UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] Quarterly report pursuant to Section 13 or 15 (d) of the Securities Exchange
Act of 1934
For the quarterly period ended March 31,2005
----------------
Commission File Number: 000-25947
NorMexSteel Inc.
---------------------------------------------
(Name of Small Business issuer in its Charter)
Florida 65-0386286
--------------------------------------------------
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
478 East Altamont Dr., Ste. 108, Altamonte Springs, FL 32701
------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
705-739-9092
---------------------------
(Issuer's Telephone Number)
Securities registered under Section 12(b) of the Exchange Act:
NONE
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, no par value
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 is 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 or any amendment to this Form 10-QSB. [ ]
The issuer is a developmental stage company, and as such has yet to generate any
substantial revenues.
The aggregate market value of the voting stock held by non-affiliates of the
registrant based on he closing bid price May 20, 2005 was approximately
$618,000,000.
As of May 20, 2005 the issuer had approximately 280,955,000 shares of common
stock outstanding.
Documents incorporated by reference: NONE
Transition Small Business Disclosure Format (check one):
YES [ ] NO [X]
NorMexSteel, Inc.
Form 10-QSB Index
Page
PART I: FINANCIAL INFORMATION 1
Item 1. Financial Statements 1
Condensed Consolidated Balance Sheet - March 31, 2005 1
Condensed Consolidated Statements of Operations -
Three months ended March 31, 2005 and 2004 2
Condensed Consolidated Statements of Cash Flows -
Three months ended March 31, 2005 and 2004 3
Notes to Financial Statements 4
Item 2. Management's Discussion and Analysis or Plan of Operation 11
PART II: OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Change in Securities 14
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 15
PART I. - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NorMexSteel, Inc.
And Subsidiary
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited) March 31, 2005
ASSETS
------
Current assets:
Cash $ 982
-------------
Total current assets 982
Property and equipment, net 3,237
Other assets
Investment in non-consolidated subsidiary 200,000,000
-------------
Total other assets 200,000,000
-------------
Total assets $ 200,004,219
-------------
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
----------------------------------------
Current liabilities:
Accounts payable $ 183,738
Accrued expenses 902,618
Due to related parties 185,176
Notes payable 226,466
-------------
Total current liabilities 1,497,998
Stockholders' deficiency:
Series 2001 convertible preferred stock 42,470
Series 2001A convertible preferred stock --
Series 2001B convertible preferred stock --
Class B preferred stock --
Common stock 204,673,783
Deferred Compensation (533,333)
Accumulated deficit (5,676,699)
-------------
Total stockholders' deficiency 198,506,221
-------------
Total liabilities and stockholders'
deficiency $ 200,004,219
=============
See accompanying notes to the condensed consolidated financial statements.
1
NorMexSteel, Inc.
And Subsidiary
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Cumulative for
the period from
Three Months Three Months March 23,1999
Ended Ended (inception) to
March 31, March 31, March 31,
2005 2004 2005
------------ ------------ ------------
Gross revenues $ -- $ -- $ 48,744
Cost of sales --
-- 264
------------ ------------ ------------
Net revenue 45,480
Operating Expenses 191,199 175,555 4,941,144
Other income(expenses):
Other income 1,390 2,122
219,572
Interest expense (454) (95,808)
(460,580)
Impairment of Assets 0 0
(315,027)
Provision for loss on
non-cancellable
Lease 0 0
(225,000)
------------ ------------ ------------
Total other income(expense) 936 (93,686)
(781,035)
------------ ------------ ------------
Net Loss $ (190,263) $ (269,241) $ (5,676,699)
============ ============ ============
Loss per common share:
Basic and Diluted (0.00) (0.48) --
Weighted average common shares outstanding:
Basic and Diluted 53,315,043 566,097 --
See accompanying notes to the condensed consolidated financial statements.
2
NorMexSteel, Inc.
