a
BBA from the University of Houston with an Accounting major and a Doctor of
Divinity from Louisiana Christian University.

Paul Thayer's background provides a wealth of experience from which he can
draw as a director. From 1983 to 1984, he served in the Reagan Administration
as Deputy Secretary of Defense and received many awards for his service. Prior
to this time, from 1970 to 1983, Mr. Thayer served as chairman of Ling-Temco-
Vought in Dallas, Texas. Mr. Thayer graduated number one in his Navy Aviation
Cadet Class. He later served as a test pilot, combat ace, commercial airline
pilot, and he flew around the world in 1993. Mr. Thayer was a U.S. Navy combat
ace in World War II and an experimental test pilot. He was the first pilot to
break the sound barrier in a production Navy fighter. In 1994, he was inducted
into the Navy Experimental Test Pilots Hall of Fame, and he is a past recipient
of the J. H. Doolittle Award and the Kitty Hawk Award. Among his many other
honors are the Distinguished Flying Cross, two presidential citations, and the
distinguished Horatio Alger Award. Mr. Thayer's notable community service
includes the Robert M. Thompson Navy League Award for outstanding civilian
leadership, the University of Kansas Distinguished Service Citation for
outstanding achievements and service to mankind, and the Air Force Medal and
Decoration for Exceptional Civilian Service. In addition, Mr. Thayer is a past
chairman of the Chamber of Commerce of the United States and of the National
Corporate Advisory Board of the Vietnam Veterans Memorial Fund. Mr. Thayer's
term as a director began on January 1, 2000, with his appointment by the board,
and it will expire on December 31, 2002

David P. Harriman has served as the President of National Law since December
1, 1999. In 1996, Mr. Harriman founded Brief Reporter as a publishing start-up
with a database of appellate briefs for attorneys on the Internet. Prior to
that time, Mr. Harriman served in various positions at The Michie Company, most
recently as president and chief executive officer from 1989 to 1996.

K. Charles Peterson joined us as our general counsel in May 2000. He
graduated from Harvard College, Class of 1965, with an A.B. in Mathematics.
Peterson was a first lieutenant in the U.S. Army and was decorated for service
in Vietnam. In 1976 he graduated summa cum laude from South Texas College of
Law, where he received the Mary Moody Northen Award for Scholastic Excellence,
was on Law Review, and received numerous American Jurisprudence awards. A
former partner of the Reynolds, Allen & Cook Law Firm, Peterson has continued in
private practice since 1976. In recent years he co-founded the Trinity Life
Center, which provides services for more than 4,500 abused children each year.

Kara A. Kirker has served as our Treasurer and as National Law's Chief
Financial Officer and Treasurer since October 1, 1999. Prior to joining us, Ms.
Kirker provided services to National Law on a contract basis as an

40
<PAGE>

officer of ITIS. From January 1994 until National Law's inception in November
1998, Ms. Kirker served as the controller and treasurer of ITIS, in which
positions she continues to serve. From 1981 to 1994, Ms. Kirker served as
assistant treasurer of Stone & Webster Oil Company, Inc. in the revenue
accounting area.

Joanna Hoover joined us on May 1, 2000, after having served as outside
Certified Public Accountant for ITIS and its related entities since 1994. Ms.
Hoover has been in the practice of public accounting since 1973 and has been a
shareholder/partner in the Houston accounting firm of Nommensen, Hoover &
Williams, P.C., since 1985. In addition to being a CPA, she holds licenses in
the fields of insurance, securities and investments. On June 6, 2000, Ms.
Hoover became our Chief Financial Officer.

Robert Sarlay has served as our Vice President for Special Programs and
Shareholder Relations since July 1, 1999. Prior to joining us, from October
1998 until July 1999, Mr. Sarlay was the manager of marketing for ITIS and
provided marketing and shareholder services on a contract basis to us and to
National Law. From August 1997 to October 1998, Mr. Sarlay was the
owner/operator of three restaurants in the Houston area. From 1993 to 1997, he
served as the president of Advanced Care Centers of America, LLC, an operator of
nursing home facilities in Texas. Mr. Sarlay was the vice president commercial
division of Asset Partners, Inc., an operator of commercial office buildings in
the Houston area. Prior to 1991, Mr. Sarlay served as an operations and
executive officer of various companies engaged in long-term care, medical
management, apartment development and management, and convenience store
operations.

Edward P. Stevens joined us as Vice President, Business Development in
November 1999. From 1998 to 1999, Mr. Stevens served as sales engineer for
StorNet, Inc., an authorized reseller of computer products and services. Prior
to that time, from 1997 to 1998, he served as integration sales consultant for
Computer Tech, Inc, another authorized reseller. From 1995 to 1997, Mr. Stevens
served as acting president and national account manager for Executive Database
Controls.

Carol Ann Wilson joined us as Secretary and Vice President of Content and
Secretary for National Law Library in June 1999. Since July 2000 she has served
as Corporate Secretary for Internet Law Library and worked exclusively in the
company's executive offices. From September 1995 to April 1999, Ms. Wilson
served as the legal secretary and personal assistant to John M. O'Quinn, P.C.
From 1980 to 1995, she was the legal secretary to Joe H. Reynolds. Since 1985,
Ms. Wilson has been an active member and speaker in various state and national
legal secretarial and paralegal organizations. She is the author of Plain
Language Pleadings (Prentice Hall 1996), and has been published in national
trade journals and other publications.

Significant Employees

The following sets forth certain information regarding significant
employees who are not executive officers but who make or are expected to make
significant contributions to our business.

Ronald W. Hogan has served as Chief Executive Officer of GoverNet Affairs
since founding that company in May 1996. In this capacity, he has been
responsible for marketing the company's services and developing and installing
much of the software used in capturing, parsing and summarizing legislative data
for GoverNet Affairs' subscribers. From late 1983 until late 1995, Mr. Hogan
was employed by Waste Management, Inc. where he was responsible for developing a
nationwide state government affairs program and serving as that company's first
regional director of state government affairs. Prior to 1983, he worked as an
issues management consultant to such organizations as Prudential Insurance, Dow
Chemical, and the Colorado Energy Research Institute, and he was employed with
the National Conference of State Legislatures where he served as Acting Director
of the Office of Science and Technology. Mr. Hogan spent seven years in the
United States Navy as a Russian linguist.

Charles F. Dunbar has served as Vice President, Sales for National Law
Library since July 1, 1999. From April 1999 to June 1999, Mr. Dunbar was an
employee of ITIS in which capacity he provided consulting services in the sales
area to National Law Library. From April 1995 to April 1999, he was the chief
executive officer and president of Image Vault, a sales and marketing consulting
firm based in Houston, Texas. From 1990 to 1995, Mr. Dunbar served as vice
president of sales for MLSI, Inc., a company once owned by Mr. Carr, and then as
vice president of sales for ITIS.

41
<PAGE>

Family Relationships

Kara A. Kirker is a niece by marriage of Hunter M.A. Carr. Kelley V. Kirker is
married to Ms. Kirker.

Executive Compensation

Each of Mr. Carr, Mr. Sarlay, and Ms. Kirker is currently an officer of us and
was, until July 1, 1999, an employee of ITIS. Effective beginning in March
1999, National Law and ITIS operated under a management and financial services
agreement under which ITIS provided accounting, staffing, and procurement
services and office space to National Law. Under this agreement, we paid ITIS
for staffing services at 125% of cost. Under a personal service contract
between National Law and Mr. Carr covering executive services, marketing and
business development, public relations, and general management, which became
effective in November 1998, Mr. Carr received $55,400 for services performed
from the inception of National Law on November 30, 1998, to June 30, 1999.

The following table summarizes the compensation paid by us directly to certain
executive officers during the six months ended December 31, 1999. Apart from
these executive officers, we did not pay any employee an annual salary and bonus
exceeding $100,000 during the six months ended December 31, 1999.

Summary Compensation Table
For the Six Months Ended December 31, 1999

<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------- ----------------------
Awards
------
Name and principal position Year Salary Bonus Other Annual Restricted Securities LTIP All other
-------------------------------------- ---- ------- ----- compensation Stock Awards underlying payouts compensation
------------- -------------- options --------- ------------
-------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Hunter M.A. Carr 1999 $90,000 $-0- $-0- $-0- -0- $-0- $-0-
Chairman of the Board, President and 1998 -0- -0- -0- -0- -0- -0- -0-
Chief Executive Officer 1997 -0- -0- -0- -0- -0- -0- -0-

David P. Harriman 1999 8,333 -0- -0- -0- 300,000 -0- -0-
Chief Operating Officer and 1998 -0- -0- -0- -0- -0- -0- -0-
President Of National Law 1997 -0- -0- -0- -0- -0- -0- -0-

</TABLE>

During the six months ended December 31, 1999, and the period from inception
of National Law on November 30, 1998, to June 30, 1999, we did not grant any
stock appreciation rights.

The following table summarizes the compensation paid by us directly to A.W.
Dugan, who served as chief executive officer until March 30, 1999, and either
directly or indirectly to Mr. Carr under a personal services contract as our
president and chief executive officer since March 30, 1999. We did not pay any
employee an annual salary and bonus exceeding $100,000 during the period from
inception of National Law on November 30, 1998, to June 30, 1999.

Summary Compensation Table
For the Period from Inception of National Law on November 30, 1998
to June 30, 1999

<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------- ----------------------
Awards Payouts
------ -------
Name and principal position Year Salary Bonus Other Annual Restricted Securities LTIP payouts All other
-------------------------------------- ---- ------ ----- compensation Stock Awards underlying ------------ compensation
------------- -------------- options ---------------
-------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Hunter M.A. Carr 1999 $-0- $-0- $55,400(1) $-0- -0- $-0- $-0-
Chairman of the Board, President and 1998 -0- -0- -0- -0- -0- -0- -0-
Chief Executive Officer 1997 -0- -0- -0- -0- -0- -0- -0-

A.W. Dugan 1999 -0- -0- -0- -0- -0- -0- -0-
Former Chairman of the Board and 1998 -0- -0- -0- -0- -0- -0- -0-
President 1997 -0- -0- -0- -0- -0- -0- -0-

</TABLE>
___________

(1) Mr. Carr was compensated under a personal service contract during the
period from inception of National Law on November 30, 1998, to June 30,
1999.

42
<PAGE>

The following table sets forth the grants of stock options made to our
employees during the six months ended December 31, 1999, and during the period
from inception of National Law on November 30, 1998, to June 30, 1999. No stock
options were granted to any other employees during these periods.

<TABLE>
<CAPTION>
Individual Grants
------------------------------------
Name Number of Percent of total Exercise or Base Expiration Grant date
---- securities options granted to price ($/share) Date value(2)
underlying employees during the --------------- ------ ---------
options granted period
-------------- -------
<S> <C> <C> <C> <C> <C>
For the six months ended
December 31, 1999
Ronald W. Hogan(3).................................. 166,250 26% $2.94 8/30/07 $295,835
John R. Marsh(3).................................... 75,000 12% $2.94 8/30/07 $133,460
David P. Harriman(3)................................ 300,000 47% $3.00 8/30/07 $300,019
During the period from inception of National Law on
November 30, 1998, to June 30, 1999
Hunter M.A. Carr(1)................................. 1,250,000 100% $3.00 4/11/09 $847,047
</TABLE>

___________

(1) All such options were exercisable on April 12, 1999, the date of grant.

(2) Grant date value was determined using the Black-Scholes option valuation
model. The following assumptions were made in using this model: Assumed
expected volatility factors ranging from 75% to 92%, a 6% risk-free rate of
return, a dividend yield of zero, and terms for exercising the options of
between three and 10 years. The actual value, if any, a person may realize
will depend on the excess of the stock price over the exercise price on the
date the option is exercised.

(3) Options issued to former officers of companies acquired during the six
months ended December 31, 1999. These individuals subsequently became
officers of us or our subsidiaries. Before the options may vest, certain
future subsidiary financial results or personal performance criteria must
be satisfied. The earliest date on which one third of these options may be
exercised is August 31, 2000, and the latest date on which the last one
third of these options may be exercised is August 30, 2006. In the case of
Messrs. Hogan and Marsh, the criteria for vesting had not been satisfied at
December 31, 1999.

The following table sets forth information concerning the number and value of
securities underlying unexercised options held on December 31 and June 30, 1999.

Aggregate Options Exercisable and Option Values

<TABLE>
<CAPTION>
Number of securities underlying Value of unexercised
unexercised options at end of period in-the-money options at end of
-------------------------------------- period(1)
--------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
----------------------------------------- ----------------- ------------------- ----------------- -------------------

December 31, 1999
<S> <C> <C> <C> <C>
Hunter M.A. Carr........................ 1,250,000 - $2,500,000 -
Jack I. Tompkins........................ 1,000,000 - $2,000,000 -
Ronald W. Hogan......................... 166,250 - $342,475
John R. Marsh........................... 75,000 - $154,500
David P. Harriman....................... 300,000 - $600,000
June 30, 1999
Hunter M.A. Carr........................ 1,250,000 - $2,500,000 -
</TABLE>

___________

(1) Based on the difference between the option exercise prices and the closing
sale prices of $5.00 and $1.875 of our common stock as reported on the
over-the-counter bulletin board on December 31, 1999, and June 30, 1999,
respectively, multiplied by the number of shares underlying the options.

Compensation of Directors

43
<PAGE>

On March 26, 1999, our majority stockholders and our board of directors
adopted the 1999 Director Option Plan pursuant to which our outside directors
are granted options for the purchase of our common stock. Under the director
option plan, each outside director is automatically granted options to purchase
15,000 shares of common stock on the date he or she becomes a director.
Thereafter, each outside director who serves for six months or longer is awarded
options to purchase an additional 1,000 shares of common stock at our annual
meeting of stockholders. These options have a term of ten years, and carry an
exercise price of 100% of the fair market value of our common stock on the date
of grant.

In April 1999, the board of directors approved a stock option grant to Mr.
Tompkins covering 1,000,000 shares of common stock. This option was exercisable
at $3.00 per share, and could be exercised in whole or in part over a term of 10
years from date of grant. The board approved this grant as an incentive for Mr.
Tompkins to serve as our first outside director, and was conditional on Mr.
Tompkins serving one year. Mr. Tompkins became one of our directors on August
31, 1999, and resigned on June 9, 2000. Since he did not serve the required one
year, this option was not earned and is void.

