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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

[X]      Quarterly  Report Under Section 13 or 15(d) of the Securities  Exchange
         Act of 1934

                  For the quarterly period ended March 31, 2006

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

  For the transition period from __________________ to ______________________.

                        Commission file number 000-13895

                               SEALIFE CORPORATION
        (Exact Name of Small Business Issuer as Specified in its Charter)

            DELAWARE                                             90-0224435
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

              5601 W. SLAUSON AVENUE, CULVER CITY, CALIFORNIA 90230
                    (Address of principal executive offices)

                                 (310) 338-9757
                           (Issuer's telephone number)

         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing  requirements  for the past 90 days.

                                 Yes [X]  No [_]

         Indicate by check mark whether the  registrant  is a shell  company (as
defined in Rule 12b-2 of the Exchange Act).  Yes [_]  No [X]

         As of May 30, 2005, the issuer had  30,401,537  shares of common stock,
par value $.0001 per share, issued and outstanding.

         Transitional Small Business Disclosure Format (check one):

                                 Yes [_]  No  [X]

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<PAGE>


                               SEALIFE CORPORATION

                              INDEX TO FORM 10-QSB

                                                                            PAGE
                                                                            ----

PART I   FINANCIAL INFORMATION.................................................3

Item 1.  Financial Statements (unaudited)......................................3

         Condensed Consolidated Balance Sheet (unaudited)
         as of March 31, 2006..................................................3

         Condensed Consolidated Statement of Income (unaudited) for
         the three months ended March 31, 2006 and March 31, 2005..............4

         Condensed Consolidated Statements of Cash Flows (unaudited)
         for the three months ended March 31, 2006 and March 31, 2005..........5

         Notes to Condensed Consolidated Financial Statements..................6

Item 2.  Management's Discussion and Analysis or Plan of Operation............15

Item 3.  Controls and Procedures..............................................30

PART II  OTHER INFORMATION....................................................30

Item 1.  Legal Proceedings....................................................30

Item 2.  Unregistered Sales of Securities and Use of Proceeds.................31

Item 6.  Exhibits.............................................................32


                                       2
<PAGE>


                                     PART I
                              FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS

                      SEALIFE CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET

                        March 31, 2006 and March 31, 2005

                                                      March 31,      March 31,
                                                        2006           2005
                                                     -----------    -----------
                         ASSETS
Current Assets

      Cash in escrow .............................   $    25,000    $    15,000
      Inventory ..................................        25,759         39,637
      Accounts Receivable ........................        77,659         16,397
      Prepaid expenses ...........................        45,647        155,371
                                                     -----------    -----------
           Total Current Assets ..................       174,065        226,405
Other Assets
      Technology .................................     1,735,309      1,735,309
      Less: accumulated amortization .............    (1,735,309)      (285,922)
                                                     -----------    -----------

                                                            --        1,449,387
                                                     -----------    -----------

           Total Assets ..........................   $   174,065    $ 1,675,792
                                                     ===========    ===========

        LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
      Bank overdrafts ............................   $     2,819    $       856
      Notes payable ..............................       183,000        175,500
      Accounts payable ...........................        34,926         72,805
      Accounts payable - shareholders ............         2,752         91,755
      Accrued expenses ...........................        43,112        194,210
      Accrued interest ...........................        85,269         17,844
      Accrued payroll taxes ......................         8,382          8,382
      Accrued royalties ..........................        16,953           --
      Accrued wages ..............................       362,500        437,297
      Current portion of long-term debt ..........        14,531          7,313
                                                     -----------    -----------
           Total Current Liabilities .............       748,244      1,005,962
Long-Term Debt
      Notes payable ..............................       220,178        311,003

Stockholders' Equity
      Common stock ...............................         3,014          1,874
      Additional paid in capital .................     7,433,146      5,619,326
      Deficit accumulated during the
         development stage .......................    (8,230,517)    (5,262,373)
                                                     -----------    -----------
              Total Stockholders' Equity .........      (794,357)       358,827
                                                     -----------    -----------

           Total Liabilities and Stockholders'
              Equity .............................   $   174,065    $ 1,675,792
                                                     ===========    ===========

See accompanying notes


                                       3
<PAGE>


                      SEALIFE CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENT OF INCOME
          For the Three Months Ended March 31, 2006 and March 31, 2005



                                                   March 31,         March 31,
                                                     2006              2005
                                                 ------------      ------------

Sales ......................................     $     25,775      $     36,052

  Cost of sales ............................           14,465            20,049
                                                 ------------      ------------

Gross Profit ...............................           11,310            16,002

  Sales and marketing ......................           58,564           127,452
  General and administrative ...............          351,525           678,639
                                                 ------------      ------------
                                                      410,089           806,090
                                                 ------------      ------------

   Net Loss ................................     $   (398,779)     $   (790,088)
                                                 ============      ============

                     Loss per share ........     $      (0.01)     $      (0.05)

   Average shares outstanding ..............       28,786,647        15,703,993

See accompanying notes


                                       4
<PAGE>


                      SEALIFE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS
          For the Three Months Ended March 31, 2006 and March 31, 2005

                                                          March 31,    March 31,
                                                            2006         2005
                                                         ---------    ---------
CASH FLOWS FROM OPERATING ACTIVITIES
     Net Loss ........................................   $(398,779)   $(790,088)
     Adjustments to reconcile net loss to net
       cash provided used in operating activities
          Amortization ...............................        --         28,923
          Stock issued for services ..................     299,266      459,017
       Changes in Current Assets and liabilities:
          Decrease (Increase) in Accounts receivable .       2,413      (16,396)
          (Increase) in Inventories ..................          (9)     (15,333)
          (Increase) in Prepaid expenses .............     (17,054)     (52,706)
          Increase (Decrease) in Accounts payable ....     (22,392)      50,572
          Increase (Decreased) in Accrued expenses ...     (16,731)     194,210
          Increase in Accrued interest ...............      13,789        5,396
          Increase in Accrued royalties ..............      16,953         --
          Increase in Accrued wages ..................     106,500       90,237
                                                         ---------    ---------
          NET CASH (USED) BY
               OPERATING ACTIVITIES ..................     (15,944)     (46,168)


CASH FLOWS FROM FINANCING ACTIVITIES
     Sale of Common stock ............................        --         60,000
     Increase (decrease) in Notes payable ............      30,000      (16,850)
     (Decrease) in Accounts payable SH ...............     (23,750)      (3,775)
                                                         ---------    ---------
          NET CASH PROVIDED BY
               FINANCING ACTIVITIES ..................       6,250       39,375
                                                         ---------    ---------

NET INCREASE (DECREASE) IN CASH ......................      (9,694)      (6,793)
CASH AT BEGINNING OF PERIOD ..........................      31,875       20,937
                                                         ---------    ---------
CASH AT END OF PERIOD ................................   $  22,181    $  14,144
                                                         =========    =========
See accompanying notes


                                       5
<PAGE>


                               SEALIFE CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                 MARCH 31, 2006


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

HISTORY:

Sealife Corp., a Nevada  corporation  ("Sealife  Nevada"),  was  incorporated in
2002. Also in 2002 Sealife Nevada became the sole  shareholder of SeaLife Marine
Products,  Inc.,  a  California  corporation.   The  subsidiary  was  formed  to
concentrate on certain marine product applications of its technology.

On  September  30,  2002  SeaLife  Nevada  entered  into an  agreement  with the
shareholders  of Division  G, Inc. to exchange  100% of the stock of Division G,
Inc. for shares of SeaLife Nevada's common stock. The agreement became effective
July 1, 2002. At the time of acquisition  Division G, Inc.'s assets consisted of
ownership of all rights in perpetuity to ProTerra AG, a soil conditioner, Grease
Bust, a grease  treatment  and  cleaner,  Soil  Rescue,  a soil  Bio-remediation
product,  OilEx, a soil  detoxification and rebuilding  product,  and Muni-Mix a
sewer clean-up and detoxification product. All products were in the early stages
of development. Division G, Inc. had no liabilities at the time of acquisition.

On July 31, 2002  Sealife  Nevada  formed a  wholly-owned  subsidiary,  ProTerra
Technologies,  Inc.,  a California  corporation.  The  subsidiary  was formed to
concentrate on the agricultural product applications.

On December 20, 2002,  SeaLife  Nevada was  acquired by SeaLife  Corporation,  a
Delaware corporation (the "Company"),  formerly Integrated Enterprises,  Inc., a
public,  reporting  corporation,  pursuant  to the  terms  of a  Share  Exchange
Agreement.  The Company was a shell at the time of the acquisition and therefore
the acquisition was treated as a reverse merger whereby the acquired  company is
treated as the acquiring  company for accounting  purposes.  At the same time as
the share exchange, the Company effected a 15 to 1 reverse stock split.

