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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
June 30, 1999 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 June 30, 1999
<PAGE>
DRUCKER INDUSTRIES, INC.
(An Exploration Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1999
(Stated in U.S. dollars)
(Unaudited - See Note 1)
<PAGE>
<TABLE>
<CAPTION>
DRUCKER INDUSTRIES, INC.
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS
June 30, 1999 and December 31, 1998
(Stated in U.S. dollars)
ASSETS June 30, December 31,
<S> <C> <C>
1999 1998
Current
Cash and term deposits $ 3,203,218 $ 2,763,628
Accrued interest receivable 3,617 5,483
Prepaid expenses - 2,269
-----
3,206,835 2,771,380
Oil and gas projects 485,406 1,262,106
------- ---------
Total Assets $ 3,692,241 $ 4,033,486
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable and accrued expenses $ 42,558 $ 47,455
------------- -------------
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 exploration stages ( 2,689,235) ( 2,352,887)
3,649,683 3,986,031
--------- ---------
$ 3,692,241 $ 4,033,486
============= =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DRUCKER INDUSTRIES, INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS for the three
months ended and the six months ended June 30, 1999 and 1998
and January 1, 1997 (Date of Inception of Exploration Stage) to June 30, 1999
(Stated in U.S. dollars)
(Unaudited - See Note 1)
January 1,
1997 (Date of
Inception of
Exploration
Stage) to
Three months ended June 30, Six months ended June 30, June 30,
1999 1998 1999 1998 1999
<S> <C> <C> <C> <C> <C>
Revenues 0 0 0 0
General and administrative
expenses - Schedule 1 $ 73,770 $ 32,541 $ 106,062 $ 103,435 $ 539,752
Dryhole expenses - Schedule 2 - - - - 187,684
Exploration expenses
- - Schedule 3 241,465 - 297,773 - 1,160,147
- ------- ------- ---------
Loss before the following: ( 315,235) ( 32,541) ( 403,835) ( 103,435) (1,887,583)
Interest income 44,497 26,979 67,487 71,417 360,291
------ ------ ------ ------ -------
Net loss $ ( 270,738) $ ( 5,562) $ ( 336,348) $ ( 32,018) $ (1,527,292)
========== ======== ========= ======== ============
Net loss per share $ ( 0.01) $ ( 0.00) $ ( 0.01) $ ( 0.00)
============ ============ =========== ==============
Weighted average shares
outstanding 32,476,250 32,476,250 32,476,250 32,476,250
========== ========== ========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DRUCKER INDUSTRIES, INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
for the six months ended June 30, 1999 and 1998 and
February 4, 1971 (Date of Inception) to June 30, 1999
(Stated in U.S. dollars)
(Unaudited - See Note 1)
Deficit
Accumulated
Additional During the
Common Stock Paid-in Exploration
Shares Amount Capital Stage Total
<S> <C> <C> <C> <C> <C>
Shares issued to acquire 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
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DRUCKER INDUSTRIES, INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
for the six months ended June 30, 1999 and 1998 and
February 4, 1971 (Date of Inception) to June 30, 1999
(Stated in U.S. dollars)
(Unaudited - See Note 1)
Deficit
Accumulated
Additional During the
Common Stock Paid-in Exploration
Shares Amount Capital Stage Total
<S> <C> <C> <C> <C> <C>
Balance Forward, 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, 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.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
for the six months ended June 30, 1999 and 1998 and
February 4, 1971 (Date of Inception) to June 30, 1999
(Stated in U.S. dollars)
(Unaudited - See Note 1)
Deficit
Accumulated
Additional During the
Common Stock Paid-in Exploration
Shares Amount Capital Stage Total
<S> <C> <C> <C> <C> <C> <C>
Balance Forward, 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)
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 six months ended June 30, 1997 ( 37,025) ( 37,025)
Balance, June 30, 1997 32,476,250 32,115 6,306,803 (1,198,968) 5,139,950
Net loss for the six months ended December 31, 1997 - - - ( 512,789) ( 512,789)
Balance, December 31, 1997 32,476,250 32,115 6,306,803 (1,711,757) 4,627,161
