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
March 31, 1998 0-29670
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 March 31, 1998
<PAGE>
DRUCKER INDUSTRIES, INC.
(A Development Stage Company)
BALANCE SHEETS
March 31, 1998 and December 31, 1997
(Stated in U.S. dollars)
(Unaudited - See Note 1)
ASSETS March 31, December 31,
1998 1997
Current
Cash and term deposits $3,373,155 $3,238,576
Advances receivable 50,737 250,709
3,423,892 3,489,285
Oil and gas projects costs 1,267,541 1,275,217
$4,691,433 $4,764,502
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable and accrued expenses $ 90,727 $ 86,539
Advance payable - 50,802
90,727 137,341
Stockholders' Equity - Note 2
Common stock $.001 par value, authorized
50,000,000 shares:
32,476,250 shares issued and outstanding 32,115 32,115
Additional paid-in capital 6,306,803 6,306,803
Deficit accumulated during the
development stages (1,738,212) (1,711,757)
Total stockholders' equity 4,600,706 4,627,161
$4,691,433 $4,764,502
SEE ACCOMPANYING NOTES
<PAGE>
[CAPTION]
<TABLE>
DRUCKER INDUSTRIES, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
for the three months ended March 31, 1998 and 1997 and years
ended December 31, 1997, 1996 and 1995
and January 1, 1997 (Date of Inception of Development Stage)
to March 31, 1998
(Stated in U.S. dollars)
(Unaudited - See Note 1)
January
1, 1997
(Date of
Inception of
Three months Year ended Development
Ended March 31, December 31 Stage) to
March 31,
1998 1997 1997 1996 1995 1998
<S> <C> <C> <C> <C> <C> <C>
Interest
income $( 44,439) $ - $(135,266) $ - $ - $(179,705)
General
and
adminis-
trative
expenses-
Schedule 1 69,534 13,053 247,566 3,118 46,004 317,100
Interest
expense - - - - 33,451 -
Fiscal
agent
fees 1,360 - 3,719 - - 5,079
Dry hole
expenses-
Schedule 2 - - 147,281 - - 147,281
Explora-
tion
expenses-
Schedule 3 - - 286,514 - - 286,514
Net loss $( 26,455) $( 13,053) $(549,814) $( 3,118) $( 79,455) $(576,269)
Net loss
per share $( 0.00) $( 0.00) $( 0.02) $( 0.00) $( 0.00)
Weighted
average
shares
out-
standing 32,476,250 26,934,185 30,167,056 26,554,183 21,575,697
</TABLE>
SEE ACCOMPANYING NOTES
<PAGE>
[CAPTION]
<TABLE>
DRUCKER INDUSTRIES, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
for the three months ended March 31, 1998 and 1997 and years
ended December 31, 1989
to December 31, 1997 and
February 4, 1971 (Date of Inception) to March 31, 1998
(Stated in U.S. dollars)
(Unaudited - See Note 1)
Deficit
Accumulated
Additional During
Common Stock Paid-in Development
Shares Amount Capital Stages Total
<S> <C> <C> <C> <C> <C>
Shares issued to
acquire Monetary
Metals, Inc. 675,00 $ 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
Adjustments to
previously reported
amounts:
Fiscal agent fees - - (12,500) (20,600) (33,100)
Balance, December 31, 20,377,500 20,378 471,324 (354,463) 137,239
1992, as restated
</TABLE>
SEE ACCOMPANYING NOTES
Continued
<PAGE>
[CAPTION]
<TABLE>
DRUCKER INDUSTRIES, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