A history of the Company is as follows:

Sealife  Corporation,  formerly  Integrated  Enterprises,  Inc.,  formerly  Vast
Technologies  Holding Company,  Inc., formerly Fraser Realty Group, Inc., is the
successor  to  Fraser  Mortgage   Investments  (the  Trust),  an  unincorporated
association  in the  form  of a  business  trust  organized  in Ohio  under  the
Declaration of Trust dated May 7, 1969. At a special meeting of the shareholders
of the Trust  held on August  28,  1984 a plan of  reorganization  was  approved
pursuant to which:

         1.       All of the assets of the Trust were sold to FRG;

         2.       FRG assumed all of the Trust's liabilities and obligations;

         3.       Each issued and  outstanding  share of the Trust was converted
                  into one share of FRG common stock; and

         4.       The Trust was terminated.

The  purpose  of the  proposed  reorganization  was to  convert  the  Trust to a
business  organization  taxable as an  ordinary  corporation,  instead of a real
estate  investment  trust,  under  Federal  income tax laws.  Unless the context
otherwise requires, the term FRG includes its predecessor, the Trust.


                                       6
<PAGE>


FRG  invested in real estate and  mortgage  loans.  FRG was  organized as a real
estate trust,  primarily for the purpose of making  passive  investments in real
estate and passing  through the income  realized  from such  investments  to its
shareholders.  From its  inception,  FRG  financed  its real  estate  investment
operations  principally  through  sale of  common  stock,  and  short-term  debt
financing,  including both bank borrowings and the issuance of commercial paper.
FRG  saw  its  real  estate  investments  evolve  from  principally   short-term
construction loans to a mix of variable and fixed-rate mortgage loans of which a
significant  portion  consists of mortgage  positions on improved and unimproved
land held by investors for development purposes.  Accordingly, FRG's investments
in  mortgage  loans  represent  long-term  assets  with  the  realization  dates
dependent upon the equity holder's ability to complete  development  projects or
obtain refinancing from other sources.  At the same time, bank notes payable and
commercial  paper  outstanding were all short-term  borrowings  renewable at the
option of the note  holders.  FRG  relied on these  short-term  borrowings,  the
intermittent  repayment  of  loans  and the  refinancing  or  sale of  portfolio
investments in order to meet its current  obligations.  During fiscal 1989, cash
provided from these sources was wholly  inadequate to provide working capital to
fund operations.  Management was unable to secure  additional  financing or find
other  means of  obtaining  needed cash in fiscal 1990 to permit FRG to meet its
current obligations. Accordingly, management determined that there was no reason
to continue operating and, thus, incurring further losses. FRG has been inactive
since 1990 and has not conducted any business since that time.

On August 4,  1998,  the  Chairman  of the Board and  President  and with  first
receiving the consent,  approval and  authorization of FRG's Board of Directors,
filed  with  the  Secretary  of State  of  Delaware  for  renewal,  revival  and
restoration of the Company's Certificate of Incorporation.

On October 27, 1999 the Company  entered into an  Acquisition  Merger  agreement
with a private  company,  Motorsports USA, Inc. The Company also effected a name
change at that time to  Motorsports  USA,  Inc.  With this  transaction  certain
assets became the property of the Company.  However,  the custody and control of
such  assets  were not  perfected  and the  management  of the  private  company
evidenced tentative compliance with SEC reporting  requirements.  This condition
was considered  intolerable to the Company's  Board of Directors and accordingly
on August 1, 2000 the  transaction  was rescinded.  The Company also changed its
name on June 1,  2000 to Vast  Technologies  Holding  Company.  Accordingly  the
enclosed  financial  statements were prepared as if the merger with  Motorsports
USA, Inc. had not taken place.

On June 11, 2001 the Company changed its name to Integrated  Enterprises,  Inc.,
issued  12,000,000  shares of Common Stock for  services  and reverse  split its
Common  Shares,  one new common share for each ten old common  shares with a par
value of $ 0.0001 per share.

On December 20, 2002 the Company acquired SeaLife Nevada.

Basis of Consolidation:

The accompanying  consolidated  financial statements include the accounts of the
Company,  SeaLife Nevada, a wholly-owned  subsidiary of the Company, and SeaLife
Marine Products, Inc., ProTerra Technologies, Inc. and Division G, Inc., SeaLife
Nevada's  three  subsidiaries.   All  significant   inter-company  accounts  and
transactions, if any, have been eliminated in consolidation.

Cash and Cash Equivalents:

For the  purposes of the  Statement  of Cash Flows,  the Company  considers  all
short-term debt securities to be cash equivalents.


                                       7
<PAGE>


Income Taxes:

The Company  accounts for income taxes under a method,  which requires a company
to recognize  deferred tax assets and  liabilities  for the expected  future tax
consequences  of events  that  have been  recognized  in a  company's  financial
statements  or  tax  returns.  Under  this  method,   deferred  tax  assets  and
liabilities  are  determined  based  on the  difference  between  the  financial
statements  carrying  amounts  and tax basis of  assets  and  liabilities  using
enacted tax rates.  The Company  presently  prepares  its tax return on the cash
basis and its financial  statements on the accrual basis. No deferred tax assets
or liabilities  have been  recognized at this time,  since the Company has shown
losses for both tax and financial  reporting.  The Company's net operating  loss
carry forward at March 31, 2006 is approximately $8,230,517.

Use of Estimates:

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect certain  reported amounts and  disclosures.  Accordingly,  actual results
could differ from those estimates.

Development Stage:

Until  January 1, 2005,  the  Company,  together  with its  subsidiaries,  was a
development  stage company as defined under  Statements of Financial  Accounting
Standards No. 7.

NOTE 2 - TECHNOLOGIES

SeaLife  Marine  Products,  Inc.  entered  into an asset  purchase  agreement to
acquire  certain  technologies  (the "Marine  Product  Technologies")  from Gael
Himmah  effective  September 30, 2002. The purchase price for the Marine Product
Technologies was $1,335,309.  Under this purchase agreement the Company acquired
the following:

     1.  Patents,  patent application rights for EPA registration number 70214-1
         and all modifications, enhancements and improvements thereon.
     2.  All rights in  perpetuity,  including  but not limited to SeaLife 1000,
         SeaLife 2000 (now known as SeaLife 1000 OutDrive(TM)), and SeaLife 3000
         (now known as SeaLife 1000 XP(TM)),  present and future marine  coating
         and  all  modifications,   variations,  enhancements  and  improvements
         thereon.
     3.  Full power to enforce its ownership interests.

SeaLife 1000 is a  solvent-based,  anti-fouling  coating for underwater  use. It
provides a unique  anti-shell,  anti-algae,  anti-fungus and anti-rust  coating,
with competitive results.

SeaLife 1000 OutDrive(TM) is a solvent-based, anti-fouling coating for submerged
marine use.

SeaLife 1000 XP(TM) is a solvent-based coating with advanced anti-rust additives
for above water applications.


                                       8
<PAGE>


NOTE 3 -  INTANGIBLE ASSETS

During the quarter ended  December 31, 2005,  the Company  recorded a $1,362,826
charge  for  the  impairment  of  technology   assets.   The  impairment  charge
attributable to certain  technologies owned by our ProTerra  Technologies,  Inc.
subsidiary  is  $338,889  and the  charge  attributable  to the  Marine  Product
Technologies is $1,023,937. After reevaluating the resources currently available
to the Company and the  historically  minimal  sales,  management  has developed
revised  financial  projections.  The  Company  believes  that the delays it has
experienced  in  implementing  its sales and marketing  plan,  and difficulty in
obtaining  investment,  due, in part, to the continuing  Securities and Exchange
Commission ("SEC") lawsuit, may have resulted in the potential impairment of its
technology assets and that an impairment  analysis was required to be performed.
In accordance  with SFAS No. 144  "Accounting  for the Impairment or Disposal of
Long-Lived  Assets," the  impairment  charge was  determined  by  comparing  the
estimated fair value of the related assets to their  carrying  value.  The write
down established a new cost basis for the impaired assets.

