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 June 30, 2005
----------------
Commission File Number: 000-25947
NorMexSteel Inc.
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(Name of Small Business issuer in its Charter)
Florida 65-0386286
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(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
478 East Altamont Dr., Ste. 108, Altamonte Springs, FL 32701
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(Address of Principal Executive Offices) (Zip Code)
705-739-9092
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(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 August
18, 2005 was approximately $882,000,000.
As of August 18, 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 (unaudited) 1
Condensed Consolidated Balance Sheet - June 30, 2005 1
Condensed Consolidated Statements of Operations -
Three months ended June 30, 2005 and 2004 2
Condensed Consolidated Statements of Operations -
Six months ended June 30, 2005 and 2004 and cumulative
for the period from March 23, 1999 (inception through
June 30, 2005 3
Condensed Consolidated Statements of Cash Flows -
Six months ended June 30, 2005 and 2004 4
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis or Plan of
Operation 10
Part II: Other Information
Item 1. Legal Proceedings 12
Item 2. Unregistered Sales of Equity and Use of Proceeds 12
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits 13
SIGNATURES 14
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
NorMexSteel, Inc.
And Subsidiary
(A Development Stage Company)
Condensed Consolidated Balance Sheet
(Unaudited)
June 30, 2005
Assets
------
Current assets:
Cash $ 370
------------
Total current assets 370
Property and equipment, net 2,922
------------
Total assets $ 3,292
============
Liabilities and Stockholders' Deficiency
----------------------------------------
Current liabilities:
Accounts payable $ 184,848
Accrued expenses 1,001,613
Due to related parties 269,554
Notes payable 226,466
------------
Total current liabilities 1,682,481
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 4,673,783
Deferred Compensation (483,333)
Deficit accumulated during the development stage (5,912,109)
------------
Total stockholders' deficiency (1,679,189)
------------
Total liabilities and stockholders' deficiency $ 3,292
============
See accompanying notes to the condensed consolidated financial statements.
1
NorMexSteel, Inc.
And Subsidiary
(A Development Stage Company)
Condensed Consolidated Statements of Operations
(Unaudited)
Three Three
Months Months
Ended Ended
June 30, 2005 June 30, 2004
------------- -------------
Gross revenues $ - $ -
Cost of revenues - -
----------- -----------
Net revenue - -
Operating Expenses 216,415 47,496
----------- -----------
Loss from Operations (216,415) (47,496)
Other income(expenses):
Other income - 52,122
Interest expense (18,995) (18,420)
----------- -----------
Total other income(expense) (18,995) 33,702
----------- -----------
Net Loss $ (235,410) $ (13,794)
=========== ===========
Loss per common share:
Basic and Diluted $ - $ -
=========== ===========
Weighted average common shares
outstanding:
Basic and Diluted 280,955,009 3,748,295
=========== ===========
See accompanying notes to the condensed consolidated financial statements.
2
NorMexSteel, Inc.
