SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the quarterly period ended: March 31, 2000
Commission file number 0-29670
CIK:0001042053
DRUCKER INDUSTRIES, INC.
------------------------
(Exact name of registrant as specified in its charter)
Delaware N/A
---------- -----
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
#1-1035 Richards Street, Vancouver, B.C. Canada V6B 3E4
- ------------------------------------------------ -------
(Address of principal executive offices) (Zip 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 X NO
----- -----
As of March 31, 2000, there were 34,476,250 shares of $0.001 par value common
stock outstanding
<PAGE>
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<CAPTION>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DRUCKER INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
March 31, 2000 and December 31, 1999
(Stated in U.S. dollars)
(UNAUDITED - SEE NOTE 1)
ASSETS
------
<S> <C> <C>
March 31, December 31,
2000 1999
---- ----
Current
Cash and cash equivalents $ 1,510,171 $ 1,867,417
Receivables - oil 241,101 -
- interest 10,410 10,958
Prepaid expenses - 1,089
Advances receivable 8,202 8,202
------------- ---------
1,769,884 1,887,666
Oil and gas projects 1,752,193 1,606,290
------------- ---------
$ 3,522,077 $ 3,493,956
============= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable and accrued expenses $ 19,647 $ 81,109
------------- ---------
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 ( 2,836,488) ( 2,926,071)
------------- ----------
3,502,430 3,412,847
------------- ----------
$ 3,522,077 $ 3,493,956
</TABLE>
SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
DRUCKER INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
for the three months ended March 31, 2000 and 1999
(Stated in U.S. dollars)
(UNAUDITED - SEE NOTE 1)
<S> <C> <C>
(3 months) (3 months)
2000 1999
---- ----
Revenue
Oil and gas sales, net of royalties $ 299,772 $ -
Interest income 26,186 22,991
------------- ---------
325,958 22,991
------------- ---------
Expenses
Production 58,671 -
Depletion 5,756 -
General and administrative expenses - Schedule 1 43,502 32,292
Exploration expenses - Schedule 2 128,446 56,308
------------- ---------
236,375 88,600
------------- ---------
Net income (loss) $ 89,583 $ ( 65,609)
============= =========
Net income (loss) per share $ 0.00 $ ( 0.00)
============= =========
Weighted average shares outstanding 32,476,250 32,476,250
============= =========
</TABLE>
SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
DRUCKER INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
for the three months ended March 31, 2000 and 1999
and February 4, 1971 (Date of Inception) to March 31, 2000
(STATED IN U.S. DOLLARS)
(UNAUDITED - SEE NOTE 1)
Additional
Common Stock Paid-in
Shares Amount Capital Deficit 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
- ------------------------------------------------------------------------------------------------------------------------------------
....Continued
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SEE ACCOMPANY NOTES
<PAGE>
<TABLE>
<CAPTION>
DRUCKER INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
for the three months ended March 31, 2000 and 1999
and February 4, 1971 (Date of Inception) to March 31, 2000
(STATED IN U.S. DOLLARS)
(UNAUDITED - SEE NOTE 1)
Additional
Common Stock Paid-in During
Shares Amount Capital Deficit 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 32,476,250 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>
...Continued
SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
DRUCKER INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
for the three months ended March 31, 2000 and 1999
and February 4, 1971 (Date of Inception) to March 31, 2000
(STATED IN U.S. DOLLARS)
(UNAUDITED - SEE NOTE 1)
<S> <C> <C> <C> <C> <C>
Additional
COMMON STOCK Paid-in
SHARES AMOUNT CAPITAL DEFICIT TOTAL
------ ------ ------- ------- -----
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
Net loss for the nine months ended
December 31, 1999 - - - (507,575) (507,575)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1999 32,476,250 32,115 6,306,803 (2,926,071) 3,412,847
Net income for the three months
March 31, 2000 - - - 89,583 89,583
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, March 31, 2000 32,476,250 $ 32,115 $ 6,306,803 $ ( 2,836,488) $ 3,502,430
====================================================================================================================================
