UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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)
FIVE EMPLOYMENT, CONSULTING AND/OR LEGAL SERVICES AGREEMENTS
(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
of Securities Amount to be Offering Price Aggregate Offering Amount of
To Be Registered Registered (1) Per Share (2) Price (2) Registration Fee
---------------- ------------- ---------------- ------------------ ----------------
Common Stock, par value
$.0001 per share..... 3,904,095 $0.10 $390,410 $45.95
- ----------
(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
December 19, 2005.
EXPLANATORY NOTE
This registration statement on Form S-8 of Sealife Corporation (this
"Registration Statement") has been prepared in accordance with the requirements
of Form S-8 under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to 3,904,095 shares of our common stock, par value $0.001 per share
(the "Shares").
2,910,000 of the Shares are to be issued pursuant to certain
employment, consulting and/or legal services agreements (the "Plans"), as
follows:
o 600,000 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 (the "Himmah Plan");
o 650,000 shares of Common Stock to be issued to Barre Rorabaugh
pursuant to that certain Employment Agreement dated as of June
15, 2004, as amended, between SeaLife Corporation and Barre
Rorabaugh (the "Rorabaugh Plan");
o an aggregate of 950,000 shares of Common Stock to be issued to
Gregory Akselrud, Scott Alderton, Scott Galer, Jonathan Hodes,
Murray Markiles, John McIlvery and V. Joseph Stubbs pursuant
to that certain Engagement Letter, dated May 17, 2004, as
amended, between the Registrant and Stubbs, Alderton &
Markiles LLP (the "SAM Plan"); and
o 710,000 shares of Common Stock to be issued to Lee Dicker
pursuant to that certain engagement letter dated as of
December 15, 2003, as amended, between the Registrant and
Leonard, Dicker & Schreiber, LLP(the "LDS Plan").
The reoffer and resale of 994,095 of the Shares is being registered
pursuant to a Reoffer Prospectus prepared in accordance with the requirements of
Instruction C to Form S-8 and Part I of Form S-3. The Reoffer Prospectus relates
to the reoffer and resale of Shares to be issued to our affiliate, Barre
Rorabaugh, pursuant to the Rorabaugh Plan, as well as the following:
o 375,160 restricted shares of our Common Stock issued to Gael
Himmah prior to the filing of this Registration Statement
pursuant to the Himmah Plan;
o an aggregate of 351,792 restricted shares of our Common Stock
issued to Gregory Akselrud, Scott Alderton, Scott Galer,
Jonathan Hodes, Murray Markiles, John McIlvery and V. Joseph
Stubbs prior to the filing of this Registration Statement
pursuant to the SAM Plan;
o 257,143 restricted shares of our Common Stock issued to Lee
Dicker prior to the filing of this Registration Statement
pursuant to the LDS Plan; and
o 10,000 restricted shares of our Common Stock issued to Michael
Caraway, CPA pursuant to that certain Consulting Agreement
effective as of October 18, 2004, between the Registrant and
Michael Caraway (the "Caraway Plan").
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Except for the Reoffer Prospectus included herein, the document(s)
containing the information specified in Part I will be sent or given to
participants as specified by Rule 428(b)(1). Such documents are not being filed
with the Securities and Exchange Commission either as part of this Registration
Statement or as prospectuses or prospectus supplements pursuant to Rule 424.
Such documents and the documents incorporated by reference in this Registration
Statement pursuant to Item 3 of Part II of this Form, taken together, constitute
a prospectus that meets the requirements of Section 10(a) of the Securities Act
of 1933, as amended.
