================================================================================

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

[X]      Annual Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934.

         For the fiscal year ended December 31, 2001.

                                       OR

[_]      Transition Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934.

                           Commission File No. 0-27994

                              1-800-ATTORNEY, Inc.
                              --------------------
        (Exact name of small business issuer as specified in its charter)

               Florida                                     59-3203301
               -------                                     ----------
   (State or other jurisdiction of                     (I.R.S. Employer
   incorporation or organization)                    Identification Number)

                             186 Attorneys.com Court
                            Lake Helen, FL 32744-0280
                                  386-228-1000
                                  ------------
                          (Address and telephone number
                         of principal executive offices)

         Securities registered under Section 12(b) of the Exchange Act:
                                      None

         Securities registered under Section 12(g) of the Exchange Act:
                           Common stock, no par value

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days:  [X] Yes  [_] No

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  referenced  in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

The  registrant's  revenues for its most recent fiscal year,  ended December 31,
2001 were $6,891,320.

The  aggregate  market  value of the  registrant's  voting  common stock held by
non-affiliates,  computed  by  reference  to the last sale price per share as of
March 12, 2001 was $1,855,000.

================================================================================
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

There were 5,374,715 shares of the registrant's common stock outstanding as of
March 12, 2002.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive proxy statement of the registrant for the
registrant's Annual Meeting of the Shareholders for the fiscal year ended
December 31, 2001, which definitive proxy statement will be filed with the
Securities and Exchange Commission not later than 120 days after the
registrant's fiscal year end of December 31, 2001 are incorporated by reference
into Part III.

Transitional Small Business Disclosure Format (check one):    [_]  Yes  [X]  No


                                      INDEX

                                                                            Page
                                     PART I


Item 1.   Business............................................................3
Item 2.   Properties.........................................................13
Item 3.   Legal Proceedings..................................................13
Item 4.   Submission of Matters to a Vote of Security Holders................13


                                     PART II

Item 5.   Market for Common Equity and Related Stockholder Matters...........14
Item 6.   Management's Discussion and Analysis
            of Financial Condition and Results of Operations.................16
Item 7.   Financial Statements...............................................22
Item 8.   Changes in and Disagreements with Accountants on Accounting
            and Financial Disclosure.........................................44


                                    PART III

Item 9.   Directors, Executive Officers, Promoters and Control Persons;
            Compliance with Section 16(a) of the Exchange Act................44
Item 10. Executive Compensation..............................................44
Item 11. Security Ownership of Certain Beneficial Owners and Management......44
Item 12. Certain Relationships and Related Transactions......................44
Item 13. Exhibits and Reports on Form 8-K, Index.............................45


                                       2
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

PART I

ITEM 1.   BUSINESS

GENERAL

     1-800-ATTORNEY, Inc. (ATTY) was incorporated in Florida on September 20,
1993. Until June 5, 2000 our name was The Publishing Company of North America,
Inc.; from June 5, 2000 until June 1, 2001 our name was Attorneys.com, Inc. In
October 1998, PCNA Communications Corporation was incorporated as a wholly-owned
subsidiary of ATTY; effective January 1, 1999, ATTY transferred substantially
all of its print directory operations into this subsidiary. In February 1999,
Attorneys Online, Inc. was incorporated as a wholly-owned subsidiary of ATTY.
Attorneys Online, Inc. had no operations prior to its dissolution in July 2001.
Throughout this document, "we", "us" or "our" shall refer to 1-800-ATTORNEY,
Inc. and, since the time of their formations, our wholly-owned subsidiaries.

     Our primary business activity has been publishing membership directories
for bar associations; although our new attorney marketing business has
increasing prominence in our operations and plans. We market our directories to
professional associations through the continental United States. Over the past
two years we have been publishing an increasing number of our own proprietary
directories of attorney listings and related information; in 2001, 26 of the 69
directories we published were our own proprietary directories. We rely
principally upon the sale of advertising within the directories to generate our
revenues. PCNA Communications Corporation conducts our print directory
operations and our Internet-based online vendor directory business that we
operate in conjunction with our print directory advertising sales.

     During 2000, we began development of an attorney marketing or referral
business. Sales to attorneys began in December 2000 and revenues for this
business were first recognized in June 2001 with the launch of an attorney
network in Central Florida. Networks in five other Florida markets and in
Atlanta were launched later in 2001. Our attorney marketing business comprised
37% or $2,540,000 of our $6,891,000 in net sales in 2001.

OUR PRINT DIRECTORY BUSINESS

     Our principal product is the publication of city, county and state
membership directories for bar associations and our own proprietary directories
throughout the continental United States. Most membership directories of bar
associations contain a complete listing of member attorneys along with the names
of their firm, addresses, and telephone numbers. They often also contain
facsimile numbers, court information and specialized local information that
attorneys may require during their course of business. In 2001 we published 69
directories, of which 38 were under contracts with bar associations, four were
under contract with medical associations, 26 were our own proprietary legal
directories (i.e., independent of official sponsorship by a bar association) and
one was a proprietary medical directory. In 2000 we published 86 directories, of
which 65 were under contracts with bar associations, five were under contract
with medical associations, 15 were proprietary legal directories and one was a
proprietary medical directory.

         We  publish  the   majority  of  our  print   directories   "in-house",
contracting the printing,  binding,  and  distribution to outside firms. In most
cases, we assume all costs of publication,  including design,  layout,  printing
and binding of our directories.

                                       3
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

     Historically, we specialized in publishing free membership directories for
bar associations nationwide. A small amount of our revenues (2% in 2001 and 5%
in 2000) are derived from the publication of directories for medical
associations. Under our free directory program, we assume all production costs
including design, advertising layout, printing and binding. In this fashion, the
financial risk is transferred from the association to us. Also under this
program, we provide directories for all members of an association, thereby
maximizing our printing expense. In the Spring of 1998, we introduced our
directory participation program ("DPP") which is designed to allow attorneys,
law firms, courts or bar associations to purchase directories directly from us.
Under our DPP, we offer participating bar associations the opportunity to share
revenue with us from the sale of directories to members. This program results in
reduced circulation and thereby reduced printing costs because not all members
purchase the membership directories. We have found that advertising revenues
have decreased under this program. However, due to the variety of factors
affecting advertising sales, it is not practicable to isolate and quantify the
impact this program has had or will continue to have on advertising revenues.
Approximately half of the membership directories we published for bar
associations in 2001, 2000 and 1999 were under the DPP; we continue our free
directory programs in cases where we believe we can earn an acceptable margin
above our costs. As indicated above, in 2001 we expanded our publication of our
own proprietary legal directories to 26 from 15 in 2000. We plan to publish
approximately 19 of these directories in 2002, having discontinued some from our
2001 schedule. With our proprietary directories, we have much greater
flexibility with content, design, and schedule, since we are not bound to the
terms of a publishing agreement. Attorney and other information that we
typically include in our directories is legally available from a variety of
sources; however, we make substantial effort to confirm the accuracy of the
information we obtain. Our proprietary directories, particularly in the first
year of publication, require more effort to produce than bar-sponsored
directories in which the bar association provides the content to us.

     Industry Overview

     The specialty publishing market is diverse, consisting of trade journals,
newsletters, directories and magazines aimed at specific target markets such as
computer users, sports fans, women or men, gun collectors, etc. Print
directories, including association directories and yellow page directories, are
just one part of the specialty publishing market. Advertisers are increasingly
seeking ways to channel their advertising dollars toward specific target
markets. Specialty publications, including our bar association and proprietary
legal directories, offer advertisers the opportunity to advertise their products
and services to these target markets.

     Legal Specialty Market

     Bar directories have long been an important segment of the legal publishing
industry. In the course of their profession, lawyers are required to frequently
communicate with other lawyers. Nationwide legal directories, such as the
Martindale-Hubbell Law Directory ("Martindale- Hubbell"), can assist in
searching for attorneys nationwide with specific credentials and expertise.
While the Martindale-Hubbell directory is an important tool for certain needs,
because of its multiple volumes and size, it lacks the convenience of a smaller
desktop directory.

     Our legal directories contain a convenient listing of names, addresses and
telephone numbers and often, facsimile numbers that can be used to contact
co-counsel, opposing counsel, courts and judges. Since this information is often
needed, the advertising contained in our directories is intended to reach its
targeted audience on a regular basis.

                                       4
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

     Our Publishing Process

     We target bar associations with enough members within a localized area so
that the potential advertising revenue is expected to exceed direct and indirect
publishing costs. In targeting these bar associations, we use area demographics
including the local yellow pages and other local publications to determine if
the number of potential advertisers meeting our criteria exist in the community
and whether it is more appropriate for us to offer our free directory program or
our DPP.

     Once we target a bar association for publication of its directory, we use
referrals from other clients to assist in obtaining an agreement to publish that
directory. Over our history, we have developed business relationships with bar
association executives throughout the country. In addition, we use our published
bar directories and letters from satisfied bar associations as marketing tools
to show prospective new clients.

     Once an agreement to publish is obtained, our sales staff solicits
advertisements from local businesses that provide goods and services to
attorneys in the bar association's community. A proof of all advertising is sent
to the customer as well as the bar association to insure that the advertisement
placed is both correct and not offensive.

     As part of the publication process, the association provides us with a
complete database of membership and other general information, such as court
listings, which the association wants to include in the directory. Many of the
directories published by us for bar associations are pictorial. For these
directories, we assist the association in arranging for photographs of its
members using unaffiliated photographers. Most graphics for the directory are
prepared by our own graphic artists. Once all of the graphics including
advertising are completed, we produce a draft of the directory, obtain proof
approval from the bar association, and then arrange for printing and binding of
the directory by an independent commercial printer. After printing and binding,
the directories are distributed to member attorneys in accordance with the terms
of the publishing contract.

     We use account executives that specialize in selling advertisements by
outbound telephone solicitation to businesses that supply support services and
products to the legal profession as well as to the general public. We believe
that through our in-house sales team, we are better able to maintain quality
control and establish a reputation for professionalism. Our management
supervises the sales staff in order to ensure that it is acting in an ethical
and professional manner and clearly communicates that we are independent of the
bar associations. Advertising in our print directories is contained in a section
entitled "Attorney Support Services" and follows a "yellow pages" format. We are
always evaluating methods to improve our sales efficiencies.

     Advertising sales in our official print directories usually are assisted by
a letter of introduction from the bar association stating that we are publishing
the official bar association directory. Like other forms of print advertising
including newspaper and yellow pages, we offer a variety of possible
advertisements including inside cover pages, full and partial pages, business
card listings, and simple classified line listings. We require a 50% deposit
upon approval by the advertiser of a proof and the balance is payable upon
publication. A 5% discount is offered in exchange for full payment upon approval
of a proof.

     Publication of our proprietary directories follows a similar process. We
use demographic studies to qualify the geographic areas in which we believe a
directory can be published and yield acceptable margins above our costs. All of
our proprietary directories have the same format and appearance, which we
believe will build a recognized "brand" image over time. Survey cards have been
included in our

                                       5
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

proprietary directories; the surveys that have been returned to us indicate a
very favorable evaluation of the directories. Attorney and other information
that we typically include in our directories is legally available from a variety
of sources; we also endeavor to independently confirm its accuracy through
mailings to the attorneys.

     Printing

     We are not engaged in the printing of our directories; we subcontract this
work to independent printing companies. We believe that there is an ample supply
of independent printers willing to perform quality printing services for us and
that we will not be materially adversely affected by subcontracting our printing
services. In doing so, we believe that we avoid the need to invest substantial
sums of capital in printing and binding equipment and that we have more
flexibility to meet our clients' specialized needs. However, delays by
independent contractors over which we have limited or no control could result in
a loss of contracts by us from either bar associations or advertisers or both.

     Significant Clients

     We rely primarily upon the sale of advertising in our print directories to
derive our revenues; directory sales and online advertising sales provide a
small portion of overall revenues. In 2001 and 2000 no single directory
contained advertising sales comprising 10% or more of our consolidated revenues;
one directory did comprise approximately 12% of our print directory revenues. We
do not expect that we would be materially adversely affected should any single
association decide not to renew its publication in future years.

     Competition

     We encounter competition in the acquisition of publishing contracts as well
as in advertising sales. Our sales force competes with all forms of media that
sell advertising--yellow pages, alternative yellow pages, specialty magazines,
newspapers, television, and the Internet, among others.

     The print bar directory market is highly segmented and localized. There are
no significant barriers to entry by competitors since these potential
competitors can enter our business without substantial capital investment or
industry experience. On a national scale, Martindale-Hubbell is the pre-eminent
name in the print bar directory business. Martindale-Hubbell's publication is a
national directory consisting of a set of 25 hardcover volumes. The publication
provides detailed information including a rating system for attorneys and law
firms and is often used for attorney-to-attorney referrals.

