NUMEX CORP, SB-2/A, 1998-10-20

NUMEX CORP
SB-2/A, 1998-10-20
BUSINESS SERVICES, NEC

Previous: PUTNAM GLOBAL NATURAL RESOURCES FUND, N-30D, 1998-10-20

Next: CONTINENTAL AIRLINES INC /DE/, 424B3, 1998-10-20

<PAGE> 1

As filed with the Securities and Exchange Commission on October 20, 1998

REGISTRATION NO. 333-65249

U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM SB-2
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933

(AMENDMENT NO. 1)

NUMEX CORPORATION
(Name of Small Business Issuer in its Charter)

<TABLE>
<CAPTION>
DELAWARE 3541 06-1034587
<S> <C> <C>
(State or Jurisdiction (Primary Standard (I.R.S. Employer
of Incorporation or Organization) Industrial Classification Code Number) Identification Number)
</TABLE>

14115 S. PONTLAVOY AVENUE
SANTA FE SPRINGS, CA 90670
(562) 404-7176
(Address and Telephone Number of
Principal Executive Offices)

COPY TO:

JACK I. SALZBERG ALLAN B. DUBOFF, ESQ.
CHAIRMAN OF THE BOARD, PRESIDENT LANCE JON KIMMEL, ESQ.
14115 S. PONTLAVOY AVENUE RICHMAN, LAWRENCE, MANN,
SANTA FE SPRINGS, CA 90670 CHIZEVER & PHILLIPS
(562) 404-7176 9601 WILSHIRE BOULEVARD
(Name, Address and Telephone Number PENTHOUSE
of Agent for Service) BEVERLY HILLS, CALIFORNIA 90210
(310) 274-8300
(310) 274-2831(FAX)

Approximate date of commencement of proposed sale to the public: As soon as
practicable from time to time after the effective date of this Registration
Statement.

If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier

<PAGE> 2

effective registration statement for the same offering. [ ]

If delivery of a prospectus is expected to be made pursuant to Rule 434, please
check the following box. [ ]

The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

<PAGE> 3

This is a preliminary prospectus which may be added to or amended. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission (SEC). These securities may not be sold
before the SEC declares the registration statement effective. We are not
offering these securities for sale in any State where their sale would be
illegal prior to registration or qualification under state law.

NUMEX CORPORATION

5,210,506 Shares of Common Stock

SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR A DISCUSSION OF CERTAIN FACTORS THAT
YOU SHOULD CONSIDER BEFORE YOU INVEST IN THE COMMON STOCK BEING SOLD WITH THIS
PROSPECTUS.

This prospectus covers the resale by some of our current stockholders of some or
all of the shares of our company's stock that they own. Only these stockholders
will be selling shares, not the company itself. The stockholders selling their
shares will receive the proceeds from any sales, not our company.

Our common stock is quoted on the Nasdaq OTC Bulletin Board under the symbol
NUMX. On September 28, 1998, the closing price for our stock was $0.5625 per
share.

Our company will pay the costs of registering these shares.

Neither the SEC nor state securities regulators have approved or disapproved
these securities or determined if this prospectus is truthful or complete. It is
illegal for any person to tell you otherwise.

This prospectus is dated ___, 1998

<PAGE> 4

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Where You Can Find More Information.................................................. 1
Summary.............................................................................. 2
Risk Factors......................................................................... 3
Use Of Proceeds...................................................................... 7
Market For Common Equity And Related Stockholder Matters............................. 7
Selling Stockholders................................................................. 8
Plan Of Distribution................................................................. 10
Management's Discussion And Analysis Of Financial Condition And Results Of Operation. 10
Business............................................................................. 14
Management........................................................................... 16
Executive Compensation............................................................... 17
Certain Relationships And Related Transactions....................................... 17
Security Ownership Of Certain Beneficial Owners And Management....................... 18
Legal Proceedings.................................................................... 19
Changes In And Disagreements With Accountants On Accounting and Financial Disclosure. 19
Disclosure Of Commission Position On Indemnification Of Securities Act Liabilities... 20
Legal Matters........................................................................ 20
Experts.............................................................................. 20
</TABLE>

<PAGE> 5

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, D.C.; New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available on the SEC's
website: http:\\www.sec.gov.