And Subsidiary
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Cumulative for
Cumulative for
the period from
Three Months Three Months March 23,1999
Ended Ended (inception) to
March 31, March 31, March 31,
2005 2004 2005
----------- ----------- -----------
Cash flows from operating activities
Net Loss $ (190,263) $ (269,241) $(5,676,699)
Adjustments to reconcile net loss to net cash
used in operating activities
Forgiveness of related party note payable -- -- (59,088)
Depreciation and amortization 268 424 294,732
Loss on impairment of assets -- -- 315,027
Provision for loss on non-cancelable leases -- -- 225,000
Bad Debt Expense -- -- 42,000
Intrinsic Value of Stock Options -- -- 500,000
Common stock issued for services -- -- 2,055,405
Amortization of Deferred Compensation 50,000 -- 66,667
Increase(decrease) in cash caused by
changes in:
Other current assets 171 (1,570) 0
Accounts payable (1,823) (17,560) 183,738
Accrued expenses 138,000 178,675 905,174
Due from related parties -- (44,622) 444,264
----------- ----------- -----------
Net cash used in operating activities (3,647) (153,894) (703,780)
Cash flows from investing activities:
Acquisition of property and equipment (1,700) (9,359) (278,699)
Cash flows from financing activities
Repayment of note payable to related party -- -- (200,000)
Proceeds from issuance of preferred stock -- -- 49,000
Proceeds from issuance of capital stock -- 160,000 1,056,348
Due to related parties -- (949) (399,353)
Issuance of Note Receivable -- -- (42,000)
Payment for Preferred Stock -- -- (32,000)
Repayment/proceeds of notes payable -- -- 551,466
----------- ----------- -----------
Net cash from provided by financing activities -- 159,051 983,461
----------- ----------- -----------
Net increase(decrease) in cash $ (5,347) $ (4,202) $ 982
Cash at beginning of period 6,329 27,648 0
----------- ----------- -----------
Cash at end of period $ 982 $ 23,446 $ 982
=========== =========== ===========
See accompanying notes to the condensed consolidated financial statements.
3
NorMexSteel, Inc.
And Subsidiary
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Cumulative for
the period from
Three Months Three Months March 23,1999
Ended Ended (inception) to
March 31, March 31, March 31,
2005 2004 2005
------------- ------------ ------------
Supplemental disclosure of cash flow information:
Cash paid for interest $ -- $ -- $ 33,495
============= ============ ============
Non-cash activity:
Purchase of intangible assets from related party $ -- $ -- $ 399,353
============= ============ ============
Reduction of capital lease obligation upon
abandonment of assets $ -- $ -- $ 65,006
============= ============ ============
Satisfaction of Notes Payable and accrued interest
by Third Party $ -- $ -- $ 487,500
============= ============ ============
Issuance of Common Stock in Connection with
acquisition of Grupo Industrial N.K.S., S.A., de CV $ 200,000,000 $ -- $200,000,000
============= ============ ============
See accompanying notes to the condensed consolidated financial statements
4
NorMexSteel, Inc.
And Subsidiary
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) STATEMENT OF INFORMATION FURNISHED
The accompanying unaudited condensed consolidated financial
statements as of March 31, 2005 and for the cumulative period from
March 23, 1999 (Inception) to March 31, 2005 have been prepared in
accordance with accounting principles generally accepted in the
United States of America for interim financial information and
pursuant with the rules and regulations of the Securities and
Exchange Commission for Form 10-QSB. Accordingly, the condensed
consolidated financial statements do not include all the
information and notes to the financial statements required by
accounting principles generally accepted in the United States of
America for complete financial statements. In the opinion of
management, the accompanying unaudited condensed consolidated
financial statements contain all adjustments (consisting of only
normal recurring adjustments) considered necessary for a fair
presentation of NorMexSteel, Inc. and Subsidiary's financial
position, results of operations, and cash flows for the periods
presented. These results have been determined on the basis of
accounting principles generally accepted in the United States of
America and applied consistently with those used in the preparation
of the Company's financial statements.
