UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
APRIL 17, 2006
SEALIFE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-13895 34-1444240
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
5601 W. SLAUSON AVE., CULVER CITY, CALIFORNIA 90293
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 338-9757
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (SEE General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange ct (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c))
under the Exchange Act (17 CFR 240.13e-4c))
ITEM 2.06. MATERIAL IMPAIRMENTS.
On April 17, 2006, we completed our annual testing for impairment of long-lived
assets pursuant to Statement of Financial Accounting Standards No. 144, and, on
the basis of that assessment, have determined to recognize a pre-tax non-cash
impairment charge as of December 31, 2005, in the aggregate amount of $1.362
million. Of this amount, $338,889 represents impairment of our ProTerra product
technology assets, and $1,023,709 represents impairment of our SeaLife Marine
product technology assets. This charge is subject to review by the Company's
independent auditors. We do not expect this charge to result in any changes to
the way we conduct our business.
ITEM 8.01 OTHER EVENTS
On April 17, 2006, we determined that we would not be able to file our Annual
Report on Form 10-KSB by the filing extension date of April 17, 2006, because we
had not yet finalized our financial statements for the fourth quarter and fiscal
year ended December 31, 2005. The audit of our 2005 financial statements is
ongoing, due, in part, to an impairment analysis that was required to be
performed on certain of our technologies. We are working diligently to complete
the Form 10-KSB but are unable at this time to provide an expected date for the
filing of the Form 10-KSB.
We currently anticipate that, for our fiscal year ended December 31, 2005,
versus the twelve month period ended December 31, 2004, our revenue will
increase by approximately $63,000 and expenses from continuing operations will
decrease by approximately $1,350,000, reflecting an increase of approximately
60% and decrease of approximately 38%, respectively, as compared to the 12
months ended December 30, 2004. The increase in revenue is attributable to
increased sales of our products. The decrease in expenses reflects a decrease in
compensation for legal services, business consulting and officers' wages during
the period. We expect that our net losses will decrease by approximately 2.7% to
$3,340,000 for our fiscal year ended December 31, 2005, as compared to the 12
months ended December 31, 2004, reflecting a decrease in compensation paid for
legal services, business consulting and officers' wages during the period,
offset by an impairment charge of $1.362 million with respect to certain of our
core technologies, as described above.
Because our use of Form S-8 registration statements requires that our reporting
under the Securities Exchange Act be current, until we file our Form 10-KSB, we
will be unable to utilize our Form S-8 registration statements to make
equity-based awards to our eligible employees and consultants pursuant to
certain of our equity compensation plans, including our 2004 Stock Award Plan.
AGREEMENT WITH GAEL HIMMAH
On Thursday, April 13, 2006, our Chief Executive Officer and the President of
our subsidiary, Sealife Marine Products, Inc., met with Gael Himmah, our Chief
Consulting Scientist, with respect to several claims by Mr. Himmah to our
management that he did not believe he had been fully compensated for his
services or for certain technologies that were assigned to us in 2002. As a
result of multiple meetings and communications with Mr. Himmah with the purpose
of
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clarifying Mr. Himmah's intent by these statements, we have entered into a
non-binding letter of intent with respect to the settlement of Mr. Himmah's
potential claims. The letter of intent outlines (a) the payment of amounts owed
to Mr. Himmah in the form of cash and shares of our common stock having an
aggregate value of approximately $188,044 and (b) the terms of an ongoing
relationship with Mr. Himmah consisting of additional consulting services, which
will include his participation in supporting our capital-raising and research
and development efforts necessary to maintain our products' technological
advantages, for which he will be compensated by payment of commissions ranging
from 8-10% of the net sales of certain ProTerra products. The maximum amount of
commissions payable is not to exceed $5.5 million. The terms of our arrangement
with Mr. Himmah are subject to the negotiation and execution of a definitive
consulting, settlement and release agreement, the final terms of which will be
disclosed on a Current Report on Form 8-K when executed.
Because the preparation of our 2005 financial statements continues, the
accounting matters identified at this stage as well as the potential impact of
these matters on our financial statements remain preliminary and are subject to
change. As we continue the process of completing the preparation of our 2005
financial statements, these and other material accounting issues may be
identified which, individually or in the aggregate, may result in material
impairments to assets and/or material adjustments to our financial statements.
FORWARD-LOOKING STATEMENTS
This current report on Form 8-K contains forward-looking statements that involve
risks and uncertainties. Forward-looking statements in this document and those
made from time-to-time by us are made under the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
concerning future plans or results are necessarily only estimates and actual
results could differ materially from expectations. Certain factors that could
cause or contribute to such differences are described from time to time in the
Company's filings with the Securities and Exchange Commission, including but not
limited to, the "Risk Factors" described in our Annual Report on Form 10-KSB for
the transition period ended December 31, 2004 and our other SEC filings.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
April 18, 2006 SEALIFE CORPORATION
/S/ ROBERT A. MCCASLIN
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Robert A. McCaslin, Chief Executive Officer and
Chief Financial Officer
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