UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 2 TO
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SEALIFE CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 34-1444240
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
5601 W. SLAUSON AVENUE, SUITE 283
CULVER CITY, CALIFORNIA 90230
(Address of Principal Executive Offices) (Zip Code)
SIX EMPLOYMENT, CONSULTING AND/OR LEGAL SERVICES AGREEMENTS
2004 STOCK AWARD PLAN
(Full Title of the Plans)
ROBERT MCCASLIN, CHIEF EXECUTIVE OFFICER
5601 W. SLAUSON AVENUE, SUITE 283
CULVER CITY, CALIFORNIA 90230
(Name and Address of Agent for Service)
(310) 338-9757
(Telephone Number, Including Area Code, of Agent for Service)
Copies to:
V. JOSEPH STUBBS, ESQ.
GREGORY AKSELRUD, ESQ.
STUBBS ALDERTON & MARKILES, LLP
15821 VENTURA BOULEVARD, SUITE 525
ENCINO, CALIFORNIA 91436
CALCULATION OF REGISTRATION FEE
============================================================================================
Title of Each Class Proposed Maximum Proposed Maximum Amount of
of Securities Amount To Be Offering Price Aggregate Offering Registration
To Be Registered Registered (1) Per Share (2)(3) Price (2)(3) Fee (3)
---------------- -------------- ---------------- ------------------ ------------
Common Stock, par
value $.0001 per
share........... 3,773,263 $0.37 $798,143 $93.94
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<FN>
(1) Pursuant to Rule 416 under the Securities Act of 1933, as amended (the
"Securities Act"), this Registration Statement also covers such additional
shares as may hereinafter be offered or issued to prevent dilution
resulting from stock splits, stock dividends or similar transactions
effected without the receipt of consideration.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and Rule 457(h) under the Securities Act of 1933
based upon the average of the high and low sales prices of the
registrant's common stock on the Over-the-Counter Bulletin Board on March
22, 2005.
(3) Pursuant to Instruction E of Form S-8, the calculated filing fee is with
respect to the additional securities (2,157,144 shares) only.
</FN>
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EXPLANATORY NOTE
SeaLife Corporation, a Delaware corporation (the "Registrant"), filed a
Registration Statement on Form S-8 with the Securities and Exchange Commission
on August 6, 2004 (File No. 333-118018) (the "Original Registration Statement"),
and filed a Post-Effective Amendment No. 1 to the Original Registration
Statement with the Securities and Exchange Commission on November 16, 2004 (the
"Amended Registration Statement"). The Original Registration Statement
registered 400,000 shares of the Common Stock, par value $0.0001 per share (the
"Common Stock"), of the Registrant, to be issued pursuant to employment,
consulting and/or legal services agreements as follows:
(i) 141,667 shares of Common Stock to be issued to Gael Himmah
pursuant to that certain Consulting Agreement dated as of January
1, 2003, as amended, between the Registrant and Gael Himmah;
(ii) 108,333 shares of Common Stock to be issued to Barre Rorabaugh
pursuant to that certain Executive Employment Agreement dated as
of June 14, 2004, as amended, between the Registrant and Barre
Rorabaugh;
(iii) 100,000 shares to be issued in the aggregate to individual
partners of Stubbs Alderton & Markiles, LLP pursuant to that
certain Engagement Letter dated May 17, 2004, as amended, between
the Registrant and Stubbs Alderton & Markiles, LLP; and
(iv) 50,000 shares of Common Stock to be issued to Lee Dicker pursuant
to that certain Engagement Letter dated December 15, 2003, between
the Registrant and Leonard, Dicker & Schreiber, LLP.
The Amended Registration Statement registered 1,157,144 shares of the Common
Stock of the Registrant, to be issued pursuant to employment, consulting and/or
legal services agreements as follows:
(i) 160,714 shares of Common Stock to be issued to Gael Himmah
pursuant to that certain Consulting Agreement dated as of January
1, 2003, as amended, between the Registrant and Gael Himmah;
(ii) 110,000 shares of Common Stock to be issued to Barre Rorabaugh
pursuant to that certain Executive Employment Agreement dated as
of June 14, 2004, as amended, between the Registrant and Barre
Rorabaugh;
(iii) 405,405 shares to be issued in the aggregate to individual
partners of Stubbs Alderton & Markiles, LLP pursuant to that
certain Engagement Letter dated May 17, 2004, as amended, between
the Registrant and Stubbs Alderton & Markiles, LLP;
(iv) 10,000 shares of Common Stock to be issued to Michael Caraway, CPA
pursuant to that certain Consulting Agreement effective as of
October 18, 2004, between the Registrant and Michael Caraway, CPA;
(v) 50,000 shares of Common Stock to be issued to Donald Davis
pursuant to that certain Engagement Letter dated November 10,
2004, between the Registrant and Davis & Associates, LLP;
(vi) 80,000 shares of Common Stock to be issued to Robert Lee pursuant
to that certain Letter Agreement dated as of November 15, 2004,
between the Registrant and Robert Lee; and
(vii) 400,000 shares to be issued to employees, officers, directors and
consultants of the Registrant pursuant to the provisions of the
Registrant's 2004 Stock Award Plan.
The purpose of this Post-Effective Amendment No. 2 is to register 2,157,144
additional shares of the Common Stock of the Registrant as follows:
(i) 214,286 shares of Common Stock to be issued to Gael Himmah
pursuant to that certain Consulting Agreement dated as of January
1, 2003, as amended, between the Registrant and Gael Himmah;
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(ii) 214,286 shares of Common Stock to be issued to Barre Rorabaugh
pursuant to that certain Executive Employment Agreement dated as
of June 14, 2004, as amended, between the Registrant and Barre
Rorabaugh;
(iii) 470,000 shares to be issued in the aggregate to individual
partners of Stubbs Alderton & Markiles, LLP pursuant to that
certain Engagement Letter dated May 17, 2004, as amended, between
the Registrant and Stubbs Alderton & Markiles, LLP; and
(iv) 257,143 shares of Common Stock to be issued to Lee Dicker pursuant
to that certain Engagement Letter dated December 15, 2003, between
the Registrant and Leonard, Dicker & Schreiber, LLP.
(v) 51,429 shares of Common Stock to be issued to Donald Davis
pursuant to that certain Engagement Letter dated November 10,
2004, between the Registrant and Davis & Associates, LLP; and
(vi) 950,000 shares to be issued to employees, officers, directors and
consultants of the Registrant pursuant to the provisions of the
Registrant's 2004 Stock Award Plan, as amended.
Because the shares herein registered are of the same class as the 1,616,119
shares previously registered by the Registrant on the Original Registration
Statement and Amended Registration Statement, Instruction E to Form S-8 allows
the Registrant to, and the Registrant hereby does, incorporate the Original
Registration Statement and Amended Registration Statement by reference.
This Post-Effective Amendment No. 2 also includes a Reoffer Prospectus prepared
in accordance with the requirements of Instruction C to Form S-8 and Part I of
Form S-3.
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PART I*
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
* Except for the Reoffer Prospectus included herein, information
required by Part I to be contained in the Section 10(a) prospectus is omitted
from the Registration Statement in accordance with Rule 428 under the Securities
Act of 1933, as amended, and the Note to Part I of Form S-8.