     For print directories covering a limited geographical area, our principal
competitor is believed to be Legal Directories Publishing Company ("LDP"), a
privately held company located in Dallas, Texas. LDP is believed to have
significantly larger revenues than us. LDP publishes state bar directories that
it sells directly to attorneys and others who have a need for a state bar
directory.

     Other companies, as well as the associations themselves, can publish
directories. We believe that, for many bar associations, competition is based
upon the perceived ability of the publisher to deliver a quality product on
schedule and sometimes upon the percentage of advertising revenues paid to them
as a royalty.

                                       6
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

     We compete in three distinct ways. First, we compete for the award of the
contract for an official association directory. Secondly, where competitors such
as LDP publish an unofficial directory and we publish the official directory,
there is competition to sell advertising and to attract lawyers to acquire the
directories. In instances where we publish unofficial directories, we sometimes
compete with the official directories.

     Backlog

     Our backlog for our print directory business consists primarily of
advertising agreements for print directories that have not been published. As of
March 1, 2002, our backlog was approximately $1,300,000 as compared to
approximately $1,900,000 a year earlier. Since we recognize revenues when we
ship our print directories, we anticipate that all of the March 1, 2002 backlog
will be recognized as revenues during the current fiscal year. We plan to
publish approximately 43 directories in 2002, a decrease from the 69 we
published in 2001. Of these 43, approximately 20 are official directories for
bar associations. We believe that our existing business of publishing bar
association and proprietary attorney directories has limited growth
opportunities. For this reason, we may significantly realign our directory
business in 2002, reducing it to those directories that are most profitable and
downsizing our staff accordingly.

OUR INTERNET BUSINESS

     During 1999, we created three new Internet web sites designed to serve
members of the legal community and others seeking legal information. We
introduced the first web site, www.lawlinks.com, in August 1999. This web site
was designed to be our portal. A portal refers to a site or location on the
Internet that is designed with the intent of attracting usage as an initial
entrance or gateway for browsing the Internet. This web site consists primarily
of a variety of legal information useful to lawyers as well as members of the
general public. A company in Atlanta, Georgia compiles much of the information
on this web site from information contained elsewhere on the Internet. We
launched our second website located at www.lawmiles.com also in August 1999.
This web site featured our online shopping mall that we called America's Legal
Superstore. It was operated by Value America, Inc., but because of Value
America's financial difficulties, this web site was unsuccessful. We abandoned
it later in 2000 after Value America filed for bankruptcy protection. Our third
web site is www.thelegalsource.com, which is our online vendor directory. We
launched this web site in September 1999. This web site is a comprehensive
online directory that features experts and product and service providers to the
legal community. We generate revenues on this web site from the sale of listings
to advertisers. As a result of our experience with Value America and the limits
we saw on revenue growth in our online vendor directory, we re-evaluated our
Internet strategy and its priority in our future operations. We continue to
operate our legal portal and our online vendor directory. In 2001, our online
vendor directory generated $159,000 in revenues. As of March 1, 2002, our
backlog for our online vendor directory was approximately $50,000 as compared to
approximately $100,000 a year earlier. We do not view our Internet operations to
be a source of material future revenues. See also the discussion under "Our
Attorney Marketing Business" (below).

                                       7
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

OUR ATTORNEY MARKETING BUSINESS

     During 2000 we invested a considerable amount of our resources into the
development of an attorney marketing or referral business that features a
branded name primarily through our promotion of the toll-free number and
trademark 1-800-ATTORNEY.

     There are hundreds of attorney referral networks currently operating in the
United States. The great majority of these are operated not-for-profit by local
and state bar associations as a service to their communities and to the
associations' members. There also exist a number of networks operated privately
for profit. The private networks often focus on particular segments of the legal
practice, such as personal injury or divorce and are typically free to the
consumer, deriving their revenues from the participating attorneys. Our research
has indicated to us that none of these referral networks are effectively branded
so that the consumer will be able to recall them from memory when a need for
legal services arises.

     In April 2000 we acquired the toll-free telephone number and the trademark
1-800-ATTORNEY. Leveraging from that, we set out to establish a new business
based upon a highly visible attorney marketing or referral network similar to
other vanity numbers (e.g., 1-800-FLOWERS and 1-800-DENTIST) that have been
branded in the minds of consumers. We also acquired the Internet web site
addresses www.attorneys.com, www.1-800-attorney.com and similar variations of
these two addresses in order that we may promote and provide access to our
referral network through the Internet. We launched a new web site in November
2001 that is accessible from any of these addresses.

     In October 2000 we entered into a strategic marketing agreement with
Futuredontics, Inc. of Los Angeles, California, which has operated the
1-800-DENTIST advertising program and dental referral service in the U.S. since
1986. Pursuant to our agreement, Futuredontics provided us consultative services
to enhance the development and implementation of our 1-800-ATTORNEY marketing
and referral network. In March 2001 we entered into an additional agreement with
Futuredontics under which they have operated our referral call center and
purchased our television advertising airtime. This arrangement allowed us to
focus on our primary expertise of selling our services to attorneys.

     In December 2000 we began to solicit attorneys and execute sales contracts
under a business model that involved the selling of "shares" of an area of
practice, such as personal injury law, to a specified number of attorneys within
a specific advertising market. The attorneys were charged annual and monthly
fees. Television commercials were produced in the spring of 2001, and airtime
was purchased for each market as it was launched. By May 30, 2001 we had
received deposits on contracts valued at approximately $5,000,000 from law firms
in Florida. We launched our first attorney network in Central Florida and
recognized initial net sales of $107,000 from this new business in June 2001.
Legal consumers who had a problem and responded to the commercials were greeted
by a phone operator in our Los Angeles call center, and then connected while on
the telephone with an attorney appropriate to their desires and geographic
location.

     In July and August, 2001 we launched networks in the Miami-Dade and Tampa,
Florida areas, respectively. Those networks, together with the one in Central
Florida, generated net sales of $1,240,000 in the third quarter of 2001. In
October 2001 we launched smaller networks in the West Palm Beach, Fort Myers /
Naples, and Jacksonville, Florida, areas; and in November 2001 we launched a
network in Atlanta, Georgia. Although we had these additional networks in
operation during the fourth quarter 2001, net sales in the fourth quarter from
the attorney marketing decreased to $1,189,000. Our operating costs were higher,
though, primarily because of the additional television advertising required in
these new markets and the costs of operating an outside sales force in more
distant markets. Since the launch

                                       8
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

of this business in June 2001, we have received cancellations from many of our
member attorneys. As of March 22, 2002, approximately 81% of the members of
Florida networks have opted to cancel their contracts prior to their full term.
In determining the appropriate size of each geographic network, we relied upon
estimates regarding the number of attorneys and the areas of practice that could
be supported in terms of being able to provide member attorneys with a
sufficient number of potential clients who would respond to our television
advertising. Our estimates proved to be overstated with regard both to the
number of attorneys and to the areas of practice that can be supported.

     In February 2002 we made a decision not to pursue our attorney marketing
business model in additional markets after the launch of the Chicago and Boston
networks. We instead are pursuing a model that is based on the concept of
exclusive market licensing (EML) of our 1-800-ATTORNEY toll-free number and
trademark assets in defined market areas. Our workforce for the 1-800-ATTORNEY
business was realigned, including the elimination of four sales and two support
staff that were required for the old business model, as well as an in-house
attorney who performed our compliance research and analysis. With EML, we have
two managers researching, planning, and selling and we expect to contract
primarily with large, sophisticated, personal injury firms, who are already
among the top broadcast advertisers in their respective markets. They will have
rights to use our 1-800-ATTORNEY toll-free number and mark under an exclusive
license for an area code, or group of contiguous area codes, using their own
advertising and promoting their own name. Their advertising will be limited to a
DMA (Direct Marketing Area as defined by Nielson Company) that approximates the
area code group. Calls originating from the applicable area codes will be routed
and terminated at the law firm's office or, if desired, we will sell them
call-center services on a cost-plus basis. Marketing of this new business began
in March 2002; no licensing contracts have been executed as of this report but a
number of significant licenses are under discussion. In the meantime, we will
continue activities under our existing contracts in Atlanta, Chicago, and
Boston. In Florida, as contracts expire, generally one-year from the launch of
the respective market, the markets will be converted to the EML model.

     Regulatory Matters

     While there are not governmental agencies or professional organizations
that impose regulations uniquely upon privately operated attorney referral
networks, control by a state or local bar can be imposed indirectly by means of
rules that member attorneys must follow regarding solicitation and advertising.
The rules vary among the states. We have consulted the rules of the states in
which we do operate our network and advertise. We have endeavored to ensure that
all of our advertising and methodology are in compliance with the applicable
rules of the venues in which we operate. With the new EML model, the attorneys
or law firms with whom we contract will be responsible for their own advertising
and thus for compliance with the applicable rules of their bar.

     Backlog

     Backlog for our attorney marketing business consists of annual agreements
for participation in our networks that have varying expirations through January
2003. As of March 1, 2002, our backlog was approximately $1,800,000. Nearly all
of this backlog is scheduled to be recognized as revenues during the current
fiscal year; however, we expect that some portion of the backlog will be lost as
a result of future cancellations of existing contracts prior to their term.

                                       9
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

EMPLOYEES

     At March 7, 2002 we had 71 full-time employees in our combined companies.
Our staff is divided into 12 people in administration, 41 in sales, 8 in sales
management and administration, and 10 in production. None of our employees are
covered by a collective bargaining agreement. We believe that our relationship
with our employees is good.

                         RISK FACTORS AND UNCERTAINTIES

     An investment in our common stock involves a high degree of risk. Anyone
should carefully consider the following risk factors and other information in
this Form 10-KSB before investing in our common stock. Our business and the
results of operations could be seriously harmed by any of the following risks.
The trading price of our common stock could decline due to any of these risks,
and investors may lose part or all of their investment.

     There are forward-looking statements in this Report that address matters
that include our expectations with regard to our print directory business and
our attorney marketing business. At the end of Item 6, Management's Discussion
and Analysis of Financial Condition and Results of Operations, we describe
specific forward-looking statements and risks associated with them. In addition
to these statements, trend analysis and other information including words such
as "seek", "anticipate", "believe", "plan", "estimate", "expect", "intend" and
other similar expressions are forward-looking statements. We may make other
forward-looking statements either orally or in writing in the future. A reader
of this Form 10-KSB should understand that it is not possible to predict or
identify all such risk factors. Consequently, the reader should not consider
this list to be a complete statement of all potential risks or uncertainties. We
do not assume the obligation to update any risk factors or forward-looking
statements. The following "Risk Factors" are intended to be cautionary
statements identifying important factors that could cause actual results to
differ materially from those in the forward-looking statements.

RISKS RELATING TO OUR BUSINESS

IF WE CANNOT EFFECTIVELY MANAGE OUR EXISTING AND PLANNED BUSINESS, WE MAY INCUR
OPERATING LOSSES

     We believe that our existing business of publishing bar association and
proprietary attorney directories has limited growth opportunities. For this
reason, our executive management is devoting substantial attention to our
attorney marketing business and may significantly realign our directory
business. The results to date of operations for our attorney marketing business
have not been as planned and we have recently changed our business model. Since
our initial public offering in 1996 we have incurred losses for each year. For
the years ended December 31, 2001 and 2000, we sustained operating losses of
$1,689,000 and $3,184,000 and net losses of $1,845,000 and $3,235,000,
respectively.

BECAUSE WE DEPEND UPON THIRD PARTIES IN OUR PRINT DIRECTORY BUSINESS, THEIR
FAILURE TO TIMELY AND RELIABLY PROVIDE SERVICES TO US MAY RESULT IN THE LOSS OF
REVENUES

     In our print directory business, we subcontract all of the printing of our
legal directories to independent printing companies. If printers delay the
delivery of directories, this could have the consequence of causing bar
associations, for which we are late in delivering directories, to terminate
their agreements with us or of causing advertisers to cancel their media
agreements with us and request

                                       10
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

refunds of prepaid fees. Advertisers who are affected by delays in the delivery
of directories, may also decline future advertising opportunities with us.

WE RELY UPON A THIRD PARTY IN OUR ATTORNEY MARKETING BUSINESS; THEIR FAILURE TO
TIMELY AND RELIABLY PROVIDE SERVICES TO US COULD CAUSE OUR ATTORNEY MARKETING
BUSINESS TO FAIL

     Our attorney marketing business is dependent upon a third party to manage
our call center and customer services. To the extent that this third party does
not effectively provide services, existing participating attorneys may lose
confidence in our ability to provide an adequate and consistent number of
referrals.