The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings made
with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934. The documents we have incorporated by reference are:

Annual Report on Form 10-KSB for the fiscal year ended March 31, 1998;

Quarterly Report on Form 10-QSB for the quarter ended June 30, 1998;
and

The description of our company's Common Stock contained in its
Registration Statement on Form S-18 (Commission File No. 2-6881813),
filed on August 14, 1980, including any amendments or updates.

This prospectus is part of a Registration Statement on Form SB-2 that
has been filed with the SEC. It does not include all of the information that is
in the registration statement and the additional documents filed as exhibits
with it. For more detail you should read the exhibits themselves.

You should rely only on the information incorporated by reference or in
this prospectus or any supplement to it. We have not authorized anyone to
provide you with information that is different. You should not assume that the
information in this prospectus or any supplement is accurate as of any date
other than the date on its cover.

1
<PAGE> 6

SUMMARY

This summary highlights selected information from this prospectus and
may not contain all of the information that is important to you. We encourage
you to read the prospectus in its entirety.

Numex Corporation was incorporated in Delaware in August, 1980.
Beginning in January 1991, our main business became the manufacture under
license and distribution of a product called Therapy Plus. Therapy Plus is a
patented, non-electric, hand-held massaging device for relieving arthritis pain.
The product is a series of starwheels mounted on a shaft that one rolls briskly
over sore body parts for a massage-like effect.

Sales of our only product, Therapy Plus, have been falling for some
time. There have been no sales of Therapy Plus since June 1998. We do not expect
to have any significant new sales of Therapy Plus. We do not have any other
products under development and we do not have plans to develop any new products.
Therefore, our future business plan depends on beginning new activities. While
we will still explore marketing Therapy Plus, the main emphasis of management
will be to acquire profitable businesses. We have $6,900,000 in federal tax loss
carry forward and $1,600,000 tax loss for California. Under certain
circumstances, these tax losses can be offset against profitable business
operations.

Management has been looking at profitable businesses with between
$10,000,000 and $30,000,000 in annual sales. To assist us in finding acquisition
candidates, we have hired a medium sized investment banking firm which
specializes in private placements of securities with institutional investors. We
are in discussion with several potential acquisition candidates, but we have not
reached an agreement with any of them. We cannot make any prediction about the
likelihood of completing any such acquisition. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Business."

Our address is 14115 S. Pontlavoy Avenue, Santa Fe Springs, CA 90670,
and our telephone number is (562) 404-7176.

The selling stockholders will be selling up to 5,210,506 shares of our
company's common stock, over time on the open market or in negotiated
transactions. The company is not selling any stock itself. The stockholders
selling their shares will receive the proceeds from any sales, not our company.
However, some stockholders may exercise options which they already have, and if
they do, our company could receive up to $738,750, which it would use for
general working capital.

Our company will pay the costs of registering these shares.

Offering these shares for sale does not guarantee that anyone will buy
them.

2
<PAGE> 7

RISK FACTORS

Investing in our stock is very risky. You should be able to bear a
complete loss of your investment. You should carefully consider the following
factors, among others.

<TABLE>
<S> <C>
Operating Losses; We have had losses from operations for an extended period of
Uncertain Future time. We lost $398,670 in fiscal 1996, $512,293 in fiscal 1997 and
$560,826 in fiscal 1998. Because of our sustained losses
over time, we had an accumulated deficit of $11,467,014
at June 30, 1998. We do not know if we will be
profitable in the future.

Need for In the last three fiscal years we had inadequate cash for our
Borrowings for operations, so we borrowed money to fund operations. In recent
Working Capital times, our working capital has been in the form of borrowings
from Jack I. Salzberg, Chairman of the Board, President
and our largest shareholder, and some of his relatives.
They have provided loans or have guaranteed some of our
obligations. Even though Mr. Salzberg has said that he
will continue to lend us the funds need for working
capital, we cannot predict whether he will continue to
do so in the future. If we do not receive funds for
working capital from these or other sources and if we do
not become profitable, we could be without adequate
funds to pay our obligations. See "Management's
Discussion and Analysis of Financial Condition and
Results of Operations" and "Certain Relationships and
Related Transactions".

No Current Sales of our only product, Therapy Plus, have been falling for
Operations some time. There have been no sales of Therapy Plus since June
1998. We do not expect to have any significant new sales
of Therapy Plus. We do not have any other products under
development and we do not have plans to develop any new
products. Therefore, our future business plan depends on
beginning new activities. Among the things we are most
actively considering is acquiring other businesses. See
"Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business."