REOFFER PROSPECTUS
SEALIFE CORPORATION
214,286 SHARES OF COMMON STOCK
($0.0001 par value)
----------
This reoffer prospectus relates to the offer and sale from time to time
of 214,286 shares of our common stock held by the stockholder named in the
"Selling Stockholder" section of this reoffer prospectus. The shares of our
common stock offered pursuant to this prospectus were originally issued to the
selling stockholder pursuant to our Registration Statement on Form S-8, filed
with the Securities and Exchange Commission on August 6, 2004, as amended, in
accordance with an Executive Employment Agreement dated June 14, 2004, as
amended. The selling stockholder is the President of our indirect subsidiary and
may be deemed an "affiliate" of us under Rule 405, promulgated under the
Securities Act of 1933, as amended.
The prices at which the selling stockholder may sell the shares in this
offering will be determined by the prevailing market price for the shares or in
negotiated transactions. We will not receive any of the proceeds from the sale
of the shares. We will bear all expenses of registration incurred in connection
with this offering. The selling stockholder whose shares are being registered
will bear all selling and other expenses.
Our common stock is traded on the Over-The-Counter Bulletin Board under
the symbol "SLIF." On March 22, 2005, the last reported sale price of the common
stock on the Over-The-Counter Bulletin Board was $0.37 per share.
SEE "RISK FACTORS" BEGINNING ON PAGE 7 TO READ ABOUT THE RISKS YOU
SHOULD CONSIDER CAREFULLY BEFORE BUYING SHARES OF OUR COMMON STOCK.
----------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
----------
The date of this prospectus is March 28, 2004
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TABLE OF CONTENTS
PAGE
----
PROSPECTUS SUMMARY 6
RISK FACTORS 7
FORWARD-LOOKING STATEMENTS 16
USE OF PROCEEDS 16
SELLING STOCKHOLDER 16
PLAN OF DISTRIBUTION 18
WHERE YOU CAN FIND MORE INFORMATION 19
LEGAL MATTERS 20
EXPERTS 20
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PROSPECTUS SUMMARY
ABOUT SEALIFE CORPORATION
Our vision is to develop, market and supply eco-friendly products that
can solve complex environmental problems with simple natural solutions,
establishing the environmentally safe choice as the right choice in specific
markets.
Our goal is to establish ourselves as the global leader in "probiotic"
technologies. Probiotic technologies refer to technologies and products that
work in "partnership with nature" without harming the environment in its
targeted markets. We believe that worldwide demand for development of products
that are not only safe for the environment but will also help clean the
environmental damage caused by decades of use and disposal of deadly toxins and
the overuse of pesticides and fertilizers, is growing, and will continue to
grow. We believe that a large percentage of the products in use today can and
will be replaced by effective, environmentally safe equivalents.
We have developed a line of products utilizing such "probiotic"
technologies for the marine, agricultural and remediation markets. We have just
recently emerged from our development stage and have begun substantial sales and
marketing efforts to launch our marine product, SeaLife 1000(TM) and our
agricultural products, NuLagoon(TM) and Soil ResQ(TM). In anticipation of our
intended growth and the introduction of additional products to the market in the
near future, we have implemented a corporate structure whereby each market is
served by a separately operated subsidiary or division. Our marine products
business is operated by our indirect subsidiary, SeaLife Marine Products, Inc..
Our agricultural products business is operated by our indirect subsidiary,
ProTerra Technologies, Inc. Our remediation product business is operated as one
of our divisions. We also plan on establishing a research and development
division that will focus on the testing and development of existing and new
products for each of our subsidiaries and divisions provided sufficient capital
can be obtained to fund such division. We have structured our operations in this
manner to accommodate a range of products for specific markets that have been
and will be developed by us.
CORPORATE INFORMATION
INCORPORATION
We were formed as a Delaware corporation in 1984 under the name Fraser
Realty Group. We operated as a real estate investment trust until 1990, when our
then current management was unable to secure additional financing or find other
means of obtaining needed cash to permit us to meet our obligations. As a
result, we ceased operations and remained inactive until December 2002.
ACQUISITION OF NEVADA CORPORATION
On December 17, 2002, pursuant to an Exchange Agreement dated June 30,
2002, we acquired all of the issued and outstanding shares of SeaLife Corp., a
Nevada Corporation ("SeaLife Nevada"), in exchange for a substantial majority of
the shares of our common stock (the "Acquisition"). Our then current
stockholders retained their 274,554 shares of common stock which were issued and
outstanding prior to the consummation of the Acquisition. Concurrent with the
Acquisition, we changed our name from Integrated Enterprises, Inc. (which was
our name at the time) to SeaLife Corporation, our then current directors and
officers resigned, and the directors and officers of SeaLife Nevada became our
directors and officers. Also concurrent with the Acquisition, we effected a
15-to-1 reverse stock split.
The Acquisition resulted in our change of control, with the
stockholders of SeaLife Nevada acquiring a substantial majority of our common
stock immediately following the closing of the Acquisition. Therefore, the
Acquisition was accounted for as a reverse merger, pursuant to which the
accounting basis of SeaLife Nevada continued unchanged subsequent to the closing
of the Acquisition. Accordingly, the pre-transaction financial
6
statements of SeaLife Nevada now represent our historical financial statements.
Sealife Nevada was organized in April of 2002 to acquire, develop and
market certain proprietary products invented by Gael Himmah, our Chief
Consulting Scientist. At the time of the Acquisition, SeaLife Nevada had three
subsidiaries, Division G, Inc., a Nevada corporation ("Division G"), SeaLife
Marine Products, Inc., a California corporation ("SeaLife Marine"), and Proterra
Technologies, Inc., a California corporation ("PROTERRA"). As a result of the
Acquisition, we became the parent corporation of SeaLife Nevada, and through
SeaLife Nevada, the indirect parent of Division G, SeaLife Marine and Proterra.
Our executive offices are located at 5601 W. Slauson Avenue, Culver City,
California, 90230, and our telephone number is (310) 338-9757.
ABOUT THE OFFERING
This prospectus may be used only in connection with the resale by the selling
stockholder of 214,286 shares of our common stock.
We will not receive any proceeds from the sale of the shares of common stock
offered by the selling stockholder using this prospectus.
The total number of securities registered under the Post-Effective Amendment No.
2 to the Registration Statement on Form S-8 of which this Reoffer Prospectus is
a part is 3,773,263 shares, all of which are common stock of the Registrant. The
Registrant is presently authorized to issue 100,000,000 shares of its Common
Stock. As of March 10, 2005, there were 17,795,113 outstanding and subscribed
for shares. The holders of common stock are entitled to one vote per share on
each matter submitted to a vote at any meeting of shareholders. Shareholders of
the Registrant have no preemptive rights to acquire additional shares of common
stock or other securities. The common stock is not subject to redemption and
carries no subscription or conversion rights. In the event of liquidation of the
Registrant, the shares of common stock are entitled to share equally in
corporate assets after satisfaction of all liabilities. The shares, when issued,
will be fully paid and non-assessable. A majority of all issued and outstanding
shares shall constitute a quorum for conducting business. The majority of shares
present, in any regular or special meeting where a quorum is present, may vote
in favor of or against any item of business or election, and shall constitute a
majority approval or disapproval of matters voted upon at any such meeting.
Shares of common stock do not carry cumulative voting rights. The Registrant
presently does not pay any dividends and has no foreseeable plan to pay
dividends. There are no special preemptive rights or rights upon liquidation,
other than the normal rights and priorities which would attach to shares in
liquidation pursuant to Delaware Law. The shares are not subject to call,
liability or assessment.
