EXHIBIT 99.1
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19171 / April 6, 2005
SECURITIES AND EXCHANGE COMMISSION V. SEALIFE CORPORATION, ET AL., Civil Action
No. 05-M-622 (CBS) (D. Colo.)
On April 5, 2005, the United States Securities and Exchange Commission filed a
civil complaint against SeaLife Corporation, its president, and several of its
promoters alleging that they engaged in a manipulative distribution of
unregistered stock. SeaLife is a Delaware corporation based in Culver City,
California, which develops environmental products, including a boat paint and a
soil enhancer. The complaint also names SeaLife's president Robert E. McCaslin
of Marina Del Rey, California, Roland M. Thomas of Las Vegas, Nevada, ERT
Technology Corporation, a Delaware corporation owned by Thomas, Douglas A.
Glaser and Barry S. Griffin of Denver, Colorado, Jeffrey A. Hayden of Walden,
Colorado, and Morgan J. Wilbur III of Savannah, Georgia. Glaser was barred in
1997 by the Commission from association with securities brokers and dealers (Sky
Scientific, Inc., Sec. Act Rel. No. 7412 (April 3, 1997)).
According to the complaint, SeaLife went public in December 2002 through reverse
merger with a public shell call Integrated Enterprises, Inc. At the same time,
McCaslin retained Thomas to raise capital for SeaLife and promote the company to
investors, and to raise $400,000 to pay the principal shareholders of the shell
and complete the takeover of the shell by McCaslin and other new management.
Thomas devised a plan with Glaser to meet those goals. To carry out the plan,
SeaLife issued one million shares to Thomas, Glaser, and an employee of ERT and
registered the stock with the Commission on Form S-8, which registers stock
issued to a company's employees and consultants. However, the complaint alleges
that Form S-8 was improperly used because Thomas and Glaser were retained to
raise capital for SeaLife and to promote and maintain the market for SeaLife
stock.
The complaint further alleges that Thomas and Glaser transferred portions of
their stock to Griffin, Hayden, and Wilbur for ultimate sale to the public
through brokerage transactions. Between January and March 2003, Thomas, ERT,
Glaser, Griffin, Hayden, and Wilbur sold most of the one million shares. While
this distribution was occurring, SeaLife embarked on a publicity campaign using
press releases, a corporate fact sheet, and a business plan. The latter two
documents were disseminated to brokers and investors and also placed on
SeaLife's web site for public review. The complaint alleges that the publicity
included materially false and misleading information. Specifically, SeaLife
allegedly claimed that its products were ready to be marketed, when in fact the
company needed capital to conduct further testing; that SeaLife's intellectual
property was worth more than $60 million, when in fact SeaLife carried the
property on its books at less than $1.5 million; and that SeaLife projected over
$5 million sales during its first year and significant profits based on a 70%
gross margin, when in fact the company had no basis for figuring its sales
margin and could not meet its projections without additional product testing and
capital. In addition, the publicity campaign did not disclose the $400,000 owed
to the principal shareholders of the shell or the fact that the company had
retained Thomas and Glaser to sell
SeaLife stock to pay that debt and raise capital. Filings made with the
Commission on Form 8-K allegedly compounded the false and misleading impact of
the publicity campaign.
The complaint further alleges that Thomas, ERT, Glaser, Griffin, Hayden, and
Wilbur used manipulative techniques to distribute SeaLife stock. According to
the complaint, they engaged in wash sales or matched trades, and purchased small
amounts of the stock that they were distributing to create artificial trading
volume and maintain the price for the distribution. Through these techniques,
they were able to generate income for themselves, but they did not send any of
that money back to SeaLife or to the prior principal shareholders of the shell.
The complaint also alleges that SeaLife made false and misleading statements in
an August 2003 press release about a renegotiation with the prior principal
shareholders of the shell, which helped conceal the earlier fraudulent
activities described above.
All defendants are charged with violating the securities registration and
antifraud provisions of the federal securities laws, Sections 5(a) and (c) and
17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the
Securities Exchange Act of 1934 ("Exchange Act"), and Rule 10b-5 thereunder.
Thomas, ERT, Glaser, Griffin, Hayden, and Wilbur are also charged with violating
Rule 101 of Regulation M, an anti-manipulation rule that prohibits participants
in a stock distribution from purchasing stock that they are distributing. The
complaint also charges that McCaslin, Thomas, ERT, and Glaser violated ownership
reporting provisions in Sections 13(d)(1) and 16(a) of the Exchange Act and
Rules 13d-1 and 16a-3, and that Thomas, ERT, and Glaser violated Section
13(d)(2) and Rule 13d-2. Finally, the complaint charges that SeaLife violated
the filings provisions, Section 13(a) of the Exchange Act and Rules 13a-11,
13a-13, and 12b-20, and that McCaslin aided and abetted those violations.
The Commission seeks permanent injunctions against all defendants, an order
requiring Thomas, ERT, Glaser, Griffin, and Wilbur to provide an accounting and
disgorgement, civil penalties against all defendants, an officer-and-director
bar against McCaslin, and penny stock bars against Thomas, ERT, Glaser, Griffin,
Hayden, and Wilbur.
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