WE WILL FACE INTENSE  COMPETITION IN ALL ASPECTS OF OUR BUSINESS THAT MAY RESULT
IN FUTURE OPERATING LOSSES

     WE FACE COMPETITION FOR CONTRACTS FOR PRINT DIRECTORIES

     We compete for print directory contracts with a number of other publishers
of bar membership directories, including LDP, a publisher of state bar
directories, and Martindale-Hubbell that publishes what is considered to be the
premier legal directory. Martindale-Hubbell is a well-recognized name to
lawyers, which gives it an important competitive advantage. If we cannot compete
effectively, we may suffer a significant decline in our print directory business
in the future.

     OUR ATTORNEY MARKETING BUSINESS FACES INTENSE COMPETITION

     In our attorney marketing business, we face enormous competition from
existing attorney referral networks, both for-profit and not-for-profit, and
from attorneys who conduct their own advertising campaigns. Some of these
competitors are spending substantial sums advertising their services and
developing a brand-name recognition. Some of these entities also have
significant other competitive advantages including extensive experience and
being first-hand providers of legal services. Because of our lack of significant
assets, we cannot afford much ineffectiveness in our initial efforts. See also
the risk factors below that describe the hurdles our attorney marketing business
faces.

IF OUR TELEVISION ADVERTISING CAMPAIGNS DO NOT RESULT IN SUFFICIENT USAGE OF OUR
EXISTING ATTORNEY MARKETING NETWORKS BY THE PUBLIC, OUR ATTORNEY MARKETING
BUSINESS MAY FURTHER SUFFER FROM CANCELLATIONS OF EXISTING CONTRACTS

     We have already incurred a substantial cancellation rate among participants
in attorney networks that we have launched to date. As the number of
participating attorneys has reduced, we have had to scale back our television
advertising campaigns accordingly. If our advertising campaigns are unable to
draw a sufficient number of consumers who want to utilize the services of our
participating attorneys, we may see further cancellations.

OUR SALES CONTRACTS ARE CANCELABLE PRIOR TO THEIR ONE-YEAR TERM

     Our sales contracts for the attorney marketing business typically allow for
cancellation by the attorney after six months. If existing member attorneys
become dissatisfied with the results they receive from participation in our
marketing network, they could cancel prior to one year and we would not realize
the annual revenues that we expected from these cancelled contracts.

                                       11
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

WE HAVE RECENTLY CHANGED OUR BUSINESS MODEL FOR OUR ATTORNEY MARKETING BUSINESS
AND THE NEW MODEL IS UNPROVEN

     The results of our initial business model for our attorney marketing
business was unsatisfactory and we have discontinued expansion of it in favor of
a new business model in which we grant exclusive licenses by market for use of
our 1-800-ATTORNEY toll-free telephone number and trademark. We first began to
market this new opportunity to attorneys in March 2002 and we have not entered
into any license agreements as of the date of this report.

RISKS RELATING TO OUR COMMON STOCK

OUR STOCK MAY BE DELISTED FROM THE NASDAQ SMALLCAP MARKET

     Our stock currently does not meet Nasdaq listing requirements for the
SmallCap market with regard to the minimum bid price. We have been notified by
Nasdaq that we have until August 13, 2002 to regain compliance, which is defined
as the bid price of our common stock closing at $1.00 per share or more for a
minimum of ten consecutive trading days. We have only limited ability to
influence this factor, primarily through strategic decisions and our results of
operations. Additionally, if we sustain material losses in the future, we could
be at risk of delisting for reason of not meeting minimum requirements of net
tangible assets or shareholders' equity. Our stock may suffer a reduction in
price and liquidity if it is delisted by Nasdaq.

OUR COMMON STOCK PRICE MAY BE HIGHLY VOLATILE AND INVESTORS MAY NOT BE ABLE TO
SELL THEIR STOCK AT OR ABOVE CURRENT MARKET PRICES

     The market price of our common stock has been highly volatile within the
past year and since our initial public offering in 1996. Over the past year, the
stock market in general has been highly volatile. For reasons relating both to
our company and to the stock market in general, our common stock price may
continue to be volatile in the future. Investors may not be able to resell their
shares of our common stock following periods of volatility because of the
market's adverse reaction to such volatility.

     Factors that could cause our common stock price to be volatile may include:

o    a limited number of shares in the "float"
o    actual or anticipated variations in quarterly operating results,
o    announcements of results concerning our attorney marketing business,
o    new products or services,
o    changes in how the market perceives us and how it perceives the nature of
     our business,
o    announcements by us or competitors of significant acquisitions,
o    strategic partnerships or joint ventures,
o    additions or departures of key personnel, and
o    sales of common stock.

Some of these factors are beyond our control. These factors may reduce the
market price of our common stock, regardless of our operating performance.

                                       12
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

WE MAY BE CONTROLLED BY OUR CHIEF EXECUTIVE OFFICER AND AS A RESULT, HIS CONTROL
MAY REDUCE THE PRICE OF OUR COMMON STOCK

     Mr. Matt Butler, CEO and chairman of our board of directors, owns
approximately 5% of our outstanding common stock and has a proxy to vote an
additional 16% owned by our former president and chairman. As a practical
matter, he may have sufficient voting power to control the outcome of matters
submitted to our shareholders for approval, including the election of directors
and any merger, consolidation or sale of substantially all of our assets. The
concentration of ownership and voting power of our common stock could affect any
proxy contest, merger, tender offer or purchases of our common stock. This may
have the effect of decreasing the market price of our common stock.

ITEM 2.   PROPERTIES

     Our corporate headquarters occupy approximately 21,500 square feet in an
eleven-year-old two-story concrete building located at 186 Attorneys.com Court,
Lake Helen, Florida, 32744. We purchased the building and approximately three
acres of land for approximately $900,000 in September 1996. As a result of
improvements and modifications we made to enhance the property's usefulness to
us, our investment on a cost basis was approximately $1,015,000 at December 31,
2001. In December 1996 we obtained mortgage financing of $800,000 on the
property. Payments of principal and interest are approximately $6,500 monthly.
See Note 5 to "Notes to Consolidated Financial Statements."

     We believe our facilities are adequate to meet our current needs and that
suitable additional or alternative space will be available, if needed, on
commercially reasonable terms.


ITEM 3.   LEGAL PROCEEDINGS

     We are not a party to any material legal proceedings.


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

     No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this Report.


                                       13
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

                                     PART II

ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Market Prices of Securities

     Our common stock trades on the Nasdaq SmallCap Market under the symbol
ATTY. The following table sets forth the prices as reported to us by Nasdaq for
the periods indicated. Such quotations reflect inter-dealer prices, without
retail mark-up, mark-down or commission and may not necessarily represent actual
transactions.

                                    High             Low
                                    ------           ------
2000     First Quarter              6.688            2.000
         Second Quarter             4.875            1.750
         Third Quarter              3.688            1.313
         Fourth Quarter             2.734            0.500

2001     First Quarter              1.313            0.656
         Second Quarter             2.700            1.070
         Third Quarter              1.930            1.190
         Fourth Quarter             1.200            0.600

     As of March 12, 2002, there were 5,374,715 shares of common stock
outstanding (net of 1,887,551 shares held in treasury) held by 84 shareholders
of record. Many shareholders hold their shares in "street name." Our transfer
agent advised us that as of March 7, 2002 there were approximately 1,023
beneficial owners of our common stock in addition to the shareholders of record.

     We did not pay dividends on our common stock in 2001 or 2000 and we do not
anticipate paying any dividends in the foreseeable future.

     Sales of Unregistered Securities during the period covered by this report

     During the period covered by this report, the following persons and
entities acquired shares of our common stock and other securities from us as set
forth in the table below:

<TABLE><CAPTION>
                                                 Class of                            Amount of
Shareholder                             Date     Securities                    Securities Sold            Consideration
------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>       <C>                                     <C>      <C>
Pondel / Wilkinson Group               1/31/01   Common stock                            3,390        Consideration for
                                                                                                  professional services

Pondel / Wilkinson Group               2/28/01   Common stock                            3,386        Consideration for
                                                                                                  professional services

Pondel / Wilkinson Group               3/31/01   Common stock                            3,300        Consideration for
                                                                                                  professional services
</TABLE>
                                       14
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

Item 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS (CONTINUED)

     Sales of Unregistered Securities during the period covered by this report
(continued)

<TABLE><CAPTION>
                                                 Class of                            Amount of
Shareholder                             Date     Securities                    Securities Sold            Consideration
------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>       <C>                                     <C>      <C>
Pondel / Wilkinson Group               4/30/01   Common stock                            3,099        Consideration for
                                                                                                  professional services

Pondel / Wilkinson Group               5/31/01   Common stock                            2,302        Consideration for
                                                                                                  professional services

Hydrogen Media, Inc.                   6/25/01   Common stock                           75,457        Consideration for
                                                                                                   web site development
                                                                                                               services

Pondel / Wilkinson Group               6/30/01   Common stock                            2,143        Consideration for
                                                                                                  professional services

Pondel / Wilkinson Group               7/31/01   Common stock                            2,479        Consideration for
                                                                                                  professional services

Steven Hirsch                          8/3/01    Common stock                           375,000                $625,000
</TABLE>

     The sales of common stock were exempt from registration pursuant to Section
4 (2) of the Securities Act of 1933. We did not engage in any general
solicitation; all investors acquired their securities for investment;
restrictive legends were placed on all certificates and instruments and stop
transfer instructions have been given to our transfer agent. Most, if not all,
of the investors are also accredited investors.


                                       15
<PAGE>
                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

RESULTS OF OPERATIONS
---------------------

Comparison of Years Ended December 31, 2001 and 2000

     The table below shows the changes in our results of operations for the
years ended December 31, 2001 and 2000:

<TABLE><CAPTION>
                                             Year ended                  Year ended                 Change      Change
                                         December 31, 2001            December 31, 2000              in $s        as %
                                     ---------------------------  --------------------------   ---------------------------
<S>                                     <C>             <C>          <C>             <C>          <C>            <C>
Net sales                               $ 6,891,320     100.0%       $ 5,001,284     100.0%       $ 1,890,036    37.8%
Costs and expenses:
     Production                           2,110,060      30.6%         1,781,775     35.6%            328,285    18.4%
     Marketing and selling                3,932,052      57.1%         3,148,091     62.9%            783,961    24.9%
     Depreciation and amortization          523,127       7.6%           438,048      8.8%             85,079    19.4%
     General and administrative           2,015,060      29.2%         2,816,952     56.3%           (801,892)  (28.5%)
                                     ---------------------------  --------------------------   ---------------
                                          8,580,299     124.5%         8,184,866    163.6%            395,433     4.8%
                                     ---------------------------  --------------------------   ---------------
Loss from operations                    $(1,688,979)    (24.5%)      $(3,183,582)   (63.6%)       $ 1,494,603   (46.9%)
</TABLE>

     Net sales in 2001 increased from that in 2000 because of the contribution
of our new attorney marketing business. Net sales for this business, which began
to recognize revenues in June 2001, were $2,540,000 in 2001. Net sales from
print directory and related operations decreased $650,000 or 13.0% to $4,351,000
in 2001 from $5,001,000 in 2000 primarily as a result of a reduction in the
number of directories published. In 2001 we published 69 directories with
average advertising sales per directory of $61,000 as compared to publishing 86
directories having average advertising sales per directory of $54,000 in 2000.
More than 20 directories published in 2000 were cancelled due to insufficient
sales. We published 26 of our proprietary Legal Source attorney directories in
2001 having average advertising sales of $60,000 each; in 2000 we published 15
Legal Source directories having average advertising sales of $39,000 each. Net
sales for our online vendor directory that is sold in conjunction with our print
advertising sales were $159,000 in 2001 as compared to $358,000 in 2000,
reflecting a lower level of resource and effort applied to sales of online
advertising in 2001.

     The increase in production costs in 2001 over that in 2000 can be
attributed to $399,000 of expense to operate our telephone call center for our
attorney marketing business. We contract this operation to Futuredontics, Inc.
in Los Angeles, Calfornia, a company having more than 15 years of experience
from the operation of its own call center for its dental referral business
(1-800-DENTIST). Our call center costs were 15.8% of net sales for the attorney
marketing business. Production costs for our print directory operations were
39.3% of related revenues in 2001, compared to 33.6% in 2000. This increase in
2001 occurred primarily in labor and distribution costs and is related to the
increase in the number of our Legal Source publications in 2001, as described in
the paragraph immediately above. These directories require more in-house labor
to prepare and have higher costs of distribution than do the directories that we
publish for bar associations, for which distribution costs are usually borne or
reimbursed to us by the association.