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS AND ALL OTHER
INFORMATION CONTAINED IN THIS REPORT BEFORE PURCHASING SHARES OF OUR COMMON
STOCK. INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. IF ANY OF
THE FOLLOWING EVENTS OR OUTCOMES ACTUALLY OCCURS, OUR BUSINESS, OPERATING
RESULTS AND FINANCIAL CONDITION WOULD LIKELY SUFFER. AS A RESULT, THE TRADING
PRICE OF OUR COMMON STOCK COULD DECLINE, AND YOU MAY LOSE ALL OR PART OF THE
MONEY YOU PAID TO PURCHASE OUR COMMON STOCK.
RISK RELATED TO OUR BUSINESS
OUR AUDITORS HAVE A GOING CONCERN QUALIFICATION IN THEIR OPINION CONTAINED IN
OUR AUDITED CONSOLIDATED FINANCIAL STATEMENTS WHICH RAISES SUBSTANTIAL DOUBT
ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.
7
As a result of our substantial historical operating losses, limited
revenues and working capital and our capital needs, our auditors have added a
going concern qualification (explanatory paragraph) in their report contained in
our audited consolidated financial statements for the year ended May 31, 2004
which raises substantial doubt about our ability to continue as a going concern.
While we have relied principally in the past on external financing and the
payment of equity as direct compensation for services to provide liquidity and
capital resources for our operations, we can provide no assurances that cash
generated from operations together with cash received in the future from
external financing will be sufficient to enable us to continue as a going
concern.
Additionally, we can provide no assurances that service providers, such
as our lawyers, and other consultants, previously willing to accept our common
stock as direct compensation for their services will continue to find that form
of compensation acceptable. If these service providers refuse to accept our
equity as compensation, and we are unable to generate adequate cash to sustain
operations or to obtain enough cash from future financing, we will not be able
to continue as a going concern.
WE HAVE INCURRED SUBSTANTIAL LOSSES FROM INCEPTION WHILE REALIZING LIMITED
REVENUES AND WE MAY NEVER GENERATE SUBSTANTIAL REVENUES OR BE PROFITABLE IN THE
FUTURE.
For each fiscal year since our acquisition of SeaLife Nevada in 2002,
we have generated net losses and we have accumulated losses totaling
approximately $3,109,197 as of September 30, 2004. We have only recently emerged
from our development stage operations and have historically generated limited
revenues. We can provide no assurances that our operations will generate
substantial revenues or be profitable in the future. We have just recently
introduced some of our products into the marketplace and have shipped small
quantities to our distributors.
WE WILL NEED TO RAISE ADDITIONAL CAPITAL AND IT MAY NOT BE AVAILABLE TO US ON
FAVORABLE TERMS OR AT ALL; INABILITY TO OBTAIN ANY NEEDED ADDITIONAL CAPITAL ON
FAVORABLE TERMS COULD ADVERSELY AFFECT OUR BUSINESS, RESULTS OF OPERATIONS AND
FINANCIAL CONDITION.
We estimate that we may need to raise up to $5 million of additional
capital over the next 12 to 15 months to support our operations, meet
competitive pressures and/or respond to unanticipated requirements during and
beyond that period. While there are no definitive arrangements with respect to
sources of additional financing, management is optimistic that these funds can
be raised through public and/or private offerings of our common stock. However,
our inability to obtain additional financing, when needed or on favorable terms,
could materially adversely affect our business, results of operations and
financial condition and could cause us to curtail or cease operations.
OUR FUTURE REVENUES ARE UNPREDICTABLE AND OUR QUARTERLY OPERATING RESULTS MAY
FLUCTUATE SIGNIFICANTLY.
We have a very limited operating history, and have very little revenue
to date. We cannot forecast with any degree of certainty whether any of our
products or services will ever generate meaningful revenue or the amount of
revenue to be generated by any of our products or services. In addition, we
cannot predict the consistency of our quarterly operating results. Factors which
may cause our operating results to fluctuate significantly from quarter to
quarter include:
o our ability to attract new and repeat customers;
o our ability to keep current with the evolving requirements of
our target market;
o our ability to protect our proprietary technology;
o the ability of our competitors to offer new or enhanced
products or services;
o our ability to sell products during different parts of the
calendar year where the use of our products by consumers is
less likely; and
o unanticipated delays or cost increases with respect to
research and development.
8
Because of these and other factors, we believe comparisons of our
results of operations for our fiscal years ending May 31, 2003 and May 31, 2004,
and the four month periods ending September 30, 2003 and September 30, 2004, are
not good indicators of our future performance. If our operating results fall
below the expectations of securities analysts and investors in some future
periods, then our stock price may decline.
WE EXPECT OUR BUSINESS TO BE SEASONAL WHICH MEANS THAT WE ANTICIPATE HAVING LESS
REVENUE DURING CERTAIN PORTIONS OF THE YEAR.
The practical application of our products, both in the case of SeaLife
Marine paint products and Proterra agriculture products, requires warmer weather
conditions with little to no precipitation. As a result, management expects our
business to be seasonal, with sales and earnings being relatively higher during
the outdoor season (such as the spring and summer seasons) and lower during the
indoor season (such as the fall and winter seasons). Accordingly, we may show
lower revenues during portions of the year which could correspondingly adversely
affect the price of our common stock.
OUR SUCCESS DEPENDS IN PART ON OUR SUCCESSFUL DEVELOPMENT AND SALE OF PRODUCTS
CURRENTLY IN THE RESEARCH AND DEVELOPMENT STAGE.
Many of our product candidates are still in the research and
development stage. The successful development of new products is uncertain and
subject to a number of significant risks. Potential products that appear to be
promising at early states of development may not reach the market for a number
of reasons, including but not limited to, the cost and time of development.
Potential products may be found to be ineffective or cause harmful side effects,
fail to receive necessary regulatory approvals, be difficult to manufacture on a
large scale or be uneconomical or fail to achieve market acceptance.
Additionally, our proprietary products may not be commercially available for a
number of years, if at all.
There can be no assurance that any of our products in development will
be successfully developed or that we will achieve significant revenues from such
products even if they are successfully developed. Our success is dependent upon
our ability to develop and market our products on a timely basis. There can be
no assurance that we will be successful in developing or marketing such
products, or taking advantage of the perceived demand for such products. In
addition, there can be no assurance that products or technologies developed by
others will not render our products or technologies non-competitive or obsolete.
WE WILL RELY IN PART ON INTERNATIONAL SALES, WHICH ARE SUBJECT TO ADDITIONAL
RISKS.
International sales may account for a significant portion of our
revenues. International sales can be subject to many inherent risks that are
difficult or impossible for us to predict or control, including:
o unexpected changes in regulatory requirements and tariffs;
o difficulties and costs associated with staffing and managing
foreign operations, including foreign distributor
relationships;
o longer accounts receivable collection cycles in certain
foreign countries;
o adverse economic or political changes;
o unexpected changes in regulatory requirements;
o more limited protection for intellectual property in some
countries;
o changes in our international distribution network and direct
sales force;
o potential trade restrictions, exchange controls and import and
export licensing requirements;
o potentially adverse tax consequences of overlapping tax
structure; and
o foreign currency fluctuations.
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FAILURE TO ADEQUATELY EXPAND TO ADDRESS EXPANDING MARKET OPPORTUNITIES COULD
HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS AND RESULTS OF OPERATIONS.
We anticipate that a significant expansion of operations will be
required to address potential market opportunities. There can be no assurances
that we will expand our operations in a timely or sufficiently large manner to
capitalize on these market opportunities. The anticipated substantial growth is
expected to place a significant strain on our managerial, operational and
financial resources and systems. While management believes it must implement,
improve and effectively use our operational, management, research and
development, marketing, financial and employee training systems to manage
anticipated substantial growth, there can be no assurances that these practices
will be successful.