for the three months ended March 31, 1998 and 1997 and years
ended December 31, 1989 to December 31, 1997 and
February 4, 1971 (Date of Inception) to March 31, 1998
(Stated in U.S. dollars)
(Unaudited - See Note 1)
Deficit
Accumulated
Additional During
Common Stock Paid-in Development
Shares Amount Capital Stages Total
<S> <C> <C> <C> <C> <C>
Balance forward,
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)
Shares issued to
settle debts 380,002 380 37,620 - 38,000
Net loss for the
year ended
December 31, 1996 - - - (3,118) (3,118)
Balance, December 31,
1996 26,934,185 26,935 1,132,483 (1,161,943) (2,525)
Net loss for the
three months ended
March 31, 1997 - - - (13,053) (13,053)
Balance, March 31,
1997 26,934,185 26,935 1,132,483 (1,174,996) (15,578)
Sale of common
stock, May, 1997 5,179,500 5,180 5,174,320 - 5,179,500
Shares issued for
finder's fee 362,565 - - - -
Net loss for the
nine months ended
December 31, 1997 - - - (536,761) (536,761)
Balance, December 31,
1997 32,467,250 32,115 6,306,803 (1,711,757) 4,627,161
Net loss for the
three months ended
March 31, 1998 - - - (26,455) (26,455)
Balance, March 31,
1998 32,476,250 $32,115 $6,306,803 $(1,738,212) $4,600,706
</TABLE>
SEE ACCOMPANYING NOTES
<PAGE>
[CAPTION]
<TABLE>
DRUCKER INDUSTRIES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOW
for the three months ended March 31, 1998 and 1997 and years ended December 31,
1997, 1996 and 1995
and January 1, 1997(Date of Inception of Development Stage)
to March 31, 1998
(Stated in U.S. dollars)
(Unaudited - See Note 1)
January
1, 1997
(Date of
Inception of
Development
Three months Year Ended Stage) to
ended March 31, December 31, March 31
1998 1997 1997 1996 1995 1998
<S> <C> <C> <C> <C> <C> <C>
Cash flow
from
operating
activities
Net loss $ (26,455) $(13,053) $ (549,814) $(3,118) $(79,455) $(576,269)
Adjustments
to reconcile
loss to net
cash used in
operations:
Advance
receivable 199,972 - (250,709) - - (50,737)
Accounts
payable and
accrued
expenses 4,188 158,816 84,014 12,118 69,111 88,202
Advance
payable (50,802) - - - - (50,802)
Net cash
provided by
(used in)
operating
activities 126,903 145,763 (716,509) 9,000 (10,344) (589,606)
Cash flow
used in
investing
activities
Oil and gas
project costs 7,676 (145,763) (1,224,415) (50,802) - 1,216,739
Cash flow from
financing
activities:
Proceeds from
sale of
common stock - - 5,179,500 - - 5,179,500
Due to a
related party - - - (9,000) 9,000 -
Advance payable - - - 50,802 - -
Net cash
provided by
financing
activities - - 5,179,500 41,802 9,000 5,179,500
Net increase
(decrease)
in cash 134,579 - 3,238,576 - (1,344) 3,373,155
Cash,
beginning of
period 3,238,576 - - - 1,344 -
Cash and term
deposits, end
of period $3,373,155 $ - $ 3,238,576 $ - $ - $3,373,155
Supplemental Disclosures of Cash Flows:
Stock issued for payment of accounts payable in 1996 $38,000 (1995: $243,716)
Stock issued for payment of Promissory note in 1995 $359,000
</TABLE>
SEE ACCOMPANYING NOTES
<PAGE>
[CAPTION]
<TABLE>
DRUCKER INDUSTRIES, INC.
