<PAGE>
DEUCALION RESEARCH, INC.
118 1/2 First Avenue West
Williston, North Dakota 58801
Information Statement
Pursuant to Section 14(f)
of the Securities Exchange Act of 1934
and Rule 14f-1 thereunder
********
INTRODUCTION
This Information Statement is being mailed on or before July 16 1999, to
holders of record on July 13 1999, of shares of Common Stock of Deucalion
Research, Inc. (the "Company"), a North Dakota corporation, in connection with
the anticipated change in all members of the Company's Board of Directors, under
the terms of a Stock Purchase Agreement (the "Agreement") dated April 20, 1999,
between the Company and Michael R. Farley and Forrest L. Metz (Messrs. Farley
and Metz) are sometimes collectively referred to as the "New Stockholders").
This transaction will hereinafter be referred to as "Proposed Transaction."
Under the Agreement, the New Stockholders have agreed to acquire 66.5%
of the then to be issued outstanding Common Stock of the Company for $100,000.
See Item 4. "Certain Information Concerning Security Ownership of Certain
Beneficial Owners and Management."
At the closing called for by the Agreement, the Company will deliver the
resignations of each of its officers and directors and the New Stockholders will
be elected to the Board who will then appoint new officers of the Company. As
soon as practicable after the completion of the closing, the New Stockholders
will cause the Company to call a special meeting of its shareholders ("Proposed
Stockholders Meeting") to: effect a recapitalization of the Company which may
include a reverse stock split of a magnitude not yet determined; change the name
of the Company (new name not decided yet); appoint independent accountants; and
change the domicile of the Company to Delaware. After the reverse stock split,
recapitalization, and the purchase of additional shares of Common Stock by the
New Stockholders for $10,000, the New Stockholders will own 95% of the Common
Stock of the Company.
This Information Statement is being delivered to provide information
regarding anticipated changes in the membership of the Board of Directors of the
Company as a result of completion of the Proposed Transaction, and is provided
for information purposes only. You are urged to read this Information Statement
carefully. However, no action on your part is sought or required.
The Company was formed to research, develop, formulate, produce and
market environmental engineering products and related services. The Company
initially emphasized the development of custom-engineered environmentally sound
products and processes to remove toxic hydrogen sulfide ("H\\2\\S" or "sour"gas)
and other impurities from gas streams originating from petroleum fields and
<PAGE>
sanitary landfills, leaving clean gas for immediate fuel use (the "Deucalion
Process"). As a result of the general decline of the petroleum industry, the
Company, during 1986, reduced its emphasis on oil field operations and began
devoting its efforts to the development and engineering of alternative products
and processes as well as the obtaining of additional funds primarily through the
exchange of an interest in a landfill gas project and additional issuances of
its common stock to fund such activities. The Company has determined that no
further demonstration plans for the Deucalion Process are warranted. The
Company's single product, Ferro-Fluids, is not being marketed at this time, and
the Company has not been successful in its attempt to license manufacturing and
marketing of the product. The Company has no other product or process currently
capable of being commercially marketed.
The Company has had no business operations since 1992 and does not
intend to recommence operations at any time in the near future. The Company has
been attempting to find an operating enterprise with which to merge or otherwise
form a business combination.
However, no such opportunity has presented itself until the New
Stockholders proposed the arrangement reflected in the Agreement.
Following the Closing, the Company will seek business opportunities in
the communications and internet businesses. The New Stockholders have indicated
their intention to have the Company acquire certain of these interests but have
informed the Company that they have not yet determined the terms and conditions
of any such acquisition.
The parties intend to close under the Agreement as soon as possible, but
not later than July 30, 1999. However, the obligations of the parties to close
are subject to the satisfaction of certain conditions. One condition is
compliance with all applicable securities laws and rules and regulations
including SEC Rule 14f-1 which requires the Company to provide not less than ten
days prior written notice to its shareholders of the change in a majority of the
Company's directors.