WE MAY NOT BE ABLE TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY RIGHTS, AND
MAY BE EXPOSED TO INFRINGEMENT CLAIMS FROM THIRD PARTIES.
The technologies upon which our products are based are protected only
by laws governing the protection of trade secrets. Our success will depend in
part on our ability to preserve our trade secrets and to operate without
infringing on the proprietary rights of third parties. There can be no assurance
that others will not independently develop similar technologies, duplicate our
technologies or design around our technologies.
The processes and know-how of importance to our technology are
dependent upon the skills, knowledge and experience of our technical personnel,
consultants and advisors and such skills, knowledge and experience are not
patentable. To help protect our rights, we require employees, significant
consultants and advisors with access to confidential information to enter into
confidentiality and proprietary rights agreements. There can be no assurance,
however, that these agreements will provide adequate protection for our trade
secrets, know-how or proprietary information in the event of any unauthorized
use or disclosure.
We may, from time to time, become involved in litigation regarding
intellectual property rights. From time to time, we may receive notices from
third parties of potential infringement and claims of potential infringement.
Defending these claims could be costly and time consuming and would divert the
attention of management and key personnel from other business issues. The
complexity of the technology involved and the uncertainty of intellectual
property litigation increases these risks. Claims of intellectual property
infringement also might require us to enter into costly royalty or license
agreements. However, we may be unable to obtain royalty or license agreements on
terms acceptable to us, or at all.
We do not believe that any of our technology infringes on the patent
rights of third parties. However, there can be no assurance that certain aspects
of our technology will not be challenged by the holders of patents or that we
will not be required to license or otherwise acquire from third parties the
right to use additional technology. The failure to overcome such challenges or
obtain such licenses or rights on acceptable terms could have a material adverse
affect on us, our business, results of operations and financial condition.
IF WE BECOME INVOLVED IN LITIGATION ARISING FROM THE FACT THAT OUR PRODUCTS ARE
FOUND TO ADVERSELY AFFECT THE ENVIRONMENT, OR IF WE ARE REQUIRED TO PARTICIPATE
IN ANY ENVIRONMENTAL REMEDIATION PROCESSES, THE COSTS OF SUCH ACTIVITIES MAY BE
SIGNIFICANT AND COULD MATERIALLY AND ADVERSELY HARM OUR BUSINESS.
As a chemical manufacturer, certain of our products are regulated by
the U.S. Environmental Protection Agency and the individual states, cities and
localities where marketed. Certain of our products are also regulated by
individual countries in the foreign markets in which we distribute, or intend to
distribute, our products. While we believe that our products do not harm the
environment, and while our products currently comply with the environmental
regulations to which they are subject, in the event any of our products do cause
adverse affects to the environment, we may be involved in litigation and other
claims raised by private parties, specialized environmental interest groups and
governmental regulatory agencies. Additionally, we may be required to remediate
any areas that are harmed by our products. If we are required to pay any third
party or
10
regulatory agency as a result of such claims, or if we are required to
participate in any such remediation processes, the costs of such activities
could materially and adversely harm our business.
WE FACE TECHNICAL RISKS ASSOCIATED WITH COMMERCIALIZING OUR TECHNOLOGY WHICH
COULD HAVE A MATERIAL ADVERSE IMPACT ON OUR BUSINESS RESULTS AND OPERATIONS.
A key to our future success is the ability to produce our products at
lower costs than our competitors. Although we are currently utilizing
proprietary technology to produce such products at lower costs, our method for
producing such products on a commercial basis has only recently begun. Further,
although results from recent independent tests and our early production results
have been encouraging, the ability of our technology to commercially produce
such products at consistent levels is still being evaluated. There can be no
assurance that we will continue to produce such products at lower costs than our
competitors, nor that our technology will allow us to commercially produce such
products at consistent levels.
WE MAY BE UNABLE TO COMPETE EFFECTIVELY WITH COMPETITORS OF PERCEIVED COMPETING
TECHNOLOGIES OR DIRECT COMPETITORS THAT MAY ENTER OUR MARKET WITH NEW
TECHNOLOGIES.
The market for our products and services is relatively new. Our ability
to increase revenues and generate profitability is directly related to our
ability to maintain a competitive advantage because of our U.S. Environmental
Protection Agency regulatory registration of our leading product, SeaLife
1000(TM). However, we face potential direct competition from companies that may
enter this market with new competing technologies and with greater financial,
marketing and distribution resources than us. These greater resources could
permit our competitors to introduce new products and implement extensive
advertising and promotional programs, with which we may not be able to compete.
As a result, we can provide no assurances that we will be able to compete
effectively in the future.
OUR PRODUCTS MAY BE SUBJECT TO TECHNOLOGICAL OBSOLESCENCE.
Considerable research is underway by competitors and potential future
competitors into the causes of and solutions for marine, agricultural and other
environmental pollution. Discovery of new technologies could replace or result
in lower than anticipated demand for our products, which would materially
adversely effect our operations and could cause us to curtail or cease
operations.
OUR INABILITY TO ACCESS, OR A CHANGE IN THE PRICES OF, RAW MATERIALS COULD
MATERIALLY ADVERSELY IMPACT OUR RESULTS OF OPERATIONS.
We purchase certain raw materials such as Cuprous Oxide and other
biocides, pesticides or toxins, under short- and long-term supply contracts. The
purchase prices are generally determined based on prevailing market conditions.
If there is a shortage in these raw materials, or if our suppliers otherwise
increase the costs of such materials, this could materially adversely impact our
results of operations.
WE HAVE LIMITED HUMAN RESOURCES.
Our growth to date has placed, and our anticipated further expansion of
our operations will continue to place, a significant strain on our management,
systems and resources. We will need to continue to develop and improve our
financial and management controls and our reporting systems and procedures. We
cannot assure you that we will be able to efficiently or effectively manage the
growth of our operations, and any failure to do so may limit our future growth
and materially and adversely affect our business, financial condition and
results of operations.
OUR FUTURE SUCCESS DEPENDS, IN PART, ON OUR KEY PERSONNEL, CONSULTANTS AND
PRINCIPAL MANAGEMENT'S CONTINUED PARTICIPATION.
11
Our ability to successfully develop our products, manage growth and
maintain our competitive position will depend, in large part, on our ability to
attract and retain highly qualified management and technologists. We are
dependent upon our Chief Executive Officer and Chief Financial Officer,
President of SeaLife Marine, and Gael Himmah, an independent contractor that
acts as our Chief Consulting Scientist, and other members of our management and
consulting team. We do not maintain Key Man life insurance on any of these
employees or consultants. Competition for such personnel is significant, and
there can be no assurance that we will be able to continue to attract and retain
such personnel. Our consultants may be affiliated or employed by others and some
may have consulting or other advisory arrangements with other entities that may
conflict or compete with their obligations to us. We address such potential
conflicts by requiring that our consultants and independent contractors execute
confidentiality agreements upon commencement of relationships with us, by
closely monitoring the work of such persons and by requiring material transfer
and assignment agreements wherever possible and appropriate.
Gael Himmah, the individual responsible for the development of most of
the technology that forms the basis of our products is currently party to a
consulting agreement with us. If Mr. Himmah terminates his relationship with us,
or otherwise is unable to provide services to us, it may have a material
negative affect on our ability to continue development of our current and new
product lines. We do not carry any Key Man life insurance on Mr. Himmah and do
not have any plans to do so in the near future.
WE ARE HIGHLY DEPENDENT ON OUTSIDE CONSULTANTS.