The components of intangible assets as of December 31, 2005 are set forth in the
following table:

<TABLE>
<CAPTION>
                                                           IMPAIRMENT OF
                                                             DEVELOPED       NET BOOK
                               FAIR VALUE    ACCUMULATED     TECHNOLOGY      VALUE AT
                              AND ADDITIONS  AMORTIZATION    INTANGIBLE      12/31/05
                               -----------   -----------    -----------    -----------
<S>                            <C>           <C>            <C>            <C>
Marine Product Technologies    $ 1,335,309   $   311,580    $(1,023,729)   $      --
Secondary ProTerra Product
   Technologies ............       400,000        61,111       (338,889)          --
                               -----------   -----------    -----------    -----------
                               $ 1,735,309   $   372,691    $(1,362,618)   $      --
                               ===========   ===========    ===========    ===========
</TABLE>


Due to the Technology impairment analysis,  the net book value for the Company's
technologies is zero and will not be an expense to the future  financials of the
company  including this first quarter ending March 31, 2006.  There are no other
assets that qualify for amortization.

NOTE 4 - NOTES PAYABLE

Current Notes Payable:

On January 9, 2004,  the Company,  in  connection  with a  consulting  contract,
issued a $100,000  note to one of its  consultants.  The note was due in full on
January  9, 2005,  and is  unsecured.  The  interest  rate is 7% per annum.  The
balance of the note at March 31, 2006 was $115,616.  The Company is currently in
default under this note.

On June 14, 2004,  the Company  entered into a $30,000 note with an  individual.
The note was due June 14, 2005, is unsecured, and does not call for any payments
until  maturity.  The interest rate is 7% per annum.  The balance of the note at
March 31, 2006 was $33,781. The Company is currently in default under this note.

On August 4, 2004,  the Company  entered into a $35,000 note with an individual.
The  note  was due  September  15,  2004,  was  unsecured,  and did not call for
payments  until  maturity.  The interest  rate is 36% per annum.  The Company is
currently in default under this note. The balance of the note including interest
at December 31, 2005 was  $55,800.  On March 17, 2006 the  individual  agreed to
accept 521,983 shares of our restricted  common stock as  consideration  for the
cancellation of the note.

On June 6, 2005, the Company entered into a $15,000 note with an individual. The
note was due  December  31, 2005,  was  unsecured  and did not call for payments
until  maturity.  The  interest  rate is 10% per month.  The balance of the note
including  interest  at March  31,  2006 was  $31,450.  On  April  21,  2006 the
individual  agreed to accept 262,083  shares of our  restricted  common stock as
consideration for the cancellation of the note.


                                       9
<PAGE>


On June 30, 2005, the Company entered into a $8,000 note with an individual. The
note is  open-ended  and is unsecured.  The interest  rate is 7% per annum.  The
Company is currently not in default under this note.

On December 22, 2005 the company  entered into 3 notes with 3 individuals,  each
at $10,000 for a total of  $30,000.  The  interest  rate is 7% per annum and the
notes are due  December  21,  2006,  December  22, 2006 and  December  27, 2006,
respectively.  The balances of these notes including  interest at March 31, 2006
was $10,192, $10,175 and $10,175,  respectively. The company is currently not in
default under these notes.

During the nine month period ended  September  30,  2005,  the Company  issued a
five-year note for $14,500 at a 5% annual  interest rate to its director,  chief
executive office and chief financial  officer,  Robert McCaslin,  as evidence of
prior loans made to the Company.

Long - Term Debt - Notes Payable:

In connection  with the purchase of the Marine Product  Technologies on June 30,
2002,  SeaLife Nevada issued a ten-year note for $1,335,309 to Gael Himmah.  The
note is to be  repaid  based on the  Company's  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.  The  note  payments  are to be made  monthly  and the note  bears
interest at the rate of 7% per annum. The note may be converted at the option of
the holder  into  common  stock of the  company at a  conversion  price which is
equivalent  to 80% of the market  price,  based on the  average bid price of the
Company's  common stock over the previous  thirty (30) days.  On January 2, 2003
Mr. Himmah  converted  $1,000,000 of the note into  1,000,000  shares of SeaLife
Corporation  common  stock.  The  balance  of the  note at  March  31,  2006 was
$220,309.  At March 31, 2006, $13,848 of principal  repayment was past due based
on the terms of 5% of sales since the date of the note,  and interest of $64,817
was also past due. The note has certain default  provisions and stated period of
times to correct the default.  Because of the repayment schedule of the note and
an inability to accurately  forecast future sales,  maturities on long-term debt
annually can not be computed.

The Company is in default on royalty  payments  of $3,105 owed to Mr.  Himmah on
the sale of  products  utilizing  certain  technologies  owned by the  Company's
Proterra Technologies, Inc. subsidiary.

NOTE 5 - COMMON STOCK

The Company has 100,000,000  shares of $.0001 par value Common Stock authorized.
At March 31, 2006 and March 31, 2005 the Company had 30,139,454,  and 18,635,793
shares outstanding respectively.

During the quarter ended March 31, 2006 the Company issued  2,204,165  shares of
Common Stock for services. The shares issued and value assigned for these shares
are as follows:


                                       10
<PAGE>


SERVICE                                               SHARES             VALUE
--------------------------------------------         ---------         ---------
Business Consulting ........................         1,321,537         $ 176,459
Legal Services .............................           569,275            80,697
Officer Salaries ...........................           313,353            42,110
                                                     ---------         ---------
Total Stock for Services ...................         2,204,165         $ 299,266
                                                     =========         =========
NOTE 6 - PREFERRED STOCK

The Company had 2,000,000 shares of convertible  preferred stock  outstanding at
December 20,  2002,  the date the Company  acquired  SeaLife  Nevada.  These had
conversion  rights of 10 shares of common  for each  share of  preferred.  In an
agreement  signed  June 24,  2003 the  owners of these  shares  agreed to cancel
1,840,000 shares of preferred stock. The remaining 160,000 shares were converted
into  1,600,000  shares of common stock of the Company of which  300,000  shares
were  conveyed to the original  shareholders  of SeaLife  Nevada,  including the
current Directors of the Company

NOTE 7 - CONSULTING AGREEMENT

On September  30, 2002, in  connection  with the purchase of the Marine  Product
Technologies,  SeaLife  Nevada  entered  into a  consulting  agreement  with the
developer of the Marine Product Technologies, Gael Himmah, for his advice in the
use and  improvement of such assets.  This agreement was assigned to the Company
and amended in January 2003.  Mr. Himmah is to provide all necessary  support in
complying  with  government  regulations,  in  solving  specific  marketing  and
environmental  problems,  in  product  improvement,  in  developing  operational
protocols,  in advising and support on the operation of the  Company's  business
and to assist in the purchase or  manufacture  of the  Company's  products.  The
agreement  calls for the consultant to receive  $10,000 per month from September
1, 2002 to April 15, 2004, and $12,000 per month  thereafter  until September 1,
2007.  During the quarter  ended  November 30, 2003 the Company  entered into an
additional  agreement with this consultant to provide  services through December
31, 2003 for an additional 300,000 shares of the Company's common stock.  During
2004 the  consultant  agreed to accept  100,000  shares of the Company's  common
stock in lieu of compensation owed to him pursuant to the consulting  agreement.
During the three months ended March 31,  2006,  Mr.  Himmah was not issued stock
for services due to discussions concerning changes in his contract. At March 31,
2006, the company owed Mr. Himmah $62,500.  Effective April 20, 2006, Mr. Himmah
agreed to accept  shares of common stock having a value of $75,000 on the day of
issuance  in  lieu  of  compensation  owed  to him  pursuant  to the  consulting
agreement.

NOTE 8 - GOING CONCERN

The  Company has not  generated  significant  revenues or profits to date.  This
factor  among  others may  indicate  the Company will be unable to continue as a
going concern.  The Company's  continuation  as a going concern depends upon its
ability to  generate  sufficient  cash flow to conduct  its  operations  and its
ability to obtain additional sources of capital and financing.  The accompanying
consolidated  financial  statements  do not include any  adjustments  that might
result from the outcome of this uncertainty.

NOTE 9 - RELATED PARTIES

At  December  31,  2005,  the  Company  owed J.P. Heyes,  a director,  executive
officer,  and major  shareholder of the Company,  $10,000 for monies advanced to
the  Company.  The note bears  interest of 7% annual rate and has no priority in
liquidation.


                                       11
<PAGE>


During the year ended  December  31, 2005,  Mr.  McCaslin  converted  $12,477 in
advances to the Company into 78,472  shares of restricted  stock and J.P.  Heyes
converted$122,410  in advances to the Company into 769,874  shares of restricted
stock.

Effective   December  31,  2005,  Ms.  Heyes  elected  to  convert  her  accrued
compensation  as of such date,  totaling  $158,998 into 1,487,353  shares of our
restricted common stock.

The Company  owed Mr.  McCaslin an  aggregate of $294,000 for wages at March 31,
2006.  The Company owed Ms. Heyes an aggregate of $25,000 for wages at March 31,
2006.

