SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10QSB
Quarterly Report under Section 13 or 15(d) of
the Securities Exchange Act of 1934
CIK NO.: 0001042053
For Quarter Ended Commission File Number
- - ----------------- ----------------------
September 30, 1997 1-13287
DRUCKER INDUSTRIES, INC.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware N/A
-------- ---
(State of incorporation) (I.R.S. Employer
Identification No.)
#1- 1035 Richards Street, Vancouver, B.C. Canada V6B 3E4
- - ------------------------------------------------ -------
(Address of principal executive offices) (Postal Code)
Registrant's telephone number, including area code: (604)681-4421
-------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to the filing
requirements for at least the past 90 days.
Yes No X
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
32,476,250 as of September 30, 1997
<PAGE>
DRUCKER INDUSTRIES, INC.
(A Development Stage Company)
BALANCE SHEETS
September 30, 1997 and December 31, 1997
(Stated in U.S. dollars)
(Unaudited - See Notice to Reader)
ASSETS
September 30, December 31,
1997 1996
Current
Cash and term deposits $ 3,516,668 $ --
Resource project 1,681,098 50,802
----------- -----------
$ 5,197,766 $ 50,802
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable and accrued expenses $ 12,975 $ 2,525
Advance payable 50,802 50,802
----------- -----------
Total current liabilities 63,777 53,327
----------- -----------
Stockholders' Equity (Deficiency) - Note 3
Common stock $.001 par value, authorized
50,000,000 shares: 32,476,250 shares
issued and outstanding 32,115 26,935
Additional paid-in capital 6,306,803 1,132,483
Deficit accumulated during the
development stage (1,204,929) (1,161,943)
----------- -----------
Total stockholders' equity 5,133,989 (2,525)
----------- -----------
$ 5,197,766 $ 50,802
=========== ===========
SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
DRUCKER INDUSTRIES, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
for the three months ended September 30, 1997, and 1996
and for the nine months ended September 30, 1997,
and 1996 and February 4, 1971 (Date of Inception) to September 30, 1997
(Stated in U.S. dollars)
(Unaudited - See Notice to Reader)
----------------------------------
February 4, 1971
(Date of inception)
Three months ended September 30, Nine months ended September 30, to September 30,
1997 1996 1997 1996 1997
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
General and administrative expenses $ 57,670 $ (20) $ 133,758 $(20) $518,675
Amortization of license agreement - - - - 56,827
Royalties - - - - 75,000
Interest expense - - - - 114,063
Fiscal agent fees - - - - 64,230
Write-off of license agreement - - - - 409,236
---------------------------------------------------------------------------------------
Income (loss) before the following: (57,670) 20 (133,758) 20 (1,238,031)
Interest income 51,709 - 90,772 - 39,063
--------------------------------------------------------------------------------------
Net loss $ (5,961) $ 20 $ (42,986) $20 $1,198,968
======================================================================================
Net loss per share $ (0.000) $ (0.000) $ (0.002) $(0.000)
=====================================================================
Weighted average shares outstanding 32,476,250 26,554,185 27,797,435 26,554,183
=======================================================================
SEE ACCOMPANYING NOTES
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DRUCKER INDUSTRIES, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
for the nine months ended September 30, 1997, and
1996 and for the years ended December 31, 1989, to
December 31, 1996 and February 4, 1971 (Date of
Inception) to September 30, 1997
(Stated in U.S. dollars)
(Unaudited - See Notice to Reader)
Shares Amount Additional Deficit Total
------ ------ Paid-in Accumulated -----
Capital During the
------- Development
Stage
Shares issued to acquire -----
<S> <C> <C> <C>
Monetary Metals, Inc. 675,000 $ 675 $ (675) $ --
Shares issued to acquire
net assets of Drucker Sound
Design Corporation 2,700,000 2,700 65,046 67,746
Net loss from inception
to December 31, 1989 -- -- -- $ (8,115) (8,115)
Net loss for year ended
December 31, 1990 -- -- -- (144,333) (144,333)
