SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                  FORM 10-KSB/A
Amendment No. 1
[ X ]            ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)

                     For the fiscal year ended June 30, 1997

                                       OR

[   ]        TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

              For the transition period from   ____ to_____

                        Commission File Number 001-12212

                         DRUMMOND FINANCIAL CORPORATION
                 (Name of Small Business Issuer in Its Charter)

            Delaware                                     95-4426690
 (State or Other Jurisdiction of                      (I.R.S. Employer
  Incorporation or Organization)                    Identification  No.)

    400 Burrard Street, Suite 1250
 Vancouver, British Columbia, Canada                        V6C 3A6
(Address of Principal Executive Offices)                  (Zip Code)

         Issuer's Telephone Number, Including Area Code: (604) 683-5312

       Securities registered under Section 12(b) of the Exchange Act: None

         Securities registered under Section 12(g) of the Exchange Act:

                          Common stock, $.01 par value
                           15 Year Variable Rate Bonds


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes X No __

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [ ]

The issuer's revenues for the most recent fiscal year were $4.3 million.

The aggregate market value of the voting and non-voting equity of the Registrant
held by non-affiliates of the Registrant on September 22, 1997 was approximately
$2.2 million.


<PAGE>




The  number  of shares  outstanding  of the  registrant's  Common  Stock,  as of
September 22, 1997 was 2,718,600.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None






















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<PAGE>



ITEM 9.  DIRECTORS, EXECUTIVES OFFICERS, PROMOTERS AND
         CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF
         THE EXCHANGE ACT

         The following table sets forth information  regarding each director and
executive officer of the Registrant.

<TABLE>
<CAPTION>
                                                                                                      Term of Office
                                                                                                       Expires at the
          Name                            Position with the Company                     Age           Annual Meeting in
<S>                               <C>                                                    <C>                <C>
Leonard Petersen                                   Director                              41                 1999
(1)(3)

Michael J. Smith                  President, Chief Executive Officer, Chief              48                 1997
(2)                                     Financial Officer and Director

Rene Randall (3)                                   Director                              47                 1998

Roy Zanatta                              Vice President and Secretary                    32


(1)      Member of Audit Committee
(2)      Member of Loan Committee
(3)      Member of Stock Option and Compensation Committee
</TABLE>

     Leonard  Petersen.  Mr.  Petersen was  appointed as a director in May 1995.
Since 1990 he has served as a director and senior officer of Pemcorp Management,
Inc.  From 1987 to 1990 he was a chartered  accountant  with Davidson & Company.
Mr. Petersen has also served as a director of Similkansen  Hydro-Power  Ltd. and
of SGI Capital Corporation since 1993 and of Vincent Resources Ltd. from 1988 to
1993.

     Michael J. Smith.  Mr. Smith was appointed as a director in March 1995, and
served  as  Chairman  of the  Board  until May 26,  1995,  at which  time he was
appointed  President and Chief Executive  Officer.  In June 1995, Mr. Smith also
assumed the duties of Chief  Financial  Officer.  He is officer and  director of
Ballinger  Corporation,  the Company's largest shareholder.  He was a Trustee of
Mercer International,  Inc. ("MII") and was the Executive Vice President,  Chief
Financial  Officer and Secretary of MII from 1988 to 1996.  Mr. Smith was one of
the founders of Prentiss Howard Group, a company organized in 1979 which assists
domestic and international companies with investments, mergers and acquisitions.
Mr. Smith is also President and a director of MFC Bancorp Ltd. ("MFC  Bancorp"),
which owns all of the outstanding shares of Ballinger Corporation and all of the
outstanding shares of Preferred Stock of the Company.

     Rene  Randall.  Mr.  Randall was elected to the Board of  Directors  of the
Company in  September  1996.  Mr.  Randall has held various  administrative  and
executive  positions with MII and its affiliated  companies  since 1985. He is a
director  of  Conqueror  Holdings  Ltd.,  a British  Columbia  merchant  banking
company.