On January 1, 2004 the Company  entered into a 5-year  employment  contract with
Mr. McCaslin, the President of the Company. The agreement defines the duties and
responsibilities of the position,  provides an annual compensation of $300,000 a
year,  with certain  vacation and sick days. The Company is required to maintain
an office and certain death benefits during the term of the contract. On October
29, 2004 the contract was amended to provide for annual compensation of $200,000
per year.

On January 1, 2004 the Company  entered into a 4-year  employment  contract with
Ms. Heyes, the  Vice-President of the Company.  The agreement defines the duties
and  responsibilities  of the  position,  provides  an  annual  compensation  of
$300,000, with annual reviews and the participation in an incentive program when
adopted.  On October  29,  2004 the  contract  was amended to provide for annual
compensation of $100,000 per year.

On June 14, 2004 the Company  entered  into an  employment  contract  with Barre
Rorabaugh,  the President of the Company's  subsidiary,  Sealife Marine, for the
period extending through December 31, 2008. The agreement defines the duties and
responsibilities  of the position,  provides an annual  compensation of $150,000
with annual reviews and the  participation in an incentive program when adopted.
During the three months ended March 31, 2006,  Mr.  Rorabaugh  accepted  313,353
shares of common  stock,  in lieu of  compensation  owed to him  pursuant to his
employment agreement.

On June  30,  2002,  in  connection  with the  purchase  of the  Marine  Product
Technologies,  SeaLife  Nevada  entered  into a  consulting  agreement  with the
developer of the Marine Product Technologies, Gael Himmah, for his advice in the
use and  improvement of such assets.  This agreement was assigned to the Company
and amended in January 2003.  Mr. Himmah is to provide all necessary  support in
complying  with  government  regulations,  in  solving  specific  marketing  and
environmental  problems,  in  product  improvement,  in  developing  operational
protocols,  in advising and support on the operation of the  Company's  business
and to assist in the purchase or  manufacture  of the  Company's  products.  The
agreement  calls for the consultant to receive  $10,000 per month from September
1, 2002 to April 15, 2004, and $12,000 per month  thereafter  until September 1,
2007.  During the quarter  ended  November 30, 2003 the Company  entered into an
additional  agreement with this consultant to provide  services through December
31, 2003 for an additional 300,000 shares of the Company's common stock.  During
2004 the  consultant  agreed to accept  100,000  shares of the Company's  common
stock in lieu of compensation owed to him pursuant to the consulting  agreement.
During the three months ended March 31,  2006,  Mr.  Himmah was not issued stock
for services due to discussions concerning changes in his contract. At March 31,
2006, the company owed Mr. Himmah  $62,500.  Effective April 20, 2006, Mr Himmah
agreed to accept  shares of common stock having a value of $75,000 on the day of
issuance  in  lieu  of  compensation  owed  to him  pursuant  to the  consulting
agreement.


                                       12
<PAGE>


In connection  with the purchase of the Marine Product  Technologies on June 30,
2002,  SeaLife Nevada issued a ten-year note for $1,335,309 to Gael Himmah.  The
note is to be  repaid  based on the  Company's  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.  The  note  payments  are to be made  monthly  and the note  bears
interest at the rate of 7% per annum. The note may be converted at the option of
the holder  into  common  stock of the  company at a  conversion  price which is
equivalent  to 80% of the market  price,  based on the  average bid price of the
Company's  common stock over the previous  thirty (30) days.  On January 2, 2003
Mr. Himmah  converted  $1,000,000 of the note into  1,000,000  shares of SeaLife
Corporation  common  stock.  The  balance  of the  note at  March  31,  2006 was
$220,309.  At March 31, 2006, $13,848 of principal  repayment was past due based
on the terms of 5% of sales since the date of the note,  and interest of $64,817
was also past due. The note has certain default  provisions and stated period of
times to correct the  default.  With respect to ProTerra  products,  the Company
owed Mr. Himmah $3,105 based on a commission that ranges from 3% to 10% on sales
of such products.

NOTE 10 - SUBSEQUENT EVENT, GAEL HIMMAH AGREEMENT

On April 20, 2006 the Company and Gael Himmah,  the company's  Chief  Consulting
Scientist, executed a Consulting Agreement,  Settlement and General Release that
reflects an additional consulting agreement with Mr. Himmah,  settlement of past
due compensation  and validation of the Company's  ownership of the ProTerra and
SeaLife Marine  products.  Pursuant to the new  consulting  agreement Mr. Himmah
will  consult  with  respect to the  development  and  commercialization  of the
Company's  current  technologies  and will assist the Company's  capital-raising
efforts by attending and participating in meetings with potential  investors and
otherwise assisting in developing  relationships with the investment  community.
As compensation for such services,  Mr. Himmah will receive commissions equal to
10% of the net sales of products utilizing the initial ProTerra  Technologies up
to  an   aggregate   of   $2,500,000   and   8%   of   such   sales   up  to  an
additional $3,200,000.

NOTE 11 - SECURITIES AND EXCHANGE COMMISSION INVESTIGATION

On April 5, 2005,  the United States  Securities  and Exchange  Commission  (the
"SEC")  filed a civil  complaint  in the United  States  District  Court for the
District of Colorado  against the Company,  Robert McCaslin (our Chief Executive
Officer and Chief  Financial  Officer),  and several third parties not currently
affiliated with the Company,  alleging  violations of the Securities Act of 1933
and the Securities  Exchange Act of 1934 in connection with events that occurred
in 2002 and 2003.

The complaint  alleges that the Company,  Mr. McCaslin and six other individuals
and  entities  engaged in a "scheme" to defraud the  investing  public by "using
materially false and misleading public statements and manipulative stock trading
to create an artificial  market for, and to sell,  stock in the Company  without
registration or a valid exemption under the federal securities laws."

Specifically,  the complaint  alleges that, Mr. McCaslin  retained Roland Thomas
("Thomas")  to  raise  capital  for the  Company  and  promote  the  company  to
investors,  and to  raise  $400,000  to pay the  principal  shareholders  of the
Company and complete the acquisition  SeaLife Nevada,  and that Thomas devised a
plan with Douglas A. Glaser  ("Glaser")  to meet those  goals.  To carry out the
plan,  the complaint  alleges,  the Company issued one million shares to Thomas,
Glaser,  and an employee of ERT Technology  Corporation (a Delaware  corporation
owned by Thomas, Douglas A. Glaser and Barry S. Griffin ("Griffin"),  Jeffrey A.
Hayden ("Hayden"), and Morgan J. Wilbur III ("Wilbur"), and registered the stock
with the SEC 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 the Company
and to promote and maintain the market for the  Company's  stock.


                                       13
<PAGE>


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 close to one  million  shares of the
Company's common stock. During this time, the Company was engaged in 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 the Company's  web site for public  review.  The  complaint  alleges that the
publicity included materially false and misleading  information,  which included
claims (a) that the Company's  products were ready to be marketed,  when in fact
the Company needed capital to conduct  further  testing;  (b) that the Company's
intellectual  property was worth more than $60 million, when in fact the Company
carried  the  property  on its  books at less than  $1.5  million;  and (c) that
projected over $5 million sales during the Company's  first year and significant
profits based on a 70% gross  margin,  when in fact the Company had no basis for
figuring our sales margin and could not meet its projections  without additional
product  testing and  capital.  In  addition,  the  complaint  alleges  that the
Company's  publicity  campaign did not  disclose the $400,000  owed to the prior
principal  shareholders of the Company or the fact that the Company had retained
Thomas  and  Glaser  to sell the  Company's  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 our common 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.  The complaint also alleges
that the Company 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 Mr.  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 Mr. 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 Mr.  McCaslin,  and penny stock bars against  Thomas,  ERT,  Glaser,
Griffin, Hayden, and Wilbur.

Based on their review of the  complaint,  the Company and Mr.  McCaslin deny the
allegations  made  by the  SEC,  and  intend  to  continue  to  investigate  the
allegations  and vigorously  defend the suit. The Company and Mr.  McCaslin have
been served with the complaint, and no further proceedings are scheduled at this
time.


                                       14
<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         The information contained in this Form 10-QSB is intended to update the
information  contained  in our Annual  Report on Form  10-KSB for the year ended
December 31, 2005 and presumes  that readers have access to, and will have read,
the  "Management's  Discussion  and  Analysis  or Plan of  Operation"  and other
information contained in such Form 10-KSB and 2005 Form 10-QSB previously filed.
The  following  discussion  and analysis  also should be read  together with our
condensed  consolidated  financial  statements  and the  notes to the  condensed
consolidated financial statements included elsewhere in this Form 10-QSB.

