Lab Rats

George Theodore was not expecting me. Judging by his what's-your-angle expression, this is not a pleasant surprise for the CEO of a Boca Raton company called University Lab Technologies. Before he will answer one of my questions, he has a few of his own. "Who are you?" is the first. "What do you want?" is his second. He knots his brow at the answers, as if they were riddles.

University Lab Technologies: The name evokes white-coated researchers squinting through microscopes or jostling one another as they carry beakers full of fluorescent, bubbling chemicals.

After all, this is the firm touting "Arthroleve," an over-the-counter pain reliever that just might work as well as Vioxx, only without those awful side effects. Another of its marquee potions is "Zenstral PMS," which offers women relief from menstrual cramps. Slogan: "We care about women, like no man can."

But University Lab isn't located on a college campus, and no one here looks the least bit scientific. The resident doctor, company President Jarret Morrow, who takes a seat beside Theodore, is a baby-faced 32-year-old with a TV anchorman's helmet of hair. He is Theodore's brother-in-law.

At 41, Theodore seems young for a CEO, and his day's stubble, untucked oxford, jeans, and flip-flops make him seem even younger. That, and the boyish sensibility that seems to inspire the office décor: A foosball table occupies its center; an oil painting of a curvaceous nude dominates the wall of Theodore's office. The rest of the space is so uncluttered and sparsely decorated that it's almost sterile.

Theodore and Morrow are both from Canada. They moved to South Florida about 18 months ago. Why?

"Different business interests," Theodore answers. In the silence that follows, he does not elaborate.

Arthroleve and Zenstral PMS are "nutraceuticals," dietary supplements in pill form that make medical claims like prescription drugs but that can hit the market without approval from the Food and Drug Administration.

Although Theodore is reluctant to talk much about his business plan, it seems evident that University Lab intends to go public as a "penny stock" — a small company that sells shares cheaply to investors willing to gamble that the company's products will be a hit with consumers. Theodore's two most recent jobs were executive positions with penny-stock companies. In both instances, he left just before the stock prices took a fall.

If Theodore seems a touch paranoid, maybe it's because in his brief career as an executive, he has known a vast array of conspiracies and corporate intrigues. Sure, I claim to be a reporter — but for all he knows, I'm a spy for his competitor or a federal investigator operating a sting or an agent of a former business partner he believes is out to destroy him.

Despite these hazards, over the course of the next 45 minutes, Theodore slowly warms to me. He cracks jokes and lets profanities fly. He compliments my intelligence and punctuates almost every sentence with my name, an effect that almost creates intimacy or at least makes Theodore seem at ease.

Yes, he says, there are two sides to the story. In this case, there is his version and that of the masked man behind the Internet postings that allege University Lab is nothing but an investment scam. Theodore claims that the accuser is Cesar Correia, Theodore's former business partner in a Toronto firm called Infolink. If that is so, then Theodore claims a credibility advantage over his cybercritic. Correia, after all, murdered his own father, went to prison, and then failed to disclose that later in his business career. That's a lot of baggage for a whistleblower.

Outside the office, on a balcony that overlooks a lushly landscaped courtyard, Theodore finishes a cigarette and grins unctuously. Suddenly, he's convivial enough to drape an arm over my shoulder as he asks, "You don't really think we're a scam company, do you?"

---

In the treacherous world of penny-stock trading, small companies with big ideas invite skepticism. Until they prove they're legitimate, investors must be cautious.

It must be noted, however, that Theodore has no criminal record, and there is no reason to believe he's perpetrating a fraud now.

Still, when it goes public — which may happen this fall — University Lab Technologies is likely to list its stock through the Over-the-Counter Bulletin Board (OTCBB) or on Pink Sheets. Neither are stock exchanges in the traditional sense. They are "quotation services" that provide a venue for trading low-value shares, known as penny stocks.

Penny stock is a literal term: Single shares of such companies can be purchased for as little as a cent. For this reason, penny stocks are seductive in the same way as slot machines and state lotteries: low cost, high reward. It is one corner of the stock market where you don't have to be wealthy to play — just willing to accept the long odds against winning.