If our consultants or collaborative partners, including, in particular,
our Chief Consulting Scientist, Gael Himmah, do not perform, we may be unable to
develop and bring to market new products as anticipated, or to further develop
and commercialize existing products.
We may in the future enter into consulting arrangements with third
parties to develop products. These arrangements may not produce successful
products. If we fail to establish these arrangements, the number of products
from which we could receive future revenues will be limited.
Our dependence on consulting arrangements with third parties subjects
us to a number of risks. These arrangements may not be on terms favorable to us.
We cannot absolutely control the amount and timing of resources our consultants
may devote to our products, and these third parties may choose to pursue
alternative products. These third parties also may not perform their obligations
as expected. Business combinations, significant changes in their business
strategy, or their access to financial resources may adversely affect a
consultant's or partner's willingness or ability to complete its obligations
under the arrangement. Moreover, we could become involved in disputes with our
consultants or partners, which could lead to delays or termination of the
arrangements and time-consuming and expensive litigation or arbitration.
WE DO NOT HAVE A SEPARATE STANDING AUDIT COMMITTEE, COMPENSATION COMMITTEE OR
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE, THE ACTIONS OF WHICH ARE
UNDERTAKEN BY THE BOARD OF DIRECTORS AS A WHOLE, AND NO DIRECTOR IS AN "AUDIT
COMMITTEE FINANCIAL EXPERT" AS DEFINED BY THE RULES AND REGULATIONS OF THE
SECURITIES AND EXCHANGE COMMISSION.
Our Board of Directors consists of two members, our Chief Executive
Officer and Chief Financial Officer, and our Vice President. The Board of
Directors as a whole performs the functions of an Audit Committee, Compensation
Committee and Nominating and Corporate Governance Committee. Neither of the
directors is considered "independent" under Rule 4200(a)(15) of the National
Association of Securities Dealers listing standards, and neither qualifies as an
audit committee financial expert as defined in Item 401 of Regulation S-B.
Accordingly, we will not be able to list our common stock with a nationally
recognized exchange or over the counter quotation system until we recruit
independent directors to the Board and restructure our Board to comply with
various requirements currently in place by those self-regulating organizations,
and as a result, it may be difficult for you to sell our common stock.
12
THE REQUIREMENTS OF THE SARBANES-OXLEY ACT, INCLUDING SECTION 404, ARE
BURDENSOME, AND OUR FAILURE TO COMPLY WITH THEM COULD HAVE A MATERIAL ADVERSE
AFFECT ON OUR BUSINESS AND STOCK PRICE.
Except with respect to the adoption of our Code of Ethics and our
compliance with certain requirements specifically applicable to our Annual
Report on Form 10-KSB and our other periodic reports, our management has not
commenced any specific procedures to comply with the requirements of the
Sarbanes Oxley Act of 2002, including specifically, the process necessary to
implement the requirements of Section 404 of the Sarbanes-Oxley Act of 2002,
which requires our management to assess the effectiveness of our internal
controls over financial reporting and include an assertion in our annual report
as to the effectiveness of our controls. Beginning with our Annual Report on
Form 10-KSB for the year ended December 31, 2006, unless otherwise amended by
the Securities and Exchange Commission, our independent registered accounting
firm will be required to attest to whether our assessment of the effectiveness
of our internal control over financial reporting is fairly stated in all
material respects and separately report on whether it believes we maintained, in
all material respects, effective internal controls over financial reporting as
of December 31, 2006. Because of our management's lack of resources, and our
limited operations, we have not commenced the process of preparing the system
and process documentation, performing an evaluation of our internal controls
required for our management to make this assessment and for the auditors to
provide their attestation report, and accordingly, have not begun testing of the
effectiveness of these internal controls. We expect that this process will
require significant amounts of management time and resources, as well as higher
expenses in the form of higher audit and review fees, higher legal fees and
higher internal costs to document, test and potentially remediate internal
controls. Accordingly, with respect to Section 404 in particular, there exists a
significant risk that we will not be able to meet all the requirements of
Section 404 by the end of fiscal year 2006, when we are required to report on
our internal controls and provide our auditor's opinion thereon. Additionally,
even in the event we attempt to comply with Section 404, in the course of
evaluation and testing, management may identify deficiencies that will need to
be addressed and remediated, which could potentially have a material adverse
effect on our stock price and could result in significant additional
expenditures.
RISKS RELATED TO OUR INDUSTRY
OUR INDUSTRY IS VERY COMPETITIVE, AND WE MAY BE UNABLE TO CONTINUE TO COMPETE
EFFECTIVELY IN THIS INDUSTRY IN THE FUTURE.
We are engaged in an industry that is highly competitive. We compete
with many other suppliers and new competitors continue to enter the markets.
Many of our competitors, both in the United States and elsewhere, are major
chemical companies, and many of them have substantially greater capital
resources, marketing experience, research and development staffs, and facilities
than we do. Any of these companies could succeed in developing products that are
more effective than the products that we have or may develop and may also be
more successful than us in producing and marketing their products. We expect
this competition to continue and intensify in the future. Competition in our
markets is primarily driven by:
o product performance, features and liability;
o price;
o timing of product introductions;
o ability to develop, maintain and protect proprietary products
and technologies;
o sales and distribution capabilities;
o technical support and service;
o brand loyalty;
o applications support; and
o breadth of product line.
If a competitor develops superior technology or cost-effective
alternatives to our products, our business, financial condition and results of
operations could be materially adversely affected.
13
WE ARE SUBJECT TO A WIDE VARIETY OF LOCAL, STATE AND FEDERAL RULES AND
REGULATIONS, WHICH COULD RESULT IN UNINTENTIONAL VIOLATIONS OF SUCH LAWS. ALSO,
CHANGES IN SUCH LAWS COULD RESULT IN LOSS OF REVENUES.
As a chemical manufacturer, we are subject to a wide variety of local,
state and federal rules and regulations. While we believe that our operations
are in compliance with all applicable rules and regulations, we can provide no
assurances that from time to time unintentional violations of such rules and
regulations will not occur. Certain of our products are regulated by the U. S.
Environmental Protection Agency and the individual states where marketed.
Government regulation results in added costs for compliance activities and
increases the risk of losing revenues should regulations change. Also, from time
to time we must expend resources to comply with newly adopted regulations, as
well as changes in existing regulations. If we fail to comply with these
regulations, we could be subject to disciplinary actions or administrative
enforcement actions. These actions could result in penalties, including fines.
RISKS RELATED TO OUR COMMON STOCK
WE HAVE A LIMITED TRADING VOLUME AND SHARES ELIGIBLE FOR FUTURE SALE BY OUR
CURRENT STOCKHOLDERS MAY ADVERSELY AFFECT OUR STOCK PRICE.
To date, we have had a very limited trading volume in our common stock.
As long as this condition continues, the sale of a significant number of shares
of common stock at any particular time could be difficult to achieve at the
market prices prevailing immediately before such shares are offered. In
addition, sales of substantial amounts of common stock, including shares issued
upon the exercise of outstanding options and warrants, under Rule 144 or
otherwise could adversely affect the prevailing market price of our common stock
and could impair our ability to raise capital at that time through the sale of
our securities. As a result of our limited cash, a number of our employees and
consultants have elected to accept a portion of their compensation in shares of
our common stock and a portion of these shares have been issued pursuant to
effective registration statements or registered for resale to the public.
OUR COMMON STOCK PRICE IS HIGHLY VOLATILE.