In December 1999, the board of directors approved outside director
compensation in the form of awards of our common stock. These awards will be
for 25,000 shares of our common stock payable to each outside director at the
beginning of each year of service. In March 2000, we issued a total of 125,000
shares of our common stock, valued at $551,200, to our outside directors. In
July 2000, we issued 50,000 shares to two new outside directors. In addition,
the board voted in January 2000 to pay each director a meeting fee of $1,000 per
in-person meeting and $500 per telephone meeting. The board agreed to hold
monthly telephone meetings and quarterly in-person meetings.

Compensation Committee Interlocks and Insider Participation

Messrs. Carr, Kirker, Reynolds and Tompkins participated in the deliberations
of our board concerning executive officer compensation during the six months
ended December 31, 1999. Since January 2000, the Compensation Committee has
been composed of outside directors.

44
<PAGE>

Stock Performance Graph

SEC rules require registration statements to contain a performance graph
comparing the performance of our common stock against a broad equity market
index and against either a published industry or line-of-business index or group
of peer issuers through the end of our latest fiscal year. We chose the Nasdaq
Composite Index as the relevant broad equity market index and Goldman Sachs
Technology Internet Index as the relevant line-of-business index. The graph
assumes the investment of $100 on April 1, 1999, the date our common stock was
first listed.

[GRAPH APPEARS HERE]

45
<PAGE>

CERTAIN TRANSACTIONS

Mr. Carr, our chairman of the board of directors, chief executive officer and
president, was also the sole stockholder of ITIS during the period from National
Law's inception on November 30, 1998, to December 31, 1999. During the three
months ended March 31, 2000, Mr. Carr sold approximately 95% of his stock in
ITIS to various individuals and entities, some of whom are either directors or
officers of Internet Law or are entities controlled by directors of Internet
Law. Under a stock exchange agreement dated April 30, 2000, we exchanged
5,044,903 shares of our common stock for all of the outstanding common stock of
ITIS. The closing price of our common stock at April 28, 2000 was $4.25 per
share. Of the 5,044,903 shares so issued, 1,721,003 shares were issued to five
of our directors or their beneficiaries and 332,300 shares were issued to five
of our officers as shown below:

<TABLE>
<CAPTION>
Name of Director/Officer Position Number of
------------------------------------------------------------- ----------------------------- Shares
--------------
<S> <C> <C>
Hunter M.A. Carr............................................. Director and officer 196,003
W. Paul Thayer (Thayer Investment Co.)....................... Director 750,000
Kelley V. Kirker............................................. Director and officer 500,000
Eugene A. Cernan............................................. Director 25,000
George A. Roberts, Ttee...................................... Director 250,000
Edward P. Stevens............................................ Officer 150,000
Donald H. Kellam............................................. Officer 150,000
David P. Harriman............................................ Officer 25,000
Robert Sarlay................................................ Officer 3,300
K. Charles Peterson.......................................... Officer 4,000
---------
Total..................................................... 2,053,303
</TABLE>

Prior to its acquisition by us, ITIS has provided National Law with various
executive, sales and marketing, and administrative services since National Law's
inception on November 30, 1998. In addition, ITIS was and continues to be the
primary provider of case law content to National Law. Set forth below is a
summary of the agreements between National Law and ITIS.

In December 1998, National Law and ITIS entered into a continuing service
agreement under which ITIS provides database content to National Law. Under the
terms of this agreement, ITIS provides National Law with data files containing
case law and statutes that are in the public domain together with coding and
proprietary editing services covering these data files. National Law is charged
$.65 per 1,000 characters for those data files that satisfy certain prescribed
quality control requirements. Under the agreement, National Law is obligated
for a three-year period to provide ITIS with minimum orders for data files
containing an aggregate of 750 million characters per month. However, pricing
under this agreement is to reflect market prices for comparable work, and
National Law may select another vendor should ITIS' prices not be competitive.

Despite the contract rate of $0.65 per 1,000 characters, during the six months
ended December 31, 1999, National Law revised its method of accounting for its
purchases of content from ITIS due to the common control exercised over both
entities by Mr. Carr and due to the increasing materiality of the transactions.
During this period, approximately 10,332,200,000 bytes of case law content was
delivered by ITIS to National Law at a contract value of $6,722,000. National
Law, however, recorded this content at ITIS' estimated cost of $987,594. In
addition, Internet Law has restated its case law content purchased from ITIS
during the period from National Law's inception on November 30, 1998, to June
30, 1999. As a result of this revaluation, at June 30, 1999, case law content
was revised from approximately $1,787,000 to approximately $1,197,000, and the
related payable to affiliated company of $115,700 was revised to reflect a
receivable from affiliated company of approximately $474,300.

Effective beginning in March 1999, National Law and ITIS operated under a
management agreement. Under this agreement, ITIS provided accounting, staffing,
and procurement services and office space to National Law. Accounting services
were charged at the rate of $85 per hour, staffing services were charged at 125%
of cost, office supplies, equipment, and telephone services were charged at 120%
of cost, and office space rental was based on 120% of cost. In addition, ITIS
was entitled to charge a $3,600 monthly management fee under the agreement.
During the six months ended December 31, 1999, and the period from inception of
National Law on November 30, 1998, National

46
<PAGE>

Law incurred charges totaling approximately $342,800 and $298,800, respectively,
and, at December 31, 1999 and June 30, 1999, National Law owed ITIS
approximately $32,400 and $97,800, respectively, under this agreement.

Effective in December 1998, National Law entered into an agreement with ITIS
to receive software development and consulting services for its database and
retrieval. During the six months ended December 31, 1999, National Law incurred
charges totaling approximately $34,600 and, at December 31, 1999, National Law
owed ITIS approximately $3,800 under this agreement. No charges were incurred
through June 30, 1999.

Effective in November 1998, National Law and Mr. Carr entered into a personal
service contract. During the period from inception of National Law on November
30, 1998, to June 30, 1999, National Law incurred total charges of $55,400 under
this agreement. The agreement was terminated on July 1, 1999 when Mr. Carr
became one of our salaried officers.

Prior to the reverse acquisition, Planet Resources paid approximately $70,000
for accounting and management services and rent to a company controlled by A.W.
Dugan, the then chairman of the board of directors and president and a
significant stockholder of Planet Resources.

During the four months ended April 30, 2000, we borrowed $1,400,000 from Mr.
Carr, personally. The borrowings from Mr. Carr are evidenced by ten unsecured
promissory notes each of which is payable in full with accrued interest six
months from the date of the note. Each note bears an annual interest rate of
11.75%. Mr. Carr has further committed that should we need to extend the
maturity of the notes, he would do so. In no event would he require payment
prior to March 31, 2001, if to do so would prevent us from paying our other
obligations on a timely basis.

47
<PAGE>

PRINCIPAL STOCKHOLDERS

The following table sets forth information as of October 18, 2000,
regarding the beneficial ownership of our common stock (i) by each person or
group known by our management to own more than 5% of the outstanding shares of
common stock, (ii) by each director, and (iii) by all directors and executive
officers as a group and by A.W. Dugan, who served as our chief executive officer
until March 30, 1999. Unless otherwise noted, each person has sole voting and
investment power over the shares indicated below, subject to applicable
community property laws.

The mailing address for each person identified below is c/o Internet Law
Library, Inc., 4301 Windfern Road, Suite 200, Houston, Texas, 77041.

<TABLE>
<CAPTION>
Name Shares Percentage of
--------------------------------------------------------------------- Beneficially Owned Outstanding Shares(1)
--------------------- ----------------------

<S> <C> <C>
Hunter M.A. Carr..................................................... 16,423,503(2) 49.2%
Eugene A. Cernan..................................................... 50,000 *
W. Allyn Hoaglund.................................................... 75,000 *
Kelley V. Kirker..................................................... 701,500(3) 2.1%
George A. Roberts.................................................... 275,000 *
Donald W. Sapaugh.................................................... 25,000 *
Paul Thayer.......................................................... 1,255,000 3.7%
Jack I. Tompkins..................................................... 2,952,500(4) 8.8%
A.W. Dugan........................................................... 1,080,091(5) 3.2%
All executive officers and directors as a group (15 persons)......... 22,837,594(6) 68.4%
</TABLE>
___________

* Less than 1%.

(1) Percentage of beneficial ownership is based on 33,366,555 shares of common
stock outstanding as of October 18, 2000. In computing an individual's
beneficial ownership, the number of shares of common stock subject to
options held by that individual that are exercisable as of or within 60
days of October 18, 2000, are deemed outstanding. Such shares, however,
are not deemed outstanding for the purpose of computing the beneficial
ownership of any other person.

(2) Includes options to purchase 1,250,000 common shares that are currently
exercisable and 600,000 shares held by a limited partnership of which Mr.
Carr is the general partner, for the benefit of Mr. Carr's children.

(3) Includes 100,000 shares held by Mr. Kirker's spouse, as to which Mr. Kirker
disclaims beneficial ownership.

(4) Includes options to purchase 1,000,000 common shares that are currently
exercisable. Mr. Tompkins resigned as one of our directors effective June
9, 2000.

(5) Includes 120,000 shares held by Anglo Exploration Corp., which is
controlled by Mr. Dugan.

(6) Includes options to purchase 2,250,000 common shares that are currently
exercisable.

SHARES ELIGIBLE FOR FUTURE SALE

As of October 18, 2000, we had issued and outstanding 33,366,555 shares of
our common stock and 1,250,000 additional shares of common stock issuable upon
exercise of outstanding options and warrants by Hunter Carr. The possibility
that substantial amounts of our common stock may be issued and/or freely resold
in the public market may adversely affect prevailing market prices for our
common stock and could impair our ability to raise capital through the sale of
our equity securities.

Of the 33,366,555 shares of common stock issued and outstanding (as of
October 18, 2000), we believe that approximately 7,700,035 of the shares are
freely tradable without restriction (except for legal opinions that might be
required for Rule 144 shares) or further registration under the Securities Act,
excluding any shares held or

48
<PAGE>

purchased by one of our "affiliates" (in general, a person who has a control
relationship with us). As of October 18, 2000, our affiliates collectively owned
18,741,094 unregistered common shares that met the holding period requirements
of Rule 144 (including 14,573,503 shares beneficially owned by Hunter Carr), of
which we believe approximately 2,731,584 shares could be immediately resold
pursuant to, and within the volume limitations of, Rule 144. We believe that
of the remaining approximately 6,925,426 shares are "restricted securities"
held by our non-affiliates and may be resold thereafter in compliance with Rule
144. We believe that such remaining shares will become tradable under Rule 144
as follows

<TABLE>
<CAPTION>
Dates that holding period expires Number of Shares
------------------------------------------------------- ---------------------------------------------------------
<S> <C>
October 2000 840,000
November 2000 446,352
December 2000 492,367
April 2001 3,323,900
May 2001 21,825
June 2001 21,825
July 2001 300,000
September 2001 9,000
October 2001 1,491,982
</TABLE>

The approximately 4,806,477 common shares that may be acquired upon conversion
of the 198.5 convertible preferred shares sold in the private placement in May
2000 and the warrants to purchase 500,000 shares issued to Cootes Drive LLC in
connection with the private placement, as well as the warrants to purchase
200,000 shares issued to Aspen Capital Partners, Inc., were registered by the
original registration statement in accordance with a registration rights
agreement. An additional 787,782 common shares that had been previously issued
by us pursuant to consulting or acquisition agreements had piggyback
registration rights and were also registered by that original registration
statement. Since then, some shares have been sold, and the remaining selling
stockholders are only offering up to 4,806,477 shares under this
prospectus.

In general, under Rule 144, a person (or persons whose shares are aggregated)
including an affiliate, who has beneficially owned such shares for one year, may
sell in the open market within any three-month period a number of shares that
does not exceed the greater of (i) 1% of the then outstanding shares of our
common stock or (ii) the average weekly trading volume in our common stock on
the OTC Bulletin Board during the four calendar weeks preceding such sale. Sales
under Rule 144 are also subject to certain limitations on the manner of sale,
notice requirements and availability of current public information about us. A
person (or persons whose shares are aggregated) who is deemed not be have been
an "affiliate" of ours at any time during the 90 days preceding a sale by that
person and who has beneficially owned his shares for at least two years, will be
able to sell his shares in the public market under Rule 144(k) without regard to
the volume limitations, manner of sale provisions, notice requirements or
availability of current information referred to above. Restricted shares
properly sold in reliance upon Rule 144 are thereafter freely tradable without
restrictions or registration under the Securities Act, unless thereafter held by
an "affiliate" of ours.

EXPERTS

The financial statements included in this prospectus and elsewhere in the
registration statement, to the extent and for the periods indicated in their
reports, have been audited by Arthur Andersen LLP and by Harper & Pearson
Company, independent public accountants, and are included herein in reliance
upon the authority of said firms as experts in giving said reports.

OTHER INFORMATION

In January 2000, our board of directors voted to dismiss and replace Harper
& Pearson Company as our independent accountants with Arthur Andersen LLP. Our
board of directors Audit Committee recommended this action and it was approved
by our board of directors on February 28, 2000. Our consolidated financial
statements for the six months ended December 31, 1999, have been audited by
Arthur Andersen LLP.

49
<PAGE>

For the period from the inception of National Law on November 30, 1998, to
June 30, 1999, and for the year ended June 30, 1998, Harper & Pearson's reports
did not contain any adverse opinions or disclaimers of opinion and were not
qualified or modified as to uncertainty, audit scope, or accounting principles.

During the periods inception to June 30, 1999, the one year ended June 30,
1998, and the subsequent interim period ended April 5, 2000, there were no
disagreements with Harper & Pearson on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreement, if not resolved to the satisfaction of Harper & Pearson, would
have caused it to make reference to the subject matter of the disagreement in
connection with its reports on our financial statements for such periods.

Prior to retaining Arthur Andersen LLP, we had not consulted with Arthur
Andersen LLP regarding accounting principles. We have authorized Harper &
Pearson to respond fully to the inquiries of Arthur Andersen, LLP.

LEGAL MATTERS

The legality of the shares of common stock offered by this prospectus will
be passed upon for us by Locke Liddell & Sapp LLP, Dallas, Texas.

WHERE YOU CAN FIND MORE INFORMATION

We have filed a registration statement of which this prospectus forms a
part. The registration statement, including the attached exhibits and
schedules, contain additional relevant information about us. The rules and
regulations of the SEC allow us to omit some of the information included in the
registration statement from this prospectus. You may inspect or obtain a copy
of the registration statement, including the exhibits and schedules, as
described below.

