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, 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 March 31, 1999
<PAGE>
DRUCKER INDUSTRIES, INC.
(An Exploration Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1999
(Stated in U.S. dollars)
(Unaudited - See Note 1)
<PAGE>
<TABLE>
<CAPTION>
SEE ACCOMPANYING NOTES
DRUCKER INDUSTRIES, INC.
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS
March 31, 1999 and December 31, 1998
(Stated in U.S. dollars)
(Unaudited - See Note 1)
ASSETS March 31, December 31,
<S> <C> <C>
Current
Cash and term deposits $ 2,556,662 $ 2,763,628
Accrued interest receivable 2,980 5,483
Advances Receivable - 2,269
Total current assets 2,559,642 2,771,380
Oil and gas projects 1,388,595 1,262,106
Total Assets $ 3,948,237 $ 4,033,486
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable and accrued expenses $ 27,815 $ 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 development stages ( 2,418,496) ( 2,352,887)
Total stockholders' equity 3,920,422 3,986,031
$ 3,948,237 $ 4,033,486
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEE ACCOMPANYING NOTES
DRUCKER INDUSTRIES, INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
for the three months ended March 31, 1999 and 1998
and January 1, 1997 (Date of Inception of Development Stage)
to March 31, 1999
(Stated in U.S. dollars)
(Unaudited - See Note 1)
January 1, 1997
(Date of
Inception of
Development
Stage) to March
31,
1999 1998 1999
---- ---- ----
<S> <C> <C> <C>
Interest income $ ( 22,991) $ ( 44,439) $ ( 315,795)
General and administrative expenses
- Schedule 1 32,292 69,534 462,263
Fiscal agent fees - 1,360 3,719
Dry hole expenses - Schedule 2 - - 187,684
Exploration expenses - Schedule 3 56,308 - 918,682
Net loss $ ( 65,609) $ ( 26,455) $ ( 1,256,553)
Net loss per share $ ( 0.00) $ ( 0.00)
Weighted average shares outstanding 32,476,250 32,476,250
</TABLE>
SEE ACCOMPANYING NOTES .../Continued
<PAGE>
<TABLE>
<CAPTION>
DRUCKER INDUSTRIES, INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
for the three months ended March 31, 1999 and 1998 and
February 4, 1971 (Date of Inception) to March 31, 1999
(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. 675,000 $ 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
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
</TABLE>
SEE ACCOMPANYING NOTES
Continued
<PAGE>
<TABLE>
<CAPTION>
DRUCKER INDUSTRIES, INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
for the three months ended March 31, 1999 and 1998 and
February 4, 1971 (Date of Inception) to March 31, 1999
(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, 200,000 200 29,800 - 30,000
1994
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 - - - ( 13,053) ( 13,053)
March 31, 1997
Balance, March 31, 1997 26,934,185 26,935 1,132,483 (1,174,996) ( 15,578)
Sale of common stock, May, 5,179,500 5,180 5,174,320 - 5,179,500
1997
Shares issued forfinder's 362,565 - - - -
fee
Netloss for the nine months
ended December 31, 1997 - - - (536,761) (536,761)
Balance, December 31, 1997 32,476,250 32,115 6,306,803 (1,711,757) 4,627,161
Net loss for the three
months ended - - - ( 26,455) ( 26,455)
March 31, 1998
Balance, March 31, 1998 32,476,250 32,115 6,306,803 (1,738,212) 4,600,706
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DRUCKER INDUSTRIES, INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
for the three months ended March 31, 1999 and 1998 and
February 4, 1971 (Date of Inception) to March 31, 1999
(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,
1998, as restated 32,476,250 $ 32,115 $ 6,306,803 $ (1,738,212 $ 4,600,706
Net loss for the nine months
ended
December 31, 1998 - - - (614,675) (614,675)
Balance, December 31, 1998 32,476,250 32,115 6,306,803 (2,352,887) 3,986,031
Net loss for the three
months ended
March 31, 1999 - - - ( 65,609) ( 65,609)
Balance, March 31, 1999 32,476,250 $ 32,115 $ 6,306,803 $ (2,418,496 $ 3,920,422
SEE ACCOMPANYING NOTES
<PAGE>
DRUCKER INDUSTRIES, INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOW for the
three months ended March 31, 1999 and 1998
and January 1, 1997(Date of Inception of Development Stage)
to March 31, 1999
(Stated in U.S. dollars)
(Unaudited - See Note 1)
<S> <C> <C> <C>
January 1, 1997
(Date of
Inception of
Development
Stage) to March
31
1999 1998 1999
---- ---- ----
Cash flow from operating activities:
Net loss $( 65,609) $( 26,455) $( 1,256,553)
Add: items not affecting cash:
Capital assets written-off - - 40,288
Write-off of advances - - 31,285
( 65,609) ( 26,455) ( 1,184,980)
Net changes in non-cash working
capital items related
to operations:
Accrued interest receivable 2,503 - ( 2,980)
Prepaid expenses 2,269 - -
Advance receivable - 199,972 -
Accounts payable and accrued expenses ( 19,640) 4,188 25,290
Net cash provided by (used in) operating ( 80,477) 177,705 ( 1,162,670)
activities
Cash flow used in investing activities
Oil and gas project costs ( 126,489) 7,676 ( 1,409,366)
Cash flow from financing activities:
Proceeds from sale of common stock - - 5,179,500
Due to a related party - - -
Advance payable - ( 50,802) ( 50,802)
Net cash provided by financing activities - ( 50,802) 5,128,698
Net increase (decrease) in cash ( 206,966) 134,579 2,556,662
Cash, beginning of period 2,763,628 3,238,576 -
Cash and term deposits, end of period $ 2,556,662 $ 3,373,155 $ 2,556,662
</TABLE>
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
SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
Schedule 1
DRUCKER INDUSTRIES, INC.