Five for one forward split
of outstanding shares 13,500,000 13,500 (13,500) -- --
Funds contributed by
stockholder -- -- 124,196 -- 124,196
Sale of units for cash,
September 1991 1,050,000 1,050 103,950 -- 105,000
Sale of units for cash,
December 1991 750,000 750 74,250 -- 75,000
Shares issued to settle debts 52,500 53 5,197 (5,250) --
Shares issued to directors
as compensation 450,000 450 44,550 (45,000) --
Correct funds contributed
to stockholders -- -- (24,990) -- (24,990)
Interest on note payable -- -- -- (7,370) (7,370)
Net loss for year ended
December 31, 1991 -- -- -- (38,417) (38,417)
---------- ---------- ---------- ---------- ----------
Balance, December 31, 1991,
as previously reported 19,177,500 19,178 378,024 (248,485) 148,717
Adjustments to previously
reported amounts:
Fiscal agent fees -- -- (18,000) (7,300) (25,300)
---------- ---------- ---------- ---------- ----------
Balance, December 31, 1991,
as restated 19,177,500 19,178 360,024 (255,785) 123,417
Sale of common stock,
March 1992 700,000 700 69,300 -- 70,000
Sale of common stock,
September 1992 500,000 500 54,500 -- 55,000
Net loss for year ended
December 31, 1992 -- -- -- (78,078) (78,078)
---------- ---------- ---------- ---------- ---------
Balance, December 31, 1992,
as previously reported 20,377,500 20,378 483,824 (333,863) 170,339
SEE ACCOMPANYING NOTES ../Continued
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DRUCKER INDUSTRIES, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
for the nine months ended September 30, 1997 and 1996
and years ended December 31, 1989 to December 31,
1996 and February 4, 1971 (Date of Inception) to September 30, 1997
(Stated in U.S. dollars)
(Unaudited - See Notice to Reader)
Common Stock
------------
Deficit
Accumulated
Additional During the
Paid-in Development
Shares Amount Capital Stage Total
------ ------ ------- ----- -----
Balance Forward, December 31, 1992,
<S> <C> <C> <C> <C> <C>
as previously reported 20,377,500 20,378 483,824 (333,863) 170,339
Adjustments to previously
reported amounts:
Fiscal agent fees -- -- (12,500) (20,600) (33,100)
---------- ---------- ---------- ---------- ----------
Balance, December 31, 1992,
as restated 20,377,500 20,378 471,324 (354,463) 137,239
Net loss for the year
ended December 31, 1993 -- -- -- (134,081) (134,081)
---------- ---------- ---------- ---------- ----------
Balance, December 31, 1993 20,377,500 20,378 471,324 (488,544) 3,158
Adjustment to previously
reported amounts:
Fiscal agent fees -- -- -- (27,280) (27,280)
---------- ---------- ---------- ---------- ----------
Balance, December 31, 1993,
as restated 20,377,500 20,378 471,324 (515,824) (24,122)
Sale of common stock,
July, 1994 200,000 200 29,800 -- 30,000
Fiscal agent fees -- -- (3,000) -- (3,000)
Net loss for the year
ended December 31, 1994 -- -- -- (563,546) (563,546)
---------- ---------- ---------- ---------- ----------
Balance, December 31, 1994 20,577,500 20,578 498,124 (1,079,370) (560,668)
Shares issued to settle debts 5,976,683 5,977 596,739 -- 602,716
Net loss for the year ended
December 31, 1995 -- -- -- (79,455) (79,455)
---------- ---------- ---------- ---------- ----------
Balance, December 31, 1995 26,554,183 26,555 1,094,863 (1,158,825) (37,407)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DRUCKER INDUSTRIES, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
for the nine months ended September 30, 1997 and 1996
and years ended December 31, 1989 to December 31,
1996 and February 4, 1971 (Date of Inception) to September 30, 1997
(Stated in U.S. dollars)
(Unaudited - See Notice to Reader)
Common Stock
------------
Deficit
Accumulated
Additional During the
Paid-in Development
Shares Amount Capital Stage Total
------ ------ ------- ----- -----
Balance Forward,
<S> <C> <C> <C> <C> <C>
December 31, 1995 26,554,183 26,555 1,094,863 (1,158,825) (37,407)
Net loss for the nine
months ended June 30, 1996 -- -- -- 20 20
----------- ----------- ----------- ----------- -----------
Balance, September 30, 1996 26,554,183 26,555 1,094,863 (1,158,825) (37,407)
Shares issued to settle debts 380,002 380 37,620 -- 38,000
Net loss for the three months
ended December 31, 1996 -- -- -- (3,138) (3,138)
----------- ----------- ----------- ----------- -----------
Balance, December 31, 1996 26,934,185 26,935 1,132,483 (1,161,943) (2,525)