In addition, we have filed reports and other information with the SEC under
the Securities Exchange Act of 1934. You may read and copy any of this
information at the following locations of the SEC:

<TABLE>
<CAPTION>
<S> <C> <C>
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois 60661-2511
</TABLE>

You may obtain information on the operation of the SEC's Public Reference
Room by calling the SEC at 1-800-SEC-0330.

The SEC also maintains an Internet web site that contains reports, proxy
statements and other information regarding issuers, like ourselves, that file
electronically with the SEC. The address of that site is http://www.sec.gov.
The SEC file number for our documents filed under the Securities Exchange Act of
1934 is 1-09016. You may request a copy of these filings at no cost by writing
or telephoning Carol A. Wilson at:

Internet Law Library, Inc.
4301 Windfern Road, Suite 200
Houston, Texas 77041
Telephone Number: (281) 600-6000

Our web site address is www.interlawlibrary.com. Our common stock is
-----------------------
quoted on the over-the-counter bulletin board under the symbol "ELAW."

50
<PAGE>

INDEX TO REPORTS OF INDEPENDENT PUBLIC ACCOUNTANTS AND
FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Page
----

<S> <C>
Reports of Independent Public Accountants............................................................................ F-2 and F-3
Consolidated Balance Sheets as of June 30, 2000, and December 31 and June 30, 1999................................... F-4
Consolidated Statements of Operations for the six-months ended June 30, 2000 and 1999, and for the six months ended
December 31, 1999, and for the period from inception (November 30, 1998) through June 30, 1999...................... F-5
Consolidated Statements of Stockholders' Equity for the six-months ended June 30, 2000 and 1999, and for the six
months ended December 31, 1999, and for the period from inception (November 30, 1998) through June 30, 1999......... F-6
Consolidated Statements of Cash Flow for the six-months ended June 30, 2000 and 1999, and for the six months ended
December 31, 1999, and for the period from inception (November 30, 1998) through June 30, 1999...................... F-7
Notes to Consolidated Financial Statements........................................................................... F-8
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Internet Law Library, Inc.:

We have audited the accompanying consolidated balance sheet of Internet Law
Library, Inc. (formerly Planet Resources, Inc.) and subsidiaries, as of December
31, 1999, and the related consolidated statements of operations, stockholders'
equity and cash flows for the six months ended December 31, 1999. These
financial statements are the responsibility of Internet Law's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.

We conducted our audit in accordance with auditing standards generally
accepted in the United States. 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 Internet Law Library, Inc., and
subsidiaries as of December 31, 1999 and the results of their operations and
their cash flows for the six months ended December 31, 1999 in conformity with
accounting principles generally accepted in the United States.

/s/ Arthur Andersen LLP

Houston, Texas
May 11, 2000

F-2
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders
Internet Law Library, Inc.
Houston, Texas

We have audited the accompanying consolidated balance sheet of Internet Law
Library, Inc. (formerly Planet Resources, Inc.) as of June 30, 1999, and the
related consolidated statements of operations, changes in stockholders' equity
and cash flows from November 30, 1998 (date of inception) to June 30, 1999.
These financial statements are the responsibility of Internet Law's management.
Our responsibility is to express an opinion on these consolidated 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 consolidated financial position of Internet Law
Library, Inc. at June 30, 1999 and the results of their operations and their
cash flows for the period ended June 30, 1999 in conformity with generally
accepted accounting principles.

As more fully discussed in the accompanying financial statements, Internet Law
has entered into material agreements and contracts with related individuals and
entities owned by related individuals and entities that have resulted in
material transactions and balances with these related parties.

/s/ HARPER & PEARSON COMPANY

Houston, Texas
September 16, 1999, (Except with respect
to June 30, 1999 matters discussed in
Note 2, Page F-8, as to which the date
is April 18, 2000)

F-3
<PAGE>

INTERNET LAW LIBRARY, INC. CONSOLIDATED BALANCE SHEETS

June 30, December 31, June 30,
2000 1999 1999
-------------- ------------- ----------
(unaudited) (restated)
ASSETS
Current assets:
<S> <C> <C> <C>
Cash and cash equivalents, including $9,196, $20,235 and $32,515, respectively,
distributable to the stockholders of Planet Resources, Inc............................. $ 164,143 $ 78,544 $ 54,629

Short-term investments.................................................................. 1,650,000 450,000 -
Accounts receivable, net of allowance for doubtful accounts of $- and $5,534 and $-, 98,775 86,015 1,322
respectively...........................................................................
Due from affiliated company............................................................. - 55,423 324,427
Due from stockholders................................................................... - - 11,295
Other current assets.................................................................... 67,983 13,284 10,000
------------ ----------- ----------

Total current assets................................................................ 1,980,901 683,266 401,673

Database content and software costs, net................................................... 7,122,579 2,956,861 1,989,035
Furniture and equipment, net............................................................... 409,598 104,066 33,362
Intangible assets, net..................................................................... 10,700,705 2,176,458 -
------------ ----------- ----------

Total assets........................................................................ $ 20,213,783 $ 5,920,651 $2,424,070
============ =========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Notes payable and advance - Chairman.................................................... $ 1,875,263 - -
Note payable............................................................................ - - 180,000
Accounts payable........................................................................ 256,481 156,472 55,857
Accrued liabilities..................................................................... 246,170 72,414 4,891
Deferred revenue........................................................................ 77,983 82,400 -
Assets distributable to stockholders.................................................... 19,196 30,235 42,515
------------ ----------- ----------

Total current liabilities........................................................... 2,475,093 341,521 283,263

Commitments and contingencies.............................................................. - - -
Redeemable common stock.................................................................... 125,000 125,000 -
Stockholders' equity:
Series A Convertible Preferred stock, par value $.001; 50,000,000 shares authorized;
300 shares issued and outstanding at June 30, 2000...................................... - - -

Common stock, par value $.001, 100,000,000 shares authorized; 30,145,761, 24,920,991 30,146 24,921 21,133
and 21,132,288 shares issued, respectively; 30,135,023, 24,910,253 and 21,121,550
shares outstanding, respectively........................................................
Additional paid-in capital.............................................................. 23,091,703 7,974,994 2,775,072
Deferred compensation................................................................... (47,020) (364,600) -
Accumulated deficit..................................................................... (5,417,955) (2,138,001) (612,214)
Treasury stock, at cost, 10,738 shares.................................................. (43,184) (43,184) (43,184)
------------ ----------- ----------

Total stockholders' equity.......................................................... 17,613,690 5,454,130 2,140,807
------------ ----------- ----------

Total liabilities and stockholders' equity.......................................... $ 20,213,783 $ 5,920,651 $2,424,070
============ =========== ==========

</TABLE>

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

F-4
<PAGE>

INTERNET LAW LIBRARY, INC. CONSOLIDATED STATEMENTS OF OPERATIONS

For the six For the six For the six From Inception
months ended months ended months ended (November 30, 1998)
June 30, 2000 June 30, 1999 December 31, 1999 to June 30, 1999
--------------- ------------- ----------------- -------------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
REVENUE.......................................... $ 459,580 $ 53,520 $ 222,697 $ 53,520
OPERATING EXPENSES:
Selling and marketing......................... 521,750 244,775 372,324 244,775
General and administrative.................... 2,336,819 211,891 1,108,645 211,891
Production and computer service............... 231,365 65,073 73,628 65,073
Amortization and depreciation................. 611,349 142,783 197,037 142,783
----------- ----------- ----------- -----------

Total operating expenses.................. 3,701,283 664,522 1,751,634 664,522
----------- ----------- ----------- -----------

OPERATING LOSS................................... $(3,241,703) $ (611,002) $(1,528,937) $ (611,002)
INTEREST INCOME (EXPENSE)........................ (38,251) (1,212) 3,150 (1,212)
----------- ----------- ----------- -----------

NET LOSS......................................... $(3,279,954) $ (612,214) $(1,525,787) $ (612,214)
=========== =========== =========== ===========

NET LOSS PER SHARE, basic and diluted............ $(0.12) $(0.03) $(0.07) $(0.06)
=========== =========== =========== ===========

SHARES USED IN COMPUTING NET LOSS PER SHARE, 27,182,476 18,701,907 22,840,676 10,763,581
basic and diluted...............................

</TABLE>

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

F-5
<PAGE>

INTERNET LAW LIBRARY, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
Common stock
--------------------
Shares Amount Additional Deferred Accumulated Treasury Stock Total
---------- -------- Paid-in Compensation Deficit --------------- -------------
Capital ------------ -----------
----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Issuance of common
stock to founding
stockholder in
exchange for
contributed assets. 15,152,500 $15,153 $ 2,014,207 $- $- $- $ 2,029,360

Pre-acquisition
transactions:
Issuance of common
stock for cash..... 2,337,500 2,338 403,987 - - - 406,325

Issuance of common
stock for services. 10,000 10 6,990 - - - 7,000

Conversion of
convertible
debentures......... 500,000 500 199,500 - - - 200,000

Reverse acquisition.. 2,010,738 2,010 98,944 - - (43,184) 57,770

Post-acquisition
transactions:
Issuance of common
stock for cash..... 130,050 130 25,635 - - - 25,765

Issuance of common
stock for services. 991,500 992 25,809 - - - 26,801
Net loss............ - - - - (612,214) - (612,214)
----------- ------- ----------- -------------- ---------------- -------------- -----------

Balance, June
30, 1999........ 21,132,288 21,133 2,775,072 - (612,214) (43,184) 2,140,807
----------- ------- ----------- -------------- ---------------- -------------- -----------

Exercise of common
stock options....... 600,000 600 179,400 - - - 180,000

Issuance of common
stock for cash.... 2,207,526 2,207 2,243,468 - - - 2,245,675

Issuance of common
stock for services.. 51,500 51 215,706 - - - 215,757

Issuance of variable
common stock option. - - 375,000 (375,000) - - -

Amortization of
deferred
compensation....... - - - 10,400 - - 10,400

Issuance of common
stock for
acquisitions net
of redeemable
common stock........ 929,677 930 2,174,000 - - - 2,175,000

Change in assets
distributable to
stockholders........ - - 12,278 - - - 12,278

Net loss............. - - - - (1,525,787) - (1,525,787)
---------- ------- ----------- -------------- ---------------- -------------- -----------

Balance, December
31, 1999.......... 24,920,991 $24,921 $ 7,974,994 $(364,600) $(2,138,001) $(43,184) $ 5,454,130
---------- ------- ----------- -------------- ---------------- -------------- -----------

Directors - - -
compensation
(unaudited)...... 125,000 125 551,047 - - - 551,172

Issuance of 1999 stock
compensation
(unaudited)......... 33,042 33 (33) - - -

Change in distributable
assets (unaudited).. 11,038 - - - - - 11,038
Issuance of variable
stock options
(unaudited)....... - - 376,208 (376,208) - - -
Amortization of
deferred
compensation
(unaudited)....... - - - 70,630 - - 70,630

Issuance of Series
A Convertible
(unaudited)......... - - 2,870,000 2,870,000
Stock issued in
acquisition
(unaudited)......... 5,044,903 5,045 11,913,233 11,918,278

Issuance of stock 42,294
for services
(unaudited)......... 21,825 22 42,272

Issuance of stock 57,132
options for services
(unaudited)......... 104,152 (47,020)

Reverse
amortization of
defered comp
(unaudited)......... (81,030) (81,030)
Reverse deferred -
compensation
(unaudited)......... (670,178) 670,178
Net loss (unaudited) - - - - (3,279,954) - (3,279,954)
---------- ------- ----------- -------------- ---------------- -------------- -----------

Balance
June 30, 2000 30,145,761 $30,146 $23,091,703 $ (47,020) $(5,417,955) $(43,184) $17,613,690
2000 ========== ======= =========== ============== ================ ============== ===========
</TABLE>

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

F-6
<PAGE>

INTERNET LAW LIBRARY, INC. CONSOLIDATED STATEMENTS OF CASH FLOW

<TABLE>
<CAPTION>
For the six months For the six For the six months From inception
ended months ended ended (November 30,
June 30, 2000 June 30, 1999 December 31, 1999 1998) to
----------------- -------------- ------------------- June 30, 1999
(unaudited) (unaudited) --------------
(restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C> <C> <C>
Net loss.................................................. $(3,279,954) $(612,214) $(1,525,787) $(612,214)
Adjustments to reconcile net loss to net cash used in
operating activities:
Issuance of common stock for services.................... 616,816 29,300 215,757 29,300
Amortization of deferred compensation.................... - - 10,400 -
Amortization and depreciation............................ 611,349 142,783 197,037 142,783
Provision for doubtful accounts.......................... - - 5,534 -
Changes in:
Due from stockholders.................................. - - 11,295 -
Accounts receivable.................................... 1,749 (1,322) (84,131) (1,322)
Other current assets................................... (45,049) - (3,284) -
Accounts payable....................................... 36,459 49,000 76,598 49,000
Accrued liabilities.................................... 56,926 4,891 67,523 4,891
Deferred revenue....................................... (4,417) - 74,061 -
----------- --------- ----------- ---------

Net cash (used in) operating activities............... (2,006,121) (387,562) (954,997) (387,562)
----------- --------- ----------- ---------

CASH FLOWS FROM INVESTMENT ACTIVITIES:
Proceeds from (additions to) short-term investments....... (1,200,000) - (450,000) -
Additions to database and development costs............... (955,912) (101,050) (1,033,363) (101,050)
Additions to furniture and equipment...................... (135,191) (23,401) (65,570) (23,401)
Cash acquired in acquisitions............................. - 90,275 35,166 90,275
----------- --------- ----------- ---------

Net cash used in investment activities................ (2,291,103) (34,176) (1,513,767) (34,176)
----------- --------- ----------- ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
Due to (due from) affiliated company...................... 55,423 (324,428) 269,004 (324,428)
Proceeds from sale of debentures.......................... - 200,000 - 200,000
Proceeds from (payments on) notes payable................. 1,395,000 180,000 (202,000) 180,000
Proceeds from exercise of stock options................... - - 180,000 -
Issuance of common stock.................................. 62,400 420,795 2,245,675 420,795
Issuance of preferred stock............................... 2,870,000 - - -
----------- --------- ----------- ---------

Net cash provided by financing activities............. 4,382,823 476,367 2,492,679 476,367
----------- --------- ----------- ---------

NET INCREASE IN CASH AND CASH EQUIVALENTS.................... 85,599 54,629 23,915 54,629
CASH AND CASH EQUIVALENTS, beginning of period............... 78,544 - 54,629 -
----------- --------- ----------- ---------

CASH AND CASH EQUIVALENTS, end of period..................... $ 164,143 $ 54,629 $ 78,544 $ 54,629
=========== ========= =========== =========

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest.................................... $ 2,892 $ - $ 6,693 $ -
Non cash investing and financing transactions:
Fair value of common stock issued for acquisitions.... $11,900,000 - $ 2,300,000 -
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements

F-7
<PAGE>

INTERNET LAW LIBRARY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
INCLUDING AMOUNTS RELATED TO UNAUDITED INTERIM PERIODS

NOTE 1-BUSINESS:

Internet Law Library, Inc. ("Internet Law"), a Delaware corporation, operates
Internet sites providing subscription access to databases used for tracking
pending legislation and for performing legal research through its wholly owned
subsidiaries, National Law Library, Inc. ("National Law"), GoverNet Affairs,
Inc. ("GoverNet"), and Brief Reporter LLC ("Brief Reporter"). The content of
these databases consists primarily of federal and state case law, statutory law
for certain states, legal briefs prepared by attorneys for trials in state and
federal courts, litigation forms, articles and summaries and details of pending
legislation at the state and federal levels used by attorneys, corporate
management and other parties involved in litigation, legal planning and
legislative undertakings. Interfacing with these databases are software
retrieval engines that are owned by or licensed to Internet Law's operating
subsidiaries.