                                       16
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

RESULTS OF OPERATIONS (CONTINUED)
---------------------

     The increase in marketing and selling expense in 2001 over that in 2000 can
be attributed to $949,000 of expense for airing our television commercials in
our attorney marketing business. In addition to the expense for airtime, we
spent $182,000 for the production of television commercials. Marketing and
selling expense for our print directory operations was $1,991,000 or 45.7% of
related net sales in 2001 as compared to $2,247,000 or 44.9% of net sales in
2000.

     Depreciation and amortization expense increased in 2001 from 2000 due to
the amortization of development costs for a new web site intended for use with
our attorney marketing business. In 2001 we recognized $243,000 of such expense
compared to $60,000 in 2000. The initial concept of a web-based business model
began in the last half of 1999; rights to the Internet web site address
"attorneys.com" was purchased in November 1999. During 2000 we entered into
numerous agreements relating to the development of a new web site initially to
have the primary address of "attorneys.com" and later to be accessible also at
"1-800-attorney.com" and other close forms of those addresses. Altogether, we
incurred $988,000 of costs relating to the development of this new web site that
was launched in November 2001. As of December 31, 2001 $578,000 of this cost
represented the unamortized balance which is included as a part of intangible
assets.

     General and administrative expense decreased both in dollars and as a
percentage of net sales in 2001 from 2000. In 2001 the Company expensed $218,000
for professional services other than legal and accounting, compared to
$1,108,000 in 2000. Of this $890,000 difference, $806,000 is attributable to
fees paid to McKinsey & Company in 2000 for services related to the development
of a business plan. Another $35,000 was paid in 2000 to firms that conducted
focus groups in conjunction with the work done by McKinsey & Company.

     For the year ended December 31, 2001, our print directory and related
operations posted a loss from operations of $319,000 and our attorney marketing
business posted a loss of $1,370,000.

     During 2001 we recognized $200,000 of non-cash expense relating to the
write-down of an equity interest in AroundCampus, Inc. that we hold in
connection with our sale of a former subsidiary in 1998. This is included on the
line "Other income (expense), Other" in the Consolidated Statements of
Operations. See Note 1 of the Notes to Consolidated Financial Statements for
additional information.


                                       17
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

RESULTS OF OPERATIONS (CONTINUED)
---------------------

Comparison of Quarters Ended December 31, 2001 and 2000

         Our results of operations for the fourth  quarters of 2001 and 2000 are
shown in the table below:

<TABLE><CAPTION>
                                           Quarter ended                Quarter ended                 Change    Change
                                           Dec. 31, 2001                Dec. 31, 2000                  in $s      As %
                                     --------------------------    -------------------------  --------------------------
<S>                                      <C>          <C>              <C>          <C>          <C>            <C>
Net sales                                $2,265,091   100.0%           $1,263,666   100.0%       $ 1,001,425    79.2%
Costs and expenses:
     Production                             466,360    20.6%              445,368    35.2%            20,992     4.7%
     Marketing and selling                1,371,520    60.5%              719,094    56.9%           652,426    90.7%
     Depreciation and amortization          144,928     6.4%              153,795    12.2%            (8,867)   (5.8%)
     General and administrative             543,671    24.0%              504,435    39.9%            39,236     7.8%
                                     --------------------------    -------------------------  ---------------
                                          2,526,479   111.5%            1,822,692   144.2%           703,787    38.6%
                                     --------------------------    -------------------------  ---------------
Loss from operations                       (261,388)  (11.5%)            (559,026)  (44.2%)          297,638   (53.2%)
Other income, net                             6,679     0.3%               26,275     2.1%           (19,596)  (74.6%)
                                     --------------------------    -------------------------  ---------------
Net loss                                 $ (254,709)  (11.2%)         $  (532,751)  (42.1%)      $   278,042   (52.2%)
                                     ===============               ===============
Net loss per common share            $       (0.05)                $       (0.10)
                                     ===============               ===============
Shares used in calculation                5,616,466                     5,095,992
                                     ===============               ===============
</TABLE>

     Net sales for the fourth quarter of 2001 include $1,189,000 from the
attorney marketing business. Net sales for the print directory operations
decreased 14.9% to $1,076,000 in the fourth quarter of 2001 from $1,264,000 in
the fourth quarter of 2000 primarily as a result of a reduction in the number of
directories published. In the last quarter of 2001 we published 13 directories
with average advertising sales per directory of $80,000; in the same period in
2000 we published 17 directories with average advertising sales per directory of
$71,000.

     Fourth quarter 2001 production costs included $110,000 for call center
operations relating to our attorney marketing business; there were no such costs
in 2000. Print directory production costs decreased $89,000 or 20.0% to $356,000
in the fourth quarter of 2001 from $445,000 in the same period of 2000. The
gross margin for print directory operations increased to 66.9% in the last
quarter of 2001 from 64.8% in the same period of 2000; the improvement was
realized from lower printing costs.

     Fourth quarter 2001 marketing and selling expense includes $868,000
relating to our attorney marketing business. Of this, $537,000 is for the airing
of our 1-800-ATTORNEY television commercials, $67,000 is for the production of
television commercials, and $181,000 is payroll expense. Marketing and selling
expense relating to our print directory operations were 46.8% of related net
sales in the fourth quarter of 2001, as compared to 43.4% in the fourth quarter
of 2000; most of the increase in this percentage in 2001 related to payroll
expense. The dollar amount of payroll expense decreased in 2001; however, it did
not do so proportionately to the decrease in net sales.

     While amortization expense relating to development costs for the new web
site intended for use with our attorney marketing business increased $59,000 in
the fourth quarter of 2001 from the same period 2000, this increase was more
than offset by decreases in depreciation expense. Please see the paragraph
discussing depreciation and amortization expense above in the year-to-year
comparison of operating results for more information regarding these expenses.

                                       18
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

RESULTS OF OPERATIONS (CONTINUED)
---------------------

     The primary cause for the increase in general and administrative expense in
the fourth quarter of 2001 from that in the fourth quarter of 2000 was an
increase in payroll expense. A secondary cause for the increase is higher costs
for our liability and group health insurances.

     For the quarter ended December 31, 2001, our print directory and related
operations posted a loss from operations of $30,000 and our attorney marketing
business posted a loss of $231,000. In the fourth quarter of 2000 the attorney
marketing business was not operating as a separate segment; however, management
attributed $387,000 of the $559,000 loss from operations as related to the
development of the attorney marketing business; $172,000 of the operating loss
was attributed to the print directory business.

     On January 18, 2002, our former president and CEO who had founded the
company in 1993 resigned and a member of our board of directors was appointed to
those positions. With a view to turning the company to positive cash flow and
profitability, our new CEO is setting our focus more than before on "bottom
line" results rather than revenue growth. We recognize that our print directory
business has limited growth opportunities; for this reason, we may significantly
realign this business in 2002, reducing it to those directories that are most
profitable and downsizing our staff accordingly. Our attorney marketing business
is being redirected from the business plan it has followed and that has been
unsuccessful to a new business model that is based on the concept of exclusive
market licensing of our 1-800-ATTORNEY toll-free telephone number and trademark.
Our workforce for the 1-800-ATTORNEY business was realigned, including the
elimination of four sales and one support staff that was required for the old
business model, as well as an in-house attorney who performed our compliance
research and analysis. While these actions and others that may yet be taken will
have a negative impact on revenues, we believe they will have a positive impact
on earnings and shareholders' equity. See Item 1 - Business for additional
information regarding our print directory and attorney marketing businesses.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

     Our balance of cash and cash equivalents at December 31, 2001 was nearly
unchanged from that at December 31, 2000 in spite of our net loss in 2001
primarily because of three factors. We received $625,000 in cash from the sale
of unregistered common stock of the Company in 2001; we incurred non-cash
depreciation and amortization expense in 2001 of $523,000; and deferred revenues
increased $520,000 during 2001. We also incurred non-cash expense in 2001
relating to (i) bad debt expense of $219,000, (ii) a write-down of $200,000
relating to an equity interest in AroundCampus, Inc., and (iii) costs of
$149,000 for certain goods and services that we procured through the exchange of
unregistered common stock and stock warrants.

     Most of our December 31, 2001 balance of cash and cash equivalents was
invested in U.S. treasury bills that matured on January 3, 2002 and has since
been maintained in a money market fund.

     Our principal debt is a mortgage relating to our land and building
purchased in September 1996 for use as our corporate headquarters. The balance
due on the mortgage as of December 31, 2001 was $533,000. The mortgage agreement
requires us, among other provisions, to maintain minimum levels of funds flow;
this covenant was not met as of and for the year ended December 31, 2001. The
mortgagor did not agree to our request for a waiver of this requirement and the
note may be called and become due and payable in full by the mortgagor at any
time. As of the time of this report, we plan to pay the note

                                       19
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
-------------------------------

and not seek re-financing if that event occurs. Additional information
concerning the mortgage is included in Note 5 of the Notes to Consolidated
Financial Statements.

     On January 18, 2002 the Company accepted the resignation of its former
president and entered into a severance agreement that terminated and superseded
his employment agreement. Pursuant to the severance agreement the Company paid a
lump-sum severance payment of $50,000 and an additional $150,000 in exchange for
216,138 shares of Company common stock. The Company sold to the former president
an automobile at fair value in exchange for an equivalent fair market value of
shares of Company common stock. On January 18, 2002 the Company and the former
president entered into a consulting and confidentiality agreement that expires
on December 31, 2004. Under the consulting and confidentiality agreement, the
Company paid a lump-sum payment of $50,000 and is required to make monthly cash
payments of $6,250 from September 15, 2002 through December 15, 2004. The
Company also agreed to pay the former president's group health insurance
coverage for him and his dependents for an 18-month period, and to reimburse him
for all business expenses reasonably incurred in the performance of his services
under the agreement.

     In addition to the cash requirements relating to the severance described
above, from January 1 through March 8, 2002, we had to draw $405,000 from the
cash reserves we maintain in a money market account in order to fund our
operations. We have taken actions to reduce our expenses, including a reduction
of staff by approximately 18% since the beginning of 2002.

     WE CANNOT ASSURE THAT OUR EXISTING CASH BALANCES ARE SUFFICIENT TO MEET OUR
WORKING CAPITAL NEEDS FOR MORE THAN THE NEXT 12 MONTHS, NOR CAN WE ASSURE WE
WILL BE ABLE TO RAISE ADDITIONAL CAPITAL AT DESIRABLE LEVELS OF DILUTION IF WE
DECIDE THAT WE NEED ADDITIONAL CAPITAL TO IMPLEMENT OUR PLANS.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES
------------------------------------------

The consolidated financial statements of the Company are prepared in accordance
with accounting principles generally accepted in the United States, which
requires us to make estimates and assumptions (see Note 1 to the consolidated
financial statements). Valuations based upon estimates are reviewed for
reasonableness and conservatism and consistently applied. Actual results could
differ from those estimates and such differences may be material to the
financial statements.

Management believes the following critical accounting policies, among others,
affect its more significant judgments and estimates used in the preparation of
its consolidated financial statements.

Directories in Progress

Costs accumulated under directories in progress are stated at estimated costs,
not in excess of estimated realizable value. Our estimate is calculated as a
percentage of applicable deferred revenue. Our consideration of a realignment of
our print directory business in 2002 could require us to re-evaluate our
estimates of directories in progress and result in a charge to income of a
portion of the accumulated costs.

                                       20
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

CRITICAL ACCOUNTING POLICIES AND ESTIMATES (CONTINUED)
------------------------------------------

Intangible Assets

Intangible assets are comprised of web site development costs, the rights to use
a particular toll-free telephone number (1-800-ATTORNEY) and Internet web site
addresses. These assets are recorded at cost and amortized over their estimated
useful lives, which are either 30 or 60 months, using the straight-line method.
In January 2000 we wrote off the value of a particular intangible asset before
it had reached the end of the useful life that we had previously estimated (see
Note 3 to "Notes to Consolidated Financial Statements.") A change in our
estimate of the useful life of an intangible asset could result in a material
non-cash charge to income.