         THIS  DISCUSSION  SUMMARIZES  THE  SIGNIFICANT  FACTORS  AFFECTING  THE
CONSOLIDATED OPERATING RESULTS, FINANCIAL CONDITION AND LIQUIDITY AND CASH FLOWS
OF SEALIFE  CORPORATION.  FOR THE THREE MONTHS ENDED MARCH 31, 2006.  EXCEPT FOR
HISTORICAL  INFORMATION,  THE MATTERS DISCUSSED IN THIS MANAGEMENT'S  DISCUSSION
AND ANALYSIS OR PLAN OF OPERATION ARE  FORWARD-LOOKING  STATEMENTS  THAT INVOLVE
RISKS AND UNCERTAINTIES AND ARE BASED UPON JUDGMENTS  CONCERNING VARIOUS FACTORS
THAT ARE BEYOND OUR CONTROL.  ACTUAL RESULTS COULD DIFFER  MATERIALLY FROM THOSE
PROJECTED IN THE FORWARD-LOOKING  STATEMENTS AS A RESULT OF, AMONG OTHER THINGS,
THE FACTORS  DESCRIBED BELOW UNDER THE CAPTION  "CAUTIONARY  STATEMENTS AND RISK
FACTORS."

OVERVIEW

         SeaLife Corporation was formed as a Delaware  corporation in 1984 under
the name Fraser  Realty  Group.  We operated as a real estate  investment  trust
until 1990,  when 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.

         On December 17, 2002, pursuant to an Exchange Agreement dated September
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 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. to SeaLife Corporation,  our former
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 a change of control  of, with the former
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
transaction  date.  Accordingly,  the  pre-transaction  financial  statements of
SeaLife Nevada are now our historical financial statements.

         Sealife  Nevada was organized in April of 2002 to acquire,  develop and
market certain proprietary  products invented by Gael Himmah. At the time of the
Acquisition,  Sealife Nevada owned all of the  outstanding  stock of 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 and sole shareholder of Sealife Nevada,  which, in turn, was the sole
shareholder of Division G, Sealife Marine and ProTerra.


                                       15
<PAGE>


         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 developed a line of products utilizing such "probiotic" technologies
for the marine, agricultural and remediation markets. We began substantial sales
and  marketing  efforts in the first  quarter of 2005.  In  anticipation  of our
intended growth and the introduction of additional products to the market in the
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   wholly-owned   subsidiary,   SeaLife  Marine.  Our
agricultural  products  business is operated  by the our  indirect  wholly-owned
subsidiary, ProTerra. Our remediation product business is operated as a. 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.

CRITICAL ACCOUNTING POLICIES, JUDGMENTS AND ESTIMATES

         Our discussion and analysis of our financial  conditions and results of
operations are based upon our consolidated financial statements, which have been
prepared in accordance  with  generally  accepted  accounting  principles in the
United States. The preparation of financial  statements  requires  management to
make  estimates  and  judgments  that affect the reported  amounts of assets and
liabilities,  revenues and expenses and disclosures on the date of the financial
statements. On an on-going basis, we evaluate our estimates,  including, but not
limited  to,  those  related  to  revenue  recognition.   We  use  authoritative
pronouncements,  historical  experience  and other  assumptions as the basis for
making judgments.  Actual results could differ from those estimates.  We believe
that the following  critical  accounting  policies  affect our more  significant
judgments  and  estimates  in  the  preparation  of our  consolidated  financial
statements.

         IMPAIRMENT  OF  GOODWILL.  We adopted SFAS No. 142 for all goodwill and
other intangible assets recognized in our statement of financial  position as of
May 31,  2004.  This  standard  changes  the  accounting  for  goodwill  from an
amortization method to an impairment-only  approach.  Our technologies are being
amortized over 15 years. This is management's best estimate of the technologies'
life at this time.

         REVENUE  RECOGNITION.  Revenue  is  recognized  on the day a product is
shipped and invoiced.

         ACCOUNTS  RECEIVABLE.  Accounts  receivable balances are evaluated on a
continual   basis  and   allowances,   if  any,  are  provided  for  potentially
uncollectible  accounts based on management's estimate of our ability to collect
such accounts. If the financial condition of a customer deteriorates,  resulting
in an impairment of its ability to make payments, an additional allowance may be
required. Allowance adjustments, if any, are charged to operations in the period
in which the facts that give rise to the  adjustments  become known. To date, we
have not had any customer  whose payment was  considered  past due, and as such,
have not recorded any reserves for doubtful collectability.


                                       16
<PAGE>


         STOCK-BASED COMPENSATION. We account for stock-based compensation using
Accounting Principles Board ("APB") Opinion No. 25, "ACCOUNTING FOR STOCK ISSUED
TO EMPLOYEE."

RECENT ACCOUNTING PRONOUNCEMENTS

         In December 2004, the Financial  Accounting  Standards  Board, or FASB,
issued SFAS No. 123R "SHARE-BASED PAYMENT," a revision to FASB No. 123. SFAS No.
123R replaces existing  requirements  under SFAS No. 123 and APB Opinion No. 25,
and  requires  public  companies  to  recognize  the cost of  employee  services
received in exchange for equity instruments,  based on the grant-date fair value
of those instruments,  with limited  exceptions.  SFAS No. 123R also affects the
pattern in which  compensation  cost is recognized,  the accounting for employee
share purchase  plans,  and the accounting for income tax effects of share-based
payment transactions. For small-business filers, SFAS No. 123R will be effective
for  interim  periods  beginning  after  December  15,  2005.  We are  currently
determining  what  impact the  proposed  statement  would have on our results of
operations and financial position.

         The  FASB  has  proposed  FASB  Staff  Position  No.  SFAS  No.  109 a,
"APPLICATION OF FASB STATEMENT NO. 109, ACCOUNTING FOR INCOME TAXES, FOR THE TAX
DEDUCTION PROVIDED TO U.S. BASED MANUFACTURERS BY THE AMERICAN JOBS CREATION ACT
OF 2004." On October 22,  2004,  the  AMERICAN  JOBS  CREATION  ACT OF 2004 (the
"ACT") was signed into law by the  President.  This Act  includes tax relief for
domestic  manufacturers by providing a tax deduction up to 9 percent (when fully
phased-in) of the lesser of (a)  "qualified  production  activities  income," as
defined  in the  Act,  or (b)  taxable  income  (after  the  deduction  for  the
utilization of any net operating loss carry forwards).  As a result of this Act,
an issue has arisen as to whether this  deduction  should be accounted  for as a
special  deduction or a tax rate reduction  under  Statement 109. The FASB staff
believes that the domestic manufacturing deduction's characteristics are similar
to special deductions because the domestic  manufacturing  deduction is based on
the future  performance  of specific  activities,  including the level of wages.
Accordingly,  the FASB staff believes that the deduction  provided for under the
Act should be accounted for as a special  deduction in accordance with Statement
109 and not as a tax rate  reduction.  This provision of the Act is not expected
to have an impact on our financial statements.

         In November 2004, the FASB issued FASB Statement No. 151, which revised
ARB No.43,  relating  to  inventory  costs.  This  revision  is to  clarify  the
accounting  for abnormal  amounts of idle facility  expense,  freight,  handling
costs and wasted material  (spoilage).  This Statement requires that these items
be  recognized as a current  period  charge  regardless of whether they meet the
criterion  specified  in ARB  43.  In  addition,  this  Statement  requires  the
allocation of fixed production  overheads to the costs of conversion be based on
normal  capacity of the production  facilities.  This Statement is effective for
financial  statements for fiscal years  beginning  after June 15, 2005.  Earlier
application  is permitted  for  inventory  costs  incurred  during  fiscal years
beginning  after the date this  Statement is issued.  Management  believes  this
Statement will have no impact on our financial statements once adopted.

         In December  2004, the FASB issued FASB Statement No. 152, which amends
FASB  Statement No. 66,  Accounting  for Sales of Real Estate,  to reference the
financial  accounting  and  reporting  guidance  for  real  estate  time-sharing
transactions  that is provided in AICPA  Statement  of  Position  ("SOP")  04-2,
ACCOUNTING FOR REAL ESTATE TIME-SHARING TRANSACTIONS. This Statement also amends
FASB Statement No. 67,  ACCOUNTING  FOR COSTS AND INITIAL  RENTAL  OPERATIONS OF
REAL ESTATE PROJECTS,  to state that the guidance for (a) incidental  operations
and (b)  costs  incurred  to  sell  real  estate  projects  does  not  apply  to
real-estate time-sharing  transactions.  The accounting for those operations and
costs is


                                       17
<PAGE>


subject to the guidance in SOP 04-2.  This  Statement is effective for financial
statements for fiscal years beginning after June 15, 2005.  Management  believes
this Statement will have no impact on our financial statements once adopted.