Net loss for the six months ended June 30, 1998 - - - ( 32,018) ( 32,018)
Balance, June 30, 1998 32,476,250 32,115 6,306,803 (1,743,775) 4,595,143
Net loss for the six months ended December 31, 1998 - - - ( 609,112) ( 609,112)
Balance, December 31, 1998 32,476,250 32,115 6,306,803 (2,352,887) 3,986,031
Net loss for the six months ended June 30, 1999 - - - ( 336,348) ( 336,348)
Balance, June 30, 1999 32,476,250 $ 32,115 $ 6,306,803 $ (2,689,235) $ 3,649,683
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DRUCKER INDUSTRIES, INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOW
for the six months ended June 30, 1999 and 1998
and January 1, 1997 (Date of Inception of Exploration Stage) to June 30, 1999
(Stated in U.S. dollars)
(Unaudited - See Note 1)
January 1, 1997
(Date of
Inception of
Exploration
Stage) to
Six months ended June 30, June 30,
<S> <C> <C> <C>
1999 1998 1999
Cash flow from operating activities:
Net loss $ ( 336,348) $ ( 32,018) $ (1,527,292)
Add items not affecting cash:
Capital assets written-off - - 40,288
Write-off of advances - - 31,285
( 336,348) ( 32,018) (1,455,719)
Net changes in non-cash working capital items
related to operations:
Advances receivable - 250,709 -
Accrued interest receivable 1,866 ( 4,227) ( 3,617)
Prepaid expenses 2,269 - -
Accounts payable and accrued expenses (4,897) ( 65,194) 40,033
Advance payable - ( 50,812) -
Net cash provided by (used in) operating ( 337,110) 98,458 (1,419,303)
activities
Cash flows used in investing activities
Oil and gas projects costs 776,700 ( 387,066) ( 506,177)
Cash flow from financing activities:
Proceeds from sale of common stock - - 5,179,500
Advance payable - - (50,802)
Net cash provided by financing activities - - 5,128,698
Net increase (decrease) in cash 439,590 ( 288,608) 3,203,218
Cash and term deposits, beginning of period 2,763,628 3,238,576 -
Cash and term deposits, end of period $ 3,203,218 $ 2,949,968 $ 3,203,218
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DRUCKER INDUSTRIES, INC.
(An Exploration Stage Company)
CONSOLIDATED SCHEDULE OF GENERAL AND ADMINISTRATIVE EXPENSES
for the three months ended and six months ended June 30, 1999
and 1998 and January 1, 1997 (Date of Inception of Exploration
Stage) to June 30, 1998
(Stated in US Dollars)
(Unaudited - See Note 1)
January 1,
1997
(Date of
Inception of
Exploration
Stage) to
Three months ended June 30, Six months ended June 30, June 30,
1999 1998 1999 1998 1998
<S> <C> <C> <C> <C> <C>
Accounting and audit $ 28,377 $ 633 $ 37,657 $ 40,647 $ 91,847
Advances written-off - - - - 24,061
Consulting fee 21,611 9,027 32,774 20,163 103,247
Foreign exchange loss 196 1,766 551 2,196 884
Interest and bank charges 234 164 608 236 1,633
Investor relations 9,858 1,548 11,418 2,914 67,941
Legal - 4,939 66 6,139 71,965
Office and general 6,774 11,129 12,563 22,406 89,096
Rent 2,051 2,044 4,039 4,157 19,435
Transfer agent 524 402 649 1,762 3,367
Travel 4,145 889 5,737 2,815 62,557
----- --- ----- ----- ------
$ 73,770 $ 32,541 $ 106,062 $ 103,435 $ 536,033
=========== =========== =========== =========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DRUCKER INDUSTRIES, INC.
CONSOLIDATED SCHEDULE OF DRY HOLE EXPENSES for
the three months ended and the six months ended June 30, 1999 and 1998
and January 1, 1997 (Date of Inception of Exploration Stage)
to June 30, 1999
(Stated in US Dollars)
(Unaudited - See Note 1)
January 1,
1997
(Date of
Inception of
Exploration
Stage) to
Three months ended June 30, Six months ended June 30, June 30,
Fuxian Concession 1999 1998 1999 1998 1999
- ----------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Administration $ - $ - $ - $ - $ 3,484
Advances written-off - - - - 31,285
Amortization - - - - 2,827
Audit - - - - 1,875
Capital assets written-off - - - - 9,118
Consulting - - - - 10,875
Entertainment - - - - 2,347
Office supplies - - - - 582
Other - - - - 4,454
Surveying - - - - 105,625
Travel - - - - 14,713
Wages and benefits - - - - 499
---
$ - $ - $ - $ - $ 187,684
============ ============ ============ ============ =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DRUCKER INDUSTRIES, INC.