FORWARD-LOOKING STATEMENTS
--------------------------

     The statements made above relating to a view to turning the company to
positive cash flow and profitability, to a focus more than before on "bottom
line" results rather than revenue growth, and to our belief that certain recent
and future actions will have a positive impact on earnings and shareholders'
equity are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. The statements that express the
"belief", "anticipation", "plans", "expectations", "will" and similar
expressions are intended to identify forward-looking statements. The results
anticipated by these forward-looking statements may not occur. While the Company
believes that these statements are accurate, the Company's business is dependent
upon general economic conditions and various conditions specific to its industry
and future trend results cannot be predicted with certainty. Important factors
that may cause actual results to differ materially from the forward-looking
statements include the following: 1) our ability to identify and successfully
implement strategies and actions that, while reducing expenses, do not also
reduce revenues even more so as to negatively impact earnings, 2) our ability to
successfully implement our plans with the capital resources we already have on
hand or are able to additionally raise in the future, 3) continued high rates of
cancellation of existing attorney marketing sales contracts before their
one-year term by attorneys who chose to exercise that option, 4) unexpected
downturns in our print directory business, including national and local economic
factors that will reduce advertising sales, 5) our reliance upon the performance
of third parties upon whom we have limited influence or control, 6) whether the
capital markets would find our current business or our business plans acceptable
for investment, 7) the intense competition we face both in our current and
planned businesses and in the market for raising additional capital, and 8) our
ability to convince sources of capital that our management is able to carry out
its new business strategy.





                                       21
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

ITEM 7.   FINANCIAL STATEMENTS




                                    Contents


Report of Independent Certified Public Accountants..........................23

Consolidated Financial Statements

Consolidated Balance Sheets.................................................24
Consolidated Statements of Operations.......................................25
Consolidated Statements of Shareholders' Equity.............................26
Consolidated Statements of Cash Flows.......................................27
Notes to Consolidated Financial Statements..................................29



















                                       22
<PAGE>


               Report of Independent Certified Public Accountants

The Board of Directors
1-800-ATTORNEY, Inc.

We have audited the accompanying consolidated balance sheets of 1-800-ATTORNEY,
Inc. as of December 31, 2001 and 2000, and the related consolidated statements
of operations, shareholders' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with 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 audits provide 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 1-800-ATTORNEY,
Inc. at December 31, 2001 and 2000, and the consolidated results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States.


                                                       /s/ ERNST & YOUNG LLP

Orlando, Florida
March 8, 2002


                                       23
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

                              1-800-ATTORNEY, Inc.
                           Consolidated Balance Sheets
<TABLE><CAPTION>
                                                                                                  DECEMBER 31
ASSETS                                                                                    2001                   2000
                                                                                      ------------           ------------
<S>                                                                                   <C>                    <C>
Current assets:
   Cash and cash equivalents                                                          $  2,227,499           $  2,164,714
   Restricted cash                                                                            --                   31,871
   Accounts receivable, less allowance for doubtful accounts of $179,591 and
     $121,223 in 2001 and 2000, respectively                                               218,144                235,571
   Directories in progress                                                                 238,279                270,071
   Prepaid expenses                                                                        207,571                163,786
                                                                                      ------------           ------------
Total current assets                                                                     2,891,493              2,866,013

Property and equipment, net                                                              1,011,021              1,138,379
Investment in AroundCampus, Inc.                                                              --                  200,000
Intangible assets, net                                                                     959,542              1,208,281
Deferred tax asset                                                                          78,000                 85,000
Other assets                                                                                 3,695                  5,095
                                                                                      ------------           ------------
Total assets                                                                          $  4,943,751           $  5,502,768
                                                                                      ============           ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                                   $    328,578           $    258,844
   Accrued expenses                                                                        136,396                167,067
   Deferred revenue                                                                      1,247,708                727,651
   Deferred tax liability                                                                   78,000                 85,000
   Mortgage payable                                                                        533,333                 53,333
                                                                                      ------------           ------------
Total current liabilities                                                                2,234,015              1,291,895

Notes payable                                                                              100,000                100,000
Mortgage payable after one year                                                               --                  533,334
                                                                                      ------------           ------------
Total liabilities                                                                        2,334,015              1,925,229

Commitment and contingencies:

Shareholders' equity:
   Common stock, no par value:
     15,000,000 shares authorized; 5,616,466 and 5,123,410 shares
     issued and outstanding in 2001 and 2000, respectively                              10,659,738              9,897,014
   Paid-in capital for stock warrants                                                      238,316                213,933
   Accumulated deficit                                                                  (7,196,481)            (5,351,087)
   Unearned compensation, net                                                                 --                     (484)
   Treasury stock, 1,645,800 shares; at cost                                            (1,181,837)            (1,181,837)
                                                                                      ------------           ------------
Total shareholders' equity                                                               2,519,736              3,577,539
                                                                                      ------------           ------------
Total liabilities and shareholders' equity                                            $  4,943,751           $  5,502,768
                                                                                      ============           ============
</TABLE>
See accompanying notes

                                       24
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

                              1-800-ATTORNEY, Inc.
                      Consolidated Statements of Operations
<TABLE><CAPTION>
                                                                                          Year ended December 31
                                                                                         2001                  2000
                                                                                     ---------------------------------
<S>                                                                                  <C>                   <C>
Net sales                                                                            $ 6,891,320           $ 5,001,284

Costs and expenses:
   Production                                                                          2,110,060             1,781,775
   Marketing and selling                                                               3,932,052             3,148,091
   Depreciation and amortization                                                         523,127               438,048
   General and administrative                                                          2,015,060             2,816,952
                                                                                     -----------           -----------
                                                                                       8,580,299             8,184,866
                                                                                     -----------           -----------
Loss from operations                                                                  (1,688,979)           (3,183,582)

Other income (expenses):
   Interest expense                                                                      (38,021)              (55,656)
   Interest income                                                                        77,105               167,935
   Other                                                                                (195,499)               19,932
                                                                                     -----------           -----------
                                                                                        (156,415)              132,211

Loss before cumulative effect of change in accounting principle                       (1,845,394)           (3,051,371)

Cumulative effect of change in accounting principle                                         --                (183,845)
                                                                                     -----------           -----------
Net loss                                                                             $(1,845,394)          $(3,235,216)
                                                                                     ===========           ===========

Loss per common share before cumulative effect of change in accounting
   principle--basic and diluted                                                      $     (0.35)          $     (0.66)
Cumulative effect of change in accounting principle                                         --                   (0.04)
                                                                                     -----------           -----------
Net loss per common share--basic and diluted                                         $     (0.35)          $     (0.70)
                                                                                     ===========           ===========

Pro forma amounts assuming the accounting change is applied retroactively:
Net loss                                                                             $      --             $(3,051,371)
                                                                                     ===========           ===========
Net loss per common share--basic and diluted                                         $      --             $     (0.66)
                                                                                     ===========           ===========

Shares used in computation of net loss per common share--basic and diluted             5,343,364             4,599,012
                                                                                     ===========           ===========
</TABLE>
See accompanying notes.

                                       25
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

                              1-800-ATTORNEY, Inc.
                 Consolidated Statements of Shareholders' Equity
<TABLE><CAPTION>
                                                                                        Paid-in
                                                                 Common Stock         Capital for
                                                         --------------------------      Stock     Accumulated
                                                            Shares         Amount       Warrants      Deficit
                                                         ------------------------------------------------------
<S>                                                        <C>          <C>           <C>           <C>
Balance at January 1, 2000                                 3,290,720    $ 5,914,416   $    26,208   $(2,115,871)
   Sale of unregistered common stock                         905,513      2,251,620          --            --
   Issuance of unregistered common stock in exchange
     for goods and services                                  881,477      1,639,773          --            --
   Issuance of stock warrants in exchange for goods
     and services                                               --             --         187,725          --
   Exercise of stock warrants                                 25,000         42,187          --            --
   Shares issued under Stock Option Plan                      32,200         49,018          --            --
   Amortization of unearned compensation                        --             --            --            --
   Acquisition of common stock for treasury                  (11,500)          --            --            --
   Net loss                                                     --             --            --      (3,235,216)

                                                         ------------------------------------------------------
Balance at December 31, 2000                               5,123,410      9,897,014       213,933    (5,351,087)
   Sale of unregistered common stock                         375,000        625,000          --            --
   Issuance of unregistered common stock in exchange
     for services                                             95,556        125,056          --            --
   Issuance of stock warrants in exchange for services          --             --          24,383          --
   Shares issued under Stock Option Plan                      22,500         12,668          --            --
   Amortization of unearned compensation                        --             --            --            --
   Net loss                                                     --             --            --      (1,845,394)
                                                         ------------------------------------------------------
Balance at December 31, 2001                               5,616,466    $10,659,738   $   238,316   $(7,196,481)
                                                         ======================================================
</TABLE>

<TABLE><CAPTION>
                                                           Unearned      Treasury
                                                         Compensation      Stock          Total
                                                         -----------------------------------------
<S>                                                      <C>            <C>            <C>
Balance at January 1, 2000                               $    (2,687)   $(1,158,702)   $ 2,663,364
   Sale of unregistered common stock                            --             --        2,251,620
   Issuance of unregistered common stock in exchange
     for goods and services                                     --             --        1,639,773
   Issuance of stock warrants in exchange for goods
     and services                                               --             --          187,725
   Exercise of stock warrants                                   --             --           42,187
   Shares issued under Stock Option Plan                        --             --           49,018
   Amortization of unearned compensation                       2,203           --            2,203
   Acquisition of common stock for treasury                     --          (23,135)       (23,135)
   Net loss                                                     --             --       (3,235,216)
                                                         -----------------------------------------
Balance at December 31, 2000                                    (484)    (1,181,837)     3,577,539
   Sale of unregistered common stock                            --             --          625,000
   Issuance of unregistered common stock in exchange
     for services                                               --             --          125,056
   Issuance of stock warrants in exchange for services          --             --           24,383
   Shares issued under Stock Option Plan                        --             --           12,668
   Amortization of unearned compensation                         484           --              484
   Net loss                                                     --             --       (1,845,394)

                                                         -----------------------------------------
Balance at December 31, 2001                             $      --      $(1,181,837)   $ 2,519,736
                                                         =========================================
</TABLE>
See accompanying notes.

                                       26
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

                              1-800-ATTORNEY, Inc.
                      Consolidated Statements of Cash Flows
<TABLE><CAPTION>
                                                                                           Year ended December 31
                                                                                         2001                  2000
                                                                                     -----------           -----------
<S>                                                                                  <C>                   <C>
Cash flows from operating activities
Net loss                                                                             $(1,845,394)          $(3,235,216)
Adjustments to reconcile net loss to net cash used in operating activities:
     Depreciation and amortization                                                       523,127               438,048
     Gain on sale of equipment                                                              --                  (8,409)
     Accretion of unearned compensation                                                      484                 2,203
     Bad debt expense                                                                    218,639               127,478
     Exchange of unregistered common stock for goods and services                        125,056               722,763
     Exchange of stock warrants for goods and services                                    24,383                86,725
     Exchange of advertising for machinery and equipment                                 (12,477)               (4,899)
     Write-down of investment in AroundCampus, Inc.                                      200,000                  --
       Decrease (increase) in restricted cash                                             31,871               (31,871)
       Increase in accounts receivable                                                  (201,212)             (116,097)
       Decrease (increase) in directories in progress                                     31,792              (105,762)
       Increase in intangible, prepaid expenses and other assets                        (152,897)             (231,265)
       Increase (decrease) in accounts payable                                            67,734               (32,954)
       (Decrease) increase in accrued expenses                                           (30,671)               41,039
       Increase in deferred revenue                                                      520,057               235,077
                                                                                     -----------           -----------
Net cash used in operating activities                                                   (497,508)           (2,113,140)

Cash flows from investing activities
Proceeds from the sale of equipment                                                         --                  11,000
Purchases of property and equipment                                                      (24,042)              (53,182)
                                                                                     -----------           -----------
Net cash used in investing activities                                                    (24,042)              (42,182)

Cash flows from financing activities
Proceeds from the exercise of stock options                                               12,688                49,018
Proceeds from the sale of unregistered common stock                                      625,000             2,251,620
Repayment of mortgage principal                                                          (53,333)              (53,333)
Purchase of treasury shares                                                                 --                 (23,135)
                                                                                     -----------           -----------
Net cash provided by financing activities                                                584,335             2,224,170
                                                                                     -----------           -----------
Net increase in cash and cash equivalents                                                 62,785                68,848
Cash and cash equivalents at beginning of year                                         2,164,714             2,095,866
                                                                                     -----------           -----------
Cash and cash equivalents at end of year                                             $ 2,227,499           $ 2,164,714
                                                                                     ===========           ===========
</TABLE>
                                       27
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

                              1-800-ATTORNEY, Inc.
                Consolidated Statements of Cash Flows (continued)
<TABLE><CAPTION>
                                                                               Year ended December 31
                                                                               2001              2000
                                                                             --------          --------
<S>                                                                          <C>               <C>
Supplemental cash flow information

Cash paid during the period for:
    Interest                                                                 $ 35,536          $ 55,013
                                                                             ========          ========

Supplemental noncash activities:

   Exchange of advertising for supplies and services                         $ 39,662          $ 37,962
                                                                             ========          ========

   Exchange of advertising for machinery and equipment                       $ 12,477          $  4,899
                                                                             ========          ========

   Exchange of stock warrants for intangible property                        $   --            $101,000
                                                                             ========          ========

   Exchange of unregistered common stock for intangible property             $   --            $917,010
                                                                             ========          ========
</TABLE>

See accompanying notes.