The results of operations for the interim periods ended March 31,
2005 and 2004 are not necessarily indicative of the results to be
expected for the full year. These interim financial statements
should be read in conjunction with the December 31, 2004 financial
statements and related notes included in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 2004.
(2) LOSS PER SHARE
Basic income or loss per common share amounts are based on the
weighted average shares outstanding of 53,315,043 and 566,097 for
the three months ended March 31, 2005 and 2004, respectively.
Diluted income per common share amounts reflect the potential
dilution that could occur if convertible preferred shares are
converted into common stock. No conversion is assumed if such
conversion would have an anti-dilutive effect on diluted loss per
common share amounts.
(3) RECENT FINANCIAL ACCOUNTING STANDARDS
In December 2004, the FASB issued SFAS No. 123 (revised 2004),
Share-Based Payment ("FAS 123(R)"), a revision of SFAS No. 123
("FAS 123"). The statement is effective for the first interim or
annual reporting period that begins after June 15, 2005. This
5
Statement establishes standards for the accounting for
transactions in which an entity exchanges its equity instruments
for goods or services and addresses transactions in which an
entity incurs liabilities in exchange for goods or services that
are based on the fair value of the entity's equity instruments or
that may be settled by the issuance of those equity instruments.
FAS 123 focuses primarily on accounting for transactions in which
an entity obtains employee services in share-based payment
transactions. The original pronouncement, issued in October 1995,
defined a fair value based method of accounting for share-based
payments, but permitted companies to disclose such payments either
employing the fair value based method of accounting or by using
the intrinsic value method as defined by APB No. 25, Accounting
for Stock Issued to Employees. For companies reporting under the
intrinsic value method, FAS 123 required a pro forma footnote
disclosure of the impact of the fair value based method for
financial reporting purposes. The 2004 revision to FAS 123, FAS
123(R), eliminates the intrinsic value method as provided by APB
No. 25. Depending upon the extent to which the Company implements
share-based compensation plans, adoption of this statement could
have a material impact on the Company's future consolidated
financial statements.
(4) ACQUISITION OF GRUPO INDUSTRIAL N.K.S., S.A., DE CV
As of March 15, 2005, the Company has completed a transaction
resulting in the acquisition of 75% of all issued and outstanding
shares of Grupo Industrial N.K.S., S.A., de CV ("NKS"). The
Company and stockholders of NKS have mutually agreed that the
Company will acquire 75% of all the shares of NKS in exchange for
250,000,000 of the Company's common restricted shares. NKS, a
Mexican corporation, is the owner of a steel mill foundry and
other assets in Lazaro Cardenas, Mexico. NKS has represented to
the Company that the value of these hard assets has a value in
excess of USD$200,000,000. In addition, the Company issued 30
million of common shares to an unrelated party as a finders fee.
NKS is currently insolvent and their financial records are not
available at this time. As a result, the Company is unable to
consolidate the results of operations of NKS into the accompanying
condensed consolidated financial statements. The investment in NKS
has been valued at $200,000,000 and is included in the
accompanying condensed consolidated balance sheet as "investment
in non-consolidated subsidiary" at March 31, 2005. The Company is
currently working with its financial advisors in Mexico to obtain
this information for future filings.
(5) CAPITALIZATION
(A) COMMON STOCK
At March 31, 2005 and 2004, the Company had 280,955,009
outstanding and 417,616 shares of common stock, respectively.
6
During 2004, the Company's Board authorized a 1 for 30 reverse
stock split, effective on July 13, 2004. On November 1, 2004, the
Company effected an additional 1 for 10 reverse split.
(B) PREFERRED STOCK
Series 2001
As of March 31, 2005, 22,100 shares of Series 2001 Preferred Stock
were outstanding.
Series 2001A
During the first quarter of 2004, the Company cancelled 35,304,000
shares of its Series 2001A Convertible Preferred stock in
voluntary conversions to 35,304,000 shares of its common stock.
