Summary of DRUCKER INC - Yahoo! Finance

ITEM 6. Management's Discussion and Analysis or Plan of Operation

The information presented here should be read in conjunction with Drucker, Inc.'s financial statements and other information included in this Form 10-KSB. When used in this Form 10-KSB, the words "expects," "anticipates," "estimates" and similar expressions are intended to identify forward-looking statements. Such statements are subject to risks and uncertainties, including those set forth below under "Risks and Uncertainties," that could cause actual results to differ materially from those projected. These forward-looking statements speak only as of the date hereof. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.

Overview

On June 15, 2003 the Company entered into an Acquisition Agreement to acquire 100% of the issued and outstanding shares of Beijing Beike-Masic Automation Engineering Company Limited ("BK"), a Chinese company specializing in industrial automation, in exchange for 93,020,800 shares of common stock of the Company, calculated on a pre-consolidation basis. The Agreement provided for a one for three reverse split of all the outstanding shares of Drucker to be approved by shareholders before the issuance of the additional shares would be completed. Pursuant to the Agreement, the Company issued 17,500,000 common shares pre-consolidation.

Shareholders' did not approve the required reverse split and the agreement did not complete. Subsequently the Company cancelled the 17,500,000 common shares previously issued.

During the period of the agreement directors of the Company expended $2,023,986 pursuant to negotiations thereto. The negotiations were unsuccessful and upon review of the expenditures by current management it became evident that proper corporate governance and financial controls had not been followed by prior management with respect to the expenditures; therefore the Company demanded the $2,023,986 be returned to the Company. The debt was recovered subsequently during 2007.

Results of Operations

During the fiscal year ended December 31, 2005 the Company's revenues were derived from the disposal of 14,700 shares of Tanganyika Oil Company Ltd. for a gain of $106,336 and earned interest income of $18,448, for total revenue of $124,784 (2004: the disposal of 495,600 shares of Tanganyika Oil Company Ltd. for a gain of $2,348,896 and earned interest income of $6,621, for total revenue of $2,355,517).

The Company incurred expenses of $170,172 in general and administrative expenditures as compared to $1,351,822 for the same period of the prior year. The decrease of $1,181,650 was due in large part to the legal and accounting fees incurred in connection with the failed BK acquisition during 2004. No future commitments exist for the BK acquisition.

The 2005 expenditures were not incurred at the level of 2004 due to the Company's current business situation. The Company currently has sufficient cash and other assets to operate for the balance of 2006 at its current level of business. This could change, however, if any other business venture were to be embarked upon which required the available cash to be depleted more rapidly.

In 2005 the net loss was $(243,687) compared to a net loss of $(1,159,825) for 2004. The operating loss in 2004 includes additional costs related to the Company's failed attempt to acquire Beijing Beike-Masic Automation Engineering Company Limited ("BK") and includes $1,652,801 written off at December 31, 2004 as a bad debt when parties related to the Company received funds from the Company for the advancement of the acquisition of BK, the BK acquisition did not complete and the acquisition agreement was terminated. As a consequence, the Company demanded $2,023,986 of the funds advanced to the related parties be returned to the Company and initiated legal action for their return. As a consequence of the legal action the defendant parties agreed to return certain hard assets of the Company which were in their possession and further agreed to provide such other funds which may be earned in the future by such parties from finders fees on third party agreements up to a maximum of $5,000,000 inclusive of the $2,023,986 subsequently returned to the Company. The resulting account receivable was fully allowed for as a bad debt at December 31, 2004. Subsequent to December 31, 2005 the Company received $249,492 in recovery of the bad debt and received 9,639,000 shares of common stock of Great China Mining, Inc. (now Continental Minerals Corporation - 1,097,296 shares) in early 2007 with a then current market value of $1,821,511 in (partial) settlement of the accounts receivable from related parties and in recovery of the bad debt.

Liquidity

The Company may use all of its liquidity in the attempt to acquire or develop a business. The Company is unable to carry out any plan of business without adequate funding. The Company cannot predict to what extent its current liquidity and capital resources will impair the consummation of a business combination or whether it will incur further operating losses through any business entity which the Company may eventually acquire. There is no assurance that the Company can continue as a going concern without more and substantial funding in any business, for which funding there is no committed source.

The Company had cash at December 31, 2005 of $14,711. The Company's primary capital resources are its cash on deposit and its own authorized capital. 14,700 shares of Tanganyika were sold during 2005 and nil shares were held as of December 31, 2005. The Company's own stock may be illiquid because it is restricted in an unproved company with a short history of income generation.

The Company will be dependent on its cash reserves and amounts due from a related party for its short term needs. The Company had current assets of $14,711 at December 31, 2005 and had current liabilities of $22,595. These amounts are sufficient for the Company to continue operations at a reduced level until the end of 2006. This could change, however, if any other business venture were to be embarked upon, and the available cash could be depleted much more rapidly. On a long-term basis, the Company has no long term or other debt.

The Company also has an amount due from a related party of $134,684. The Company has negotiated for repayment by installments of the amount due.

The Company has no plans for significant research and development or for capital expenditures in the next twelve months, nor does it expect to hire any employees, subject to its discovery and completion of a merger opportunity.

Market Risk

Except for the securities held for sale, the Company does not hold any derivatives or other investments that are subject to market risk. The carrying values of any financial instruments approximate fair value as of those dates because of the relatively short-term maturity of these instruments eliminating any potential market risk associated with such instruments.

Need for Additional Financing

No commitments to provide additional funds have been made by management or other stockholders. Accordingly, there can be no assurance that any additional funds will be available to the Company to allow it to cover expenses as they may be incurred.

In the event the Company's cash and other assets prove to be inadequate to meet the Company's operational needs, the Company might seek to compensate providers of services by issuances of stock in lieu of cash.