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REOFFER PROSPECTUS
SEALIFE CORPORATION
1,644,095 SHARES OF COMMON STOCK
($0.0001 par value)
----------
This Reoffer Prospectus covers the reoffer and resale by the selling
stockholders from time to time of up to 1,644,095 shares (the "Shares") of our
common stock that we have issued or that we may issue in the future pursuant to
certain employment, consulting and/or legal services agreements (the "Plans"),
including:
o up to 994,095 restricted shares of our common stock issued
prior to the filing of this Registration Statement to
employees and consultants pursuant to the Plans, which shares
constitute "restricted securities" as such term is defined in
Rule 144(a)(3) under the Securities Act, and
o up to 650,000 shares of our common stock that may be acquired
in the future under this Registration Statement by Barre
Rorabaugh pursuant to that certain Employment Agreement dated
as of June 15, 2004, as amended, between Sealife Corporation
and Mr. Rorabaugh (the "Rorabaugh Plan"). Mr. Rorabaugh is our
"affiliate" as such term is defined in Rule 405 under the
Securities Act of 1933, which shares constitute "control
securities" as such term is defined in General Instruction
C.1(a) of Form S-8 under the Securities Act.
The prices at which the selling stockholders 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 stockholders 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 December 19, 2005, the last reported sale price of the
common stock on the Over-The-Counter Bulletin Board was $.10 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 December 20, 2005
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TABLE OF CONTENTS
PAGE
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PROSPECTUS SUMMARY 6
RISK FACTORS 7
FORWARD-LOOKING STATEMENTS 16
USE OF PROCEEDS 16
SELLING STOCKHOLDERS 16
PLAN OF DISTRIBUTION 19
WHERE YOU CAN FIND MORE INFORMATION 22
LEGAL MATTERS 22
EXPERTS 22
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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 statements of
SeaLife Nevada now represent our historical financial statements.
6
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 stockholders of up to 1,644,095 shares of our common stock.
We will not receive any proceeds from the sale of the shares of common
stock offered by the selling stockholders using this prospectus.
The total number of securities registered under the Registration
Statement on Form S-8 of which this Reoffer Prospectus is a part is 3,904,095
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
December 12, 2005, there were 24,640,279 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 stockholders. Stockholders 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 PROSPECTUS 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.
RISKS 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.
As a result of our substantial historical operating losses, limited
revenues and working capital and our capital needs, our auditors added a going
concern qualification (explanatory paragraph) in their report contained in our
audited consolidated financial statements for the seven months ended December
31, 2004 which raises substantial doubt about our ability to continue as a going
concern. While we have relied
7
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 $6,174,346 as of September 30, 2005. 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 fifteen 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 provide any guarantee that 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.
If our operating results fall below the expectations of securities
analysts and investors in some future periods, then our stock price may decline.
8
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.
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
9
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 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 affect our business.
10
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
chemicals, 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.
Our ability to successfully develop our products, manage growth and
maintain our competitive
11
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, SO THE DUTIES CUSTOMARILY
DELEGATED TO THOSE COMMITTEES ARE PERFORMED 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 and Secretary. 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 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, 2007, 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, 2007. 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 2007, 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
13
business, financial condition and results of operations could be materially
adversely affected.
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
14
written agreement to the transaction prior to the sale. Consequently, the rule
may affect the ability of broker-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.
Stockholders 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 STOCKHOLDERS INTEND TO SELL THEIR RESPECTIVE SHARES OF COMMON STOCK
IN THE OPEN MARKET, WHICH SALES MAY CAUSE OUR STOCK PRICE TO DECLINE.
The selling stockholders intend to sell in the public market up to
1,644,095 shares of common stock being registered in this offering. That means
that up to 1,644,095 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.
ANY ISSUANCE OF FURTHER STOCK MAY RESULT IN THE LOSS OF CONTROL BY PRESENT
MANAGEMENT AND STOCKHOLDERS.
We may issue shares in consideration for cash, assets or services out
of our authorized but unissued common stock that could, upon issuance, represent
a majority of our voting power and equity. The result of such an issuance would
be that those new stockholders and management would control us, and unknown
persons could replace our management at that time. Such an occurrence would
result in a greatly reduced percentage of ownership of us by our current
stockholders.
OFFICERS AND DIRECTORS OWN A SIGNIFICANT PORTION OF OUR COMMON STOCK, WHICH
COULD LIMIT OUR STOCKHOLDERS' ABILITY TO INFLUENCE THE OUTCOME OF KEY
TRANSACTIONS.