During the third quarter of 2004, 458,000 share so the Series
2001A Convertible Preferred Stock were converted to 458,000 shares
of its common stock. As of March 31, 2005, the number of shares
outstanding of Series 2001A Convertible Preferred stock was
27,488,000.
Series 2001B
During February 2004, 526,667 common shares (adjusted for stock
splits) were converted to 50,000,000 shares of Class B Preferred
stock. In November 2004, the Company repurchased the 20,000,000
shares of class B Preferred Stock from the non-related party for
approximately $32,000. As a result, 30,000,000 shares of Class B
Preferred Stock are outstanding as of March 31, 2005.
(6) RELATED PARTY TRANSACTIONS
The president, current and former principal stockholders, and
certain employees from time to time made advances to the Company.
The advances have been made for financing and working capital
purposes. At March 31, 2005, the total of such advances, including
accrued interest, was $185,176.
(7) ACCRUED EXPENSES
Accrued expenses at March 31, 2005 consisted of the following:
2005
-------
Accrued lease obligations 397,996
Accrued interest 115,702
Accrued Professional Fees 168,920
Accrued salaries 220,000
-------
902,618
7
(8) NOTES PAYABLE
Notes Payable as of March 31, 2005 is $226,466. Interest accrues at
various rates between 9 and 12 percent per annum.
(9) STOCK OPTIONS
During 2004, the Company established a stock option plan under which
options to purchase shares of common stock may be granted to
employees, directors, officers, agents, consultants and independent
contractors.
During November 2004, the Company granted 1,000,000 stock options to
the Company's Chief Financial Officer. The options have an exercise
price of $1.00, vest immediately, and have a life of three years. At
the grant date, these options had an intrinsic value of $500,000,
$50,000 of which has been charged as a deferred compensation expense
to Operating Expenses in the accompanying condensed consolidated
statements of operations for the 3 months ended March 31, 2005. These
options remain outstanding at March 31, 2005, are fully exercisable
and have a remaining life of 2.66 years.
(10) SUBSEQUENT TRANSACTIONS
The Company changed its name to NorMexSteel Corporation, effective
April 12, 2005 to reflect the changes in the operations of the
Company. The new trading symbol is NXSI.
On May 3, 2004, we received a letter from Pedro Fenando Arizpe
Carreon, a shareholder of Grupo Industrial NKS, S.A. DE C.V. ("NKS"),
addressed to Montague Securities International, Ltd., the escrow
agent for the transaction by which we acquired 75% of the outstanding
shares of capital stock of NKS. Mr. Carreon alleged that we had
breached the Purchase Agreement. We have denied any breach of the
purchase agreement and have advised Mr. Carreon in writing. We do not
believe there is any basis in fact or law for Mr. Carreon to
intervene in the NKS transaction, and we intend to defend vigorously
any actions he might take.
(11) GOING CONCERN MATTERS
The accompanying condensed consolidated financial statements have
been prepared on a going concern basis, which contemplates the
realization of assets and the satisfaction of liabilities in the
normal course of business. Due to its past financial difficulties,
the Company has accumulated debt, including judgments, and accrued
interest of approximately $1,500,000 relating to its current and
former lines of business and maintains these on its balance sheet as
current liabilities. Interest on these balances is accruing at a rate
of approximately $13,000 per quarter as of March 31, 2005. The
Company is continuing in its efforts to resolve these obligations and
8
others through settlements. However, there is no assurance that the
Company will be able to settle in terms agreeable to the Company and
if it does not do so, this will have a material adverse affect on the
ability of the Company to operate properly in the future. As shown in
the consolidated financial statements, the Company has incurred
cumulative losses of approximately $5,677,000 during its development
stage.
As a result of the recent acquisition of NKS, the Company's primary
focus will be on operating the steel foundry business in Mexico and
looking for other complementary businesses in Mexico and in support
of the steel foundry operations. These factors among others may
dictate that the Company will be unable to continue as a going
concern for a reasonable period of time.