Sale of units for cash, May, 1997 5,179,500 5,180 5,174,320 -- 5,179,500
Shares issued for finders' fee 362,565 -- -- -- --
Net loss for the nine months
ended September 30, 1997 -- -- -- (42,986) (42,986)
----------- ----------- ----------- ----------- -----------
Balance, September 30, 1997 32,476,250 $ 32,115 $ 6,306,803 $(1,204,929) $ 5,133,989
=========== =========== =========== =========== ===========
SEE ACCOMPANYING NOTES
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DRUCKER INDUSTRIES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOW
for the nine months ended September 30, 1997 and 1996
and February 4, 1971 (Date of Inception) to September 30, 1997
(Stated in U.S. dollars)
(Unaudited - See Notice to Reader)
Three months ended Nine months ended February 4, 1971
September 30, September 30, (Date of
1997 1996 1997 1996 inception) to
Sept. 30, 1997
------------------------------------------------------------------------
Cash flow from operating activities:
<S> <C> <C> <C> <C> <C>
Net income (loss) $ (5,961) $ 20 $ (42,986) $ 20 $(1,204,929)
Adjustments to reconcile net loss to
net cash used in operations:
Amortization of license agreement -- -- -- -- 56,827
Stock issued for payment of expenses -- -- 50,250
Write-off of license agreement -- -- 409,236
-----------------------------------------------------------------------
(5,961) 20 42,986 20 (688,616)
Changes in non-cash items related to the operations
Increase (decrease) in royalties payable -- -- -- -- --
Net increase (decrease) in assets/liabilities 6,478 (20) 10,450 (20) (342,163)
Stock issued for payment of accounts payable -- -- -- -- 281,716
Stock issued for payment of promissory note -- -- -- -- 359,000
-----------------------------------------------------------------------
Net cash provided by (used in) operating activities 517 -- (32,536) -- (390,063)
-----------------------------------------------------------------------
Cash flows used in investing activities
Payments for license agreement -- -- -- -- (100,000)
Resource project (234,533) -- (1,630,296) -- (1,647,565)
-----------------------------------------------------------------------
(234,533) -- (1,630,296) -- (1,747,565)
-----------------------------------------------------------------------
SEE ACCOMPANYING NOTES .../Continued
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DRUCKER INDUSTRIES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOW
for the nine months ended September 30, 1997 and 1996
and February 4, 1971 (Date of Inception) to September 30, 1997
(Stated in U.S. dollars)
(Unaudited - See Notice to Reader)
February 4, 1971 (Date
Three months ended Nine months ended of Inception) to
September 30 September 30 September 30
1997 1996 1997 1996 1997
------------------------------------------------------------------------------------
Cash Flow from financing activities:
<S> <C> <C> <C> <C> <C>
Payment on license agreement payable -- - -- - (366,063)
Proceeds from sale of common stock -- - 5,179,500 - 5,481,000
Proceeds from promissory notes -- - -- - 345,000
payable
Other capital contributions -- - -- - 99,206
Due to a related party -- - -- - 44,351
Advance payable (25,000) - -- - 50,802
-----------------------------------------------------------------------
Net cash provided by financing (25,000) - 5,179,500 - 5,654,296
activities
-----------------------------------------------------------------------
Net increase (decrease) in cash (259,016) - 3,516,668 - 3,516,668
Cash, beginning of period 3,775,684 - -- - --
-----------------------------------------------------------------------
Cash, end of period $ 3,516,668 $- $ 3,516,668 $- $ 3,516,668
=======================================================================
SEE ACCOMPANYING NOTES
</TABLE>
<PAGE>
DRUCKER INDUSTRIES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 1997 and 1996
(Stated in U.S. dollars)
(Unaudited - See Notice to Reader)
Note 1 Interim Reporting
-----------------
While the information presented in the accompanying interim nine months
financial statements is unaudited, includes all adjustment which are, in
the opinion of management, necessary to present fairly the financial
position, results of operations and changes in financial position for the
interim period presented.