And Subsidiary
(A Development Stage Company)
Condensed Consolidated Statements of Operations
(Unaudited)
Cumulative for
Six Six the period from
Months Months March 23,1999
Ended Ended (inception) to
June 30, 2005 June 30, 2004 June 30, 2005
------------- ------------- -------------
Gross revenues $ - $ - $ 45,744
Cost of revenues - - 264
------------- ------------- -------------
Net revenue - - 45,480
Operating Expenses 407,614 223,051 5,157,559
------------- ------------- -------------
Loss from Operations (407,614) (223,051) (5,112,079)
Other income(expenses):
Other income 1,390 54,244 219,572
Interest expense (19,449) (114,228) (479,575)
Impairment of assets - - (315,027)
Provision for loss on non-cancellable
lease - - (225,000)
------------- ------------- -------------
Total other income(expense) (18,059) (59,984) (800,030)
Net Loss $ (425,673) $ (283,035) $ (5,912,109)
============= ============= ============
Loss per common share:
Basic and Diluted $ - $ (0.06)
============ =============
Weighted average common shares
outstanding:
Basic and Diluted 167,763,865 4,706,984
============ =============
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
Six Six the period from
Months Months March 23, 1999
Ended Ended (inception) to
June 30, 2005 June 30, 2004 June 30, 2005
-------------------------------------------
Cash flows from operating activities
Net Loss $ (425,673) $ (283,035) $ (5,912,109)
Adjustments to reconcile net loss to net cash
used in operating activities
Forgiveness of related party note payable - - (59,088)
Depreciation and amortization 583 1,064 295,047
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 100,000 - 116,667
Increase(decrease) in cash caused by
changes in:
Other current assets 171 1,244 -
Other assets - 80,000 -
Accounts payable (713) (9,642) 184,848
Accrued expenses 236,995 143,094 1,004,169
Due from related parties 84,378 (46,744) 528,642
------------ ------------ ------------
Net cash used in operating activities (4,259) (114,019) (704,392)
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 common stock - 160,000 1,056,348
Due to related parties - 7,747 (399,353)
Issuance of note receivable - - (42,000)
Payment for preferred stock - - (32,000)
Repayment/proceeds of notes payable - - 551,466
------------ ------------ ------------
Net cash provided by financing activities - 167,747 983,461
------------ ------------ ------------
Net increase(decrease) in cash $ (5,959) $ 44,369 $ 370
Cash at beginning of period 6,329 27,648 0
------------ ------------ ------------
Cash at end of period $ 370 $ 72,017 $ 370
============ ============ ============
See accompanying notes to the condensed consolidated financial statements.
4
NorMexSteel, Inc.
And Subsidiary
(A Development Stage Company)
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Cumulative for
Six Six the period from
Months Months March 23, 1999
Ended Ended (inception) to
June 30, 2005 June 30, 2004 June 30, 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
========== ========== ==========
See accompanying notes to the condensed consolidated financial statements.
5
NorMexSteel, Inc.
And Subsidiary
(A Development Stage Company)
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(1) Statement of Information Furnished
The accompanying unaudited condensed consolidated
financial statements as of June 30, 2005 and for the
cumulative period from March 23, 1999 (Inception) to June
30, 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
June 30, 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 280,955,009
and 3,748,295 for the three months ended June 30, 2005
and 2004, respectively and 167,763,865 and 4,706,984 for
the six months ended June 30, 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
6
the first interim or annual reporting period 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.
(4) Acquisition of Grupo Industrial N.K.S., S.A., de CV
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; however, until such time as
the Company has completed a formal appraisal of these
assets, we have chosen not to show any asset value for
NKS on our Balance Sheet. In addition, the Company
issued 30 million shares of restricted common stock to
an unrelated party as a finder's 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 $0
at June 30, 2005. The Company is currently working with
its financial advisors in Mexico to obtain a formal
valuation, which will be disclosed in future filings.
(5) Capitalization
(A) COMMON STOCK
At June 30, 2005, the Company had approximately
280,955,000 of common stock outstanding.
7
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 June 30, 2005, 22,100 shares of Series 2001
Preferred Stock were issued and 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 shares of the Series 2001A Convertible
Preferred Stock were converted to 458,000 shares of its
common stock. As of June 30, 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 June 30, 2005.
(6) Related Party Transactions
The president, current and former principal stockholders,
and certain employees from time to time made advances or
loans to the Company. The unsecured advances and loans
have been made for financing and working capital purposes.
At June 30, 2005, the total of such advances and loans,
including accrued interest, was $269,554.
The Company entered into an unsecured funding agreement
with Tropical Ventures/Cazador Enterprises, a shareholder
of the Company, whereby Tropical will lend the Company
funds under the following terms; interest on outstanding
amounts of 10% per annum payable to Cazador Enterprises,
a 10% funding fee on any drawdown payable to Tropical
Ventures, and no fixed repayment terms. As of June 30,
2005, no borrowings had been provided through this
agreement.
(7) Accrued Expenses
Accrued expenses at June 30, 2005 consisted of the
following:
8
2005
----
Accrued lease obligations $ 395,996
Accrued interest 134,697
Accrued Professional Fees 190,920
Accrued salaries 280,000
-----------
$ 1,001,613
===========
(8) Notes Payable
Notes Payable as of June 30, 2005 was $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 term of three years. At the grant date, these
options had an intrinsic value of $500,000. For the three
and six months ended June 30, 2005, $50,000 and $100,000
of which has been charged as a deferred compensation
expense to Operating Expenses in the accompanying
condensed consolidated statements of operations. These
options remain outstanding at June 30, 2005, are fully
exercisable, and have a remaining term of 29 months.