National Law was formed in November 1998 as a Texas corporation for the
purpose of developing and marketing an Internet site to be used for legal
research. Following its formation, National Law's then sole stockholder
contributed to National Law all 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 National Law's common stock.
In January 1999, National Law agreed in principle to be acquired by Internet Law
in a transaction structured as a reverse acquisition. This reverse acquisition
was accomplished through a one-for-one tax-free exchange of shares of common
stock pursuant to an Agreement and Plan of Reorganization, dated March 25, 1999,
as amended (the "Merger Agreement"), which became effective on March 30, 1999.
Immediately following the reverse acquisition, Internet Law's stockholders voted
to change the name of the company from Planet Resources, Inc. to Internet Law
Library, Inc. See Note 3.

While National Law has currently developed database content for all 50 states,
it has primarily achieved its revenue growth since inception through sales in
Texas, New York and Georgia. Consequently, Internet Law continues to face the
challenge of successfully expanding the market for all of its products by
further penetrating markets in existing states and implementing its business
strategy in additional states. Internet Law's future success is dependent on
many factors that include, among others, competition, technological changes,
generating a sufficient subscriber base and sales volume to achieve and maintain
profitability, hiring and retaining qualified personnel and obtaining sufficient
financing to fund its stated business objectives.

On May 11, 2000, Internet Law executed an intermediate financing agreement
(see Note 12) for the sale of $3 million of convertible preferred stock.
Additionally, with respect to notes payable (see Note 12) extended to Internet
Law from its chief executive officer after December 31, 1999, the chief
executive officer has provided a written commitment to Internet Law to provide
forbearance and extend the due date on such notes, if to demand payment would
impair Internet Law's ability to meet its other existing liabilities and
commitments. This commitment is effective for notes between Internet Law and
the chief executive officer with maturity dates through March 2001.

As shown in the accompanying consolidated financial statements, Internet Law
has incurred significant losses from operations, maintains a working capital
deficit and has used significant cash in operations. Accordingly, Internet Law
will require additional financing to fund its operations and execute its
business plan. The inability to obtain additional financing will substantially
impact Internet Law's ability to continue as a going concern. To provide
interim financing to fund its operations until the $25 million equity line (see
Note 12) is completed or an alternative source of long-term financing becomes
available, management plans to utilize additional loans from Mr. Carr and other
directors and investors. While Internet Law expects to obtain financing by
November 2000, they have been informed by Arthur Andersen LLP, that if the
conditions described above related to the need for additional financing continue
to exist at the time of their audit of the financial statements for the year
ended December 31, 2000, their report on those statements will include an
explanatory fourth paragraph expressing uncertainty regarding Internet Law's
ability to continue as going concern.

NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of Presentation-These consolidated financial statements reflect the
assets, liabilities, results of operations, and cash flows of the business
conducted by Internet Law from its inception on November 30, 1998 to June 30,
1999 ("Inception to June 30, 1999"). In January 2000, Internet Law's Board of
Directors approved a resolution changing the fiscal year end from June 30 to
December 31. Accordingly, transition period financial statements for the six
months ended December 31, 1999, have been included in these consolidated
financial statements.

F-8
<PAGE>

Unaudited Interim Financial Statements-The accompanying consolidated balance
sheet as of June 30, 2000, the consolidated statements of operations and cash
flows for the six months ended June 30, 2000 and 1999, and the consolidated
statement of stockholders' equity for the six months ended June 30, 2000, are
unaudited but, in the opinion of management, include all adjustments, consisting
only of normal recurring adjustments, necessary for a fair presentation of
results for the interim periods. Results for the six months ended June 30,
2000, are not necessarily indicative of the results that may be expected for the
fiscal year ending December 31, 2000.

Restatement of Financial Statements-As further discussed in Note 4, Internet
Law purchases database content from ITIS Inc. ("ITIS"), an affiliated company,
which was controlled by the majority shareholder (also the chief executive
officer) of Internet Law during the two periods ended December 31, 1999. As
required by generally accepted accounting principles, transfers of assets
between entities under common control must be accounted for using the cost basis
of the transferor. Internet Law previously recorded the purchase of database
content using the contracted rate between Internet Law and the affiliate.
Accordingly, the database content balances previously reported as of June 30,
1999 have been revised in the accompanying balance sheet. Additionally, the
database content balance as of December 31, 1999, reflects purchases for the six
months ended December 31, 1999, at the cost basis of the affiliate, which
represents a revision from the unaudited balances reported in Internet Law's
quarterly report on Form 10-Q as of September 30, 1999. The effect of these
revisions was to decrease the database content balance by $590,358 as of June
30, 1999, and to record the excess of payments to the affiliate over the cost
basis of the database content received as due from affiliated company totaling
$55,423 and $324,427 as of December 31 and June 30, 1999, respectively.

Principles of Consolidation-The accompanying consolidated financial statements
include the accounts of Internet Law and its wholly owned subsidiaries, National
Law, GoverNet, Brief Reporter, IT/IS, and New Planet Resources, Inc. All
significant inter-company balances and transactions have been eliminated in
consolidation.

Use of 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
revenues and expenses and the disclosure of contingent assets and liabilities.
Actual results could differ from those estimates.

Cash, Cash Equivalents and Short-term Investments-Internet Law considers all
highly liquid investments with maturities of three months or less at the time of
purchase to be cash equivalents. Short-term investments are classified as
"securities available for sale" and are reported at their fair value with
accrued interest expense and income recorded when such securities are purchased
and sold, respectively.

Revenue Recognition-Revenues consist of subscription and other fees charged
for access to Internet Law's databases. Fees are recognized ratably over the
periods ranging from a single use to two years.

Database and Development Costs-Database and development costs include content
databases containing federal and state case law, statutory law, rules, pending
legislation, and database and retrieval software. The capitalized value of a
content database is determined from the cost of purchasing, verifying and
installing the database for release to Internet customers. Once a case law
database has been capitalized, the cost of updating the database with current
case law is expensed. The cost of updating statutory law and pending
legislation databases is capitalized.

Internet Law applies SOP 98-1, "Software for Internal Use," which provides
guidance on accounting for the cost of computer software developed or obtained
for internal use. The capitalized value of software is derived from programming
expenses incurred directly in the application or development of the database and
retrieval software.

Internet Law uses the straight-line method to amortize the components of the
content databases. Content and software development assets consist of the
following:

<TABLE>
<CAPTION>
Useful life June 30, 2000 December 31, 1999 June 30, 1999
(in years) -------------- ------------------ --------------
----------- (unaudited)

Content:
<S> <C> <C> <C> <C>
Case and statutory law................ 20 $6,532,387 $2,184,257 $1,196,664
Pending legislation................... 5 3,804 3,804 -
Software development.................. 8 1,482,042 1,037,728 933,757
---------- ---------- ----------

Total............................... 8,018,233 3,225,789 2,130,421
Less: Accumulated amortization........ 895,654 (268,928) (141,386)
---------- ---------- ----------

$7,122,579 $2,956,861 $1,989,035
========== ========== ==========
</TABLE>

F-9
<PAGE>

Furniture and Equipment-Furniture and equipment is stated at cost less
accumulated depreciation. Depreciation is computed using the straight-line
method over a five-year period. At December 31 and June 30, 1999, accumulated
depreciation was $15,288 and $1,395, respectively. At June 30, 2000,
accumulated depreciation was $82,496.

Acquired Intangible Assets-Intangible and other assets consist of values
associated with goodwill and developed technologies, all acquired from the
acquisition of GoverNet, Brief Reporter, and IT/IS . Amortization of these
intangibles is calculated on a straight-line basis over their respective useful
lives.

Internet Law has adopted Statement of Financial Accounting Standards ("SFAS")
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of." SFAS No. 121 requires that long-lived assets and
certain identifiable intangibles to be held and used by an entity be reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. If the sum of the expected
future cash flows from the use of the asset and its eventual disposition is less
than the carrying amount of the asset, an impairment loss is recognized based on
the fair value of the asset.

Income Taxes-Internet Law accounts for income taxes in accordance with the
liability method prescribed by SFAS No. 109, "Accounting for Income Taxes."
Under this method, deferred income taxes reflect the impact of temporary
differences between financial accounting and tax bases of assets and
liabilities. Such differences relate primarily to the capitalization,
amortization and write-off of certain intangibles, the deductibility of certain
accruals and reserves and the effect of tax loss and tax credit carry-forwards
not yet utilized. Deferred tax assets are evaluated for realization based on a
more-likely-than-not criteria in determining if a valuation allowance should be
provided.

Stock-Based Compensation-Under SFAS No. 123, "Accounting for Stock-Based
Compensation," Internet Law has elected the method that requires disclosure of
stock-based compensation. Because of this election, Internet Law accounts for
its employee stock-based compensation plan under Accounting Principles Board
("APB") Opinion No. 25 and the related interpretations. Accordingly, deferred
compensation is recorded for stock-based compensation grants to employees based
on the excess of the estimated fair value of the common stock on the measurement
date over the exercise price. The deferred compensation is amortized over the
vesting period of each unit of stock-based compensation. If the exercise price
of the stock-based compensation grant is equal to the estimated fair value of
Internet Law's stock on the date of grant, no compensation expense is recorded.
Additionally, for stock-based compensation grants to consultants, Internet Law
recognizes as compensation expense the fair value of such grants as calculated
pursuant to SFAS No. 123, recognized over the related service period.

Net Loss Per Share-Basic net loss per share has been computed by dividing net
loss by the weighted average number of shares outstanding. Shares of Internet
Law outstanding at the time of the reverse acquisition have been treated as
outstanding during the entire period, after adjustment for a 1 for 2 reverse
stock split immediately preceding the reverse acquisition. Shares of National
Law outstanding before the reverse acquisition have been included in weighted
average shares outstanding since November 30, 1998, its date of inception. All
options outstanding at December 31 and June 30, 1999, have not been included
because they are anti-dilutive. Accordingly, basic and diluted net loss per
share is the same for all periods presented.

NOTE 3-REVERSE ACQUISITION:

On March 30, 1999, Internet Law (then Planet Resources, Inc.) and National Law
completed a reorganization under the terms of the Merger Agreement. Under this
agreement, National Law's stockholders exchanged all of their issued and
outstanding shares of common stock, consisting of 18 million shares, for a like
amount of new shares of common stock to be issued by Internet Law. In
contemplation of the merger, Internet Law's original stockholders agreed to a 1
for 2 reverse stock split which resulted in two million issued and outstanding
shares of common stock immediately prior to the merger. These shares are to be
retained by Internet Law's original stockholders. In addition, under an
Agreement and Plan of Distribution dated March 25, 1999 (the "Distribution
Agreement"), Internet Law is obligated to distribute certain assets consisting
of cash and mining assets to its original stockholders. At December 31, 1999,
and June 30, 1999, these assets totaled $30,235 and $42,515, respectively. Also
pursuant to the Distribution Agreement, Internet Law formed a subsidiary for the
purpose of effecting this asset distribution. Two million shares of this
subsidiary's common stock is to be distributed to Internet Law's original
stockholders once the subsidiary

F-10
<PAGE>

completes a registration of these shares with the Securities and Exchange
Commission. Once these shares are registered and can be distributed, Internet
Law will transfer the cash and mining assets to the subsidiary.

At the time of the reverse acquisition, Internet Law's authorized shares of
common stock were 10 million. The terms of the Merger Agreement required that
Internet Law's stockholders approve an amendment to its articles of
incorporation that would increase the authorized shares to 30 million and change
the name of the company to Internet Law Library, Inc. Internet Law's
stockholders approved such an amendment on March 31, 1999, but it was not filed
with the Secretary of State of Delaware until July 8, 1999. Because it was the
intent of the parties to the Merger Agreement and because the parties completed
the reverse acquisition as contemplated in the Merger Agreement, Internet Law's
financial statements for the period from Inception to June 30, 1999, have been
prepared on the basis that Internet Law was able to issue up to 30 million
shares of common stock as of March 31, 1999.

Internet Law has accounted for the reverse acquisition under the purchase
method of accounting, whereby National Law is treated as the accounting acquirer
and Internet Law as the acquired entity. Using this method, the retained
deficit of Internet Law as of the acquisition date and the par value of National
Law's common stock were closed to Internet Law's additional paid-in capital.
This accounting reflects the intent of the parties, specifically, that National
Law as an operating entity acquired Internet Law in order to implement a capital
development program from which both Internet Law's original stockholders and its
new stockholders expect to benefit.