(A Development Stage Company)
SCHEDULE OF GENERAL AND ADMINISTRATIVE EXPENSES
for the three months ended March 31, 1998 and 1997 and years ended December
31, 1997, 1996 and 1995
and January 1, 1997 (Date of Inception of Development Stage)
to March 31, 1998
(Stated in US Dollars)
(Unaudited - See Note 1)
January 1,
1997
(Date of
Inception of
Development
Three months Year Ended Stage) to
ended March 31, December 31, March 31,
1998 1997 1997 1996 1995 1998
<S> <C> <C> <C> <C> <C> <C>
Accounting
and audit $40,015 $ 3,029 $ 9,539 $2,745 $ 7,985 $ 49,554
Consulting 11,135 - 32,185 - 36,000 43,320
Foreign exchange
(gain) loss 430 - (778) (3,138) (5) (348)
Franchise tax 1,482 - - - - 1,482
Interest and bank
charges 72 - 406 - 146 478
Investor relations 895 - 45,280 - - 46,175
Legal 1,201 10,024 59,795 - 220 60,996
Office and general 7,225 - 29,776 373 1,362 37,001
Printing 426 - 10,059 - - 10,485
Promotion 470 - 1,409 - - 1,879
Rent 2,113 - 7,376 - - 9,489
Telephone 2,143 - 6,741 - 296 8,884
Travel 1,927 - 45,778 - - 47,705
Write-off of
advances - - - 3,138 - -
$69,534 $13,053 $247,566 $3,118 $46,004 $317,100
</TABLE>
SEE ACCOMPANYING NOTES
<PAGE>
[CAPTION]
<TABLE>
DRUCKER INDUSTRIES, INC.
SCHEDULE OF DRY HOLE EXPENSES
for the three months ended March 31, 1998 and 1997 and years ended December
31, 1997, 1996 and 1995
and January 1, 1997 (Date of Inception of Development Stage)
to March 31, 1998
(Stated in US Dollars)
(Unaudited - See Note 1)
January 1,
1997
(Date of
Inception of
Development
Three months Year ended Stage) to
ended March 31, December 31, March 31,
Fuxian Concession 1998 1997 1997 1996 1995 1998
<S> <C> <C> <C> <C> <C> <C>
Administration $ - $ - $ 3,484 $ - $ - $ 3,484
Amortization - - 2,827 - - 2,827
Audit - - 1,875 - - 1,875
Consulting - - 10,875 - - 10,875
Entertainment - - 2,347 - - 2,347
Office supplies - - 582 - - 582
Other - - 4,454 - - 4,454
Surveying - - 105,625 - - 105,625
Travel - - 14,713 - - 14,713
Wages and benefits - - 499 - - 499
$ - $ - $147,281 $ - $ - $147,281
</TABLE> SEE ACCOMPANYING NOTES
<PAGE>
[CAPTION]
<TABLE>
DRUCKER INDUSTRIES, INC.
(A Development Stage Company)
SCHEDULE OF EXPLORATION EXPENSES
for the three months ended March 31, 1998 and 1997 and years ended December
31, 1997, 1996 and 1995
and January 1, 1997 (Date of Inception of Development Stage)
to March 31, 1998
(Stated in US Dollars)
(Unaudited - See Note 1)
January 1,
1997
(Date of
Inception of
Three months Year ended Development
ended December 31, Stage) to
March 31 Ninxia Shaanxi 1997 1996 1995 March 31,
1998 1997 Concession Concession Total Total Total 1998
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Adminis-
tration $ - $ - $ 6,173 $ - $ 6,173 $ - $ - $ 6,173
Amortization - - 9,573 568 10,141 - 10,141
Audit - - 1,875 1,250 3,125 - - 3,125
Entertain-
ment - - 1,463 6,006 7,469 - - 7,469
Insurance - - 5,256 - 5,256 - - 5,256
Office
Supplies - - 3,950 1,740 5,690 - - 5,690
Other - - 676 2,396 3,072 - - 3,072
Rental - - 918 - 918 - - 918
Repairs and
maintenance - - 1,983 - 1,983 - - 1,983
Surveying
and testing - - 56,250 101,107 157,357 - - 157,357
Telephone - - 2,242 1,133 3,375 - - 3,375
Travel - - 25,285 22,720 48,005 - - 48,005
Wages and
benefits - - 27,194 6,756 33,950 - - 33,950
$ - $ - $142,838 $143,676 $286,514 $ - $ - $286,514
</TABLE> SEE ACCOMPANYING NOTES
<PAGE>
DRUCKER INDUSTRIES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 1998
(Stated in U.S. dollars)
(Unaudited - See Note 1)
Note 1 Interim Reporting
These financial statements have not been audited or reviewed.