                                       28
<PAGE>


                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

                   Notes to Consolidated Financial Statements

                                December 31, 2001

1. SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS

1-800-ATTORNEY, Inc. (ATTY) (formerly Attorneys.com, Inc. until June 1, 2001,
and The Publishing Company of North America, Inc. (PCNA) until June 5, 2000)
began operations on September 30, 1993. The primary business activity of ATTY is
publishing membership directories for bar associations and selling advertising
in those directories. ATTY markets its directories to associations throughout
the continental United States. ATTY also operates an attorney referral or
marketing business that was launched in June 2001. In March 2002 ATTY began
development of a program under which attorneys or law firms may license
exclusive use of the 1-800-ATTORNEY toll-free number within designated market
areas.

On October 14, 1998, PCNA Communications Corporation was incorporated as a
wholly-owned subsidiary of ATTY. Effective January 1, 1999, PCNA transferred
substantially all of its print directory operations into this subsidiary. On
February 15, 1999, Attorneys Online, Inc. was incorporated as a wholly-owned
subsidiary of PCNA. Attorneys Online, Inc. had no operations prior to its
dissolution in July 2001.

CONSOLIDATION

The consolidated financial statements include the accounts of ATTY, PCNA
Communications Corporation and Attorneys Online, Inc. since their respective
dates of incorporation (collectively, the Company). Intercompany transactions
have been eliminated in consolidation.

RECLASSIFICATIONS

Certain  amounts  in  the  2000  consolidated  financial  statements  have  been
reclassified to conform to current year presentation.

CASH AND CASH EQUIVALENTS

The Company considers all highly-liquid investments with a maturity of three
months or less when purchased to be cash equivalents. Included in cash and
equivalents at December 31, 2001 are $1,700,000 in U.S. Treasury bills recorded
at fair value that approximates cost, which matured on January 3, 2002. Included
in cash and cash equivalents at December 31, 2000 is a $1,900,000 Federal Home
Loan Bank discount note recorded at fair value that approximates cost, which
matured on January 26, 2001.

                                       29
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

             Notes to Consolidated Financial Statements (continued)

1. SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

RESTRICTED CASH

At December 31, 2000, the Company had approximately $32,000 in a money market
account administrated by its outside counsel as escrow agent for certain advance
payments made in connection with the Company's attorney group marketing
business. The escrowed funds were released to the Company on May 9, 2001.

ACCOUNTS RECEIVABLE

Accounts receivable are comprised primarily of amounts due from advertisers in
the bar association directories and the online vendor directory. The Company's
allowance for doubtful accounts is estimated by management as a percentage of
sales. The percentages used at December 31, 2001 and 2000 were 4.5% and 5.0%,
respectively. All amounts outstanding in excess of six months are written off.

DIRECTORIES IN PROGRESS

Costs accumulated under directories in progress are stated at estimated costs of
selling advertising not yet published and are primarily salaries and
commissions, not in excess of estimated realizable value based upon historical
data.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost. Depreciation for machinery and
equipment and office furniture and equipment is computed using straight-line and
accelerated methods over five years. Purchased software is amortized using the
straight-line method over five years. Real property is depreciated using the
straight-line method over 30 years. Expenditures for maintenance and repairs are
charged to expense as incurred. Major improvements are capitalized.

INVESTMENT IN AROUNDCAMPUS, INC.

The investment in AroundCampus, Inc. (ACI) (formerly College Directory
Publishing Corporation) was accounted for on the cost basis as the Company did
not participate in ACI's management. This investment is comprised of 440,040
shares of common stock of ACI, $0.001 par value per share. In April 2001, the
Company's management decided, based upon discussions with ACI's management, that
it was unlikely that the Company would realize any benefit from its equity
interest in ACI. The carrying value of this investment ($200,000) was written
off as an Other expense, in the 2001 statements of operations.

                                       30
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

             Notes to Consolidated Financial Statements (continued)

1. SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INTANGIBLE ASSETS

Intangible assets are comprised of web site development costs, rights to use a
particular toll-free telephone number (1-800-ATTORNEY) and Internet web site
addresses. The web site development costs, capitalized in accordance with
Emerging Issues Task Force Issue No. 00-2, Accounting for Web Site Development
Costs, toll-free telephone number and Internet web site addresses are recorded
at cost. Intangible assets are amortized over the estimated useful lives of the
assets, which are either 30 or 60 months, using the straight-line method.

LONG-LIVED ASSETS

In accordance with Statement of Financial Accounting Standards No. 121,
ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO
BE DISPOSED OF, the Company periodically evaluates the recoverability of its
long-lived assets based on expected undiscounted cash flows and will recognize
impairment of the carrying value of long-lived assets, if any is indicated,
based on the fair value of such assets.

REVENUE RECOGNITION

Print directory advertising revenues and related costs are recorded by the
Company upon shipment of directories.

In the fourth quarter of 2000, the Company adopted Staff Accounting Bulletin No.
101 (SAB 101), Revenue Recognition in Financial Statements. Accordingly, the
Company changed the method it uses to account for the sale of Internet
advertising revenues. Under the new accounting method revenues and related
incremental direct costs are recognized over the life of the Internet
advertising contracts. Previously, Internet advertising revenue was recognized
in full at the time advertising was placed on the Company's web site and related
costs were recognized as incurred. This change was applied retroactively to
January 1, 2000 through a cumulative charge to the statement of operations, in
accordance with Accounting Principles Board Opinion (APB) No. 20, Accounting
Changes. The cumulative effect, as of January 1, 2000, was approximately
$184,000, which is reflected as a charge in the 2000 statement of operations.

Revenues for the attorney marketing business are recognized over the service
periods of the contracts, which are expected to be one year. Related direct
costs are recognized when incurred.

Deferred revenue represents amounts received from advertisers prior to shipment
of the related directories and amounts received from attorneys in advance of the
applicable service periods for the attorney marketing business.

During 2001 and 2000, advertising sales from the publication of any one
directory did not exceed 10% of the revenues of the Company.

                                       31
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

             Notes to Consolidated Financial Statements (continued)

1. SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

BARTER TRANSACTIONS

The Company engages in nonmonetary trades of advertising space in exchange for
goods or services. For the years ended December 31, 2001 and 2000, nonmonetary
barter transactions totaled $52,000 and $43,000 respectively. These barter
transactions are recorded at the estimated fair value of the asset or services
received in accordance with FAS No. 29, Accounting for Nonmonetary Transactions.

INCOME TAXES

The Company follows the liability method of accounting for income taxes.
Deferred income taxes relate to the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.

SHIPPING AND HANDLING COSTS

The costs of shipping and handling are included in production costs on the
consolidated statements of operations. For the years ended December 31, 2001 and
2000, shipping and handling costs were $374,152 and $261,822 respectively.

ADVERTISING COSTS

The costs of advertising are expensed as incurred. For the years ended December
31, 2001 and 2000, advertising costs included in marketing and selling costs
were $1,173,591 and $400,118, respectively. These include costs for the
production and airing of television commercials related to the Company's
attorney marketing business, which were $1,131,259 in 2001 and $359,640 in 2000.

STOCK-BASED COMPENSATION

The Company has elected to follow the provisions of APB No. 25, Accounting for
Stock Issued to Employees, and related interpretations in accounting for its
employee stock-based compensation. As discussed in Note 7, the alternative fair
value accounting of stock options provided for under FAS No. 123, requires use
of option valuation models that were not developed for use in valuing employee
stock options. Under APB Opinion No. 25, because the exercise price of the
Company's employee stock options equals the market price of the underlying stock
on the date of grant, no compensation expense is recognized.

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual results could differ
from those estimates.

                                       32
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

             Notes to Consolidated Financial Statements (continued)

1. SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

EARNINGS PER SHARE

Basic income (loss) per share is computed by dividing net income (loss)
available to common shareholders by the weighted average common shares
outstanding for the period. Diluted income (loss) per share is computed giving
effect to all potentially dilutive common shares. Potentially dilutive common
shares may consist of incremental shares issuable upon the exercise of stock
options, adjusted for the assumed repurchase of the Company's common stock, at
the average market price, from the exercise proceeds and also may include
incremental shares issuable in connection with convertible securities. In
periods in which a net loss has been incurred, all potentially dilutive common
shares are considered antidilutive and thus are excluded from the calculation.

NEW ACCOUNTING PRONOUNCEMENTS

In July 2001, the Financial Accounting Standards Board ("FASB") issued FASB
Statement No. 142 (FAS 142), Goodwill and Other Intangible Assets. Under the new
rules, goodwill and indefinite lived intangible assets are no longer amortized
but are reviewed annually for impairment. Separate intangible assets that are
not deemed to have an indefinite life will continue to be amortized over their
useful lives. The Company will apply the new accounting rules beginning January
1, 2002. In connection with the adoption of FAS 142, the Company will be
required to perform a transitional goodwill impairment assessment. The Company
does not expect the adoption of FAS 142 to materially impact its results of
operations or financial position.

2. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

                                                        December 31
                                                 2001                  2000
                                             -----------           -----------

         Land                                $   255,000           $   255,000
         Building                                760,387               760,387
         Machinery and equipment                 726,883               695,023
         Office furniture and equipment           85,762                84,082
         Purchased software                      135,077               132,100
                                             -----------           -----------
                                               1,963,109             1,926,592
         Less accumulated depreciation          (952,088)             (788,213)
                                             -----------           -----------
                                             $ 1,011,021           $ 1,138,379
                                             ===========           ===========


For the years ended December 31, 2001 and 2000, depreciation expense was
approximately $164,000 and $183,000, respectively.

                                       33
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

             Notes to Consolidated Financial Statements (continued)

3. INTANGIBLE ASSETS

In January 2000, the Company acquired the rights to use a particular toll-free
telephone number in exchange for stock warrants having an aggregate value of
$101,000. In April 2000, the Company acquired the rights to use a second
toll-free telephone number, in exchange for unregistered shares of Company stock
having an aggregate value of $557,010. During 2000, in conjunction with the
further development of the Company's attorney referral business plan, management
determined it no longer intended to use the first toll-free telephone number
acquired and expensed the remaining unamortized cost of $90,500. This write-off
is included in amortization expense in 2000.

Intangible assets consist of the following:
                                                        December 31
                                                 2001                  2000
                                             -----------           -----------

         Web site development costs          $   759,077           $   648,565
         Toll-free telephone number              557,010               557,010
         Internet web site addresses             150,587               150,587
                                             -----------           -----------
                                               1,466,674             1,356,162
         Less accumulated amortization          (507,132)             (147,881)
                                             -----------           -----------
                                             $   959,542           $ 1,208,281
                                             ===========           ===========


For the years ended December 31, 2001 and 2000, amortization expense was
approximately $359,000 and $255,000, respectively.

4. INCOME TAXES

At December 31, 2001, the Company had available net operating loss carryforwards
of approximately $5,527,041 for federal income tax purposes, which begin to
expire in 2011. Utilization of the Company's net operating loss may be subject
to substantial annual limitation due to the ownership change limitations
provided by the Internal Revenue Code and similar state provisions. Such an
annual limitation could result in the expiration of the net operating loss
before utilization.