Shown below is a reconciliation of balances in Internet Law's stockholders'
equity accounts from June 30, 1998, through the date of the reverse acquisition:

<TABLE>
<CAPTION>
Shares Issued Common Stock Additional Retained Deficit Treasury Stock Total
-------------- ------------- Paid-in Capital ----------------- --------------- -----------
------------------

<S> <C> <C> <C> <C> <C> <C>
Balances at June 30, 1998......... 1,605,147 $ 1,605 $252,184 $ (92,249) $(43,184) $ 118,356
Sale of shares to an existing
stockholder...................... 2,394,853 2,395 57,460 - - 59,855
Reverse 1 for 2 stock split....... (2,000,000) (2,000) 2,000 - - -
Net loss through the reverse
acquisition date................. - - (120,441) - (120,441)
---------- --------- ----------- ------------- -------- -----------
Balances, as of the reverse
acquisition date................. 2,000,000 $ 2,000 $311,644 $ (212,690) $(43,184) $ 57,770
========== ========= =========== ============= ======== ===========
</TABLE>

NOTE 4-TRANSACTIONS WITH AFFILIATED COMPANY:

The content and software development assets of National Law were sold to it by
an individual who is now the Chairman of the Board, Chief Executive Officer,
President and its largest stockholder (the "CEO of Internet Law"). Until
January 2000, the CEO of Internet Law was also the controlling stockholder of
ITIS, a Texas corporation formed in 1994 for the purpose of developing software
to be used in the area of litigation support. ITIS has provided a variety of
services to National Law as set forth below:

1. In December 1998, National Law and ITIS entered into a continuing
service agreement under which ITIS provides database content to
National Law. Under the terms of this agreement, ITIS provides
National Law with data files containing case law and statutes as are
in the public domain together with coding and proprietary editing
services covering these data files. Under the agreement, National Law
is obligated for a three-year period to provide ITIS with minimum
orders for data files containing an aggregate of 750 million
characters per month. However, pricing under this agreement is to
reflect market prices for comparable work, and National may select
another vendor should ITIS' prices not be competitive. During the six
months ended December 31, 1999, and during the period from Inception
to June 30, 1999, National Law paid charges totaling $987,594 and
$101,052 respectively representing estimated costs incurred by ITIS
for data files created by ITIS for National Law.

Upon the divestiture of the CEO's controlling interest in ITIS in
January 2000, and through the date of acquisition of ITIS (see Note
12) National Law recorded purchases of database content from ITIS in
accordance with the contractual rate between ITIS and National Law.
The effective rate recorded by National Law during its period under
common control with ITIS is substantially less than the contractual
rate. During the three months ended March 31, 2000, National Law
purchased

F-11
<PAGE>

$3,428,774 of case law content from ITIS, including $260,930 purchased
at ITIS' estimated cost and $3,167,844 purchased at the contractual
rate of $0.65 per 1,000 characters of data.

2. Effective in March 1999, National Law and ITIS operated under a
management and financial services agreement under which ITIS provides
accounting, staffing, and procurement services and office space to
National Law. In addition, ITIS is entitled to charge a $3,600
monthly management fee under the agreement. During the six months
ended December 31, 1999, and during the period from Inception to June
30, 1999, charges totaling $342,800 and $298,800, respectively,
representing costs incurred by ITIS to provide these services were
billed to National Law under this agreement; and

3. Effective in December 1998, National Law entered into an agreement
with ITIS to receive software development and consulting services for
its database and retrieval software. During the six months ended
December 31, 1999, charges totaling $34,600 were incurred by National
Law under this agreement.

In the aggregate, at December 31, 1999 and June 30, 1999, National Law prepaid
$55,423 and $324,427, respectively, to ITIS under the foregoing agreements.
National Law owed ITIS an aggregate $3,015,835 at March 31, 2000, under various
agreements, primarily from database content purchases.

Effective in November 1998, National Law and the CEO of Internet Law entered
into a personal service contract covering executive services, marketing and
business development, public relations and general management. The agreement
was terminated on July 1, 1999, when the CEO of Internet Law became a salaried
officer of Internet Law, on which date National Law owed $40,440 to the CEO of
Internet Law. During the six months ended December 31, 1999, Internet Law
remitted this amount, together with reimbursable out-of-pocket expenditures
totaling $8,384, to the CEO of Internet Law.

NOTE 5-ACQUISITIONS:

GoverNet

In November 1999, Internet Law acquired GoverNet, a Georgia corporation, which
owns and operates an Internet site and connected databases that provide
subscribers with a tracking and monitoring system for legislation pending before
federal and state legislatures. Internet Law issued 446,352 shares of common
stock in exchange for all the outstanding stock of GoverNet. The total purchase
price of $1,341,400, includes the estimated fair value of common stock issued of
$1.3 million, $22,000 of promissory notes payable to two stockholders, and
$19,400 of other debt. The acquisition was accounted for under the purchase
method of accounting. Pending the results of an independent appraisal, Internet
Law's preliminary allocation to intangible assets includes $1,271,854 to
developed technology. The results of operations of GoverNet and the fair value
of the tangible and intangible assets acquired and liabilities assumed have been
included in Internet Law's consolidated financial statements as of the
acquisition date.

In addition, options to purchase 320,000 shares of Internet Law's common stock
were granted to the former stockholders of GoverNet. These stock options are
exercisable over a five-year period beginning on August 31, 2000, provided
certain revenue and earnings targets are achieved in each of the three years
ended August 2002. The options are subject to an exercise price of $2.94 per
share.

Brief Reporter

In December 1999, Internet Law acquired Brief Reporter, a Virginia limited
liability company, which owns and operates an Internet site and connected
databases containing appellate briefs written by attorneys for important cases
in all federal and state jurisdictions. Internet Law issued 483,325 shares of
common stock in exchange for all of the members' interests of Brief Reporter.
The total purchase price of $1,000,000 consists of the estimated fair value of
the common stock issued by Internet Law. The acquisition was accounted for
under the purchase method of accounting and resulted in $960,206 of the purchase
price being allocated to intangible assets. Pending the results of an
independent appraisal, Internet Law's preliminary allocation to intangible
assets includes $250,000 to developed technology, $225,700 to legal brief
content, and $484,506 to goodwill. The results of operations of Brief Reporter
and the fair value of the tangible and intangible assets acquired and
liabilities assumed have been included in Internet Law's consolidated financial
statements as of the acquisition date.

F-12
<PAGE>

Under the terms of the acquisition agreement with Brief Reporter, these former
owners of Brief Reporter may have up to 25 percent of their shares of Internet
Law's common stock registered in a public offering prior to July 1, 2000,
provided there is such an offering and the registration of their shares is not
detrimental to the offering. If there is no public offering or if none of these
shares are registered in such an offering, then Internet Law is obligated to
repurchase an aggregate of $125,000 worth of these shares at a then prevailing
market price. As this contingency is outside the control of Internet Law,
$125,000 has been reflected as redeemable common stock in the accompanying
balance sheet at December 31, 1999.

F-13
<PAGE>

The following unaudited pro forma financial information for the six months
ended December 31, 1999, and for the period from Inception to June 30, 1999,
assumes the acquisitions of GoverNet and Brief Reporter had occurred on November
30, 1998, the date of Internet Law's inception:

<TABLE>
<CAPTION>
Six months ended Inception to
December 31, 1999 June 30, 1999
---------------------- -----------------
<S> <C> <C>
Revenues.......................................... $ 265,424 $ 110,387

Net loss.......................................... $(2,000,462) $(1,127,502)

Loss per share.................................... $ (0.08) $ (0.10)

</TABLE>

NOTE 6-INTANGIBLE ASSETS:

Intangible assets as of December 31, 1999, consist of the following:

<TABLE>
<CAPTION>
Estimated Useful
lives (in years)
-----------------

<S> <C> <C>
Developed technology........................................................... 5 $1,521,854
Content-legal briefs........................................................... 20 225,700
Goodwill....................................................................... 5 484,506
----------

Subtotal.................................................................... 2,232,060

Less: Accumulated amortization................................................ (55,602)
----------

Total....................................................................... $2,176,458
==========
</TABLE>

NOTE 7-NOTES PAYABLE:

In June 1999, Internet Law executed a demand promissory note in the amount of
$180,000 payable to a third party. The note was subject to an annual interest
rate of 10 percent, and was paid in full in October 1999. During the six months
ended December 31, 1999, Internet Law recognized interest expense of $5,200
related to this note.

In November 1999, with the acquisition of GoverNet, Internet Law assumed two
promissory notes made to two former stockholders of GoverNet totaling $22,000.
These notes, one for $15,000 dated in October 1999 and one for $7,000 dated in
November 1999, were both subject to an annual interest rate of prime plus four
percent. Internet Law paid both notes in full in December 1999.

NOTE 8-INCOME TAXES:

Internet Law has had losses since inception and, therefore, has not been
subject to federal income taxes. As of December 31, 1999, Internet Law had
accumulated net operating loss ("NOL") carryforward for income tax purposes of
approximately $1.7 million. These carryforwards begin to expire in 2018. The
Tax Reform Act of 1986 provided for an annual limitation on the use of NOL and
tax credit carryforwards following certain ownership changes that limit Internet
Law's ability to utilize these carryforwards. Additionally, because U.S. tax
laws limit the time during which NOL and tax credit carryforwards may be applied
against future taxable income and tax liabilities, Internet Law may not be able
to take full advantage of its NOL and tax credits for federal income tax
purposes. Since Internet Law has had a net operating loss carry forward since
inception and there is no assurance of future taxable income, a valuation
allowance has been established to fully offset the deferred tax assets.

F-14
<PAGE>

Significant components of Internet Law's net deferred tax asset at December
31 and June 30, 1999 are as follows:

<TABLE>
<CAPTION>
Deferred tax assets relating to: December 31 June 30
-------------------------------- ------------ ----------

<S> <C> <C>
Federal net operating loss carryforwards........................................................... $ 582,000 $ 256,000
Book/tax differences on depreciable, amortizable and other assets.................................. 20,400 17,300
Deferred revenue................................................................................... 28,000 -
Restricted stock................................................................................... 76,500 -
Deferred tax valuation allowance................................................................... (706,900) (273,300)
--------- ---------

Net deferred tax asset.............................................................................. $ $
- -
========== =========

</TABLE>

Internet Law's statutory tax rate differs from the effective tax rate
primarily from the effect of non-deductible expenses and the increase in the
deferred tax valuation allowance.

NOTE 9-COMMITMENTS AND CONTINGENCIES:

Lease for Office Space

Effective in July 2000, Internet Law is committed to making monthly
payments of at least $6,200 under a lease agreement for office space that
expires in June 2004. If Internet Law is not successful in maintaining existing
sub-leasing arrangements with a third party tenant, this monthly obligation may
increase to approximately $18,600 beginning in July 2000. In addition, GoverNet
Affairs leases office space pursuant to a lease agreement requiring monthly
payments of approximately $3,300 through December 2001.

Employment Contracts

Internet Law has signed various employment and consulting agreements with
certain officers and a third party advisor. At December 31, 1999, under these
agreements, Internet Law is obligated to pay $250,000 per year through 2002, and
thereafter $150,000 per year through 2004. In January 2000, Internet Law
executed two additional three-year employment agreements requiring aggregate
annual payments of approximately $140,000 per year.

Litigation

Internet Law is subject to various other claims, either asserted or
unasserted, arising in the normal course of business. Management believes that
the outcome of any or all of these claims will not have a material effect on the
consolidated financial position or results of operations of Internet Law.

NOTE 10-COMMON STOCK:

Since inception, Internet Law has sold unregistered shares of its common
stock to a number of investors pursuant to Regulation D of the Securities Act of
1933, as amended. During the six months ended December 31, 1999, 2,207,526
shares were sold for an average price of $1.02 per share for net cash proceeds
of $2,245,675, after

F-15
<PAGE>

commissions totaling $42,250. During the period from Inception to June 30, 1999,
Internet Law sold 2,467,550 shares for an average price of $0.18 per share
resulting in cash proceeds of $432,090.

During the six months ended December 31, 1999, Internet Law issued 51,500
shares of common stock for services rendered. Additionally, in December 1999,
Internet Law approved a bonus to various employees and two board members for
services rendered in 1999. The bonus consisted of 33,042 aggregate shares of
common stock, which were issued in January 2000. The aggregate value of the
award, totaling $105,404, has been recorded to compensation expense and
additional paid-in capital as of December 31, 1999. Since the common shares
were not issued until January 2000, no par value has been recorded as of
December 31, 1999. Also in December 1999, the Board of Directors approved
outside directors' compensation in the form of annual awards of 25,000 shares of
Internet Law's common stock issuable to each outside director at the beginning
of each calendar year. In March 2000, Internet Law issued a total of 125,000
shares of its common stock, valued at $551,200, to its outside directors.

In February 2000, Internet Law's stockholders approved an amendment to the
certificate of incorporation increasing the number of authorized shares of
preferred and common stock. Pursuant to this amendment, shares of authorized
preferred stock were increased from 1,000,000 shares to 50,000,000, and shares
of authorized common stock were increased from 30,000,000 shares to 100,000,000
shares.

NOTE 11-STOCK OPTIONS:

On March 26, 1999, the Board of Directors and the majority stockholders of
Internet Law adopted the 1999 Stock Option Plan for Internet Law (the "Plan").
Under the Plan, the Compensation Committee of the Board of Directors, consisting
of at least two non-employee members of the Board of Directors, may grant stock
options to purchase common stock of Internet Law (either incentive or non-
qualified stock options) and stock appreciation rights ("SARs") to officers and
employees, including directors who are employees, of Internet Law. The
Compensation Committee has discretion to determine the terms and conditions upon
which the options may be exercised. Originally, the stockholders approved
300,000 shares of common stock for the grant of options under the Plan, subject
to anti-dilution provisions. In February 2000, the stockholders approved a
resolution increasing this number to 3,000,000 shares.

On March 26, 1999, the Board of Directors and the majority stockholders
approved the 1999 Director Option Plan (the "Director Plan"). The Director Plan
provides for automatic grants of stock options to non-employee directors.
Internet Law has reserved 200,000 shares of common stock for the grant of
options under the Director Plan, subject to anti-dilution adjustments. Through
December 31, 1999, no options were awarded or granted under either the Plan or
the Director Plan.