(An Exploration Stage Company)
CONSOLIDATED SCHEDULE OF EXPLORATION EXPENSES for
the three months ended and six months ended June 30, 1999 and 1998
and January 1, 1997 (Date of Inception of Exploration Stage)
to June 30, 1999
(Stated in US Dollars)
(Unaudited - See Note 1)
January 1,
1997
(Date of
Inception of
Exploration
Stage)
Three months ended June 30, Six months ended June 30, to June 30,
1999 1998 1999 1998 1999
<S> <C> <C> <C> <C> <C>
Administration $ 23,788 $ - $ 36,286 $ - $ 82,988
Amortization - - - - 18,042
Audit - - - - 7,371
Capital assets written-off - - - - 31,170
Consumables 109,518 - 111,119 - 141,191
Drilling 41,020 - 41,020 - 41,440
Entertainment - - - - 12,221
Geological/geophysical 48,347 - 83,386 - 248,326
Insurance - - - - 2,645
Office Supplies - - - - 5,754
Other - - - - 6,309
Overhead 18,792 - 25,962 - 40,564
Rent - - - - 8,826
Repairs and maintenance - - - - 2,612
Surveying and testing - - - - 399,957
Telephone - - - - 5,942
Travel - - - - 52,673
Wages and benefits - - - - 63,296
Interest income - - - - ( 7,614)
Other income - - - - ( 3,566)
$ 241,465 $ - $ 297,773 $ - $ 1,160,147
</TABLE>
<PAGE>
DRUCKER INDUSTRIES, INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1998
(Stated in U.S. dollars)
(Unaudited - See Note 1)
Note 1 Interim Reporting
These consolidated financial statements have not been audited or
reviewed and have been prepared on a compilation basis only. Readers
are cautioned that these statements may not be appropriate for their
purposes. While the information presented in the accompanying interim
six months financial statements is unaudited, it includes all
adjustments which are, in the opinion of management, necessary to
present fairly the financial position results of operations and
changes in financial position of the interim period presented.
Note 2 Common Stock
Commitment
Share Purchase Warrants
At June 30, 1999, 5,179,500 share purchase warrants are outstanding.
Each warrant entitles the holder to purchase one additional unit of
the company at $0.40 per unit until the earlier of March 31, 2000 and
the 90th day after the day on which the weighted average trading
price of the company's shares exceed $0.90 per share for 10
consecutive trading days. 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 $0.60 per share. The additional warrants will expire one
year after the occurrence of the exercise of the original warrant.
Note 3 Significant Accounting Policy
Principles of Consolidation
These financial statements include the accounts of its wholly-owned
subsidiary, Drucker Petroleum, Inc. a British Virgin Island company.
All intercompany transactions have been eliminated.
Note 4 Term Deposit
The company's subsidiary, Drucker Petroleum, Inc. ("DPI") has entered
into a letter of credit in the amount of $2,000,000. As a condition
of the letter of credit, DPI paid a financing deposit of $2,000,000.
The deposit will be used as payment for the costs incurred in
exploring the concession located in West Gharib, Gulf of Suez, Egypt.
Note 5 Oil and Gas Projects
The company's wholly-owned subsidiary, Drucker Petroleum, Inc.
("DPI"), a British Virgin Island 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.
<PAGE>
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS FOR THREE MONTH PERIOD ENDED JUNE 30, 1998
The Company had general and administrative expenses for the three month period
in 1999 of $73,770 and exploration expenses of $241,465 as compared to $32,541
in expenses and no exploration expense in the 1998 period. There were no
revenues for the period in 1999 or 1998, however, interest income was received
in the amount of $44,497 in 1999 and $26,979 in 1998. The Company recorded a net
loss on operations of ($315,235)) for the period in 1999 and a net loss on
operations of ($32,541) in the 1998 period. The Company operating losses may
continue until income can be achieved. Net losses after interest income were
($270,738) in the quarter in 1999 and ($5,562) in 1998.
RESULTS OF OPERATIONS FOR SIX MONTH PERIOD ENDED JUNE 30, 1999 COMPARED TO SAME
PERIOD IN 1998
The Company had expenses (including exploration) for the six month period in
1999 of $403,835 as compared to $103,435 in expenses in the 1998 period. There
were no revenues for the period in 1998 or 1999, however, interest income was
received in the amount of $71,417 in 1998 and $67,487 in the period in 1999. The
Company recorded a net loss on operations of ($336,348) for the period in 1999
and a net loss of ($32,018) in the 1998 period. (The company received a
repayment of $761,900 for project advances that were outstanding at March 31,
1999 upon the abandonment of the Ningxia oil and gas concessions in China.) 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 Egypt will be productive.
LIQUIDITY AND CAPITAL RESOURCES
The Company had $3,203,218 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 $485,406 is illiquid. Total liabilities were $42,558 at period end. All
exploration activities in China have been terminated at this time.
<PAGE>
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
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
<PAGE>
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: /s/Ernest Cheung
------------------------
Ernest Cheung, Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 3,203,318
<SECURITIES> 0
<RECEIVABLES> 3,617
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,206,835
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,692,241
<CURRENT-LIABILITIES> 42,558
<BONDS> 0
0
0
<COMMON> 32,115
<OTHER-SE> 3,617,568
<TOTAL-LIABILITY-AND-EQUITY> 3,649,683
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 315,235
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (44,497)
<INCOME-PRETAX> (270,738)
<INCOME-TAX> 0
<INCOME-CONTINUING> (270,738)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (270,738)
<EPS-BASIC> (.01)
<EPS-DILUTED> (.01)
</TABLE>
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