         In  December  2004,  the FASB  issued  FASB  Statement  No.  153.  This
Statement  addresses the  measurement  of exchanges of nonmonetary  assets.  The
guidance in APB Opinion No. 29,  ACCOUNTING  FOR  NONMONETARY  TRANSACTIONS,  is
based on the principle that  exchanges of nonmonetary  assets should be measured
based on the fair value of the assets  exchanged.  The guidance in that Opinion,
however,  included certain  exceptions to that principle.  This Statement amends
Opinion 29 to  eliminate  the  exception  for  nonmonetary  exchanges of similar
productive  assets and  replaces it with a general  exception  for  exchanges of
nonmonetary assets that do not have commercial substance. A nonmonetary exchange
has commercial  substance if the future cash flows of the entity are expected to
change  significantly  as a result of the exchange.  This Statement is effective
for financial statements for fiscal years beginning after June 15, 2005. Earlier
application is permitted for nonmonetary asset exchanges  incurred during fiscal
years beginning after the date of this Statement is issued.  Management believes
this Statement will have no impact on our financial statements once adopted.

COMPARISON  OF THREE MONTHS ENDED MARCH 31, 2006 VERSUS THREE MONTHS ENDED MARCH
31, 2005

RESULTS OF OPERATIONS

         REVENUES

         We had  revenues of $25,775 for the three  months  ended March 31, 2006
and revenues of $36,052 for the same period ending in 2005. Proterra contributed
66.3% and SeaLife  Marine 33.7% of the revenues for the three months ended March
31, 2006. Sales for Marine products are down  significantly due to the company's
limited  funding  and  therefore  its ability to fill  orders.  Both the limited
funding  and the slow  recovery  of the  economies  in the  Southeast  and other
southern  states will continue to affect our sales for some time. Our sales rate
will depend on the success of our marketing  efforts,  regulatory  acceptance of
our products,  and our ability to raise additional  capital to support continued
operations.

         OPERATING EXPENSES

         Our Cost of Sales for the three months ended March 31, 2006 and for the
same period ending in 2005 was $14,465 and $20,049  respectively.  Cost of sales
over these  periods  consisted of costs for goods and services  directly used in
the production of our Proterra and SeaLife Marine coating products. The decrease
in Cost of Sales is directly  attributable to our decrease in product sales over
the 3 month period.  Our goal is to lower costs as a percentage of revenues,  in
part, by increasing volume to achieve bulk discounts.

         We incurred a net loss of $398,779 for the three months ended March 31,
2006 as compared to a net loss of $790,088  for the three months ended March 31,
2005. This loss solely represents a loss from operations. Our net loss primarily
reflects  costs for  consultants,  attorneys  and  employees  with limited sales
revenue.

           Total operating expenses consist of general administrative, sales and
marketing  expenses.  For the three months ended March 31, 2006, total operating
expenses  were  $410,089  versus  $806,090 for the period ending March 31, 2005.
This  represents  a 49.1%  decrease  due to a  reduction  in the use of  outside
consultants and legal expenses.


                                       18
<PAGE>

         The majority of our expenses are recorded as paid-in capital, since the
large  majority of our  administrative  expenses were paid in the form of common
stock instead of cash.

LIQUIDITY AND CAPITAL RESOURCES

         As of March 31, 2006, we had bank  overdrafts of  approximately  $2,819
and negative working capital of approximately  $574,179. We expect a significant
use of cash  during the  balance of fiscal  2006 as we  continue  to develop our
sales and marketing  efforts.  We anticipate that our current cash reserves plus
cash we expect to generate  from  operations  will not be sufficient to fund our
operational  expenditures for the balance of 2006. We anticipate a need to raise
additional funds by issuing  additional  equity,  the amount and timing of which
will depend on sales volume and  increased  investment  spending in the areas of
sales/marketing and expenses in the legal and administration categories.

         If  additional   funds  are  raised  through  the  issuance  of  equity
securities, the current stockholders may experience dilution. Furthermore, there
can be no assurance that additional  financings will be available when needed or
that  if  available,  such  financings  will  include  terms  favorable  to  our
stockholders.  If such  financings  are not  available  when required or are not
available on acceptable  terms,  we may be unable to take  advantage of business
opportunities  or respond to  competitive  pressures,  any of which could have a
material  adverse  effect on our  business,  financial  condition and results of
operations.

         CASH FLOWS

         We currently satisfy our working capital requirements primarily through
sales and grants of equity  securities.  For the three  months  ended  March 31,
2006,  we had a net decrease in cash of  approximately  $9,694.  Cash flows from
operating,  and financing  activities  for the three months ended March 31, 2006
are summarized in the following table:

                                                        THREE MONTHS ENDED
                                                             MARCH 31,
                                                   ----------------------------
ACTIVITY:                                              2005            2006
------------------------------------------------   ------------    ------------

Operating activities ...........................   $    (46,168)   $    (15,944)
Financing activities ...........................         39,375           6,250
  Net increase (decrease) in cash ..............   $     (6,793)   $     (9,694)


GOING CONCERN

         Our independent  auditor expressed  substantial doubt as to our ability
to  continue  as a going  concern,  in its report for the  twelve  months  ended
December 31, 2005,  based on significant  operating  losses that we incurred and
the fact that we do not have adequate  working capital to finance our day-to-day
operations.

         We currently  plan to raise  additional  capital  through the public or
private  placement  of our common  stock  and/or  private  placement  of debt or
convertible  debentures  in order to meet our ongoing cash needs.  However,  the
additional funding we require may not be available on acceptable terms or at all
and, if obtained, could result in significant dilution. Management also hopes to
begin generating commercial orders for its SeaLife 1000(TM) marine paint product
which would generate additional cash flow.


                                       19
<PAGE>


         To date we have financed  approximately  95% of our expenses by issuing
shares  of  common   stock  in  exchange   for   services  of  legal  and  other
professionals.  The remaining 5% was financed  through  private  placement stock
offerings.  In  order  to  expand,  we will be  required  to  obtain  additional
financing either in the form of debt or equity.

         If we cannot obtain adequate  funding or achieve revenues from the sale
of our products,  we could be required to significantly curtail or even shutdown
our operations.

CAUTIONARY STATEMENTS AND RISK FACTORS

         Several   of  the   matters   discussed   in  this   document   contain
forward-looking  statements  that  involve  risks  and  uncertainties.   Factors
associated with the  forward-looking  statements that could cause actual results
to differ  materially  from those  projected  or  forecast  are  included in the
statements  below.  In addition to other  information  contained in this report,
readers should carefully consider the following cautionary statements.

                                  RISK FACTORS

YOU  SHOULD  CAREFULLY  CONSIDER  THE  FOLLOWING  RISK  FACTORS  AND  ALL  OTHER
INFORMATION  CONTAINED  IN THIS REPORT  BEFORE  PURCHASING  SHARES OF OUR COMMON
STOCK.  INVESTING IN OUR COMMON STOCK  INVOLVES A HIGH DEGREE OF RISK. IF ANY OF
THE  FOLLOWING  EVENTS OR OUTCOMES  ACTUALLY  OCCURS,  OUR  BUSINESS,  OPERATING
RESULTS AND FINANCIAL  CONDITION WOULD LIKELY SUFFER.  AS A RESULT,  THE TRADING
PRICE OF OUR COMMON  STOCK  COULD  DECLINE,  AND YOU MAY LOSE ALL OR PART OF THE
MONEY YOU PAID TO PURCHASE OUR COMMON STOCK.

                          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 twelve months ended December
31, 2005 which raises substantial doubt about our ability to continue as a going
concern.  While we have relied principally in the past on external financing and
the payment of equity as direct  compensation for services to provide  liquidity
and capital resources for our operations, we can provide no assurances that cash
generated  from  operations  together  with cash  received  in the  future  from
external  financing  will be  sufficient  to  enable us to  continue  as a going
concern.

         Additionally, we can provide no assurances that service providers, such
as our lawyers and other  consultants,  previously  willing to accept our common
stock as direct compensation for their services, will continue to find that form
of  compensation  acceptable.  If these service  providers  refuse to accept our
equity as compensation,  and we are unable to generate  adequate cash to sustain
operations or to obtain enough cash from future  financing,  we will not be able
to continue as a going concern.

WE HAVE INCURRED  SUBSTANTIAL  LOSSES FROM  INCEPTION  WHILE  REALIZING  LIMITED
REVENUES AND WE MAY NEVER GENERATE  SUBSTANTIAL REVENUES OR BE PROFITABLE IN THE
FUTURE.