The market price of our common stock is likely to be highly volatile as
the stock market in general, and the market for technology companies in
particular, has been highly volatile.
Factors that could cause such volatility in our common stock may
include, among other things:
o actual or anticipated fluctuations in our quarterly operating
results;
o announcements of technological innovations;
o changes in financial estimates by securities analysts;
o conditions or trends in our industry; and
o changes in the market valuations of other comparable
companies.
THE SALE OF OUR COMMON STOCK ON THE OVER-THE-COUNTER BULLETIN BOARD AND THE
POTENTIAL DESIGNATION OF OUR COMMON STOCK AS A "PENNY STOCK" COULD IMPACT THE
TRADING MARKET FOR OUR COMMON STOCK.
Our securities, as traded on the Over-the-Counter Bulletin Board, will
be subject to Securities and Exchange Commission rules that impose special sales
practice requirements upon broker-dealers who sell such securities to persons
other than established customers or accredited investors. For purposes of the
rule, the phrase "accredited investors" means, in general terms, institutions
with assets in excess of $5,000,000, or individuals having a net worth in excess
of $1,000,000 or having an annual income that exceeds $200,000 (or that, when
combined with a spouse's income, exceeds $300,000). For transactions covered by
the rule, the broker-dealer must make a special suitability determination for
the purchaser and receive the purchaser's written agreement to the transaction
prior to the sale. Consequently, the rule may affect the ability of broker-
14
dealers to sell our securities and also may affect the ability of purchasers to
sell their securities in any market that might develop therefor.
In addition, the Securities and Exchange Commission has adopted a
number of rules to regulate "penny stock." Such rules include Rules 3a51-1,
15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities
and Exchange Act of 1934, as amended. Because our securities may constitute
"penny stock" within the meaning of the rules, the rules would apply to us and
to our securities. The rules may further affect the ability of owners of our
common stock to sell our securities in any market that might develop for them.
Shareholders should be aware that, according to Securities and Exchange
Commission, the market for penny stocks has suffered in recent years from
patterns of fraud and abuse. Such patterns include (i) control of the market for
the security by one or a few broker-dealers that are often related to the
promoter or issuer; (ii) manipulation of prices through prearranged matching of
purchases and sales and false and misleading press releases; (iii) "boiler room"
practices involving high-pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (iv) excessive and undisclosed
bid-ask differentials and markups by selling broker-dealers; and (v) the
wholesale dumping of the same securities by promoters and broker-dealers after
prices have been manipulated to a desired level, resulting in investor losses.
Our management is aware of the abuses that have occurred historically in the
penny stock market. Although we do not expect to be in a position to dictate the
behavior of the market or of broker-dealers who participate in the market,
management will strive within the confines of practical limitations to prevent
the described patterns from being established with respect to our securities.
THE SELLING STOCKHOLDER INTENDS TO SELL HIS SHARES OF COMMON STOCK IN THE OPEN
MARKET, WHICH SALES MAY CAUSE OUR STOCK PRICE TO DECLINE.
The selling stockholder intends to sell in the public market up to
214,286 shares of common stock being registered in this offering. That means
that up to 214,286 shares of common stock may be sold pursuant to this
prospectus. Such sales may cause our stock price to decline.
WE DO NOT FORESEE PAYING DIVIDENDS IN THE NEAR FUTURE.
We have not paid dividends on our common stock and do not anticipate
paying such dividends in the foreseeable future.
OFFICERS AND DIRECTORS OWN A SIGNIFICANT PORTION OF OUR COMMON STOCK, WHICH
COULD LIMIT OUR SHAREHOLDERS' ABILITY TO INFLUENCE THE OUTCOME OF KEY
TRANSACTIONS.
As of March 22, 2005, our officers and directors and their affiliates
owned approximately 30% of our outstanding voting shares. As a result, our
officers and directors are able to exert considerable influence over the outcome
of any matters submitted to a vote of the holders of our common stock, including
the election of our Board of Directors. The voting power of these shareholders
could also discourage others from seeking to acquire control of us through the
purchase of our common stock, which might depress the price of our common stock.
FORWARD-LOOKING STATEMENTS
This reoffer prospectus contains statements that constitute forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Exchange Act of 1934, both as amended. These forward-looking
statements are subject to various risks and uncertainties. The forward-looking
statements include, without limitation, statements regarding our future business
plans and strategies and our future financial position or results of operations,
as well as other statements that are not historical. You can find many of these
statements by looking for words like "will", "may", "believes", "expects",
"anticipates", "plans" and "estimates" and for similar expressions. Because
forward-looking statements involve risks and
15
uncertainties, there are many factors that could cause the actual results to
differ materially from those expressed or implied. These include, but are not
limited to, economic conditions. Any forward-looking statements are not
guarantees of future performance and involve risks and uncertainties. Actual
results may differ materially from those projected in this prospectus, for the
reasons, among others, described in the Risk Factors section beginning on page
7. You should read the Risk Factors section carefully, and should not place
undue reliance on any forward-looking statements, which speak only as of the
date of this prospectus. We undertake no obligation to release publicly any
updated information about forward-looking statements to reflect events or
circumstances occurring after the date of this prospectus or to reflect the
occurrence of unanticipated events.
USE OF PROCEEDS
The proceeds from the sales of the selling stockholder's common stock will
belong to the selling stockholder. We will not receive any proceeds from such
sales.
SELLING STOCKHOLDER
EXECUTIVE EMPLOYMENT AGREEMENT
On June 14, 2004, we entered into an Executive Employment Agreement with Barre
Rorabaugh pursuant to which Mr. Rorabaugh was appointed the President of our
indirect subsidiary, SeaLife Marine Products, Inc., the subsidiary that operates
our marine products business. Mr. Rorabaugh is responsible for all business
activities involving SeaLife Marine Products, Inc. and may be deemed an
"affiliate" of us under Rule 405, promulgated under the Securities Act of 1933,
as amended. Pursuant to his agreement, Mr. Rorabaugh receives an annual base
salary of $150,000 (the "Base Salary"), which the Board may increase at the end
of each year of his employment. Mr. Rorabaugh's Base Salary is payable in
installments throughout the year in the same manner and at the same times that
we pay base salaries to other executive officers, however, until such time that
we complete a debt or equity financing in the gross amount of $2,000,000, the
Base Salary is payable as follows: (i) payment monthly, at our option, of either
(a) a cash amount equal to two hundred percent (200%) of the applicable minimum
wage amount then in effect in the State of California for a month of work based
on forty hours of work per week (calculated to be $2,340.00 in the aggregate for
a month of work), or (b) a number of shares of our common stock, having a value
at the time of issuance, based on the volume weighted average trading price of
Common Stock, as quoted on the Over-The-Counter Bulletin Board, for the twenty
(20) consecutive trading days immediately preceding the date of issuance of such
shares of common stock, equal to the forgoing cash amount; plus (ii) issuance
monthly of a number of shares of common stock having a value at the time of
issuance, based on the volume weighted average trading price of Common Stock, as
quoted on the Over-The-Counter Bulletin Board, for the twenty (20) consecutive
trading days immediately preceding the date of issuance of such shares of Common
Stock, of not less than $10,160.
The securities offered for resale pursuant to this reoffer prospectus are the
securities issued to Mr. Rorabaugh pursuant to the agreement. In accordance with
the provisions of the agreement, we were permitted to issue the securities
payable to Mr. Rorabaugh periodically, as payments became due, or as an
aggregate sum. We and Mr. Rorabaugh agreed to issue the securities in aggregate
installments, representing the aggregate number of securities issuable to Mr.