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SEE ACCOMPANYING NOTES
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<CAPTION>
DRUCKER INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
for the three months ended March 31, 2000 and 1999
(Stated in U.S. dollars)
(UNAUDITED - SEE NOTE 1)
----------------------
<S> <C> <C>
(3 months) (3 months)
2000 1999
---- ----
Cash flow from operating activities:
Net income (loss) $ 89,583 $ ( 65,609)
Add item not affecting cash:
Depletion 5,756 -
----------------- --------------
95,339 ( 65,609)
Net changes in non-cash working capital items related to operations:
Oil receivable ( 241,101) -
Accrued interest receivable 548 2,503
Prepaid expenses 1,089 2,269
Accounts payable and accrued expenses ( 61,462) ( 19,640)
----------------- --------------
Net cash used in operating activities ( 205,587) ( 80,477)
----------------- --------------
Cash flow used in investing activities
Oil and gas project costs ( 151,659) ( 126,489)
----------------- --------------
Net increase (decrease) in cash ( 357,246) ( 206,966)
Cash, beginning of period 1,867,417 2,763,628
----------------- --------------
Cash and cash equivalents, end of period $ 1,510,171 $ 2,556,662
================= ==============
Cash and cash equivalents consists of:
Cash $ 37,829 $ 107,090
Term deposits 1,472,342 2,449,572
----------------- --------------
Cash and cash equivalents, end of period $ 1,510,171 $ 2,556,662
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
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SEE ACCOMPANYING NOTES
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<CAPTION>
DRUCKER INDUSTRIES, INC.
CONSOLIDATED SCHEDULE OF GENERAL AND ADMINISTRATIVE EXPENSES
for the three months ended March 31, 2000 and 1999
(Stated in US Dollars)
(UNAUDITED - SEE NOTE 1)
----------------------
<S> <C> <C>
(3 months) (3 months)
2000 1999
---- ----
Accounting and audit fees $ 12,428 $ 9,280
Consulting 11,041 11,163
Foreign exchange loss 261 355
Franchise tax - 1,548
Investor relations 5,016 1,559
Interest and bank charges 1,398 375
Legal 1,773 66
Office and general 7,888 4,241
Rent 3,272 1,988
Transfer agent fee 425 125
Travel - 1,592
----------------- ----------------
$ 43,502 $ 32,292
================= ================
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SEE ACCOMPANYING NOTES
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<CAPTION>
DRUCKER INDUSTRIES, INC.
CONSOLIDATED SCHEDULE OF EXPLORATION EXPENSES
for the three months ended March 31, 2000 and 1999
(Stated in US Dollars)
(UNAUDITED - SEE NOTE 1)
----------------------
<S> <C> <C> <C>
(3 months)
West (3 months) (3 months)
GHARIB 2000 1999
------ ---- ----
Administration $ 17,375 $ 17,375 $ 12,498
Consumables 49,048 49,048 1,600
Development costs 19,742 19,742 -
General operating expenses 42,071 42,071 -
Geological/geophysical 210 210 35,040
Other - - 7,170
------------- -------------- ----------
$ 128,446 $ 128,446 $ 56,308
============= ============== ==========
</TABLE>
SEE ACCOMPANYING NOTES
<PAGE>
DRUCKER INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2000
(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 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
cash flows for the interim periods presented. It is suggested that
these interim financial statements be read in conjunction with the
company's December 31, 1999 annual financial statements.
NOTE 2 COMMON STOCK
Commitment
Share Purchase Warrants
At March 31, 2000, 5,542,065 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, 2001 and the 90th day after the date on which the
weighted average trading price of the company's shares exceed
$2.50 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 UNCERTAINTY DUE TO THE YEAR 2000
--------------------------------
The Year 2000 Issue arises because many computerized systems use
two digits rather than four to identify a year. Date-sensitive
systems may recognize the year 2000 as 1900 or some other date,
resulting in errors when information using the year 2000 date is
processed. In addition, similar problems may arise in some systems
which use certain dates in 1999 to represent something other than
a date. Although the change in date has occurred, it is not
possible to conclude that all aspects of the Year 2000 Issue that
may affect the company, including those related to customers,
suppliers or other third parties, have been fully resolved.