As of November 18, 2005, our officers and directors and their
affiliates owned approximately 28.1% 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 stockholders could also discourage others from seeking to acquire control
of us through the purchase of our common stock,
15
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 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 stockholders' common stock
will belong to the selling stockholders. We will not receive any proceeds from
such sales.
SELLING STOCKHOLDERS
The Shares to which this Reoffer Prospectus relates are being
registered for reoffer and resale by the selling stockholders, who acquired the
Shares pursuant to the Plans. The material relationships between the Registrant
and the selling shareholders are described below.
HIMMAH CONSULTING AGREEMENT
We entered into a Consulting Agreement with Gael Himmah, our Chief
Consulting Scientist, doing business as Aspen Laboratories, Ecosys International
and Sealife Marine Coatings, on January 1, 2003, and amended the agreement in
August 2004. Pursuant to the consulting agreement, as amended, Mr. Himmah is to
be paid $12,500 per month in exchange for providing consulting services to us
associated with the development, testing, and marketing of our products. In lieu
of cash, Mr. Himmah has consistently elected to be paid in shares of our common
stock. The consulting agreement terminates on January 1, 2008, unless earlier
terminated.
On September 17, 2003 we entered into an agreement with Gael Himmah to
purchase all proprietary rights and interest in four products and processes
developed by him. The purchase price was $400,000 and was paid with 400,000
shares of our common stock.
In addition, in connection with the purchase of certain technologies
from Division G, Inc. on June 30, 2002, we issued a ten-year note for $1,220,309
to Gael Himmah. The note is to be paid based on our sales, i.e. at 5% of the
first $3,000,000 of sales, and at 2.5% on the sales in excess of that amount,
until paid in full. In addition to payment based on our sales, the note required
monthly payments and the note bears interest at the rate of 7% per annum. The
note may be converted at the option of the holder into our common stock at a
conversion price, which is equivalent to 80% of the market price, based on the
average bid price for the 30 days immediately preceding the date of conversion.
On January 2, 2003, Mr. Himmah converted $1,000,000
16
of the note into 1,000,000 shares of SeaLife Corporation common stock. The
balance of the note at December 31, 2004 and 2003, including accrued interest
was $312,812 and $292,330 respectively.
Other than the transactions and relationships described above, we had
no material relationship with Mr. Himmah during the three years preceding the
date of this prospectus.
RORABAUGH EXECUTIVE EMPLOYMENT AGREEMENT
On June 15, 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.
Certain securities offered for resale pursuant to this reoffer
prospectus are the securities issued and to be 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 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 Mr. Rorabaugh during the three years preceding the date of
this prospectus.
CARAWAY CONSULTING AGREEMENT
We entered into a Consulting Agreement with Michael Caraway on October
26, 2004, and amended the agreement effective June 29, 2005, and September 1,
2005. Pursuant to the Consulting Agreement, as amended, Mr. Caraway is to be
issued 5,000 shares of our common stock per month, pursuant to our 2004
17
Stock Award Plan, in exchange for providing consulting services to us associated
with the implementation of an accounting system for the Company, and other
accounting services. The consulting agreement terminates on December 31, 2005,
unless earlier terminated.
Other than the transaction described above, we had no material
relationship with Mr. Caraway during the three years preceding the date of this
prospectus.
SAM ENGAGEMENT LETTER
We entered into an Engagement Letter with Stubbs, Alderton & Markiles
LLP ("SAM LLP") to provide legal services to us effective May 17, 2004.
Individual partners of SAM LLP (Scott Alderton, Gregory Akselrud, Scott Galer,
Jonathan Hodes, Murray Markiles, John McIlvery and V. Joseph Stubbs) receive
shares of our common stock in lieu of cash compensation pursuant to the terms of
the Engagement Letter.