Rorabaugh under the agreement based on the date the securities were issued, and
therefore, Mr. Rorabaugh's ability to resell any portion of the securities is
subject to the provisions of the agreement, which requires that Mr. Rorabaugh
only resell such portion of the securities as is sufficient to compensate him
for any periodic payments then due by us under the agreement.
Mr. Rorabaugh is also eligible to receive an annual bonus under our management
incentive plan to be agreed upon between Mr. Rorabaugh and the Board on an
annual basis. The management incentive plan will provide for the payment of
certain percentage bonuses based on Mr. Rorabaugh's then-current base salary,
and the issuance of options to purchase our common stock, upon achieving
specified target objectives set forth in the plan. The agreement terminates on
December 31, 2008. In the event that Mr. Rorabaugh's employment is terminated
without cause during the term of the agreement, we are obligated to continue to
pay Mr. Rorabaugh's then-current base salary for varying periods of time up to
twelve (12) months following the
16
effective date of such termination, depending upon when, after the effective
date of the agreement, Mr. Rorabaugh was terminated.
Other than the transactions described above, we had no material relationship
with the selling stockholder during the three years preceding the date of this
prospectus.
SELLING STOCKHOLDER TABLE
This reoffer prospectus relates to shares of Common Stock that are being
registered for reoffers and resale by the selling stockholder who has acquired
such shares pursuant to an executive employment agreement, and who may be deemed
an "affiliate" of us. An "affiliate" is defined under the Securities Act of
1933, as amended, as "a person that directly or indirectly, through one or more
intermediaries, controls or is controlled by, or is under common control with"
us. Subject to any limitations required by Form S-8, the selling stockholder may
resell any or all of the shares of Common Stock at any time while this reoffer
prospectus is current. The inclusion of the shares of Common Stock in the table
below does not constitute a commitment to sell any shares.
The following table sets forth: (1) the name of the selling stockholder; (2) the
position the selling stockholder holds with us; (3) the number of shares of our
common stock beneficially owned by such selling stockholder prior to this
offering; (4) the number of shares of our common stock offered by such selling
stockholder pursuant to this prospectus; and (5) the number of shares, and (if
one percent or more) the percentage of the total of the outstanding shares, of
our common stock to be beneficially owned by such selling stockholder after this
offering, assuming that all of the shares of our common stock beneficially owned
by such selling stockholder and offered pursuant to this reoffer prospectus are
sold and that the selling stockholder acquires no additional shares of our
common stock prior to the completion of this offering. Such data is based upon
information provided by the selling stockholder.
PERCENTAGE OF
COMMON STOCK COMMON STOCK COMMON STOCK
COMMON STOCK BEING OFFERED OWNED UPON OWNED UPON
OWNED PRIOR TO PURSUANT TO THIS COMPLETION OF COMPLETION OF
NAME POSITION THE OFFERING PROSPECTUS THIS OFFERING THIS OFFERING
- ---- -------- ------------ ---------- ------------- -------------
Barre Rorabaugh President of 214,286 214,286 0 --
Subsidiary
PLAN OF DISTRIBUTION
The shares of our common stock offered pursuant to this prospectus may
be offered and sold from time to time by the selling stockholder listed in the
preceding section, or his donees, transferees, pledgees or other successors in
interest that receive such shares as a gift or other non-sale related transfer.
The selling stockholder will act independently of us in making decisions with
respect to the timing, manner and size of each sale.
The selling stockholder and any of his respective pledgees, assignees
and successors-in-interest may, from time to time, sell any or all of their
shares of common stock on any stock exchange, market or trading facility on
which the shares are traded or in private transactions. These sales may be at
fixed or negotiated prices. The selling stockholder may use any one or more of
the following methods when selling shares:
17
o Ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o Block trades in which the broker-dealer will attempt to sell
the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
o Purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o An exchange distribution in accordance with the rules of the
applicable exchange;
o Privately negotiated transactions;
o Settlement of short sales;
o Broker-dealers may agree with the selling stockholder to sell
a specified number of such shares at a stipulated price per
share;
o A combination of any such methods of sale; and
o Any other method permitted pursuant to applicable law.
The selling stockholder may also sell shares under Rule 144 under the
Securities Act of 1933, if available, rather than under this prospectus.
Broker-dealers engaged by the selling stockholder may arrange for other
broker-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling stockholder (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling stockholder does not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
The selling stockholder may from time to time pledge or grant a
security interest in some or all of the shares of common stock owned by him and,
if he defaults in the performance of his secured obligations, the pledgees or
secured parties may offer and sell the shares of common stock from time to time
under this prospectus, or under an amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act of 1933 amending
the list of selling stockholders to include the pledgee, transferee or other
successors in interest as a selling stockholder under this prospectus.
The selling stockholder and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933 in connection with such sales. In such
event, any commissions received by such broker-dealers or agents and any profit
on the resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act of 1933. The selling
stockholder has informed us that he does not have any agreement or
understanding, directly or indirectly, with any person to distribute the common
stock.
We are required to pay all fees and expenses incident to the
registration of the shares.
The foregoing plan of distribution shall at all times be subject to any
limitations on resale set forth in Form S-8.
18
WHERE YOU CAN FIND MORE INFORMATION
We have filed a post-effective amendment to a registration statement on
Form S-8 with the SEC with respect to the common stock offered by this reoffer
prospectus. This reoffer prospectus, which constitutes a part of the
post-effective amendment to the registration statement, does not contain all of
the information set forth in the registration statement or the exhibits and
schedules that are part of the registration statement. You may read and copy any
document we file at the SEC's public reference room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. We refer you to the registration statement and the
exhibits and schedules thereto for further information with respect to us and
our common stock. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference room. Our SEC filings are also available to the public
from the SEC's website at www.sec.gov.
We are subject to the information and periodic reporting requirements
of the Securities Exchange Act of 1934 and, in accordance with those
requirements, will continue to file periodic reports, proxy statements and other
information with the SEC. These periodic reports, proxy statements and other
information will be available for inspection and copying at the SEC's public
reference rooms and the SEC's website referred to above.
The SEC allows us to "incorporate by reference" the information we file
with the SEC, which means that we can disclose important information to you by
referring to those documents. We incorporate by reference the documents listed
below and any additional documents filed by us with the SEC under Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until this offering of
securities is terminated. The information we incorporate by reference is an
important part of this prospectus, and any information that we file later with
the SEC will automatically update and supersede this information.
The documents we incorporate by reference are:
1. Our Annual Report on Form 10-KSB for the year ended May 31,
2004 (File No. 000-13895);
2. Our Quarterly Report on Form 10-QSB for the four-month period
ended September 30, 2004 (File No. 000-13895);
3. Our Registration Statement on Form S-8, filed with the
Securities and Exchange Commission on August 6, 2004 (File No.
333-118018), as amended; and
4. All other reports filed by us pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended,
subsequent to the date of this reoffer prospectus and prior to
the filing of a post-effective amendment which indicates that
all securities offered hereby have been sold or which
deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference and to be a part hereof
from the date of filing of such documents.
You may request a copy of these filings, at no cost, by writing or
calling us at SeaLife Corporation, 5601 W. Slauson Avenue, Culver City,
California, 90230, (310) 338-9757, Attention: Secretary.
You should rely only on the information contained in this reoffer
prospectus or any supplement and in the documents incorporated by reference
above. We have not authorized anyone else to provide you with different
information. You should not assume that the information in this prospectus or
any supplement or in the documents incorporated by reference is accurate on any
date other than the date on the front of those documents.