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<PAGE>




There are no material  relationships  between  any  companies  of which  Messrs.
Smith,  Lee or Randall are an officer or  director  and any company of which Mr.
Petersen is an officer or director.

     Roy  Zanatta.  Mr.  Zanatta  first joined the Company as Secretary in March
1995 and became a Vice  President in May 1995.  Mr. Zanatta is also currently an
independent  consultant,  and has been associated with MII in various capacities
since 1993.  During 1992 and 1993 he was employed as a management  consultant by
the British Columbia Hydro and Power Authority,  a major electric utility.  From
1991 to 1992 he was employed as a project  manager  with the Canadian  Standards
Association.  Mr. Zanatta earned a B.A.Sc. degree in 1987 from the University of
British Columbia,  and an M.B.A. from McGill University in 1991. Mr. Zanatta was
appointed  Secretary  of MFC Bancorp in April 1996 and a director of MFC Bancorp
in October 1996.

Compliance with Section 16(a) of the Exchange Act

     Based  solely  upon the  Company's  review of the  reports  filed  with the
Securities and Exchange  Commission  ("SEC") by the Company's current and former
officers,  directors and 10 percent  shareholders for the period July 1, 1996 to
June 30, 1997, the Company believes that all such required reports were filed on
a timely basis.

ITEM 10.  EXECUTIVE COMPENSATION

<TABLE>
<CAPTION>
                           Summary Compensation Table

                                                                                                            Options
                Name and Principal Position                       Year              Salary             Number of Shares
<S>                                                               <C>                <C>                     <C>
Michael J. Smith (1)                                              1997               ---                     ---
         President, Chief Executive Officer and                   1996               ---                     ---
         Chief Financial Officer                                  1995               ---                     ---

-----------
(1)      Mr.  Smith  did not  receive  any  compensation  from the  Company  for
         services as an  executive  officer in fiscal 1995,  1996 and 1997.  Mr.
         Smith did  however  receive  the  $6,000  annual  fee for  service as a
         director in each of those years. Mr. Smith declined to accept the grant
         of  stock   options  for  25,000  shares  of  Common  Stock  which  are
         automatically  granted to each nonemployee director upon appointment to
         the Board of Directors.

</TABLE>

Stock Options

         There was no grants of stock  options to the Named  Executive  Officers
during the year ended June 30, 1997.

         At June 30, 1997,  no stock  options  were held by any Named  Executive
Officer.


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<PAGE>



Profit Sharing Plan

As an incentive to key employees  who  contribute to the success of the Company,
the Board of Directors  adopted a profit sharing plan ("Profit Sharing Plan") to
enable key employees and directors to  participate  in the Company's  success as
reflected by its earnings.  The Board of Directors  recently  amended the Profit
Sharing Plan to provide that it is to be funded by crediting the Incentive  Fund
under the Profit Sharing Plan with 10% of pre-tax earnings for fiscal 1996, 7.5%
for  fiscal  1997  and  5.0%  for  each  fiscal  year  thereafter.  The  Plan is
administered  by the Stock Option and  Compensation  Committee of the  Company's
Board of  Directors.  Selection  to  participate  in the Profit  Sharing  Profit
Sharing Plan and the amount to be awarded  under the Plan is  determined  by the
Committee upon the  recommendation  of the Company's  Chairman and the President
and Chief Financial Officer.  For the fiscal years ended June 30, 1996 and 1997,
no payments were made by the Company pursuant to the Profit Sharing Plan.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The following  table sets forth,  as of October 24, 1997, the  information  with
respect to Common Stock and  Preferred  Stock  ownership of each person known by
the Company to own  beneficially  more than 5% of the shares of the Common Stock
or Preferred Stock, each of the Named Executive Officers, each director, and all
officers and  directors  as a group.  This does not include  holders  holding in
"street" and "nominee" name. Except as noted, the persons named have sole voting
and  investment  power with  respect  to all of the  shares of Common  Stock and
Preferred Stock owned by them.