Other than the transaction described above, we had no material
relationship with SAM LLP, nor any individual partner thereof, other than in
their role as outside legal counsel, during the three years preceding the date
of this prospectus.
LDS ENGAGEMENT LETTER
We entered into an Engagement Letter with Leonard, Dicker & Schreiber,
LLP ("LDS") to provide legal services to us effective December 15, 2003. Lee
Dicker received shares of our common stock in lieu of cash compensation pursuant
to the terms of such Engagement Letter.
Other than the transaction described above, we had no material
relationship with LDS, nor any individual partner thereof, including Lee Dicker,
other than in their role as outside legal counsel, during the three years
preceding the date of this prospectus.
SELLING STOCKHOLDER TABLE
The selling stockholders currently own 994,095 of the 3,904,095 shares
of our common stock registered under the registration statement of which this
prospectus is a part. Offers and sales by the selling stockholders of these
currently owned shares are covered by this prospectus. In addition, up to
2,910,000 shares of our common stock that we may issue in the future pursuant to
the terms of the respective Plans are being registered under the registration
statement of which this prospectus is a part. Offers and sales by Barre
Rorabaugh, who is our "affiliate" (as such term is defined in Rule 405 under the
Securities Act) of up to 650,0000 of any such shares issued in the future
pursuant to the Rorabaugh Plan are also covered by this prospectus.
The inclusion of the shares of Common Stock in the table below does not
constitute a commitment to sell any shares.
The selling stockholders are our current and future officers,
directors, employees and consultants who have received or will in the future
receive shares of our common stock under the respective Plans in which they are
participants. The selling stockholders may from time to time resell all, a
portion, or none of the shares of our common stock covered by this prospectus.
The following table sets forth information as of December 8, 2005 with respect
to the beneficial ownership of our common stock by each selling stockholder
whose identity is known as of the date of this prospectus and the number of
shares of our common stock held by such selling stockholders as of the date of
this prospectus that are covered by this prospectus. The address for each
executive officer, director, consultant and employee listed below is c/o Sealife
Corporation, 5601 W. Slauson Avenue, Suite 283, Culver City, California 90230.
The following table sets forth: (1) the name of each selling
stockholder; (2) the number of shares of our common stock beneficially owned by
such selling stockholder prior to this offering; (3) the number of shares of our
common stock offered by such selling stockholder pursuant to this prospectus;
and (4) the number of
18
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 THE OFFERING PROSPECTUS THIS OFFERING THIS OFFERING
- ---------------- -------------- ---------------- ------------- -------------
Gael Himmah 1,953,682 375,160 1,578,522 6.5%
Barre Rorabaugh 615 650,000(1) 615 *
Michael Caraway 32,000 10,000 22,000 *
Lee Dicker 407,143(2) 257,143 149,989 --
Gregory Akselrud 34,604 34,604 0 --
Scott Alderton 22,985 22,985 0 --
Murray Markiles 105,485 105,485 0 --
V. Joseph Stubbs 62,985 62,985 0 --
Jonathan Hodes 56,671 56,671 0 --
John McIlvery 56,671 56,671 0 --
Scott Galer 69,062 69,062 0 --
- ----------
* Less than 1%
(1) Includes those shares of our common stock that we may issue in the
future under the Rorabaugh Plan to Barre Rorabaugh, who is our
"affiliate" (as such term is defined in Rule 405 under the Securities
Act ).
(2) Includes 100,000 shares of common stock held by Leonard, Dicker &
Schreiber, LLP, of which Lee Dicker is a partner.