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS AND PLAN OF OPERATION
-----------------------------------------------------------------
All statements contained herein that are not historical facts, including but not
limited to, statements regarding the anticipated impact of future capital
requirements and future development plans are based on current expectations.
These statements are forward looking in nature and involve a number of risks and
uncertainties. Actual results may differ materially. Among the factors that
could cause actual results to differ materially are the following: amount of
revenues earned by the Company's operations; the availability of sufficient
capital to finance the Company's business plan on terms satisfactory to the
Company; general business and economic conditions; and other risk factors
described in the Company's reports filed from time to time with the Commission.
The Company wishes to caution readers not to place undue reliance on any such
forward looking statements, which statements are made pursuant to the Private
Securities Litigation Reform Act of 1995 and, as such, speak only as of the date
made.
RESULTS OF OPERATIONS
---------------------
Three Months Ended March 31, 2005 versus Three Months Ended March 31, 2004.
We had no revenues for the three months ended March 31, 2005 and 2004. There is
no assurance that we will any have revenues in fiscal 2005. As we had no sales
in this quarter, we had no cost of sales for the quarters.
Operating expenses for the three months ended March 31, 2005 were $191,199
compared to $175,555 for the three months ended March 31, 2004. Other income for
the three months ended March 31, 2005 was $1,390 as compared to other income of
$2,122 for three months ended March 31, 2004. The income was partially offset by
interest expense of $454 for three months ended March 31, 2005 versus $95,808
for the three months ended March 31, 2004.
The Company's net loss for the three months ended March 31, 2005 was $190,263,
as compared to a loss of $269,241 for the three months ended March 31, 2004, a
decrease in net loss of $78,978 or 29%.
9
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
On March 31, 2005, the Company had a working capital deficit of approximately
$1,498,000. Since its inception, the Company has continued to sustain losses.
The Company's operations since inception have been funded by the sale of common
and preferred stock, and proceeds from both secured and unsecured loans. These
funds have been used for working capital and capital expenditures and other
corporate purchases. The Company has had losses of approximately $5,677,000
since inception. The Company is seeking financing through equity financing.
There can be no assurance that the Company will be able to obtain funding at
terms acceptable to the Company. These factors indicate that the Company may not
be able to continue as a going concern.
RECENT ACCOUNTING PRONOUNCEMENTS
--------------------------------
In December 2004, the FASB issued SFAS No. 123 (revised 2004), Share-Based
Payment ("FAS 123(R)"), a revision of SFAS No. 123 ("FAS 123"). For small
business issuers, this Statement must be implemented at the beginning of the
fiscal year that begins after December 15, 2005. This Statement establishes
standards for the accounting for transactions in which an entity exchanges its
equity instruments for goods or services and addresses transactions in which an
entity incurs liabilities in exchange for goods or services that are based on
the fair value of the entity's equity instruments or that may be settled by the
issuance of those equity instruments. FAS 123 focuses primarily on accounting
for transactions in which an entity obtains employee services in share-based
payment transactions. The original pronouncement, issued in October 1995,
defined a fair value based method of accounting for share-based payments, but
permitted companies to disclose such payments either employing the fair value
based method of accounting or by using the intrinsic value method as defined by
APB No. 25, Accounting for Stock Issued to Employees. For companies reporting
under the intrinsic value method, FAS 123 required a pro forma footnote
disclosure of the impact of the fair value based method for financial reporting
purposes. The 2004 revision to FAS 123, FAS 123(R), eliminates the intrinsic
value method as provided by APB No. 25. Depending upon the extent to which the
Company implements share-based compensation plans, adoption of this statement
could have a material impact on the Company's future consolidated financial
statements.
OFF-BALANCE SHEET ARRANGEMENTS
------------------------------
The Company does not maintain off-balance sheet arrangements nor does it
participate in non-exchange traded contracts requiring fair value accounting
treatment.