(An Exploration Stage Company)
CONSOLIDATED SCHEDULE OF GENERAL AND ADMINISTRATIVE EXPENSES
for the three months ended March 31, 1999 and 1998
and January 1, 1997 (Date of Inception of Development Stage)
to March 31, 1999
(Stated in US Dollars)
(Unaudited - See Note 1)
January 1,
1997 (Date of
Inception of
Development
Stage) to March
31,
1999 1998 1999
---- ---- ----
<S> <C> <C> <C>
Accounting and audit fees $ 9,280 $ 40,015 $ 63,470
Advances written-off - - 24,061
Consulting 11,163 11,135 81,636
Foreign exchange (gain) loss 355 430 688
Franchise tax 1,548 1,482 3,030
Investor relations 1,559 1,365 58,082
Interest and bank charges 375 72 1,400
Legal 66 1,201 71,965
Office and general 4,241 9,794 79,292
Rent 1,988 2,113 17,384
Transfer agent feet 125 - 2,843
Travel 1,592 1,927 58,412
$ 32,292 $ 69,534 $ 462,263
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Schedule 2
DRUCKER INDUSTRIES, INC.
CONSOLIDATED SCHEDULE OF DRY HOLE EXPENSES for
the three months ended March 31, 1999 and 1998
and January 1, 1997 (Date of Inception of Development Stage)
to March 31, 1999
(Stated in US Dollars)
(Unaudited - See Note 1)
January 1, 1997
(Date of
Inception of
Development
Stage) to March
31,
Fuxian Concession 1999 1998 1999
- ----------------- ---- ---- ----
<S> <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>
Schedule 3
DRUCKER INDUSTRIES, INC.
(An Exploration Stage Company)
CONSOLIDATED SCHEDULE OF EXPLORATION EXPENSES for
the three months ended March 31, 1999 and 1998
and January 1, 1997 (Date of Inception of Development Stage)
to March 31, 1999
(Stated in US Dollars)
(Unaudited - See Note 1)
January 1, 1997
(Date of
Inception of
Development
Stage) to
West March 31,
Gharib 1999 Total 1998 Total 1999
------ ---------- ---------- ----
<S> <C> <C> <C> <C>
Administration $ 12,498 $ 12,498 $ - $ 59,200
Amortization - - - 18,042
Audit - - - 7,371
Capital assets written-off - - - 31,170
Consumables 1,600 1,600 - 31,672
Drilling - - - 420
Entertainment - - - 12,221
Geological/geophysical 35,040 35,040 - 199,980
Insurance - - - 2,645
Interest income - - - ( 7,614)
Office Supplies - - - 5,754
Other - - - 6,309
Other income - - - ( 3,566)
Overhead 7,170 7,170 - 21,772
Rental - - - 8,826
Repairs and maintenance - - - 2,612
Surveying and testing - - - 399,957
Telephone - - - 5,942
Travel - - - 52,673
Wages and benefits - - - 63,296
$ 56,308 $ 56,308 $ - $ 918,682
</TABLE>
<PAGE>
DRUCKER INDUSTRIES, INC.
(An Exploration Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1999
(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, 1999, 5,179,000 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 date 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 warrants.
Note 3 Subsequent Event
On April 15, 1999, the company abandoned the Ningxia oil and gas
concessions in China. In this regard, the company paid a $33,000
termination fee and received $761,900 as a repayment of project
advances outstanding at March 31, 1999.
Note 4 Oil & Gas Projects
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.
<PAGE>
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS FOR THREE MONTH PERIOD ENDED MARCH 31, 1999 COMPARED TO
THE SAME PERIOD IN 1998
The Company had general and administrative expenses for the three month period
in 1999 of $88,600 as compared to $69,534 in expenses in the 1998 period. There
were no revenues for the period in 1999, however, interest income of $22,991 was
received. The Company recorded a net loss on operations of ($65,609) for the
period in 1999 and a net loss on operations of ($26,455) in the 1998 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 Egypt will be productive.
LIQUIDITY AND CAPITAL RESOURCES
The Company had $2,556,662 in cash capital at the end of the period. Such
capital will be used for oil and gas exploration in Egypt in the following
quarter and thereafter. The investment in oil and gas exploration projects of
$1,388,595 is illiquid. Total liabilities were $27,815 at period end.
<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
In April of 1999 the company abandoned the Ningzia oil and gas
concessions, including and all exploration efforts in China have ceased. As a
result of this abandonment the company paid a $33,000 termination fee. A second
result of abandonments of the China exploration was that the company received a
repayment of $761,900 for project advances outstanding at March 31, 1999.
The Board of Directors approved a change in the terms of the Share
Purchase Warrants : A) The exercise price was changed from $1.50 to $0.40 and B)
The expiration date of the warrant was changed from September 30, 1998 to March
31, 2000; and C) The share exercise price was changed from $2.00 to $0.06.
Further the share purchase warrants are to expire one year after the exercise of
the unit purchase warrants.
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)
<PAGE>
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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 2,556,662
<SECURITIES> 0
<RECEIVABLES> 2,980
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,559,642
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,948,237
<CURRENT-LIABILITIES> 27,815
<BONDS> 0
0
0
<COMMON> 32,115
<OTHER-SE> 3,898,407
<TOTAL-LIABILITY-AND-EQUITY> 3,920,422
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 88,600
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (22,991)
<INCOME-PRETAX> (65,609)
<INCOME-TAX> 0
<INCOME-CONTINUING> (65,609)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (65,609)
<EPS-BASIC> (.0)
<EPS-DILUTED> (.0)
</TABLE>