MANAGEMENT
The directors and executive officers currently serving the Company are
as follows:
- -------------------------------------------------------------------------------
NAME | AGE | POSITIONS HELD AND TENURE
- -------------------------------------------------------------------------------
Jon Geyerman | 53 | President, CEO since June, 1988 and a
| | Director since September, 1992
- -------------------------------------------------------------------------------
Richard Broshat | 69 | Director from 1983 to 1988 and a
| | Director since April, 1999
- -------------------------------------------------------------------------------
James Fransen | 46 | Director since April, 1999
- -------------------------------------------------------------------------------
-2-
<PAGE>
Biographical Information
Jon Geyerman
Mr. Geyerman was appointed President and Chief Executive Officer of
Deucalion in June 1988. From 1973 to the present he has been president and owner
of NJ&A, Inc. ("NJ&A"), formally known as "Norman Jessen & Associates, Inc." of
Williston, North Dakota, involved in the oil and gas lease brokerage business.
Since 1973, Mr. Geyerman has also been president of the following companies:
Western Energy Corporation, a company involved in the oil and gas exploration
business; Precis' Databanc Incorporated, an oil and gas information company; and
Energy Data Source, Inc., also an oil and gas information company. Western
Energy Corporation and Precis' Databanc Incorporated are wholly owned
subsidiaries of NJ&A, and Energy Data Source, Inc., is an 80% subsidiary of
NJ&A. Mr. Geyerman is also an owner and managing partner of Jesco Enterprises, a
real estate partnership. Mr. Geyerman is a member of the American Association of
Petroleum Landmen, and the Independent Petroleum Association of America.
Richard E. Broschat
Mr. Broschat was a director of Deucalion from 1983 until 1988. He
agreed to serve as director again and was appointed director April 5, 1999, in
order to facilitate the completion of the Proposed Transaction. From 1953 to
1963, Mr. Broschat was employed by Amerada Petroleum Corporation ("Amerada") as
a petroleum engineer serving in North Dakota, Texas, New Mexico, and Oklahoma.
In 1963, Mr. Broschat was promoted to Division Engineer for the North American
Division of Amerada. In 1970, he was promoted to Manager of Technical Services,
responsible for all technical operations in the North Dakota region. In 1973,
Mr. Broschat was promoted to Operations Manager of Amerada responsible for all
North Dakota field production operations. In this capacity, he established and
implemented the corporation's financial and operational objectives for North
Dakota. In 1976, Mr. Broschat formed Broschat Engineering and Management
Services in Williston, North Dakota. He continues to serve as president of
Broschat Engineering and Management Services, a company that provides consulting
services in; drilling, production, reservoir analysis, property evaluation and
management for oil companies.
Mr. Broschat received his Bachelor of Science Degree in Mechanical
Engineering from North Dakota State University in 1949 and his Masters of
Science Degree in Mechanical Engineering from Iowa Sate University in 1950. Mr.
Broschat is a registered Professional Engineer in North Dakota and a member of
the Society of Petroleum Engineers of AIME.
James R. Fransen
Mr. Fransen was appointed a director of the Company on April 5, 1999.
Mr. Fransen received his Bachelor of Science Degree in Business Administration
from the University of North Dakota in 1977. In 1981, after a short time working
in the oil industry, Mr. Fransen became involved in the family business in
Williston, North Dakota. He currently serves as president of the family
business, Northern, Inc., a company that provides water conditioning and
satellite system service.
There are no family relationships between any of the directors or
officers of the Company.
The Company has no outstanding audit, nominating or compensation
committees of the board of directors, or any committees performing similar
functions.
-3-
<PAGE>
The Company's Board of directors held no formal meetings during the
fiscal year ending December 31, 1998. The Company's board of directors held one
meeting on April 5, 1999, in order to fill two vacant director positions and
approve the Agreement.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
To the best knowledge and belief of the Company, each of the 10%
Beneficial Owners and directors, with the exception of James Fransen, made the
necessary filing on Form 3. James Fransen was required to file an Initial
Statement of Beneficial Ownership of Securities on Form 3 when he was appointed
director on April 5, 1999. The Company has been informed that Mr. Fransen filed
his Form 3 on July 14, 1999. The reports on Form 3 were due on or before April
15, 1999, and accordingly, were filed late.
DESIGNATED COMPANY DIRECTORS AND EXECUTIVE OFFICERS
AFTER COMPLETION OF THE AGREEMENT
The following table sets forth the name, age and position of each of the
persons expected to be designated by the Company to be appointed to the
Company's Board of Directors and each of the persons expected to be appointed as
an executive officer of the Company following completion of the transactions
contemplated by the Agreement.