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2000
COMPARED TO THE SAME PERIOD IN 1999.
In the first quarter of 2000, the Company received revenue from the West
Gharib, Egypt joint venture. For the first quarter of 2000, oil revenue net of
royalties amounted to $299,772 compared to no revenues from production in the
same quarter in 1999. Expenses of production were $58,671, depletion was $5,756,
general and administrative costs were $43,502 and exploration expenses were
$128,446, for total expenses of $236,375 in the first quarter in 2000. In the
same quarter in 1999, the general and administrative expenses were $32,292, and
the exploration expenses were $56,308 for a total of $88,600. The operating
income for the first quarter in 2000 was $63,397 compared to an ($88,600)
operating loss in the same quarter in 1999. The Company had interest income of
$26,186 in the quarter in 2000 and $22,991 in 1999. The net income from the
period in 2000 was $89,583 and for 1999 the net loss was ($65,609). The profit
per share was $.0027 in 2000 compared to a ($.002) loss in 1999.
Following the oil discovery in July 1999 in the Hana field, West Gharib,
onshore Egypt and the successful drilling of an appraisal well in September
1999, production and sale of oil commenced on December 29, 1999. To date, the
Hana Field has produced approximately 200,000 barrels of oil (averaging 2000
b/d), which have been delivered to market by truck. Drucker has a 20% working
interest in the West Gharib Block. The total production from the Hana field in
Egypt in the first quarter was 121,952 barrels.
An initial development program of the Hana Field consisting of 4 wells
drilled in succession commenced on February 14, 2000 and has been completed on
May 1, 2000. All 4 wells are found to be productive. When all six completed
wells are put into production, oil output is expected to increase from the
current 2,000 barrels per day to over 5,000 barrels per day.
A plan to further evaluate the Hana structure and similar offsetting
features with a new 3D seismic program covering approximately 48 square
kilometers is currently underway. This survey will commence almost immediately
and is designed to validate additional prospects to be drilled on the West
Gharib Block.
The Company expects the trend of increased exploration and general and
administrative expenses to continue. The Company also expects continued
production revenues from the West Gharib Block.
LIQUIDITY AND CAPITAL RESOURCES
The Company had $1,510,171 cash on hand at the quarter end and $244,101 in
receivables. These amounts are deemed sufficient by the Company for continued
operations at the current level in the following nine months, assuming that oil
revenues from the Hana field in Egypt continue, which cannot be assured.
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings - None.
Item 2. Changes in securities - None.
Item 3. Defaults 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
(a) The following are filed as Exhibits to this
Quarterly Report. The numbers refer to the Exhibit Table of
Item 601 of Regulation S-K:
None.
(b) Reports on Form 8-K filed during the three months
ended March 31, 2000. (incorporated by reference)
None.
<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 of the
undersigned thereunto duly authorized.
Dated: May 15, 2000
DRUCKER INDUSTRIES, INC.
by:/s/Gerald Runolfson
---------------------------
Gerald Runolfson, President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 1,510,171
<SECURITIES> 0
<RECEIVABLES> 241,101
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,769,884
<PP&E> 1,752,193
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,522,077
<CURRENT-LIABILITIES> 19,647
<BONDS> 0
0
0
<COMMON> 32,115
<OTHER-SE> 3,470,315
<TOTAL-LIABILITY-AND-EQUITY> 3,522,077
<SALES> 299,772
<TOTAL-REVENUES> 299,772
<CGS> 0
<TOTAL-COSTS> 236,375
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (26,186)
<INCOME-PRETAX> 89,583
<INCOME-TAX> 0
<INCOME-CONTINUING> 89,583
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 89,853
<EPS-BASIC> .002
<EPS-DILUTED> .002
</TABLE>