Internet Law granted certain stock options outside both the Plan and the
Director Plan during the six months ended December 31, 1999, and during the
period from Inception to June 30, 1999, as summarized below:

<TABLE>
<CAPTION>
Six months ended Inception to June 30, 1999
December 31, 1999 --------------------------
-----------------
Weighted Average Number of Weighted Average Number of
---------------- --------- --------------- --------
Exercise Price Shares Exercise Price Shares
-------------- ------ -------------- ------
<S> <C> <C> <C> <C>
Options outstanding, beginning of period................. $2.24 3,300,000 $ - -
Options granted.......................................... 2.93 645,000 2.24 3,300,000
Options cancelled........................................ - - - -
Options exercised........................................ 0.30 (600,000) - -
--------- ---------

Options outstanding, end of period....................... $2.72 3,345,000 $2.24 3,300,000
========= =========

$3.00 2,250,000 $3.00 2,250,000
Options exercisable, end of period....................... ========= =========

</TABLE>

Other information regarding stock options outstanding as of December 31, 1999
is as follows:

<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
------------------- -------------------
Range of Exercise Shares Remaining Life Weighted Average Shares Weighted Average
----------------- ------- -------------- ---------------- ------- ----------------
price (Years) Exercise price Exercise price
----- ------ -------------- --------------
<S> <C> <C> <C> <C> <C>
$1.00 450,000 4.25 $1.00 - $ -
$2.12 - $3.00 2,895,000 0.6 - 9.3 $2.99 2,250,000 $3.00
--------- ---------

3,345,000 2,250,000
========= =========

</TABLE>

F-16
<PAGE>

In January 1999, as partial consideration for arranging Internet Law's
acquisition of National Law, options were awarded to a consulting firm for the
purchase of 600,000 shares of common stock at an exercise price of $.30 per
share. The estimated fair value of these options was immaterial. These options
were exercisable for a period of ten days following the first day on which the
quoted market price of the Internet Law's common stock reached a price of $1.10
per share. Effective in April 1999, this option agreement was amended to extend
the exercise period from ten days to anytime on or before December 31, 1999.
The estimated fair market value incrementally provided to the consulting firm as
a result of changing the measurement date of this stock option was approximately
$12,500, which amount was not recorded due to its immateriality. Pursuant to
this award, as amended, two blocks of options, each for 300,000 shares, were
exercised in July 1999 and December 1999.

In April 1999, the Board of Directors granted an option for 1,000,000
shares of common stock to a stockholder as an incentive for this person to join
the Board. This individual subsequently became a member of the Board of
Directors in August 1999. Both of these options were fully vested at the grant
date and may be exercised in whole or in part at any time for a period of 10
years at an exercise price of $3.00 per share.

During December 1999, Internet Law granted stock options for the purchase
of an aggregate of 300,000 shares of common stock which are classified as a
variable award. Pursuant to APB Opinion No. 25, the initial compensation expense
related to these options was calculated based on the difference between the
market price of the underlying common stock on the grant date and the exercise
price of the option. The charge is recognized ratably over the expected service
period related to the variable award. Additionally, a periodic adjustment to
deferred compensation and related compensation expense is computed at the end of
each reporting period based on the difference between the then current market
price and the exercise price less previously recognized compensation expense. In
January 2000, Internet Law granted two officers variable option awards for an
aggregate of 105,000 shares of common stock subject to terms similar to the
above described variable option.

Had the compensation cost for all stock options been determined under the
alternative method under SFAS No. 123, Internet Law's net loss for the periods
ended December 31, 1999 and June 30, 1999, would have changed to the following
pro forma amounts:

<TABLE>
<CAPTION>
Six months ended Inception to June
December 31, 1999 30, 1999
------------------------- -------------------

Net loss:
<S> <C> <C>
As reported............................................... $1,525,787 $ 612,214
Pro forma................................................. $2,402,795 $3,129,707
Basic and diluted net loss per share:
As reported............................................... $ 0.07 $ 0.06
Pro forma................................................. $ 0.11 $ 0.39
</TABLE>

For the pro forma disclosures, the fair value of each option grant is
estimated at the date of the grant using the Black-Scholes option pricing model
with the following assumptions: no expected dividends, risk-free interest rate
of six percent, price volatility between 75% and 92% for the six months ended
December 31, 1999, and between 118% and 287% for the period Inception to June
30, 1999, and expected lives between 10 and 0.5 years.

NOTE 12-SUBSEQUENT EVENTS (UNAUDITED):

Promissory Notes Payable

During the period from January 1 to April 30, 2000, Internet Law borrowed a
total of $1,400,000 from the CEO of Internet Law to fund working capital
requirements. These borrowings are evidenced by ten unsecured promissory notes,
each bearing an annual interest rate of 11.75% and payable in full with accrued
interest after six months. The CEO has further committed that should Internet
Law need to extend the maturity of the note, he has agreed to do so. In no
event would he require payment prior to March 31, 2001, if to do so would
prevent Internet Law from paying its other obligations on a timely basis.

Acquisition of ITIS

F-17
<PAGE>

On March 23, 2000, Internet Law's Board of Directors approved the purchase
of ITIS subject to certain final reviews and negotiations that were concluded in
April 30, 2000. According to the terms of a Stock Exchange Agreement, effective
April 30, 2000, Internet Law exchanged 5,044,903 shares of its common stock, of
which all were unregistered shares. The closing price of Internet Law's common
stock at April 28, 2000 was $4.25 per share.

Since National Law's inception on November 30, 1998, ITIS has served as its
sole vendor of new case law content while also providing to National Law various
executive, sales, production, and administrative services. During the period
from National Law's inception to December 31, 1999, Mr. Carr was the sole
stockholder of ITIS. Then, during the three months ended March 31, 2000, Mr.
Carr sold or otherwise conveyed for cash approximately 92% of his stock in ITIS
to various individuals and entities, some of whom are either directors or
officers of Internet Law or are entities controlled by directors of Internet
Law. Of the 5,044,903 shares issued to ITIS stockholders, 1,721,003 shares were
issued to five directors of Internet Law or their beneficiaries and 328,300
shares were issued to four officers of Internet Law.

The acquisition will be accounted for under the purchase method of
accounting and is expected to result in the purchase price being allocated to
tangible assets, specific intangible assets such as trademarks, developed
technology, and experienced workforce and goodwill. Pending the results of an
independent appraisal, the ultimate value assigned to the consideration given
for ITIS and the value received is presently undeterminable. Considering the
unregistered nature of the shares conveyed, the limited trading activity of
Internet Law's common stock, the closely held nature of ITIS, and the
significant related party activity between the entities and their shareholders,
a significant discount from the traded price of Internet Law at April 28, 2000
is likely. Internet Law has preliminarily estimated this value at approximately
$11.9 million, which would result in intangible assets of approximately $8.942
million. The following unaudited pro forma financial information for the six
months ended December 31, 1999, and for the period from Inception to June 30,
1999, assumes the acquisition of ITIS had occurred on November 30, 1998, the
date of Internet Law's inception. The pro forma financial information is
preliminary, pending the final results of the previously discussed appraisal,
which is currently in process:

<TABLE>
<CAPTION>
Six months Inception
ended to
December 31, 1999 June 30, 1999
---------------------- -----------------

<S> <C> <C>
Revenues.......................................... $ 479,000 $ 983,000

Net loss.......................................... $(3,039,000) $(1,302,000)

Loss per share.................................... $ (0.11) $ (0.08)

</TABLE>

Acquisition of Compass Data Systems, Inc.

Internet Law Library, Inc. signed a Stock Purchase Agreement, effective
October 1, 2000, for the purchase of a controlling interest of Compass Data
Systems Inc., a private Nevada corporation. Compass Data Systems provides
electronic information publishing services in a completely searchable infobase
to a wide variety of industries and organizations. Under the terms of the Stock
Purchase Agreements, Internet Law is obligated to issue an aggregate of
1,676,105 unregistered shares of its common stock, valued at approximately $2.3
million, for approximately 63% of the total outstanding shares of the common
stock of Compass Data Systems.

Compass Data Systems provides electronic information publishing services in
a completely searchable infobase to a wide variety of industries and
organizations. Compass Data Systems hosts an Internet site at
www.compassdata.com. Using Internet and CD technology, clients can search
through endless piles of paper on computer files in seconds. These infobases are
quickly accessed through a hard drive, CD-ROM or over the Internet.

Acquisition of Venco Compliance, Inc.

On September 28, 2000, the Board of Directors of the Company approved the
purchase of all of the stock of Venco Compliance, Inc., a private Texas
corporation. Venco Compliance is in the business of selling compliance and
safety training and information to businesses such as dry cleaners and others
that deal with hazardous chemicals,

F-18
<PAGE>

biomaterials and other regulated substances. Internet Law issued an aggregate of
100,000 unregistered shares of Internet Law's common stock at closing on October
1, 2000, valued then at $90,600. Internet Law may issue 50,000 additional
unregistered shares to the former shareholders of Venco Compliance in the future
with the last issuance occurring in the year 2003. Venco Compliance has also
entered into a consulting agreement with Cathryn Tull, a former owner of Venco,
that pays her $72,000 per year for one year, with a renewal right for a one-year
term on each anniversary of the agreement. In addition, Ms. Tull is eligible to
receive a cash bonus based on Venco Compliance's revenues.

Intermediate Financing Agreement

Internet Law registered shares of its common stock with the SEC that will
be sufficient to satisfy any conversion, warrant exercise, and dividend
requirements under the terms of this financing agreement. The convertible
preferred stock purchased by the investor is also subject to mandatory
redemption by Internet Law upon the occurrence of a change in control or other
certain events.

F-19
<PAGE>

4,806,477 Shares

INTERNET LAW LIBRARY, INC.

Shares of
Common Stock

____________________

PROSPECTUS

____________________

You should rely only on the information contained in this document or in
documents that we have referred you to. We have not authorized anyone to
provide you with information that is different.

This prospectus is not an offer to sell or a solicitation of an offer to
buy any security other than the common shares offered. This prospectus is not
an offer to sell or a solicitation or an offer to buy securities to any person
in any jurisdiction in which it is unlawful to make such an offer or
solicitation. You should not assume that the information contained in this
prospectus is correct on any date after the date of this prospectus, even though
this prospectus is delivered or shares are sold pursuant to this prospectus on a
later date.

October 25, 2000
<PAGE>

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

Shown below are the expenses (other than underwriting discounts and commissions)
expected to be incurred in connection with the issuance and distribution of the
securities registered in this prospectus. With the exception of the Securities
and Exchange Commission registration fee the amounts shown below are estimates:

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............................. $ 3,196
-------
Printing expenses............................................................... $ 4,000
-------
Legal fees and expenses $50,000
-------
Accounting fees and expenses.................................................... $30,000
-------
Transfer agent and registrar fees............................................... $ 500
-------
Miscellaneous................................................................... $ 1,500
-------

TOTAL........................................................................... $89,196
-------
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145(a) of the Delaware General Corporation Law (the "DGCL")
provides that a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he or she is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him or her in connection with
such action, suit or proceeding if such person acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.

Section 145(b) of the DGCL provides that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against such expenses
actually and reasonably incurred by him or her in connection with the defense or
settlement of such action or suit if he or she acted under similar standards,
except that no indemnification may be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnification
for such expenses which the court shall deem proper.

Further, Section 145(c) of the DGCL provides that, to the extent a director
or officer of a corporation has been successful on the merits or otherwise in
the defense of any action, suit or proceeding referred to above or in the
defense of any claim, issue or matter therein, he or she shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him or her in connection therewith.

Section 145(f) of the DGCL provides that the statutory provisions on
indemnification are not exclusive of indemnification provided pursuant to, among
other things, the bylaws or indemnification agreements. Article XIV of our
Certificate of Incorporation provides for the indemnification of our officers
and directors to substantially the same extent permitted by the DGCL.

Section 102(b)(7) of the DGCL permits a corporation to provide in its
certificate of incorporation that a director of the corporation shall not be
personally liable to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, but excludes specifically liability
for any (i) breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) acts or omissions not in good faith or involving intentional
misconduct or a knowing violation of law, (iii) payments of unlawful dividends
or unlawful stock repurchases or redemptions, or (iv) transactions from which
the director derived an improper personal benefit. The provision does not limit
equitable remedies, such as an injunction or rescission for breach of a
director's fiduciary duty of care.

II-1
<PAGE>

The Registrant's Certificate of Incorporation contains a provision
eliminating the personal liability of a director from breaches of fiduciary
duty, subject to the exceptions described above.

(b) The Registrant has entered into Indemnity Agreements with certain of
its directors and officers that establish contract rights to indemnification
substantially similar to the rights to indemnification provided for in its
Certificate of Incorporation.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

During the last three years, we have issued unregistered shares of our common
stock in the following transactions:

1. Pursuant to the agreement and plan of reorganization, each share of National
Law common stock was exchanged for one share of our unregistered common
stock.

2. In March 1999, we issued and sold 2,394,184 shares of our common stock, to
A. W. Dugan, our former Chairman of the Board of Directors and President,
and, currently, a significant stockholder of us, for $59,855.

3. In April 1999, we issued and sold 15,000 shares of common stock to Chuck
Dunbar, for $150.

4. In April 1999, we issued and sold 25,000 shares of common stock to Joanna
Hoover for $10,000.

5. In April 1999, we issued and sold 15,000 shares of common stock to D.H.
Westmoreland, for $150.

6. In May 1999, we issued and sold 15,000 shares of common stock to Joanna
Hoover, for $150.

7. In May 1999, we issued and sold 15,000 shares of common stock to Bryan
Gentle for $15,000.

8. In May 1999, we issued and sold 15,000 shares of common stock to Rich
Nommensen for $150.

9. In May 1999, we issued and sold 15,000 shares of common stock to Tina
Williams for $150.

10. In June 1999, we issued and sold 15,000 shares of common stock to Joe H.
Reynolds for $15.

11. In June 1999, we issued and sold 50 shares of common stock to Ekat
Tcherkassova for $.05.

12. In June 1999, we issued and sold 1,500 shares of common stock to Rhea Laws
as consideration for a conference table that we valued at $4,500.

13. In June 1999, we issued and sold 10,000 shares of common stock to Robert
Bolton as consideration for consulting services valued at $12,500.

14. In August 1999, we issued and sold 8,000 shares of common stock to Bill and
Neta Brewer for $11,200.

15. In July 1999, we issued and sold 13,334 shares of common stock to Michael
G. Tompkins for $20,000.

16. In July 1999, we issued and sold 1,500 shares of common stock to Michael G.
Tompkins for consulting services valued at $3,000.