- --------------------------------------------------------------------------
NAME | AGE | POSITION
- --------------------------------------------------------------------------
Michael R. Farley | 55 | CEO, Secretary
- --------------------------------------------------------------------------
Forrest L. Metz | 53 | President, Treasurer
- --------------------------------------------------------------------------
Biographical Information
Michael R. Farley
Mr. Farley is the current President of Farley and Associates, Inc., a
company involved in the business of providing financing and strategic business
plans for small and medium sized companies. From 1994 until 1996, Mr. Farley
served as Chairman of the Board and CEO of Green Turf, International, Inc., a
company involved in the golf course maintenance business. From 1988 to 1994, Mr.
Farley was a member of the Board of Directors of Mid-Atlantic Paging Company,
Inc. and New Era Communications, Inc. Both of these affiliated companies were
involved in the communications industry and specialized in paging. From 1988 to
1994, Mr. Farley was also the managing General Partner of the Richmond/Tidewater
System, which was also involved in the communications industry and specialized
in paging. In 1988, Mr. Farley served as Director of Communications for George
Bush for President at the Republican National Convention. From 1985 to 1988 Mr.
Farley served as Director, Chief Financial Officer, and Vice President for
Celutel, Inc., a company specializing in the development of cellular telephone
systems.
Mr. Farley has served in community organizations in the following
capacity: member of the Board of Trustees for St. Joseph's Hospital in Tucson,
Arizona; member of the Arizona State Board of Vocational/Technical Education;
member of the Advisory Committee on the Arts for the John F.
-4-
<PAGE>
Kennedy Center for the Performing Arts; Chairman of the Policy Forum for the
National Center for Research in Vocational Education; Director for the
University of Arizona Foundation; Trustee for St. Gregory High School; President
of the Parent-Teacher Group for Fort Lowell School; and Treasurer of the Parents
for St. Michael's School.
Mr. Farley received his Bachelor of Science Degree from the University
of Arizona and studied at the American College of Life Underwriters. Mr. Farley
is a member of the Southern Arizona Association of Life Underwriters and the
National Association of Life Underwriters.
Forrest L. Metz
From 1974 until the present, Mr. Metz has served as Chairman of the
Board and CEO of Urban Engineering, Inc., a planning, engineering, and surveying
consulting firm. Mr. Metz is also Chairman of the Board and CEO of Metz, LLC, a
holding company involved in investing in communications, software, and
manufacturing industries. From 1988 to 1993, Mr. Metz served as President and a
Director of Celutel, Inc., a company that specialized in the development of
cellular telephone systems. Celutel, Inc. was sold to a regional telephone
company in 1993.
Mr. Metz is also a Board Member of the following community
organizations; United Way of Greater Tucson, Boys and Girls Club of Tucson,
Educational Enrichment Foundation, Mountain Oyster Club, Los Charros Del
Desierto, and the Pima County Fair Horse Racing Commission. Mr. Metz also
served as a board member of the Arizona Mexico Commission, University of Arizona
Extra Point Club, University of Arizona Foundation Presidents' Club, and the
Southwestern Fair Commission.
Mr. Metz received his Bachelor of Science Degree from the University of
Arizona and took graduate level courses in Planning and Engineering there as
well. Mr. Metz is a member of the Urban Land Institute, American Planning
Association, and Society of Military Engineers.
SECURITY OWNERSHIP OF CERTAIN CURRENT BENEFICIAL
OWNERS AND MANAGEMENT
As of July 13, 1999, the Company had a total of 501,610,127 shares of
Common Stock issued and outstanding, add the issuance of shares of Common Stock
from the Proposed Transaction and the Company will have a total of approximately
1,489,610,127 shares issued and outstanding. The following table sets forth, as
of July 13, 1999, the number of shares of Common Stock currently owned of record
and beneficially by current executive officers, directors and persons who hold
5% or more of the outstanding Common Stock of the Company. The table also
reflects the number of shares which are expected to be owned by such persons
following completion of the issuance of shares required by the Agreement.