Note 2 Resource Project
----------------
By Farm-in Agreements dated January 21, 1997, the company has agreed to
participate in an exploration and development program on oil and gas
concessions in China. The company will pay all drilling and associated
costs to earn a 50% interest in the concession. The term of this agreement
ends on the earliest of:
- January 21, 2007
- the date on which the required amount has been expended pursuant
to this agreement; or
- upon default by the company.
Note 3 Share Capital
-------------
Commitments
-----------
The company has 5,542,065 share purchase warrants outstanding which
entitles the holders thereof to acquire 5,542,065 additional units at $1.50
per unit. These warrants expire on September 30, 1998. The additional unit
consists of one common share and one additional share purchase warrant to
acquire one common share at $2.00 per share. This warrant expires September
30, 1999.
<PAGE>
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
- - --------------------------------------------------------------------------------
RESULTS OF OPERATIONS FOR THREE MONTH PERIOD ENDED SEPTEMBER 30, 1997
- - ---------------------------------------------------------------------
The Company had expenses for the three month period in 1997 of $57,670 as
compared to ($20) in expenses in the 1996 period. There were no revenues for the
period in 1997, however, interest income of $51,709 was received. The Company
recorded a net loss on operations of ($57,670) and a net loss of ($5,961) for
the period in 1997 and a net income of $20 in the 1996 period. The Company
operating losses may continue until income can be achieved. While the Company is
seeking additional capital sources for investment; there is no assurance that
sources can be found, and there is no assurance that its oil and gas exploration
efforts in China will be productive.
LIQUIDITY AND CAPITAL RESOURCES
- - -------------------------------
The Company had $3,516,668 in cash capital at the end of the period. Such
capital will be used for oil and gas exploration in China in the following
quarter and thereafter. The investment in oil and gas exploration in China of
$1,681,098 is illiquid.
RESULTS OF OPERATIONS FOR NINE MONTH PERIOD ENDED SEPTEMBER 30, 1997
- - --------------------------------------------------------------------
The Company had no operating revenues for the nine month period in either 1996
or 1997. The Company had a general and administrative credit in 1996 of ($20)
resulting in a net profit of $20 for the period. In the 1997 nine month period,
the Company had $57,670 in general and administrative expenses a net operating
loss of ($57,670) and a net loss of ($5,961).
PART II - OTHER INFORMATION
---------------------------
ITEM 1. LEGAL PROCEEDINGS
- - -------------------------
None
ITEM 2. CHANGES IN SECURITIES
- - -----------------------------
None
ITEM 3. DEFAULT UPON SENIOR SECURITIES
- - --------------------------------------
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- - -----------------------------------------------------------
None
ITEM 5. OTHER INFORMATION
- - -------------------------
The Company commenced its oil and gas exploration efforts in China in the
quarter under its agreements with subsidiaries of Richco Petroleum, Ltd. No
results have been achieved on an investment of $1,681,098.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- - ----------------------------------------
No reports on Form 8-K were made for the period for which this report is
filed.
DRUCKER INDUSTRIES, INC.
(A Development Stage Company)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DRUCKER INDUSTRIES, INC.
Date: November 19, 1997 /s/ Gerald Runolfson
-------------------------------------------
Gerald Runolfson, President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1996
<PERIOD-END> SEP-30-1997 DEC-31-1996
<CASH> 3,516,668 0
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 1,681,098 50,802
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 5,197,766 50,802
<CURRENT-LIABILITIES> 63,777 53,327
<BONDS> 0 0
0 0
6,306,803<F1> 1,132,483
<COMMON> 32,115 26,935
<OTHER-SE> (1,204,929)<F2> (1,161,943)
<TOTAL-LIABILITY-AND-EQUITY> 5,133,989 0
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 57,670 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (57,670) 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 51,709<F3> 0
<CHANGES> 0 0
<NET-INCOME> (5,961) (3,118)
<EPS-PRIMARY> (.001) (.001)
<EPS-DILUTED> (.001) (.001)
<FN>
<F1>Additional Paid in Capital
<F2>Retained Earnings (Deficit)
<F3>Interest Income
</FN>
</TABLE>