                                       20
<PAGE>


         For each fiscal year since our  acquisition  of SeaLife Nevada in 2002,
we  have  generated  net  losses  and  we  have   accumulated   losses  totaling
approximately  $8,230,517 as of March 31, 2006.  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.  The  Company  is facing  difficulties  in  attracting  potential  major
investors  due, in part, to the  unresolved  SEC lawsuit.  Until this lawsuit is
settled,  the company will continue to be restricted in attracting  investors to
fund the  company's  growth.  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.

         Because  of these and other  factors,  we  believe  comparisons  of our
results of  operations  for our three  months ended March 31, 2006 and March 31,
2005,  are not good  indicators  of our  future  performance.  If our  operating
results fall below the expectations of securities analysts and investors in some
future periods, then our stock price may decline.

WE EXPECT OUR BUSINESS TO BE SEASONAL WHICH MEANS THAT WE ANTICIPATE HAVING LESS
REVENUE DURING CERTAIN PORTIONS OF THE YEAR.

         The practical application of our products,  both in the case of SeaLife
Marine paint products and ProTerra agriculture products, requires warmer weather
conditions with little to no precipitation.  As a result, management expects our
business to be seasonal, with sales and earnings being relatively higher


                                       21
<PAGE>


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 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,


                                       22
<PAGE>


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 an environmental products 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.


                                       23
<PAGE>


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.


                                       24
<PAGE>


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  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


                                       25
<PAGE>


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.

THE  REQUIREMENTS  OF  THE  SARBANES-OXLEY   ACT,  INCLUDING  SECTION  404,  ARE
BURDENSOME,  AND OUR FAILURE TO COMPLY  WITH THEM COULD HAVE A MATERIAL  ADVERSE
AFFECT ON OUR BUSINESS AND STOCK PRICE.

         Except  with  respect  to the  adoption  of our Code of Ethics  and our
compliance  with  certain  requirements  specifically  applicable  to our Annual
Report on Form 10-KSB and our other  periodic  reports,  our  management has not
commenced  any  specific  procedures  to  comply  with the  requirements  of the
Sarbanes Oxley Act of 2002,  including  specifically,  the process  necessary to
implement the  requirements  of Section 404 of the  Sarbanes-Oxley  Act of 2002,
which  requires  our  management  to assess the  effectiveness  of our  internal
controls over financial  reporting and include an assertion in our annual report
as to the  effectiveness  of our controls.  Beginning  with our Annual Report on
Form 10-KSB for the year ended December 31, 2006,  unless  otherwise  amended by
the Securities and Exchange Commission,  our independent  registered  accounting
firm will be required to attest to whether our  assessment of the  effectiveness
of our  internal  control  over  financial  reporting  is  fairly  stated in all
material respects and separately report on whether it believes we maintained, in
all material respects,  effective internal controls over financial  reporting as
of December 31, 2006.  Because of our  management's  lack of resources,  and our
limited  operations,  we have not  commenced the process of preparing the system
and process  documentation,  performing an  evaluation of our internal  controls
required  for our  management  to make this  assessment  and for the auditors to
provide their attestation report, and accordingly, have not begun testing of the
effectiveness  of these  internal  controls.  We expect that this  process  will
require significant amounts of management time and resources,  as well as higher
expenses  in the form of higher  audit and review  fees,  higher  legal fees and
higher  internal  costs to document,  test and  potentially  remediate  internal
controls. Accordingly, with respect to Section 404 in particular, there exists a
significant  risk  that we will  not be able  to meet  all the  requirements  of
Section  404 by the end of fiscal year 2006,  when we are  required to report on
our internal controls and provide our auditor's  opinion thereon.  Additionally,
even in the event we  attempt  to comply  with  Section  404,  in the  course of
evaluation and testing,  management may identify  deficiencies that will need to
be addressed and  re-mediated,  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:


                                       26
<PAGE>


         o        product performance, features and liability;

         o        price;

         o        timing of product introductions;

         o        ability to develop,  maintain and protect proprietary products
                  and technologies;

         o        sales and distribution capabilities;

         o        technical support and service;

         o        brand loyalty;

         o        applications support; and

         o        breadth of product line.

         If  a  competitor   develops  superior   technology  or  cost-effective
alternatives to our products,  our business,  financial condition and results of
operations could be materially adversely affected.

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 an  environmental  products  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.


                                       27
<PAGE>


         Factors  that could  cause  such  volatility  in our  common  stock may
include, among other things:

         o        actual or anticipated  fluctuations in our quarterly operating
                  results;

         o        announcements of technological innovations;

         o        changes in financial estimates by securities analysts;

         o        conditions or trends in our industry; and

         o        changes  in  the  market   valuations   of  other   comparable
                  companies.

THE SALE OF OUR  COMMON  STOCK ON THE  OVER-THE-COUNTER  BULLETIN  BOARD AND THE
POTENTIAL  DESIGNATION  OF OUR COMMON STOCK AS A "PENNY  STOCK" COULD IMPACT THE
TRADING MARKET FOR OUR COMMON STOCK.

         Our securities,  as traded on the Over-the-Counter Bulletin Board, will
be subject to Securities and Exchange Commission rules that impose special sales
practice  requirements upon  broker-dealers  who sell such securities to persons
other than established  customers or accredited  investors.  For purposes of the
rule, the phrase  "accredited  investors" means, in general terms,  institutions
with assets in excess of $5,000,000, or individuals having a net worth in excess
of $1,000,000 or having an annual  income that exceeds  $200,000 (or that,  when
combined with a spouse's income, exceeds $300,000).  For transactions covered by
the rule, the broker-dealer  must make a special  suitability  determination for
the purchaser and receive the purchaser's  written  agreement to the transaction
prior  to  the  sale.   Consequently,   the  rule  may  affect  the  ability  of
broker-dealers  to sell our  securities  and  also may  affect  the  ability  of
purchasers to sell their securities in any market that might develop therefore.

         In  addition,  the  Securities  and Exchange  Commission  has adopted a
number of rules to regulate  "penny  stock." Such rules  include  Rules  3a51-1,
15g-1,  15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities
and Exchange Act of 1934,  as amended.  Because our  securities  may  constitute
"penny stock"  within the meaning of the rules,  the rules would apply to us and
to our  securities.  The rules may  further  affect the ability of owners of our
common stock to sell our securities in any market that might develop for them.

         Shareholders should be aware that, according to Securities and Exchange
Commission,  the  market  for penny  stocks has  suffered  in recent  years from
patterns of fraud and abuse. Such patterns include (i) control of the market for
the  security  by one or a few  broker-dealers  that are  often  related  to the
promoter or issuer; (ii) manipulation of prices through prearranged  matching of
purchases and sales and false and misleading press releases; (iii) "boiler room"
practices   involving   high-pressure   sales  tactics  and  unrealistic   price
projections  by  inexperienced  sales persons;  (iv)  excessive and  undisclosed
bid-ask  differentials  and  markups  by  selling  broker-dealers;  and  (v) the
wholesale dumping of the same securities by promoters and  broker-dealers  after
prices have been  manipulated to a desired level,  resulting in investor losses.
Our  management  is aware of the abuses that have occurred  historically  in the
penny stock market. Although we do not expect to be in a position to dictate the
behavior  of the market or of  broker-dealers  who  participate  in the  market,
management  will strive within the confines of practical  limitations to prevent
the described patterns from being established with respect to our securities.

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 SHAREHOLDERS.


                                       28
<PAGE>


         We may issue shares in consideration  for cash,  assets or services out
of our  authorized  but  un-issued  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  shareholders  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 shareholders.

OFFICERS AND  DIRECTORS OWN A  SIGNIFICANT  PORTION OF OUR COMMON  STOCK,  WHICH
COULD  LIMIT  OUR  SHAREHOLDERS'   ABILITY  TO  INFLUENCE  THE  OUTCOME  OF  KEY
TRANSACTIONS.

         As of March 31, 2006 our officers and  directors  and their  affiliates
owned  approximately  28.2% of our outstanding  voting shares. As a result,  our
officers and directors are able to exert considerable influence over the outcome
of any matters submitted to a vote of the holders of our common stock, including
the election of our Board of Directors.  The voting power of these  shareholders
could also  discourage  others from seeking to acquire control of us through the
purchase of our common stock, which might depress the price of our common stock.


                                       29
<PAGE>


ITEM 3.  CONTROLS AND PROCEDURES.