-5-
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Name and Address | Number of Shares | Percent of
| Owned Beneficially | Class Owned
- --------------------------------------------------------------------------------------------
| Current |After Closing| Current | After Closing
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Jon Geyerman | 0 | 1%(1) | 0% | 1%
P.O. Box 1107 | | | |
Williston, ND 58802-1107 | | | |
- --------------------------------------------------------------------------------------------
James R. Fransen | 8,000,000 | 8,000,000 | 1.5% | 0.53%
5511 Highway 85 | | | |
Williston, ND 58801 | | | |
- --------------------------------------------------------------------------------------------
Richard E. Broschat | 20,797,362 | 20,797,362 | 4.14% | 1.3%
1306 W. Jackson | | | |
Williston, ND 58801 | | | |
- --------------------------------------------------------------------------------------------
Marlys Fransen | 51,587,587 | 51,587,587 | 10.2% | 3.4%
5511 Highway 85 | | | |
Williston, ND 58801 | | | |
- --------------------------------------------------------------------------------------------
Alma Ritter | 49,211,575 | 49,211,575 | 9.8% | 3.3%
2124 E. Dakota Parkway | | | |
Williston, ND 58801 | | | |
- --------------------------------------------------------------------------------------------
Loye A. Ashton | 55,427,350 | 55,427,350 | 11.0% | 3.7%
P.O. Box 1481 | | | |
Williston, ND 58802-1481 | | | |
- --------------------------------------------------------------------------------------------
Officers and Directors as a group | 28,797,362 | 43,693,464 | 5.7% | 2.9%
- --------------------------------------------------------------------------------------------
</TABLE>
The following table sets forth, as of the date of completion of the
transactions contemplated by the Agreement, the number of shares of Common Stock
expected to be owned of record and beneficially by persons who are expected to
be appointed as directors and executive officers of the Company, by persons who
are expected to then hold 5% or more of the outstanding Common Stock of the
Company and all expected future officers and directors as a group.
- -------------------------------
(1)It is unknown at this time how many shares of stock Mr. Geyerman
will own after the Proposed Transaction. After the closing of the Proposed
Transaction the New Stockholders will call a special stockholders meeting which
will effect a recapitalization of the Company which may include a reverse stock
split of a magnitude not yet determined. Furthermore, the New Stockholders will
also purchase additional shares of Common Stock for $10,000, bringing their
ownership of the Company to 95%. After this has been done, Mr. Geyerman will be
issued 1% of the outstanding shares of the Company.
-6-
<PAGE>
- ------------------------------------------------------------------------------
Name and Address | Number of Shares | Percent of
| Owned Beneficially | Class
- ------------------------------------------------------------------------------
Michael R. Farley | 499,000,000 | 33.4%
- ------------------------------------------------------------------------------
Forrest L. Metz(2) | 499,000,000 | 33.4%
- ------------------------------------------------------------------------------
Officers and Directors as a Group(3) | 998,000,000 | 66.9%
- ------------------------------------------------------------------------------
LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceedings, and no such
proceedings are known to be contemplated. No director, officer or affiliate of
the Company, no owner of record or beneficial owner of more than five percent of
the securities of the Company, or any associate of any such director, officer or
security holder, nor any New Stockholder is a party adverse to the Company or
has a material interest adverse to the Company in reference to pending
litigation.
EXECUTIVE COMPENSATION OF CURRENT MANAGEMENT
Current management has not received compensation in any form over the
last two years.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company is in debt to NJ&A, Inc. ("NJ&A"), formally know as "Norman
Jessen and Associates, Inc.", a company owned and operated by Jon Geyerman, in
the amount of $93,411.94. After the Proposed Stockholders Meeting and the
additional purchase of shares by the New Stockholders, the Company proposes to
settle this debt by issuing 1% of its outstanding securities. The Company is
also in debt to Friedlob Sanderson Raskin Paulson & Tourtillott, LLC ("FRSPT"),
in the amount of $38,835.74. After the Proposed Stockholders Meeting and the
additional purchase of shares by the New Stockholders, the Company proposes to
settle this debt by issuing 1/2 of 1% of its outstanding securities to FRSPT.
FRSPT is also legal counsel to the New Stockholders. FRSPT will receive payment
for the legal services to the New Stockholders based upon the normal hourly
rates of the persons providing legal services.
THIS INFORMATION STATEMENT IS PROVIDED TO YOU FOR INFORMATION PURPOSES ONLY. NO
ACTION ON YOUR PART IS SOUGHT OR REQUIRED.
- ------------------------------
(2) Includes shares placed in the Metz Trust, of which Mr. Metz is the
trustee, for the benefit of D. Kim Metz, Forrest L. Metz, Jr. and Jenifer K.
Metz.
(3) After the stockholders meeting following the closing of the Proposed
Transaction, the New Stockholders will own 95% of the Company as a result of the
reverse stock split, recapitalization, and purchase of additional shares of
Common Stock by the New Stockholders for an additional $10,000.
-7-