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 stockholders listed in the
preceding section, or their 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 stockholders and any of their 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:
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;
19
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 stockholders 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 stockholders 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 stockholders may from time to time pledge or grant a
security interest in some or all of the shares of common stock owned by them
and, if they default in the performance of their 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 stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933 in connection with such sales. In such
event, any commissions received by such broker-dealers or agents and any profit
on the resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act of 1933. The selling
stockholders have informed us that they do 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.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
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 seven months ended
December 31, 2004 (File No. 000-13895);
2. Our Quarterly Report on Form 10-QSB for the quarterly period
ended March 31, 2005 (File No. 000-13895);
20
3. Our Current Report on Form 8-K, filed May 24, 2005 (File No.
000-13895);
4. Our Current Report on Form 8-K, filed July 7, 2005 (File No.
000-13895);
5. Our Quarterly Report on Form 10-QSB for the quarterly period
ended June 30, 2005 (File No. 000-13895);
6. Our Current Report on Form 8-K, filed August 19, 2005 (File
No. 000-13895);
7. Our Quarterly Report on Form 10-QSB for the quarterly period
ended September 30, 2005 (File No. 000-13895);
8. 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.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Section 145 of the Delaware General Corporation Law authorizes a
court to award or a corporation's Board of Directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the 1933 Act. Our Bylaws
provide that the we shall indemnify our director and officers to the fullest
extent not prohibited by the Delaware General Corporation Law, subject to
limited exceptions. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to our directors, officers and controlling
persons pursuant to the foregoing provisions, or otherwise, we have 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.
INTERESTS OF NAMED EXPERTS AND COUNSEL
SAM LLP, has provided legal services to the Registrant in 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 have been 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 thereof, has been employed on a contingent
basis. Neither SAM LLP, nor any individual partner thereof, is connected with
Registrant other than in their role as outside legal counsel for the Company.
21
WHERE YOU CAN FIND MORE INFORMATION
We have filed 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 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.
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 seven months ended
December 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.
22
PART II
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) Our Annual Report on Form 10-KSB for the seven months ended
December 31, 2004 (File No. 000-13895);
(b) Our Quarterly Report on Form 10-QSB for the quarterly period
ended March 31, 2005 (File No. 000-13895);
(c) Our Current Report on Form 8-K, filed May 24, 2005 (File No.
000-13895);
(d) Our Current Report on Form 8-K, filed July 7, 2005 (File No.
000-13895);
(e) Our Quarterly Report on Form 10-QSB for the quarterly period
ended June 30, 2005 (File No. 000-13895);
(f) Our Current Report on Form 8-K, filed August 19, 2005 (File
No. 000-13895);
(g) 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
(h) 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.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Stubbs, Alderton & Markiles, LLP ("SAM LLP"), has provided legal
services to the Registrant in 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 have been 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 thereof, has been employed on a contingent basis. Neither SAM
LLP, nor any individual partner thereof, is connected with Registrant other than
in their role as outside legal counsel for the Company.
23
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.
The restricted securities that are to be reoffered or resold pursuant
to this registration statement were issued pursuant to the Plans in transactions
that were exempt from registration pursuant to Section 4(2) under the Securities
Act of 1933.
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)
24
5.1 Opinion of Stubbs Alderton & Markiles, LLP.
23.1 Consent of Pollard-Kelley Auditing Services, Inc.
23.2 Consent of Stubbs Alderton & Markiles, LLP (included in
Exhibit 5.1)
- ----------
(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.
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 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.
25
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
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 20th
day of December, 2005.
SEALIFE CORPORATION
(Registrant)
By: /s/ Robert McCaslin
----------------------------------------
Robert McCaslin
President
(Principal Executive Officer)
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, December 20, 2005
- ------------------------- Chief Financial Officer
Robert McCaslin and Director (Principal
Executive Officer, and
Principal Financial and
Accounting Officer)
/s/ J.P. Heyes Secretary and Director December 20, 2005
- -------------------------
J.P. Heyes
26
EXHIBIT INDEX
EXHIBIT NO. EXHIBIT DESCRIPTION
- ----------- -------------------
4.1 Restated Certificate of Incorporation of the Registrant (1)
4.2 Bylaws of the Registrant (1)
5.1 Opinion of Stubbs Alderton & Markiles, LLP.
23.1 Consent of Pollard-Kelley Auditing Services, Inc.
23.2 Consent of Stubbs Alderton & Markiles, LLP (included in
Exhibit 5.1)
- ----------
(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.
27