CONTROLS AND PROCEDURES

         Members  of  our  management,  including  Robert  McCaslin,  our  Chief
Executive  Officer,  President and Chief Financial  Officer,  have evaluated the
effectiveness of our disclosure controls and procedures, as defined by paragraph
e) of Exchange Act Rules 13a-15 or 15d-15,  as of March 31, 2006, the end of the
period  covered  by this  report.  Based  upon  that  evaluation,  Mr.  McCaslin
concluded that our disclosure controls and procedures are effective.

INTERNAL CONTROL OVER FINANCIAL REPORTING

         There were no changes in our internal control over financial  reporting
or in other factors  identified in connection  with the  evaluation  required by
paragraph  (d) of Exchange Act Rules 13a-15 or 15d-15 that  occurred  during the
fourth  quarter  ended  March 31,  2006 that have  materially  affected,  or are
reasonably  likely to materially  affect,  our internal  control over  financial
reporting.


                                     PART II

                                OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

         On April 5, 2005, the United States Securities and Exchange  Commission
(the "SEC") filed a civil  complaint in the United States District Court for the
District of Colorado  against us, Robert McCaslin (our Chief  Executive  Officer
and Chief Financial Officer), and several third parties not currently affiliated
with the Company,  alleging  violations  of the  Securities  Act of 1933 and the
Securities  Exchange Act of 1934 in connection with events that occurred in 2002
and 2003.

         The complaint alleges that we, Mr. Caslin and six other individuals and
entities  engaged  in a  "scheme"  to  defraud  the  investing  public by "using
materially false and misleading public statements and manipulative stock trading
to create an  artificial  market  for,  and to sell,  our common  stock  without
registration or a valid exemption under the federal securities laws."

         Specifically,  the complaint alleges that, Mr. McCaslin retained Roland
Thomas  ("Thomas") to raise  capital for us and promote us to investors,  and to
raise $400,000 to pay our principal shareholders and complete the acquisition of
SeaLife Nevada, and that Thomas devised a plan with Douglas A. Glaser ("Glaser")
to meet those goals. To carry out the plan, the complaint alleges, we issued one
million shares to Thomas,  Glaser, and an employee of ERT Technology Corporation
(a Delaware corporation owned by Thomas,  Douglas A. Glaser and Barry S. Griffin
("Griffin"),  Jeffrey A. Hayden ("Hayden"), and Morgan J. Wilbur III ("Wilbur"),
and registered the stock with the SEC 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 us and to promote and maintain the market for our common 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 close to one million shares of our
common stock.  During this time, we were engaged in a publicity  campaign  using
press  releases,  a corporate  fact sheet,  and a business  plan. The latter two
documents were  disseminated to


                                       30
<PAGE>


brokers and  investors  and also placed on our web site for public  review.  The
complaint  alleges that the publicity  included  materially false and misleading
information,  which  included  claims  (a) that our  products  were  ready to be
marketed,  when in fact we needed capital to conduct further  testing;  (b) that
our  intellectual  property  was worth  more than $60  million,  when in fact we
carried  the  property  on its  books at less than  $1.5  million;  and (c) that
projected  over $5 million sales during our first year and  significant  profits
based on a 70% gross margin, when in fact we had no basis for figuring our sales
margin and could not meet its projections without additional product testing and
capital. In addition,  the complaint alleges that our publicity campaign did not
disclose the $400,000  owed to the  principal  shareholders  of the shell or the
fact that we had retained Thomas and Glaser to sell our common 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 our common 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 us or to the prior principal  shareholders of
the  shell.  The  complaint  also  alleges  that we 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 Mr.  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 Mr. 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  Mr.  McCaslin,  and penny stock bars  against
Thomas, ERT, Glaser, Griffin, Hayden, and Wilbur.

         Based on their review of the  complaint,  the Company and Mr.  McCaslin
intend to continue to investigate  the  allegations  and  vigorously  defend the
suit. The Company and Mr. McCaslin have been served with the complaint.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

         In the 3 months  ending at March 31,  2006,  we issued to  Appropriated
Funding and  Advancements,  Inc.,  an aggregate of 109,610  shares of our common
stock, pursuant to the terms of a consulting agreement,  as payment for services
rendered through March 31, 2006. The investor in this transaction represented to
us that he was an  "accredited  investor"  within  the  meaning  of Rule  501 of
Regulation D under the  Securities  Act of 1933,  and that he was  receiving the
securities for investment and not in connection with a distribution thereof. The
issuance  and sales of these  securities  is exempt  from the  registration  and
prospectus delivery  requirements of the Securities Act pursuant to Section 4(2)
of the Securities Act as transactions not involving any public offering.


                                       31
<PAGE>


         Effective  March 31, 2006, we issued 105,535 shares of our common stock
to Daniel Kubik, pursuant to the terms of a consulting agreement, as payment for
services  rendered during the first quarter through March 31, 2006. The investor
in this  transaction  represented  to us that  he was an  "accredited  investor"
within the meaning of Rule 501 of Regulation D under the Securities Act of 1933,
and that he was receiving the  securities  for  investment and not in connection
with a  distribution  thereof.  The  issuance and sales of these  securities  is
exempt  from  the  registration  and  prospectus  delivery  requirements  of the
Securities Act pursuant to Section 4(2) of the  Securities  Act as  transactions
not involving any public offering.

         Effective  March 10, 2006,  we issued 75,000 shares of our common stock
to Howard Issacs,  pursuant to the terms of a consulting  agreement,  as payment
for services  rendered  during the first  quarter  through  March 31, 2006.  The
investor  in this  transaction  represented  to us  that  he was an  "accredited
investor"  within the meaning of Rule 501 of  Regulation D under the  Securities
Act of 1933,  and that he was receiving the securities for investment and not in
connection  with a  distribution  thereof.  The  issuance  and  sales  of  these
securities is exempt from the registration and prospectus delivery  requirements
of the  Securities  Act  pursuant  to  Section  4(2)  of the  Securities  Act as
transactions not involving any public offering.

         Effective  March 31, 2006,  we issued 75,000  restricted  shares of our
common stock to Richard Kaiser as compensation  for investor  relation  services
provided to us by Yes  International,  Inc. through March 31, 2006. The issuance
and sales of these  securities was exempt from the  registration  and prospectus
delivery  requirements  of the  Securities  Act  pursuant to Section 4(2) of the
Securities Act as transactions not involving any public offering.

         Effective  March 31, 2006,  we issued 69,275  restricted  shares of our
common  stock to Leonard,  Dicker &  Schreiber,  LLP as  compensation  for legal
services  provided to us through March 31, 2006. The issuance and sales of these
securities was exempt from the registration and prospectus delivery requirements
of the  Securities  Act  pursuant  to  Section  4(2)  of the  Securities  Act as
transactions not involving any public offering.

ITEM 6.  EXHIBITS

         The following exhibits are filed as part of this report:

EXHIBIT
NUMBER                                   DESCRIPTION
-------        -----------------------------------------------------------------

3.1            Restated Certificate of Incorporation of SeaLife Corporation (1)

3.2            Bylaws of SeaLife Corporation (1)

31.1           Certification  of  Principal   Executive  Officer  and  Principal
               Financial  Officer pursuant to pursuant  Securities  Exchange Act
               Rules 13a-14(a) and 15d-14(a) as adopted  pursuant to Section 302
               of the Sarbanes-Oxley Act of 2002.

32.1           Certification  of  Principal   Executive  Officer  and  Principal
               Financial Officer pursuant to 18 U.S.C.  Section 1350, as adopted
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(1) Filed as an Exhibit to our Annual Report on Form 10-KSB for the period ended
May 31, 2003, dated September 19, 2004.


                                       32
<PAGE>


                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

                                        SEALIFE CORPORATION


Date: May 31, 2006                        /s/ Robert A. McCaslin
                                          ------------------------
                                    By:   Robert A. McCaslin
                                    Its:  Chief Financial Officer
                                          (Principal Financial and
                                          Accounting Officer)


                                       33
<PAGE>


                                  EXHIBIT INDEX

EXHIBIT
NUMBER                                   DESCRIPTION
-------        -----------------------------------------------------------------

3.1            Restated Certificate of Incorporation of SeaLife Corporation (1)

3.2            Bylaws of SeaLife Corporation (1)

31.1           Certification  of  Principal   Executive  Officer  and  Principal
               Financial  Officer pursuant to pursuant  Securities  Exchange Act
               Rules 13a-14(a) and 15d-14(a) as adopted  pursuant to Section 302
               of the Sarbanes-Oxley Act of 2002.

32.1           Certification  of  Principal   Executive  Officer  and  Principal
               Financial Officer pursuant to 18 U.S.C.  Section 1350, as adopted
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(1) Filed as an Exhibit to our Annual Report on Form 10-KSB for the period ended
May 31, 2003, dated September 19, 2004.


                                      EX-1