ITEM 3. CONTROLS AND PROCEDURES
--------------------------------
In accordance with Exchange Act Rules 13a-15 and 15d-15, the Company's
management carried out an evaluation with the participation of the Company's
Chief Executive Officer and Chief Financial Officer, its principal executive
officer and principal financial officer, respectively, of the effectiveness of
the Company's disclosure controls and procedures as of the end of the period
covered by this report. Based upon that evaluation, the Chief Executive Officer
and Chief Financial Officer concluded as of the end of the period covered by
this Form 10-QSB that the Company's disclosure controls and procedures are
effective in timely alerting them to material information relating to the
Company required to be included in periodic reports filed under the Securities
Exchange Act of 1934, as amended. There were no changes in the Company's
internal controls over financial reporting identified in connection with the
evaluation by the Chief Executive Officer and Chief Financial Officer that
occurred during the Company's fourth quarter that have materially affected or
are reasonably likely to materially affect the Company's internal controls over
financial reporting.
10
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
--------------------------
Due to our financial difficulties, we defaulted on a number of debt and lease
obligations. We have several judgments totaling approximately $378,000 that were
entered against us. We are currently trying to resolve these obligations through
settlements. However, there is no assurance that we will be able to settle on
terms favorable to us and if we are unable to do so, this will have a material
adverse affect on our ability to operate properly in the future.
On May 3, 2004, we received a letter from Pedro Fenando Arizpe Carreon, a
shareholder of Grupo Industrial NKS, S.A. DE C.V. ("NKS"), addressed to Montague
Securities International, Ltd., the escrow agent for the transaction by which we
acquired 75% of the outstanding shares of capital stock of NKS. Mr. Carreon
alleged that we had breached the Purchase Agreement. We have denied any breach
of the purchase agreement and have advised Mr. Carreon in writing. We do not
believe there is any basis in fact or law for Mr. Carreon to intervene in the
NKS transaction, and we intend to defend vigorously any actions he might take.
ITEM 2. CHANGE IN SECURITIES
-----------------------------
On September 16, 2004: Amendments to Articles of Incorporation or Bylaws; On
September 10, 2004, the holders of a majority of the Company' outstanding voting
shares executed a written consent, amending the Company's Articles of
incorporation to increase the total number of authorized shares of the Company's
Common Stock from 500,000,000 to 1,000,000,000.
As of March 15, 2005, the Company completed a transaction resulting in the
acquisition of 75% of all issued and outstanding shares of Grupo Industrial
N.K.S., S.A., de CV ("NKS") in exchange for 250,000,000 of the Company's common
restricted shares. NKS, a Mexican corporation, is the owner of a steel mill
foundry and other assets in Lazaro Cardenas, Mexico. NKS has represented to the
Company that the value of these hard assets has a value in excess of
USD$200,000,000.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
----------------------------------------
Not applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------------------------------------------------------------
Not applicable
ITEM 5. OTHER INFORMATION
--------------------------
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
-----------------------------------------
(a) Exhibits and Index of Exhibits
31. Rule 13a-14(a)/15d-14(a) Certifications pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
32. Section 1350 Certification pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K.
On September 16, 2004, the Company filed a current report on
Form 8-K in connection with the following:
(i) as of September 10, 2004, the Company has finalized the Letter
of Intent to originally acquire 100% of all classes of shares
issued and outstanding of Grupo Industrial N.K.S., S.A., de CV, a
Mexican corporation;
(ii) on September 10, 2004, the holders of a majority of the
Company' outstanding voting shares executed a written consent,
amending the Company's Articles of incorporation to increase the
total number of authorized shares of the Company's Common Stock
from 500,000,000 to 1,000,000,000, and
(iii) on March 15, 2005, the Company completed the purchase of 75%
of all outstanding shares on NKS.
11
SIGNATURES
NorMexSteel Inc.
By /s/
-----------------------------
James Wolff, President
Date: May 20, 2005
By /s/
-----------------------------
Garth Jensen, CFO
Date: May 20, 2005