The reconciliations of income tax computed at the U.S. federal statutory rates
to income tax expense are as follows:

<TABLE><CAPTION>
                                                                             December 31
                                                                     2001                  2000
                                                                 -----------           -----------
<S>                                                              <C>                   <C>
         Income taxes computed at the federal statutory
           rate of 34%                                           $  (627,434)          $(1,099,973)
         State income taxes, net of federal benefit                  (63,596)             (117,018)
         Non deductible items and other                               31,767               275,103
         Change in valuation allowance                               659,263               941,888
                                                                 -----------           -----------
         Total                                                   $      --             $      --
                                                                 ===========           ===========
</TABLE>
                                       34
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

             Notes to Consolidated Financial Statements (continued)

4. INCOME TAXES (CONTINUED)


The components of the deferred income tax asset and liability are as follows:

<TABLE><CAPTION>
                                                                December 31
                                                         2001                  2000
                                                     -----------           -----------
<S>                                                  <C>                   <C>
         Deferred tax assets:
            Property and equipment                   $    18,830           $      --
            Allowance for doubtful accounts               67,580                45,616
            Net operating loss carryforward            2,004,566             1,596,618
            Unearned compensation                         12,041                11,859
            Unrealized loss on investment                 75,260                  --
            Other                                          7,308                 6,126
                                                     -----------           -----------
                                                       2,185,585             1,660,219
         Valuation allowance                          (1,792,675)           (1,133,412)
                                                     -----------           -----------
         Total deferred tax assets                       392,910               526,807

         Deferred tax liabilities:
            Prepaid expenses                              (2,964)               (2,866)
            Property and equipment                          --                 (19,961)
            Directories in progress                      (89,664)             (101,628)
            Intangible assets                           (300,282)             (402,352)
                                                     -----------           -----------
         Total deferred tax liabilities                 (392,910)             (526,807)
                                                     -----------           -----------
         Total                                       $      --             $      --
                                                     ===========           ===========
</TABLE>

In accordance with SFAS No. 109, Accounting for Income Taxes, valuation
allowances are provided against deferred tax assets if, based on the weight of
available evidence, it is more likely than not that some or all of the deferred
tax assets will not be realized. The Company has evaluated the realizability of
the deferred tax assets on its balance sheets and has established valuation
allowances in the amounts of $1,792,675 and $1,133,412 against its net deferred
tax assets at December 31, 2001 and 2000, respectively.


                                       35
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

             Notes to Consolidated Financial Statements (continued)

5. LONG-TERM OBLIGATIONS

MORTGAGE PAYABLE

Principal payments related to the mortgage on the Company's headquarters are due
monthly along with accrued interest on the outstanding principal based upon the
LIBOR (London InterBank Offering Rate) plus 250 basis points. The interest rate
charged on the mortgage was 4.6063% at December 31, 2001. The mortgage is
secured by assets with a carrying value of approximately $975,000 at December
31, 2001.

For the year ended December 31, 2001, the Company was out of compliance with the
covenant requiring a minimum level of funds flow. Noncompliance represents an
event of default under the mortgage and security agreement. Because of the event
of default, amounts outstanding have been classified as current liabilities in
the accompanying consolidated balance sheet at December 31, 2001.

NOTES PAYABLE

On November 3, 1999, in connection with the Company's acquisition of an Internet
address, the Company issued the sellers four-year non-interest bearing
promissory notes in the total amount of $100,000. Principal is due on November
3, 2003 unless the holders elect to exercise warrants issued by the Company in
connection with the transaction (see Note 7). The notes are collateralized by
right, title and interest in the Internet address.

LEASE OBLIGATIONS

For the years ended December 31, 2001 and 2000, total expenses pursuant to lease
obligations for office space were $10,480 and $25,811, respectively.  This lease
was terminated during 2001.

6. TREASURY STOCK

Pursuant to a buy-back plan approved by its Board of Directors in May 1997, the
Company purchased 11,500 shares of its common stock in open market transactions
during 2000 for approximately $23,000.

7. SHAREHOLDERS' EQUITY

INCENTIVE STOCK PLAN

The Company's 1996 Stock Plan covers 2,000,000 shares of the Company's common
stock and provides for incentive stock options, nonqualified stock options,
nondiscretionary stock options, and awards of stock to employees, officers,
directors, and certain other parties related to the Company. Generally, grants
of options are exercisable each December 31 equally over three or five years and
they expire ten years from the date of grant.

                                       36
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

             Notes to Consolidated Financial Statements (continued)

7. SHAREHOLDERS' EQUITY (CONTINUED)

The following table summarizes option activity in 2001 and 2000:

<TABLE><CAPTION>
                                                        Exercise Price  Weighted Average
                                             Shares         Range        Exercise Price
                                         ---------------------------------------------------

<S>                                            <C>       <C>                   <C>
Outstanding at January 1, 2000                 965,900   $1.00-$6.25           $1.63
   Granted                                     222,000       0.56               0.56
   Granted                                      22,000       0.91               0.91
   Granted                                     129,000    2.00-2.88             2.30
   Granted                                      13,380       4.06               4.06
   Exercised                                   (16,600)   1.00-1.41             1.07
   Exercised                                   (15,600)      2.00               2.00
   Forfeited                                   (50,000)   1.00-1.41             1.08
   Forfeited                                   (36,000)   1.69-2.00             1.82
                                         ---------------------------------------------------
   Outstanding at December 31, 2000          1,234,080    0.56-6.25             1.54
   Granted                                     206,000    0.94-1.12             0.94
   Granted                                     343,000    1.40-1.55             1.40
   Exercised                                   (22,500)      0.56               0.56
   Forfeited                                    (3,700)   0.91-1.00             0.99
                                         ---------------------------------------------------
Outstanding at December 31, 2001             1,756,880   $0.56-$6.25           $1.46
                                         ===================================================
</TABLE>

The following table summarizes information about stock options outstanding at
December 31, 2001:

<TABLE><CAPTION>
                                        Outstanding                                     Exercisable
                           ----------------------------------------       ------------------------------------------
                                           Weighted Average                                 Weighted Average
                                    -------------------------------                   ------------------------------
      Range of                                       Remaining                                         Remaining
      Exercise                        Exercise      Contractual                         Exercise      Contractual
       Prices               Shares      Price           Life                 Shares       Price          Life
--------------------------------------------------------------------------------------------------------------------
<S>                         <C>         <C>             <C>                  <C>           <C>           <C>
        $0.56               199,500     $0.56           8.99                 199,500       $0.56         8.99
      0.91-1.12             539,600      0.98           7.03                 490,900        0.98         6.89
      1.40-2.00             860,400      1.69           7.38                 821,000        1.69         7.30
      2.19-2.88             123,000      2.42           7.66                 113,000        2.37         7.59
        4.06                 13,380      4.06           8.15                  13,380        4.06         8.15
      5.50-6.25              21,000      5.68           4.30                  21,000        5.68         4.30
--------------------------------------------------------------------------------------------------------------------
     $0.56-$6.25          1,756,880     $1.46           7.45               1,658,780       $1.46         7.37
====================================================================================================================
</TABLE>
                                       37
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

             Notes to Consolidated Financial Statements (continued)

7. SHAREHOLDERS' EQUITY (CONTINUED)

The following table summarizes information about stock options outstanding at
December 31, 2000:

<TABLE><CAPTION>
                                        Outstanding                                     Exercisable
                           ----------------------------------------       ------------------------------------------
                                           Weighted Average                                 Weighted Average
                                    -------------------------------                   ------------------------------
      Range of                                       Remaining                                         Remaining
      Exercise                        Exercise      Contractual                         Exercise      Contractual
       Prices               Shares      Price           Life                 Shares       Price          Life
--------------------------------------------------------------------------------------------------------------------
<S>                         <C>         <C>             <C>                  <C>           <C>           <C>
        $0.56               222,000     $0.56           8.30                 222,000       $0.56         8.30
      0.91-1.00             337,300      0.99           6.69                 272,100        1.00         6.33
      1.41-2.00             517,400      1.88           7.06                 407,467        1.90         7.24
      2.19-2.88             123,000      2.42           8.66                 103,000        2.33         8.51
        4.06                 13,380      4.06           9.15                   8,920        4.06         9.15
      5.50-6.25              21,000      5.68           5.30                  21,000        5.68         5.30
--------------------------------------------------------------------------------------------------------------------
     $0.56-$6.25          1,234,080     $1.54           7.33               1,034,487       $1.51         7.33
====================================================================================================================
</TABLE>

PRO FORMA DISCLOSURES

Pro forma information regarding net loss is required by SFAS No. 123 and has
been determined as if the Company had accounted for its employee stock options
under the fair value method. The fair value for these options was estimated at
the date of grant using a Black-Scholes option pricing model with the following
weighted-average assumptions for 2001 and 2000: risk-free interest rate of 4.73%
and 5.73%, respectively; dividend yields of 0% for each; volatility factor of
1.145 and 1.184, respectively; and a weighted-average expected life of the
options of five years during each.

For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options' vesting periods. The Company's pro
forma net loss and net loss per common share for the years ended December 31,
2001 and 2000 are as follows:

<TABLE><CAPTION>
                                                          2001                2000
                                                     -------------       -------------
<S>                                                  <C>                 <C>
         Pro forma net loss                          $  (2,548,194)      $  (3,899,146)
                                                     =============       =============

         Pro forma net loss per common share--
              basic and diluted                      $       (0.48)      $       (0.85)
                                                     =============       =============
</TABLE>
                                       38
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

             Notes to Consolidated Financial Statements (continued)

7. SHAREHOLDERS' EQUITY (CONTINUED)

UNREGISTERED STOCK

During 2001, the Company received $625,000 in cash from the sale of 375,000
unregistered shares of the Company's common stock. Also during 2001, the Company
issued 95,556 unregistered shares of the Company's common stock valued at
$125,056 in exchange for services. During 2000, the Company received $2,251,620
in cash from the sale of 905,513 unregistered shares of the Company's common
stock. Also during 2000, the Company issued 881,477 unregistered shares of the
Company's common stock valued at $1,639,773 in exchange for various goods and
services.

STOCK WARRANTS

The underwriter of the Company's initial public offering purchased for $95
warrants to purchase up to 95,000 shares of the Company's common stock at $6.60
per share (120% of the initial public offering price). The warrants expired
unexercised on May 17, 2001.

In connection with a contract for investor relations services, in July 1999 the
Company issued warrants valued at $52,416 to purchase 225,000 shares of the
Company's common stock exercisable at prices ranging from $1.69 to $7.50 per
share and having expiration dates ranging from January 7, 2001 to December 7,
2001. The Company expensed the value of these warrants over the life of the
contract that ended in July 2000. The Company registered the shares underlying
these warrants under the Securities Act of 1933 in a registration statement on
Form S-3 that became effective March 7, 2000. During 2000, warrants for 25,000
shares were exercised at a price of $1.69 per share.

As described in Note 5, in January 1999 the Company issued promissory notes in
connection with an asset acquisition. It also issued to the sellers warrants to
purchase 100,000 shares of ATTY common stock exercisable for four years at $2.25
per share. In the event that the Company has more than 15,000,000 shares of
common stock outstanding, the warrants will be adjusted to permit the holders to
purchase more shares. The sellers have the option to either exercise the
warrants or have the notes paid.

In January 2000, the Company acquired the rights to use a particular toll-free
telephone number in exchange for warrants valued at $101,000, to purchase
100,000 shares of the Company's common stock exercisable at $2.188 per share and
expiring January 16, 2004. As described in Note 3, the Company wrote off the
full value of the related asset during 2000.

Also in January 2000, the Company granted warrants valued at $14,300 to a member
of its Board of Directors to purchase 10,000 shares of the Company's common
stock exercisable at $2.188 per share through January 17, 2003, pursuant to a
verbal consulting agreement. Services pursuant to the agreement were completed
in June 2000.

In payment for consulting services provided by an unrelated individual, in
February 2000 the Company granted warrants valued at $3,600 to purchase 3,000
shares of the Company's common stock exercisable at $2.25 per share and expiring
February 4, 2002.

                                       39
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

             Notes to Consolidated Financial Statements (continued)

7.  SHAREHOLDERS' EQUITY (CONTINUED)

STOCK WARRANTS (CONTINUED)

In connection with a contract for investment banking services, in May 2000 the
Company issued warrants valued at $67,000, to purchase 100,000 shares of the
Company's common stock exercisable at $2.875 per share and expiring May 12,
2002. The Company expensed the value of these warrants over the life of the
one-year contract. Expense charged against operations during 2001 and 2000 was
$24,383 and $42,617, respectively.

The following table summarizes information about stock warrants described above
that are outstanding at December 31, 2001:

                                                  Weighted Average
                                        -----------------------------------
       Range of Exercise     Number       Exercise            Remaining
             Prices       Outstanding      Price          Contractual Life
    -----------------------------------------------------------------------
          $2.19-$2.88       313,000          $2.43              1.39

The fair value for these warrants was estimated at the date of grant using a
Black-Scholes option pricing model with the following weighted-average
assumptions: risk-free interest rate of 5.37%; dividend yield of 0%; volatility
factor of 1.143; and a weighted-average expected life of the warrants of 1.34
years.

The following table summarizes information about stock warrants described above
that are outstanding at December 31, 2000:

                                                  Weighted Average
                                      --------------------------------------
   Range of Exercise       Number         Exercise            Remaining
         Prices         Outstanding        Price          Contractual Life
   -------------------------------------------------------------------------
      $2.19-$3.00         363,000            $2.47              2.08
       3.50- 5.00          66,668             4.25              0.39
       5.50- 7.50         178,332             6.55              0.55
   -------------------------------------------------------------------------
      $2.19-$7.50         608,000            $3.86              1.45
   =========================================================================

The fair value for these warrants was estimated at the date of grant using a
Black-Scholes option pricing model with the following weighted-average
assumptions: risk-free interest rate of 5.08%; dividend yield of 0%; volatility
factor of 1.009; and a weighted-average expected life of the warrants of 1.35
years.