17. In July 1999, we issued and sold 20,000 shares of common stock to Robert
Sarlay for $200.

18. In August 1999, we issued and sold 8,000 shares of common stock to Morris
H. Chapman for $10,000.

19. In August 1999, we issued and sold 20,000 shares of common stock to Gene D.
Wright for $29,000.

20. In August 1999, we issued and sold 6,667 shares of common stock to Devon
Kirk for $10,000.

II-2
<PAGE>

21. In August 1999, we issued and sold 10,000 shares of common stock to Perry
Auguston for $15,000.

22. In August 1999, we issued and sold 40,000 shares of common stock to J.
Michael Duncan for $60,000.

23. In August 1999, we issued and sold 10,000 shares of common stock to Bill
and Neta Brewer for $15,000.

24. In August 1999, we issued and sold 25,000 shares of common stock to Carol
Ann Wilson for $25.

25. In August 1999, we issued and sold 6,667 shares of common stock to J. Lance
Byrns for $10,000.

26. In August 1999, we issued and sold 5,000 shares of common stock to L.
Stanley Coffee for $7,000.

27. In August 1999, we issued and sold 7,143 shares of common stock to R. David
Cullum for $10,000.

28. In August 1999, we issued and sold 6,667 shares of common stock to Paul W.
Ledbetter for $10,000.

29. In August 1999, we issued and sold 14,286 shares of common stock to Mike R.
O'Meara for $20,000.

30. In August 1999, we issued and sold 21,429 shares of common stock to Robert
Peoples for $30,000.

31. In August 1999, we issued and sold 6,667 shares of common stock to Ronald
E. Stedman for $10,000.

32. In August 1999, we issued and sold 16,666 shares of common stock to Les T.
Csorba for $25,000.

33. In August 1999, we issued and sold 6,667 shares of common stock to Kenneth
C. Peterson for $10,000.

34. In August 1999, we issued and sold 7,000 shares of common stock to Walter
E. Whitehead for $10,500.

35. In September 1999, we issued and sold 20,000 shares of common stock to
Bryan L. Goolsby for $30,000.

36. In September 1999, we issued and sold 50,000 shares of common stock to W.
Allyn Hoaglund for $50,000.

37. In September 1999, we issued and sold 500,000 shares of common stock to
Jack I. Tompkins for $500,000.

38. In September 1999, we issued and sold 6,667 shares of common stock to
Mildred Holeman for $10,000.

39. In September 1999, we issued and sold 6,667 shares of common stock to Kelly
Auguston for $10,000.

40. In September 1999, we issued and sold 25,000 shares of common stock to
Thomas D. & Carolyn D. Kirker for $35,000.

41. In September 1999, we issued and sold 50,000 shares of common stock to
First York Partners Inc. for legal services valued at $20,000.

42. In September 1999, we issued and sold 25,000 shares of common stock to
George L. Ball for $25,000. A commission equal to five percent of the cash
proceeds was paid to Sanders Morris Mundy, Inc. in connection with this
transaction.

43. In September 1999, we issued and sold 75,000 shares of common stock to
Morton A. Cohn for $75,000. A commission equal to five percent of the cash
proceeds was paid to Sanders Morris Mundy, Inc. in connection with this
transaction.

44. In September 1999, we issued and sold 100,000 shares of common stock to
John E. Drury for $100,000. A commission equal to five percent of the cash
proceeds was paid to Sanders Morris Mundy, Inc. in connection with this
transaction.

45. In September 1999, we issued and sold 25,000 shares of common stock to Ben
T. Morris for $25,000. A commission equal to five percent of the cash
proceeds was paid to Sanders Morris Mundy, Inc. in connection with this
transaction.

II-3
<PAGE>

46. In September 1999, we issued and sold 25,000 shares of common stock to John
I. Mundy for $25,000. A commission equal to five percent of the cash
proceeds was paid to Sanders Morris Mundy, Inc. in connection with this
transaction.

47. In September 1999, we issued and sold 25,000 shares of common stock to
Christine M. Sanders for $25,000. A commission equal to five percent of the
cash proceeds was paid to Sanders Morris Mundy, Inc. in connection with
this transaction.

48. In September 1999, we issued and sold 125,000 shares of common stock to Don
A. Sanders for $125,000. A commission equal to five percent of the cash
proceeds was paid to Sanders Morris Mundy, Inc. in connection with this
transaction.

49. In September 1999, we issued and sold 100,000 shares of common stock to
Katherine U. Sanders for $100,000. A commission equal to five percent of
the cash proceeds was paid to Sanders Morris Mundy, Inc. in connection with
this transaction.

50. In October 1999, we issued and sold 125,000 shares of common stock to
Fernhill Holdings for $125,000. A commission equal to five percent of the
cash proceeds was paid to Jay A. Smith in connection with this transaction.

51. In October 1999, we issued and sold 110,000 shares of common stock to Hedy
Frisch for $110,000. A commission equal to five percent of the cash
proceeds was paid to Jay A. Smith in connection with this transaction.

52. In October 1999, we issued and sold 110,000 shares of common stock to Jay
A. Smith for $110,000. A commission equal to five percent of the cash
proceeds was paid to Jay A. Smith in connection with this transaction.

53. In October 1999, we issued and sold 495,000 shares of common stock to Plaza
Investment Corp., Ltd. for $495,000.

54. In November 1999, we issued 137,942 shares of common stock, par value
$.001, to Charles E. Bowen, Jr. in exchange for his shares of GoverNet
Affairs, valued at $401,756.

55. In November 1999, we issued 8,422 shares of common stock to John R. Marsh
in exchange for his shares of GoverNet Affairs, valued at $24,529.

56. In November 1999, we issued 299,988 shares of common stock to Ronald W.
Hogan in exchange for his shares of GoverNet Affairs, valued at $873,565.

57. In December 1999, we issued 180,280 shares of common stock to David P.
Harriman in exchange for his shares of Brief Reporter, valued at $373,000.

58. In December 1999, we issued 180,280 shares of common stock to Andrew
Wyszkowski in exchange for his shares of Brief Reporter valued at $373,000.

59. In December 1999, we issued 79,265 shares of common stock to Eugene Meyung
in exchange for his shares of Brief Reporter valued at $163,999.

60. In December 1999, we issued 33,833 shares of common stock to Suzanne Meyung
in exchange for her shares of Brief Reporter valued at $70,001.

61. In December 1999, we issued 9,997 shares of common stock to Christina Brown
in exchange for her shares of Brief Reporter valued at $20,001.

62. In January 2000, we awarded and issued 25,000 shares of common stock to
Eugene A. Cernan for his service as an outside director on Internet Law's
Board.

II-4
<PAGE>

63. In January 2000, we awarded and issued 25,000 shares of common stock to Joe
H. Reynolds for his service as an outside director on Internet Law's Board.

64. In January 2000, we awarded and issued 25,000 shares of common stock to
George A. Roberts for his service as an outside director on Internet Law's
Board.

65. In January 2000, we awarded and issued 25,000 shares of common stock to W.
Paul Thayer for his service as an outside director on Internet Law's Board.

66. In January 2000, we awarded and issued 25,000 shares of common stock to
Jack I. Tompkins for his service as an outside director on Internet Law's
Board.

67. In May 2000, we issued 1,000,000 shares of our common stock to TCA
Investment in exchange for its shares of ITIS valued at $3,502,000.

68. In May 2000, we issued 750,000 shares of our common stock to Thayer
Investment Co. in exchange for its shares of ITIS valued at $2,626,500.

69. In May 2000, we issued 500,000 shares of our common stock to Kelley V.
Kirker in exchange for his shares of ITIS valued at $1,751,000.

70. In May 2000, we issued 300,000 shares of our common stock to Homer E. Young
in exchange for his shares of ITIS valued at $1,050,600.

71. In May 2000, we issued 250,000 shares of our common stock to Franklin C.
Fisher in exchange for his shares of ITIS valued at $1,030,000.

72. In May 2000, we issued 250,000 shares of our common stock to Michael J.
Hluchanek in exchange for his shares of ITIS valued at $875,500.

73. In May 2000, we issued 250,000 shares of our common stock to George A.
Roberts, Trustee in exchange for his shares of ITIS valued at $875,500.

74. In May 2000, we issued 250,000 shares of our common stock to Steven L. Tebo
in exchange for his shares of ITIS valued at $1,030,000.

75. In May 2000, we issued 200,000 shares of our common stock to Belmont
Equities in exchange for its shares of ITIS valued at $700,400.

76. In May 2000, we issued 196,003 shares of our common stock to Hunter M. A.
Carr in exchange for his shares of ITIS valued at $686,403.

77. In May 2000, we issued 180,000 shares of our common stock to International
Fluid Dynamics in exchange for its shares of ITIS valued at $630,360.

78. In May 2000, we issued 150,000 shares of our common stock to Donald H.
Kellam in exchange for his shares of ITIS valued at $525,300.

79. In May 2000, we issued 150,000 shares of our common stock to Edward P.
Stevens in exchange for his shares of ITIS valued at $525,300.

80. In May 2000, we issued 125,000 shares of our common stock to Donald
Zwernemann, Nominee in exchange for his shares of ITIS valued at $437,750.

81. In May 2000, we issued 50,000 shares of our common stock to J. Michael
Duncan, M.D. in exchange for his shares of ITIS valued at $175,100.

82. In May 2000, we issued 50,000 shares of our common stock to Nommensen &
Williams in exchange for its shares of ITIS valued at $175,100.

II-5
<PAGE>

83. In May 2000, we issued 50,000 shares of our common stock to Tim Thomas in
exchange for his shares of ITIS valued at $175,100.

84. In May 2000, we issued 25,000 shares of our common stock to Eugene A.
Cernan in exchange for his shares of ITIS valued at $87,550.

85. In May 2000, we issued 25,000 shares of our common stock to Alan Gugenheim
in exchange for his shares of ITIS valued at $87,550.

86. In May 2000, we issued 25,000 shares of our common stock to David P.
Harriman in exchange for his shares of ITIS valued at $87,550.

87. In May 2000, we issued 25,000 shares of our common stock to W. B. Rae in
exchange for his shares of ITIS valued at $87,550.

88. In May 2000, we issued 25,000 shares of our common stock to Donald W.
Sapaugh in exchange for his shares of ITIS valued at $87,550.

89. In May 2000, we issued 25,000 shares of our common stock to Southerland
Group in exchange for its shares of ITIS valued at $87,550.

90. In May 2000, we issued 22,500 shares of our common stock to Esmerian, Inc.
in exchange for its shares of ITIS valued at $78,795.

91. In May 2000, we issued 20,100 shares of our common stock to Ramona Anderson
in exchange for her shares of ITIS valued at $70,390.

92. In May 2000, we issued 18,000 shares of our common stock to Morris H.
Chapman in exchange for its shares of ITIS valued at $63,036.

93. In May 2000, we issued 15,000 shares of our common stock to Bobby Forshe in
exchange for his shares of ITIS valued at $52,530.

94. In May 2000, we issued 15,000 shares of our common stock to Jimmy Langham,
Jr. in exchange for his shares of ITIS valued at $52,530.

95. In May 2000, we issued 15,000 shares of our common stock to Paul Ledbetter
in exchange for his shares of ITIS valued at $52,530.

96. In May 2000, we issued 13,000 shares of our common stock to Ronald W.
Vickers in exchange for his shares of ITIS valued at $45,526.

97. In May 2000, we issued 10,000 shares of our common stock to Damaris Gore in
exchange for her shares of ITIS valued at $35,020.

98. In May 2000, we issued 10,000 shares of our common stock to Debbie L. Levy
in exchange for her shares of ITIS valued at $35,020.

99. In May 2000, we issued 10,000 shares of our common stock to Marie Anne
Shultz in exchange for her shares of ITIS valued at $35,020.

100. In May 2000, we issued 9,000 shares of our common stock to James I. Dunn
in exchange for his shares of ITIS valued at $31,518.

101. In May 2000, we issued 5,000 shares of our common stock to Eric Brauel in
exchange for its shares of ITIS valued at $17,510.

II-6
<PAGE>

102. In May 2000, we issued 5,000 shares of our common stock to Murray Fogler
in exchange for his shares of ITIS valued at $17,510.

103. In May 2000, we issued 5,000 shares of our common stock to Robert M.
Peoples in exchange for his shares of ITIS valued at $17,510.

104. In May 2000, we issued 5,000 shares of our common stock to Jack & Alaine
Reid in exchange for their shares of ITIS valued at $17,510.

105. In May 2000, we issued 4,000 shares of our common stock to K. Charles
Peterson in exchange for his shares of ITIS valued at $14,008.

106. In May 2000, we issued 3,500 shares of our common stock to Donna Kennedy
in exchange for her shares of ITIS valued at $12,257.

107. In May 2000, we issued 3,300 shares of our common stock to Robert Sarlay
in exchange for his shares of ITIS valued at $11,557.

108. In May 2000, we issued 2,000 shares of our common stock to Ed Junell in
exchange for his shares of ITIS valued at $7,004.

109. In May 2000, we issued 1,500 shares of our common stock to Tim Von Kennel
in exchange for her shares of ITIS valued at $5,253.

110. In May 2000, we issued 1,000 shares of our common stock to Vaughn Pederson
in exchange for his shares of ITIS valued at $3,502.

111. In May 2000, we issued 500 shares of our common stock to John R. DeBusk in
exchange for his shares of ITIS valued at $1,751.

112. In May 2000, we issued 500 shares of our common stock to Fred J. Ramski in
exchange for his shares of ITIS valued at $1,751.

113. In June 2000, we issued 21,825 shares of our common stock to Value Plus
Marketing Inc. as a fee for services valued at $60,018.

114. In July 2000, we issued 9,000 shares of our common stock to Value Plus
Marketing Inc. as a fee for services valued at $17,370.

115. In July 2000, we awarded and issued 25,000 shares of our common stock to
W. Allyn Hoaglund for his service as an outside director on Internet Law's
Board.

116. In July 2000, we awarded and issued 25,000 shares of our common stock to
Donald W. Sapaugh for his service as an outside director on Internet Law's
Board.

117. In August 2000, we issued 300,000 shares of our common stock to Sunstate
Futures, Inc., as a fee for services valued at $256,200.

118. In September 2000, we issued 9,000 shares of our common stock to Value
Plus Marketing Inc. as a fee for services valued at $17,370.

119. In October 2000, a transaction previously reported in connection with the
acquisition of ITIS, Inc., was rescinded for nonpayment, and we therefore
canceled 150,000 previously issued shares of common stock and reissued them
to Hunter M. A. Carr.