<PAGE>

<TABLE>
<CAPTION>
                                                                    Number of Shares
                                                                   Beneficially Owned
                Name and Address                                Directly or Indirectly (1)            Percent of Class (2)
                ----------------                                -------------------------            --------------------
<S>                                                         <C>                 <C>                  <C>
                                                            Preferred           Common

Gibralt Holdings Ltd.                                                              558,150            20.5%
1177 West Hastings Street, Suite 2000
Vancouver, British Columbia V6E 2K3

Ballinger Corporation                                                              940,900             26.8
700 West Georgia Street, Suite 1900
Vancouver, British Columbia V7Y 1G5

MFC Bancorp Ltd.                                            3,000,000           940,900(3)             47.9
6, Cours De Rive
P.O. Box 3540
1211 Geneve 3
Switzerland


Michael J. Smith                                         3,000,000(4)           940,900(4)             47.9
6, Cours De Rive
P.O. Box 3540
1211 Geneve 3
Switzerland

Rene Randall                                                                             0               0
400 Burrard Street, Suite 1250
Vancouver, British Columbia V6C 3A6

Leonard Petersen                                                                    25,000              0.7
609 Granville Street, Suite 1270
Vancouver, British Columbia V7Y 1G6

Roy Zanatta                                              3,000,000(4)           940,900(4)             47.9
2 Stratford Place
London, W1N 9AE
United Kingdom

All Directors and Officers as a group                       3,000,000           965,900(4)             48.6
(4 persons)

     ------------- 

     (1) Includes shares subject to outstanding stock options exercisable within
60 days of  October  24,  1997,  as  follows:  Leonard  Petersen  (25,000),  and
directors and officers as a group (25,000).

     (2) Percentage ownership is based on shares owned (including shares subject
to outstanding  stock options  exercisable  within 60 days of October 24, 1997),
divided by total  shares  outstanding  plus,  for each  person,  the shares that
person has the right to acquire within 60 days of October 24, 1997,  adjusted to
give effect to the voting power attributable to the Preferred Stock.

     (3) MFC  Bancorp is the sole  shareholder  of  Ballinger  Corporation  and,
pursuant to the rules of the SEC, is deemed to be the indirect  beneficial owner
of all of the shares owned by Ballinger Corporation.

     (4) Includes the 940,900 shares of Common Stock owned directly by Ballinger
Corporation,  for which Mr.  Smith serves as an officer and sole  director,  and
indirectly  by MFC Bancorp,  and the 3,000,000  shares of Preferred  Stock owned
directly by MFC Bancorp, for which Mr. Smith serves as President and a director,
and Mr.  Zanatta  serves as  Secretary  and a director,  and of which shares Mr.
Smith and Mr. Zanatta are deemed to be the indirect  beneficial  owners pursuant
to the rules of the SEC. Mr.  Smith and Mr.  Zanatta  each  disclaim  beneficial
ownership of all of such shares.

</TABLE>

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<PAGE>


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Agreements with MFC Bancorp and MII

During the years ended June 30, 1996 and 1997,  the Company paid an aggregate of
$456,000 and  $300,000,  respectively,  in fees to MFC Bancorp,  MII and a third
affiliate for accounting and administrative services provided to the Company and
reimbursement for office expenses.

During the year ended June 30, 1996, MFC Bancorp  purchased  3,000,000 shares of
Preferred  Stock from the Company for  $6,000,000  cash.  During such year,  the
Company also purchased  60,000 shares of preferred stock of Logan  International
Corp. for  $6,000,000  cash.  MFC Bancorp owns 70.2% of the  outstanding  Common
Stock of Logan International Corp.

                                   SIGNATURES

In accordance  with Section 13 or 15(d) of the Securities  Exchange Act of 1934,
the  Registrant  has caused  the  amendment  to this  report to be signed on its
behalf by the undersigned, thereunto duly authorized.

Date: October 27, 1997                       DRUMMOND FINANCIAL CORPORATION


                                        By:  /s/ Michael J. Smith
                                             Michael J. Smith
                                             President


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