Readers are cautioned that these statements may not be appropriate
for their purposes.
While the information presented in the accompanying
interim three months financial statements is
unaudited, it 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 Common Stock
Commitment
Share Purchase Warrants
At March 31, 1998, 5,179,500 share purchase warrants
are outstanding. Each warrant entitles the holder
to purchase one additional unit of the company at
$1.50 per unit until September 30, 1998. Each unit
consists of one common share of the company and one
additional warrant. Each additional warrant
entitles the holder to purchase one additional
common share of the company at $2.00 until September
30, 1999.
Note 3 Subsequent Event
The company entered into a farm-out agreement dated
April 1998 to acquire an undivided 20% participating
interest in the right to explore for and exploit
petroleum in a concession located in West Gharib,
Gulf of Suez, Egypt.
The company shall pay:
- $352,000 within seven days of the execution of
the agreement
- pay 20% of all costs and expenses incurred
subsequent to the execution of the agreement
related to this concession.
- 40% of the costs and expenses associated with the
drilling of an exploratory well to a maximum cost
to the company of $600,000; thereafter, the
company shall pay 20% of all costs and expenses
associated with any further activity related to
this well
In addition, the company is required to provide a
bank guarantee of $2,000,000 within seven days of
the execution of the agreement, being 40% of a
letter of guarantee.
The company agrees to pay a finders fee of 7% net
profit interest from the profits generated from the
concession, after recovery of all exploration and
development expenditures.
This agreement is subject to ratification by the
Government of the Arab Republic of Egypt, the
Exploration Offers Committee of the Egyptian General
Petroleum Corporation and regulatory authorities.
<PAGE>
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THREE MONTH PERIOD ENDED MARCH 31, 1998
The Company had expenses for the three month period in 1998
of $69,534 as compared to $13,053 in expenses in the 1997
period. There were no revenues for the period in 1997,
however, interest income of $44,439 was received. The
Company recorded a net loss on operations of ($26,455) for
the period in 1998 and a net loss of ($13,053) in the 1997
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 $3,373,155 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
projects in China of $1,267,541 is illiquid. Total
liabilities were $90,727 at period end.
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 entered into a farm-out agreement dated
April 1998 to acquire an undivided 20% participating
interest in the right to explore for and exploit
petroleum in a concession located in West Gharib,
Gulf of Suez, Egypt.
The company shall pay:
- $352,000 within seven days of the execution of the
agreement
- pay 20% of all costs and expenses incurred
subsequent to the execution of the agreement
related to this concession.
- 40% of the costs and expenses associated with the
drilling of an exploratory well to a maximum cost
to the company of $600,000; thereafter, the
company shall pay 20% of all costs and expenses
associated with any further activity related to
this well
<PAGE>
In addition, the company is required to provide a
bank guarantee of $2,000,000 within seven days of
the execution of the agreement, being 40% of a
letter of guarantee.
The company agrees to pay a finders fee of 7% net
profit interest from the profits generated from the
concession, after recovery of all exploration and
development expenditures.
This agreement is subject to ratification by the
Government of the Arab Republic of Egypt, the
Exploration Offers Committee of the Egyptian General
Petroleum Corporation and regulatory authorities.
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: June 2, 1998 /s/Ernest Cheung
Ernest Cheung, Secretary
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 3,373,155
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,267,541
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,691,433
<CURRENT-LIABILITIES> 90,727
<BONDS> 0
0
0
<COMMON> 32,155
<OTHER-SE> 4,568,591
<TOTAL-LIABILITY-AND-EQUITY> 4,691,433
<SALES> 0
<TOTAL-REVENUES> 44,439
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 70,894
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (26,455)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (26,455)
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>