120. In October 2000, we issued 556,793 shares of common stock to Jeremiah Kane
in exchange for his shares of Compass Data Systems, Inc., valued at
$761,239.

121. In October 2000, we issued 556,793 shares of common stock to John McHugh
in exchange for his shares of

II-7
<PAGE>

Compass Data Systems, Inc., valued at $761,239.

122. In October 2000, we issued 278,396 shares of common stock to Miller,
Stratvert & Torgerson, P.A., Trustee, in exchange for shares of Compass
Data Systems, Inc., valued at $380,619.50.

123. In October 2000, we issued 100,000 shares of common stock to Cathryn V.
Tull, valued at $90,600.

During the last three years, we have also issued the following other
unregistered securities:

124. In March 1999, we issued warrants (subject to various vesting
requirements) to Jonathan Gilchrist to purchase 450,000 shares of our
common stock at an exercise price of $1.00 per share in exchange for
services provided to us.

125. In April 1999, we issued options to Hunter M.A. Carr to purchase 1,250,000
shares of our common stock at an exercise price of $3.00 per share in
exchange for services provided to us.

126. In April 1999, we issued options to Jack Tompkins to purchase 1,000,000
shares of our common stock at an exercise price of $3.00 per share in
exchange for services rendered as a board member.

127. In July 1999, we issued options (subject to certain vesting requirements)
to Tony Schor to purchase 25,000 shares of our common stock at an exercise
price of $2.12 per share in exchange for services provided to us.

128. In November 1999, we issued options (subject to certain vesting
requirements) to Ronald W. Hogan to purchase 166,250 shares of our common
stock at an exercise price of $2.94 per share in connection with the
GoverNet Affairs acquisition.

129. In November 1999, we issued options (subject to certain vesting
requirements) to Charles E. Bowen to purchase 78,750 shares of our common
stock at an exercise price of $2.94 per share in connection with the
GoverNet Affairs acquisition.

130. In November 1999, we issued options (subject to certain vesting
requirements) to John R. Marsh to purchase 75,000 shares of our common
stock at an exercise price of $2.94 per share in connection with the
GoverNet Affairs acquisition.

131. In December 1999, we issued options (subject to certain vesting
requirements) to David P. Harriman to purchase 300,000 shares of our
common stock at an exercise price of $3.00 per share in connection with
the Brief Reporter acquisition.

132. In January 2000, we issued options (subject to certain vesting
requirements) to Jeffrey P. Coughter to purchase 60,000 shares of our
common stock at an exercise price of $3.75 per share in connection with
the Brief Reporter acquisition.

133. In January 2000, we issued options (subject to certain vesting
requirements) to Robert E. Anderson to purchase 45,000 shares of our
common stock at an exercise price of $5.19 per share in connection with
the Brief Reporter acquisition.

134. In February 2000, we issued options (subject to certain vesting
requirements) to Brad Kellam to purchase 25,000 shares of our common stock
at an exercise price of $2.40 per share in exchange for services provided
to us.

135. In May 2000, we issued options (subject to certain vesting requirements)
to Donald E. Selby to purchase 7,568 shares of our common stock at an
exercise price of $4.625 per share in exchange for services provided to
us.

136. In May 2000, we issued warrants to purchase 500,000 shares of our common
stock at an exercise price of $3.56 per share to Cootes Drive LLC in
connection with a $3,000,000 investment in us and the negotiation of a
$25,000,000 equity line.

137. In May 2000, we issued 300 shares of our Series A Convertible Preferred
Stock to Cootes Drive LLC for $3,000,000.

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<PAGE>

138. In May 2000, we issued warrants to Aspen Capital Partners, Inc. to
purchase 200,000 shares of our common stock at an exercise price of
$3.3994 per share as partial payment of a fee in connection with the
Cootes Drive financing transaction.

Except as noted in paragraphs numbered 42 to 52 above, none of the
foregoing transactions involved any underwriters, underwriting discounts or
commissions, or any public offering, and believe that each transaction was
exempt from the registration requirements of the Securities Act by virtue of
Section 4(2) thereof. The recipients in such transactions represented their
intention to acquire the securities for investment only and not with a view to
or for sale in connection with any distribution thereof, and appropriate legends
were affixed to the share certificates and instruments issued in such
transactions. All recipients had adequate access, through their relationships
with us, to information about us.

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<PAGE>

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE
<TABLE>
<CAPTION>

Exhibit Description
------- -----------
Number
------

<C> <S>
2.1 Agreement and Plan of Reorganization dated March 25, 1999, between Planet Resources, National Law and the
stockholders of National (incorporated by reference to Exhibit A to Company's Form 8-K filed on April 2, 1999).

2.2 First Amendment to Agreement and Plan of Reorganization dated as of March 30, 1999, between Planet Resources,
National Law and the stockholders of National Law (incorporated by reference to Exhibit 2.2 to Company's Form 10-K
filed on October 13, 1999).

2.3 Agreement and Plan of Distribution dated as of March 25, 1999, between Planet Resources, New Planet Resources, Inc.
and National Law (incorporated by reference to Annex B to Company's Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934 filed on April 19, 1999).

2.4 Contract for Sale of Stock, dated November 8, 1999, by and between John R. Marsh, Ronald W. Hogan, and Charles E.
Bowen, Jr., as Sellers, and Internet Law, as Buyer (incorporated by reference to Exhibit 2.1 to Internet Law's Form
8-K filed on November 30, 1999).

2.5 Option Agreement to Purchase Stock, dated November 8, 1999, by and between Internet Law, as Seller, and Ronald W.
Hogan, as Optionee (incorporated by reference to Exhibit 2.2 to Internet Law's Form 8-K filed on November 30, 1999).

2.6 Option Agreement to Purchase Stock, dated November 8, 1999, by and between Internet Law, as Seller, and Charles E.
Bowen, Jr., as Optionee (incorporated by reference to Exhibit 2.3 to Internet Law's Form 8-K filed on November 30,
1999).

2.7 Option Agreement to Purchase Stock, dated November 8, 1999, by and between Internet Law, as Seller, and John R.
Marsh, as Optionee (incorporated by reference to Exhibit 2.4 to Internet Law's Form 8-K filed on November 30, 1999).

2.8 Contract of Sale, dated December 8, 1999, by and between David P. Harriman, Andrew Wyszkowski, Eugene Meyung,
Suzanne Meyung, and Christina Brown, as Sellers, and Internet Law, as Buyer (incorporated by reference to Exhibit
2.7 to Internet Law's Form 8-K filed December 23, 1999).

2.9 Stock Exchange Agreement by and among Internet Law and the Shareholders of ITIS relating to the acquisition of all
of the outstanding stock of ITIS, dated April 30, 2000 (incorporated by reference to Exhibit 2.9 to Company's Form
10-K/A filed on May 24, 2000).

2.10 Stock Purchase Agreement by and between Internet Law and Jeremiah Kane, dated July 27, 2000, as amended by that
amendment dated effective October 1, 2000 (Incorporated by reference to Exhibit 2.10 to the Registrant's Form 8-K
filed with the SEC on October 16, 2000).

2.11 Stock Purchase Agreement by and between Internet Law and John McHugh, dated July 27, 2000, as amended by that
amendment dated effective October 1, 2000 (Incorporated by reference to Exhibit 2.11 to the Registrant's Form 8-K
filed with the SEC on October 16, 2000).

2.12 Stock Purchase Agreement by and between Internet Law and Jack Ben Ezra, dated July 27, 2000, as amended by that
amendment dated effective October 1, 2000 (Incorporated by reference to Exhibit 2.12 to the Registrant's Form 8-K
filed with the SEC on October 16, 2000).

2.13 13 Stock Exchange Agreement by and among Internet Law and all of the shareholders of Venco Compliance, Inc., a
Texas corporation, dated effective October 1, 2000 (Incorporated by reference to Exhibit 2.13 to the Registrant's
Form 8-K filed with the SEC on October 16, 2000).

3.1 Amended and Restated Certificate of Incorporation of Internet Law (incorporated by reference to the Annex A of
Internet Law's Definitive Proxy Statement on Schedule 14A filed on January 31, 2000).

3.2 Bylaws of Internet Law, as amended (incorporated by reference to Exhibit 3.2 to Company's Form 10-K filed on October
13, 1999).

3.3 Certificate of Designation for Internet Law's 5% Series A Convertible Preferred Stock (incorporated by reference to
Exhibit 3.3 to Company's Form 10-K/A filed on May 24, 2000).

5.1+ Opinion of Locke Liddell & Sapp, dated October 20, 2000.

10.1 Stock Option Agreement between Internet Law and Hunter M.A. Carr (incorporated by reference to Exhibit D to Schedule
13D filed on October 12, 1999, by Hunter M.A. Carr).
</TABLE>

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<PAGE>

Exhibit Description
------- -----------
Number
------
<S> <C>

10.2 Stock Option Agreement between Internet Law and Jack I. Tompkins (incorporated by reference to Exhibit D to Schedule
13D filed on October 12, 1999, by Jack I. Tompkins).

10.3 Consulting Agreement between National Law and Castle Development, Ltd. (incorporated by reference to Exhibit 4(A)
to Company's Registration Statement on Form S-8 filed on April 2, 1999).

10.4 Continuing Service Agreement between National Law and ITIS, effective December 1, 1998 (incorporated by reference to
Exhibit 10.4 to Internet Law's Form 10-K filed on October 13, 1999).

10.5 Management and Financial Services Agreement between National Law and ITIS, effective March 1, 1999 (incorporated by
reference to Exhibit 10.5 to Internet Law's Form 10-K filed on October 13, 1999).

10.6 Software Development and Consulting Agreement between National Law and ITIS, dated March 24, 1999 (incorporated by
reference to Exhibit 10.6 to Internet Law's Form 10-K filed on October 13, 1999).

10.7 Option Agreement to Purchase Stock, effective March 30, 1999, by and between Internet Law and Jonathan Gilchrist
(incorporated by reference to Exhibit 10.7 to Internet Law's Form 10-K filed on October 13, 1999).

10.8 Planet Resources 1999 Stock Option Plan (incorporated by reference to Exhibit 10.1 to Company's Form 10-K/A filed on
October 28, 1999).

10.9 Planet Resources Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.2 to Company's Form 10-K/A
filed on October 28, 1999).

10.10 New Planet Resources, Inc. Stock Incentive Plan (incorporated by reference to Exhibit 10.3 to Company's Form 10-K/A
filed on October 28, 1999).

10.11 Planet Resources 1999 Director Option Plan (incorporated by reference to Exhibit 10.4 to Company's Form 10-K/A filed
on October 28, 1999).

10.12 Consulting and Option Agreement by and between ITIS, Frank Fisher and Steve Tebo, dated January 22, 2000, as amended
(incorporated by reference to Exhibit 10.12 to Company's Form 10-K/A filed on May 24, 2000).

10.13 Convertible Preferred Stock Purchase Agreement by and among Internet Law and Cootes Drive LLC, dated May 11, 2000
(incorporated by reference to Exhibit 10.13 to Company's Form 10-K/A filed on May 24, 2000)..........................

10.14 Warrant to purchase 500,000 shares of Internet Law's common stock issued to Cootes Drive LLC, dated May 11, 2000
(incorporated by reference to Exhibit 10.14 to Company's Form 10-K/A filed on May 24, 2000).

10.15 Registration Rights Agreement by and among Internet Law and Cootes Drive LLC, dated May 11, 2000 (incorporated by
reference to Exhibit 10.15 to Company's Form 10-K/A filed on May 24, 2000).

10.16 Warrant to purchase 200,000 shares of Internet Law's common stock issued to Aspen Capital Partners, Inc., dated May
19, 2000 (incorporated by reference to Exhibit 10.16 to Company's Form 10-K/A filed on May 24, 2000).

10.17 Consulting Agreement by and between Venco Compliance, Inc. and Kathryn Tull d/b/a First Choice Consulting, dated
October 1, 2000 (incorporated by reference to Exhibit 10.17 to the Registrant's Form 8-K filed with the SEC on
October 16, 2000).

16.1 Letter, dated April 5, 2000, from Harper & Pearson Company to the Securities and Exchange Commission (incorporated
by reference to Exhibit 16.1 to Internet Law's Form 8-K/A filed on April 5, 2000).

21+ Subsidiaries of Internet Law.

23.1+ Consent of Arthur Andersen LLP, dated June 24, 2000.

23.2+ Consent of Harper & Pearson Company, dated June 23, 2000.

23.3+ Consent of Locke Liddell & Sapp LLP (included in Exhibit 5.1 hereto).

27 Financial Data Schedule for the six-month transition period from July 1, 1999, to December 31, 1999 (incorporated by
reference to Exhibit 27 to Company's Form 10-K/A filed on May 24, 2000).
</TABLE>

ITEM 17. UNDERTAKINGS

The undersigned registrant hereby undertakes:

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<PAGE>

(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;

(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 thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
20 percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
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 such information in the registration statement;

Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the registrant pursuant to Section 13
or 15(d) of the Exchange Act that are incorporated by reference in the
registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.

(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.

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

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<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies hat it has reasonable grounds to believe that it meets all of the
requirements for filing Form S-1 and has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Dallas, State of Texas on October 24, 2000.

/s/ Hunter M.A. Carr
--------------------
Hunter M.A. Carr
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.

Hunter M.A. Carr /s/ Hunter M.A. Carr October 24, 2000
------------------------------------------------------
President, Chief Executive Officer, and Chairman
(Principal Executive Officer)

Eugene A. Cernan *signed by Hunter M.A. Carr, Attorney in Fact October 24, 2000
------------------------------------------------------
by: Hunter M.A. Carr, Attorney in Fact

Kelley V. Kirker /s/ Kelley V. Kirker October 24, 2000
------------------------------------------------------
Director

George A. Roberts *signed by Hunter M.A. Carr, Attorney in Fact October 24, 2000
------------------------------------------------------
by: Hunter M.A. Carr, Attorney in Fact

W. Paul Thayer *signed by Hunter M.A. Carr, Attorney in Fact October 24, 2000
------------------------------------------------------
by: Hunter M.A. Carr, Attorney in Fact

Joanna Hoover /s/ Joanna Hoover October 24, 2000
------------------------------------------------------
Chief Financial Officer
(Principal Financial and Accounting Officer)
</TABLE>

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