                                       40
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

             Notes to Consolidated Financial Statements (continued)

8. LOSS PER SHARE

The following table sets forth the computation of basic and diluted loss per
common share:

<TABLE><CAPTION>
                                                                              2001                  2000
                                                                          -----------           -----------
<S>                                                                       <C>                   <C>
Numerator:
   Net loss                                                               $(1,845,394)          $(3,235,216)
                                                                          -----------           -----------
   Numerator for basic loss per common share--loss available to
      common shareholders                                                  (1,845,394)           (3,235,216)
   Effect of dilutive securities:                                                --                    --
                                                                          -----------           -----------
     Numerator for diluted loss per common share--loss available
       to common shareholders after assumed conversions                    (1,845,394)           (3,235,216)

Denominator:
   Denominator for basic and diluted loss per common share--
     weighted-average shares                                                5,343,364             4,599,012
                                                                          -----------           -----------
Net loss per common share                                                 $     (0.35)          $     (0.70)
                                                                          ===========           ===========
</TABLE>

In computing diluted loss per share, 140,981 and 343,448 common share
equivalents were excluded for the years ended December 31, 2001 and 2000,
respectively, from the diluted loss per share computation because their effects
would have been antidilutive.

9. BUSINESS SEGMENTS

In conjunction with the launch of the Company's new attorney marketing business
in June 2001, the Company began reporting in two operating segments. These are
the publishing of directories of attorney listings and selling of advertising in
those directories and the marketing and operation of an attorney referral or
group marketing network. The Company publishes official membership directories
for bar associations and it also publishes its own proprietary directories of
attorneys for some geographic areas; it relies principally upon the sale of
advertising within the directories to generate its revenues for this segment.
The attorney marketing business segment operates by contracting with attorneys
for participation by area of practice and by geographic area. The Company
generates its revenues from the fees it charges attorneys for participation in
the network. The Company evaluates performance based on profit or loss from
operations before income taxes excluding interest income and expense, equity
income, and gains and losses from investments or extraordinary items not
directly related to an operating segment.

For determining operating results, management uses estimates to allocate charges
for goods, services, or assets that are shared by both operating segments.

                                       41
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

             Notes to Consolidated Financial Statements (continued)

9. BUSINESS SEGMENTS (CONTINUED)

The following table shows net sales, costs and expenses, and loss from
operations by business segment for the year ended December 31, 2001 as if the
attorney marketing business segment was in operation as of January 1, 2001:

<TABLE><CAPTION>
                                                       Attorney               Print
                                                      Marketing             Directory               Total
                                                     -----------           -----------           -----------
<S>                                                  <C>                   <C>                   <C>
         Net sales                                   $ 2,539,933           $ 4,351,387           $ 6,891,320
         Costs and expenses:
              Operating expenses                       3,532,887             4,524,285             8,057,172
              Depreciation and amortization              377,370               145,757               523,127
                                                     -----------           -----------           -----------
                                                       3,910,257             4,670,042             8,580,299
                                                     -----------           -----------           -----------
         Loss from operations                        $(1,370,324)          $  (318,655)          $(1,688,979)
                                                     ===========           ===========           ===========
</TABLE>

The following table provides the allocation of assets among the two operating
segments and headquarters as of December 31, 2001:

                                                   Assets
                                                 ----------
         Attorney marketing                      $1,295,150
         Print directory                          1,339,406
         Headquarters                             2,309,195
                                                 ----------
         Total                                   $4,943,751
                                                 ==========

The following table provides the amount of expenditures for long-lived assets
among the two operating segments for the year ended December 31, 2001:

                                                        Expenditures for
                                                       Long-lived Assets
                                                       -----------------
         Attorney marketing                                 $  114,163
         Print directory                                        32,865
                                                       -----------------
         Total                                              $  147,028
                                                       =================

10. EMPLOYEE BENEFIT PLAN

The Company has a 401(k) Salary Reduction Plan covering substantially all
employees with twelve months of service or more. A participant may contribute up
to 19% of his or her annual compensation. The Company's matching contribution is
determined annually by the Board of Directors. The Company's contributions were
approximately $18,000 and $14,000 for 2001 and 2000, respectively.

                                       42
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

             Notes to Consolidated Financial Statements (continued)

11. COMMITMENTS AND CONTINGENCIES

In September 2001 the Company entered into a new employment agreement with its
president. On January 18, 2002 the Company accepted the resignation of the
president and entered into a severance agreement that terminated and superseded
the employment agreement. Pursuant to the severance agreement the Company paid a
lump-sum severance payment of $50,000 and an additional $150,000 in exchange for
216,138 shares of Company common stock. The Company sold to the former president
an automobile at fair value in exchange for an equivalent fair market value of
shares of Company common stock. On January 18, 2002 the Company and the former
president entered into a consulting and confidentiality agreement that expires
on December 31, 2004. Under the consulting and confidentiality agreement, the
Company paid a lump-sum payment of $50,000 and is required to make monthly cash
payments of $6,250 from September 15, 2002 through December 15, 2004. The
Company also agreed to pay the former president's group health insurance
coverage for him and his dependents for an 18-month period, and to reimburse him
for all business expenses reasonably incurred in the performance of his services
under the agreement.

On September 28, 2001 the Company entered into a five-year employment agreement
with its chief operating officer that provides for an annual salary of $190,000
in 2002 that increases 10% per year, beginning January 1st of each year, for the
remaining years of the agreement and an annual bonus of 5% of the Company's
increase in the prior fiscal year pre-tax income. The agreement also provides
for health insurance and other expense benefits and has a three-year severance
provision.

On October 1, 2001 the Company entered into a three-year employment agreement
with its chief financial officer that provides for an annual salary of $118,000
beginning on the date of the agreement, and an 8% increase on each October 1st
for the term of the agreement. The agreement also provides for an annual bonus
of 2.5% of the Company's increase in the prior fiscal year pre-tax income, for
health insurance benefits, and has nine-month severance provision.


--------------------------------------------------------------------------------







                                       43
<PAGE>

                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

        Not applicable.



                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(A) OF THE EXCHANGE ACT

        Information concerning Directors, Executive Officers, Promoters and
Control Persons is incorporated herein by reference to the definitive proxy
statement of the Company for the Company's Annual Meeting of the Shareholders
for the fiscal year ended December 31, 2001, which definitive proxy statement
will be filed with the Securities and Exchange Commission not later than 120
days after the Company's fiscal year end of December 31, 2001.

ITEM 10. EXECUTIVE COMPENSATION

        Information concerning Executive Compensation is incorporated herein by
reference to the definitive proxy statement of the Company for the Company's
Annual Meeting of the Shareholders for the fiscal year ended December 31, 2001,
which definitive proxy statement will be filed with the Securities and Exchange
Commission not later than 120 days after the Company's fiscal year end of
December 31, 2001.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        Information concerning Security Ownership of Certain Beneficial Owners
and Management is incorporated herein by reference to the definitive proxy
statement of the Company for the Company's Annual Meeting of the Shareholders
for the fiscal year ended December 31, 2001, which definitive proxy statement
will be filed with the Securities and Exchange Commission not later than 120
days after the Company's fiscal year end of December 31, 2001.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

        Information concerning Certain Relationships and Related Transactions is
incorporated herein by reference to the definitive proxy statement of the
Company for the Company's Annual Meeting of the Shareholders for the fiscal year
ended December 31, 2001, which definitive proxy statement will be filed with the
Securities and Exchange Commission not later than 120 days after the Company's
fiscal year end of December 31, 2001.


                                       44
<PAGE>


                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

a.   Exhibits

        3.1       Amended and Restated Articles of Incorporation (1)

        3.2       Form of First Amendment to Amended and Restated Articles of
                  Incorporation (1)

        3.3       Amended and Restated Bylaws (1)

        4.1       Form of Representative's Warrant Agreement (1)

        4.2       Form of Common Stock Certificate (2)

        4.3       Form of Warrants (for purchase of Internet address known as
                  "attorneys.com") (3)

        4.4       Form of Notes (for purchase of Internet address known as
                  "attorneys.com") (3)

        4.5       Form of Warrants (for acquisition of intangible asset) (4)

       10.1       1996 Stock Plan (2)

       10.2       Form of Employment Agreement of Peter S. Balise dated
                  September 25, 2001 (5)

       10.3       Form of Employment Agreement of J. William Wrigley dated
                  September 28, 2001 (5)

       10.4       Form of Employment Agreement of James M. Koller dated October
                  1, 2001 (5)

       10.5       Severance Agreement dated January 18, 2002 (6)

       10.6       Consulting and Confidentiality Agreement dated January 18,
                  2002 (6)

       21.0       Subsidiaries of the Registrant

       23.0       Consent of Ernst & Young LLP, Independent Certified Public
                  Accountants

     (1) Contained in the Registration Statement on Form SB-2 filed on March 11,
         1996
     (2) Contained in Amendment No. 2 to the Registration Statement on Form SB-2
         filed on April 18, 1996
     (3) Contained in the Registration Statement on Form S-3/A No. 1 filed on
         December 14, 1999
     (4) Contained in the Registration Statement on Form S-3/A No. 2 filed on
         February 7, 2000
     (5) Contained in the Interim Report on Form 10-QSB filed on November 9,
         2001
     (6) Contained in the Current Report on Form 8-K filed on January 24, 2002

b.   No reports on Form 8-K were filed during the quarter ended December 31,
     2001.

                                       45
<PAGE>


                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf on March 28, 2002
by the undersigned, thereunto duly authorized.

                                        1-800-ATTORNEY, Inc.


                                        /s/  Matt Butler
                                        --------------------------------------
                                        President and Chief Executive Officer

In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  registrant and in the capacities and on the
dates indicated.


Signatures                     Title                             Date
---------------------------    ------------------------------    ---------------


/s/  Matt Butler               Chairman of the Board             March 28, 2002
---------------------------    of Directors
Matt Butler


/s/  James M. Koller           Chief Financial Officer           March 28, 2002
---------------------------    (Principal Financial Officer
James M. Koller                and Chief Accounting Officer)


/s/ George R. Boltres, Jr.     Director                          March 28, 2002
---------------------------
George R. Boltres, Jr.


/s/ Andrew J. Cahill           Director                          March 28, 2002
---------------------------
Andrew J. Cahill


/s/ J. William Wrigley         Director                          March 28, 2002
---------------------------
J. William Wrigley




                                       46
<PAGE>


                              1-800-ATTORNEY, Inc.
                         Form 10-KSB - December 31, 2001

                                INDEX TO EXHIBITS
                                -----------------

      Exhibit
        No.
      -------
        3.1       Amended and Restated Articles of Incorporation (1)

        3.2       Form of First Amendment to Amended and Restated Articles of
                  Incorporation (1)

        3.3       Amended and Restated Bylaws (1)

        4.1       Form of Representative's Warrant Agreement (1)

        4.2       Form of Common Stock Certificate (2)

        4.3       Form of Warrants (for purchase of Internet address known as
                  "attorneys.com") (3)

        4.4       Form of Notes (for purchase of Internet address known as
                  "attorneys.com") (3)

        4.5       Form of Warrants (for acquisition of intangible asset) (4)

       10.1       1996 Stock Plan (2)

       10.2       Form of Employment Agreement of Peter S. Balise dated
                  September 25, 2001 (5)

       10.3       Form of Employment Agreement of J. William Wrigley dated
                  September 28, 2001 (5)

       10.4       Form of Employment Agreement of James M. Koller dated October
                  1, 2001 (5)

       10.5       Severance Agreement dated January 18, 2002 (6)

       10.6       Consulting and Confidentiality Agreement dated January 18,
                  2002 (6)

       21.0       Subsidiaries of the Registrant

       23.0       Consent of Ernst & Young LLP, Independent Certified Public
                  Accountants

     (1) Contained in the Registration Statement on Form SB-2 filed on March 11,
         1996
     (2) Contained in Amendment No. 2 to the Registration Statement on Form SB-2
         filed on April 18, 1996
     (3) Contained in the Registration Statement on Form S-3/A No. 1 filed on
         December 14, 1999
     (4) Contained in the Registration Statement on Form S-3/A No. 2 filed on
         February 7, 2000
     (5) Contained in the Interim Report on Form 10-QSB filed on November 9,
         2001
     (6) Contained in the Current Report on Form 8-K filed on January 24, 2002

                                      E-1