(10) Subsequent Transactions
The Company has signed a letter of intent with Global
Steel Holdings ("GSH"), an Indian company with globally
diverse steel interests. The letter of intent has been
extended to August 31, 2005, as noted in the Company's
most recent press release. GSH intends to purchase 50% of
NorMexSteel's shares in NKS and in turn provide a line of
credit totaling $60 million to settle debt and provide
working capital for the facility.
At the end of July 2005, the Company utilized the funding
note provided by Tropical Ventures/Cazador Enterprises to
borrow $155,000 for working capital.
(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
9
Company has accumulated debt, including judgments and
accrued interest, of approximately $1,700,000 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 $10,000 per quarter as of June 30, 2005. The
Company is continuing in its efforts to resolve these
obligations and 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
$5,900,000 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 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 June 30, 2005 versus Three Months Ended June
30, 2004.
We had no revenues for the three months ended June 30, 2005 and
2004. There is no assurance that we will any have revenues in
fiscal 2005. As we had no revenues in this quarter, we had no
cost of revenues for the quarters.
Operating expenses for the three months ended June 30, 2005 were
$216,415 compared to $47,496 for the three months ended June 30,
2004. Other income for the three months ended June 30, 2005 was
$0 as compared to other income of $52,122 for three months ended
June 30, 2004. Interest expense was $18,995 for three months
ended June 30, 2005 versus $18,420 for the three months ended
June 30, 2004.
10
The Company's net loss for the three months ended June 30, 2005
was $235,410, as compared to a loss of $13,794 for the three
months ended June 30, 2004.
Six Months Ended June 30, 2005 versus Six Months Ended June 30,
2004.
We had no revenues for the six months ended June 30, 2005 and
2004. There is no assurance that we will any have revenues in
fiscal 2005. As we had no revenues in this period, we had no
cost of revenues for this period.
Operating expenses for the six months ended June 30, 2005 were
$407,614 compared to $223,051 for the six months ended June 30,
2004. Other income for the six months ended June 30, 2005 was
$1,390 as compared to other income of $54,244 for the six months
ended June 30, 2004. Interest expense was $19,449 for six months
ended June 30, 2005 versus $114,228 for the six months ended June
30, 2004.
The Company's net loss for the six months ended June 30, 2005 was
$425,623, as compared to a loss of $283,035 for the six months
ended June 30, 2004.
Liquidity and Capital Resources
-------------------------------
On June 30, 2005, the Company had a working capital deficit of
approximately $1,682,000. 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 $5,900,000 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
11
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.
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, 2005, 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 of this fact. On August 8, 2005, Normexsteel
filed a civil complaint, in Broward County, Florida, against Mr.
12
Carreon and Grupo Industrial NKS alleging breach of contract and
tortuous interference with a business relationship and requested
the court to order temporary and permanent injunctive relief,
declaratory judgement and monetary damages for the alleged
interferences.
Item 2. Unregistered Sales of Equity and Use of Proceeds
---------------------------------------------------------
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.
Item 3. Defaults Upon Senior Securities
----------------------------------------
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
------------------------------------------------------------
Not applicable
Item 5. Subsequent Events
---------------------------
The Company has signed a letter of intent with Global Steel
Holdings ("GSH"), an Indian company with globally diverse steel
interests. The letter of intent has been extended to August 31,
2005, as noted in the most recent press release. GSH intends to
purchase 50% of NorMexSteel's shares in Grupo NKS and in turn
provide a line of credit totaling $60 million to settle debt and
provide working capital for the facility.
At the end of July 2005, the Company utilized the funding note
provided by Tropical Ventures/Cazador Enterprises to borrow
$155,000 for working capital.
Item 6. 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.
13
SIGNATURES
NorMexSteel Inc.
By /s/James Wolff
----------------------
James Wolff, President
Date: August 22, 2005
14