19
LEGAL MATTERS
Stubbs Alderton & Markiles, LLP, Encino, California, has rendered to
SeaLife Corporation a legal opinion as to the validity and due issuance of the
shares of the Registrant's Common Stock covered by this reoffer prospectus.
EXPERTS
The financial statements incorporated in this reoffer prospectus by
reference to the Annual Report on Form 10-KSB for the year ended May 31, 2004
have been so incorporated in reliance on the report of Pollard-Kelley Auditing
Services, Inc., independent accountants, given on the authority of said firm as
experts in auditing and accounting.
20
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents previously filed by the Registrant with the
Securities and Exchange Commission are incorporated in this Registration
Statement by reference:
(a) The Registrant's Annual Report on Form 10-KSB for the year
ended May 31, 2004 (File No. 000-13895);
(b) Our Quarterly Report on Form 10-QSB for the four-month period
ended September 30, 2004 (File No. 000-13895);
(c) The Registrant's Registration Statement on Form S-8, filed
with the Securities and Exchange Commission on August 6, 2004
(File No. 333-118018), as amended;
(d) All other reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended, subsequent to the date of this Registration Statement
and prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference and to be a part
hereof from the date of filing of such documents.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), subsequent to the date of this Registration Statement and prior
to the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference and to be a part hereof
from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
The total number of securities registered hereunder is 3,773,263
shares, all of which are common stock of the Registrant. The Registrant is
presently authorized to issue 100,000,000 shares of its Common Stock. As of
March 10, 2005, there were 17,795,113 outstanding and subscribed for shares. The
holders of common stock are entitled to one vote per share on each matter
submitted to a vote at any meeting of shareholders. Shareholders of the
Registrant have no preemptive rights to acquire additional shares of common
stock or other securities. The common stock is not subject to redemption and
carries no subscription or conversion rights. In the event of liquidation of the
Registrant, the shares of common stock are entitled to share equally in
corporate assets after satisfaction of all liabilities. The shares, when issued,
will be fully paid and non-assessable. A majority of all issued and outstanding
shares shall constitute a quorum for conducting business. The majority of shares
present, in any regular or special meeting where a quorum is present, may vote
in favor of or against any item of business or election, and shall constitute a
majority approval or disapproval of matters voted upon at any such meeting.
Shares of common stock do not carry cumulative voting rights. The Registrant
presently does not pay any dividends and has no foreseeable plan to pay
dividends. There are no special preemptive rights or rights upon liquidation,
other than the normal rights and priorities which would attach to shares in
liquidation pursuant to Delaware Law. The shares are not subject to call,
liability or assessment.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Stubbs Alderton & Markiles, LLP ("SAM LLP"), has provided legal
services to the Registrant in
21
connection with its preparation of this Registration Statement. In addition, SAM
LLP has rendered a legal opinion, attached hereto as Exhibit 5.1, as to the
validity and due issuance of the shares of the Registrant's Common Stock to be
issued and registered hereby. Individual partners of SAM LLP will be issued
Common Stock registered by this Registration Statement in payment of fees due
SAM LLP for legal services rendered pursuant to the terms of that certain
Engagement Letter dated May 17, 2004, as amended, between the Registrant and SAM
LLP. Neither SAM LLP, nor any individual partner therof, has been employed on a
contingent basis. Neither SAM LLP, nor any individual partner therof, is
connected with Registrant other than in their role as outside legal counsel for
the Company.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides in
relevant part that a corporation may indemnify any person who was or is a party
to or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation, and with respect to any criminal action or
proceeding had no reasonable cause to believe such person's conduct was
unlawful.
In addition, Section 145 provides that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection with the defense or settlement
of such action or suit if such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Delaware Court
of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Delaware Court of Chancery or
such other court shall deem proper. Delaware law further provides that nothing
in the above-described provisions shall be deemed exclusive of any other rights
to indemnification or advancement of expenses to which any person may be
entitled under any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise.
Article XI of the Registrant's Bylaws provides for the indemnification
of officers, directors and third parties acting on behalf of the Registrant to
the fullest extent permissible under Delaware law.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION.
Not applicable.
22
ITEM 8. EXHIBITS.
THE FOLLOWING EXHIBITS ARE FILED AS PART OF THIS REGISTRATION
STATEMENT:
EXHIBIT
NO. EXHIBIT DESCRIPTION
- ------- --------------------------------------------------------------
4.1 Restated Certificate of Incorporation of the Registrant (1).
4.2 Bylaws of the Registrant (1).
4.3 2004 Stock Award Plan, as amended.
5.1 Opinion of Stubbs Alderton & Markiles, LLP.
10.1 Executive Employment Agreement dated June 14, 2004, between the
Registrant and Barre Rorabaugh. (2)
23.1 Consent of Pollard-Kelley Auditing Services, Inc.
23.2 Consent of Stubbs Alderton & Markiles, LLP (included in Exhibit
5.1).
24.1 Power of Attorney (included as part of the Signature Page of this
Registration Statement).
- ----------
(1) Filed previously as an exhibit to the Registrant's Annual Report on
Form 10-KSB for the year ended May 31, 2003 (File No. 000-13895), and
incorporated herein by this reference.
(2) Filed previously as an exhibit to the Registrant's Original
Registration Statement, filed on August 6, 2004 (File No. 333-118018),
and incorporated herein by this reference.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement
to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement.
(2) That for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the
23
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.
24
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Post-Effective Amendment No. 2 to Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Los
Angeles, State of California, on this 28th day of March, 2005.
SEALIFE CORPORATION
(Registrant)
By: /s/ Robert McCaslin
-----------------------------------------
Robert McCaslin
President
(Principal Executive Officer)
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints each
of Robert McCaslin and J P Heyes as his true and lawful attorney-in-fact and
agent with full power of substitution and resubstitution, for him and his name,
place and stead, in any and all capacities, to sign any or all amendments
(including post-effective amendments) to this Post-Effective Amendment No. 2 to
Registration Statement or to the Original Registration Statement and to file a
new registration statement under Rule 461 or Instruction E of Form S-8 of the
Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the foregoing, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or either of them, or
their substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons in
the capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ Robert McCaslin Chief Executive Officer, Chief March 28, 2005
- ---------------------- Financial Officer and Director
Robert McCaslin (Principal Executive Officer, and
Financial and Accounting Officer)
/s/ J.P. Heyes Secretary and Director March 28, 2005
- ----------------------
J.P. Heyes
25
EXHIBIT INDEX
EXHIBIT
NO. EXHIBIT DESCRIPTION
- ------- --------------------------------------------------------------
4.1 Restated Certificate of Incorporation of the Registrant (1).
4.2 Bylaws of the Registrant (1).
4.3 2004 Stock Award Plan, as amended.
5.1 Opinion of Stubbs Alderton & Markiles, LLP.
10.1 Executive Employment Agreement dated June 14, 2004, between the
Registrant and Barre Rorabaugh. (2)
23.1 Consent of Pollard-Kelley Auditing Services, Inc.
23.2 Consent of Stubbs Alderton & Markiles, LLP (included in Exhibit
5.1).
24.1 Power of Attorney (included as part of the Signature Page of this
Registration Statement).
- ----------
(1) Filed previously as an exhibit to the Registrant's Annual Report on
Form 10-KSB for the year ended May 31, 2003 (File No. 000-13895), and
incorporated herein by this reference.
(2) Filed previously as an exhibit to the Registrant's Original
Registration Statement, filed on August 6, 2004 (File No. 333-118018),
and incorporated herein by this reference.