Dependence on Our future success depends on management, especially Jack
Management Salzberg. The loss of Mr. Salzberg's services could have an
adverse effect on our business prospects. Even though
Mr. Salzberg works on a full-time basis, we do not have an
employment agreement with him. Therefore, Mr. Salzberg has
the right to change his working arrangement to part-time or to
stop working for us. However, Mr. Salzberg has not indicated
that he will change his current working arrangement. See
"Management."

Control by Jack Salzberg owns approximately 12.4% of the outstanding shares
Management of stock and he has options to acquire an additional 850,000
shares of stock. If he exercised these options, he would own
approximately
</TABLE>

3
<PAGE> 8

<TABLE>
<S> <C>
18.5% of the outstanding shares of stock. Therefore, Mr. Salzberg
has significant influence over the outcome of all matters submitted
to the stockholders, including the election of directors of the
company. See "Selling Stockholders."

Possibility of The stockholders who will be selling their shares of stock in this
Change of offering include all our directors and officers and many of our
Control largest stockholders. Many of these people are relatives of Jack
Salzberg. These selling stockholders will be selling most or all of
their shares, including shares that would be issued to them if they
convert options which they now hold. These selling stockholders
will not necessarily be selling their shares, but if they do sell all or
most of their shares, there will be a change in control of our
company. See "Selling Stockholders."

Conflicts of Dealings with officers, directors and large stockholders often
Interest involve conflicts of interest. In particular, before January 1, 1998,
we borrowed money from Jack Salzberg and he has
exchanged this debt into shares of common stock. Since
January 1, 1998, we borrowed $578,414 from Mr.
Salzberg's relatives. Because of the nature of these
relationships, we did not conduct arms' length
negotiations for these borrowings. Therefore, it is
possible that we could have borrowed money on better
terms from unaffiliated people. See "Certain
Relationships and Related Transactions".

Resolution of Delaware law provides that an agreement that a corporation
Conflicts of enters into with its officers, directors, or certain other people
Interest (including their relatives) is not void or voidable under certain
circumstances. If the material facts of an agreement are
known to the Board of Directors, the directors who do
not have an interest in the agreement may act in good
faith and approve it. Delaware law also provides that
such an agreement is not void or voidable if the
agreement is fair to the corporation at the time the
Board of Directors approves it. We currently permit
these types of agreements so long as they are permitted
under Delaware law. We ensure that the disinterested
directors are aware of all the necessary facts so that
they can make the appropriate decision.

Future We are looking to acquire other profitable businesses in the
Acquisitions future. Our ability to complete such a transaction will depend on
many factors, including:

- finding a suitable business

- negotiating acceptable terms

- our own financial condition

- obtaining financing to acquire the business

</TABLE>

4
<PAGE> 9

<TABLE>
- general economic and business conditions

<S> <C>
At present, we do not know if we will be able to engage
in any such transactions, because of the reasons
indicated.

Need for Our ability to acquire another business may depend on obtaining
Financing To financing from outside sources. If we are not successful in
Acquire obtaining financing, we would be unable to complete any
Businesses acquisitions. Even if we can obtain outside financing, there are
risks. For example, if the performance of the acquired business
does not meet our expectations, the cost of servicing the debt
could have a material negative effect on our results of operations
and financial condition. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

Possible Dilution Our ability to acquire another business may depend on issuing
In Acquisition shares of our stock. The issuance of stock could dilute the
percentage ownership that the current stockholders have
in our company. We are authorized to issue 20,000,000
shares of Common Stock. A total of 11,286,756 shares are
currently issued and outstanding and an additional
1,185,000 shares have been reserved for issuance in
connection with the exercise of options and warrants
that are currently outstanding. Therefore, 7,528,244
shares of Common Stock are available to be issued
without stockholder approval in the future. If these
shares are issued to acquire businesses, raise money for
our company or for any other reason, the current
stockholders would own a much smaller percentage of our
company's stock.

Effect of Debt Our ability to acquire another business may depend on issuing
Used to Acquire debt instruments, such as a promissory note. The issuance of
debt Businesses would result in increased costs to service that obligation,
which could have a material negative effect on our profitability.
If we did not have adequate resources to service the debt, we could
default in our obligations. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

Business Risks of Acquisitions involve numerous business risks and these risks could
Acquisitions have a material negative effect on our own results of operations
and financial condition. Some of these risks include

- entering a market in which we have no or limited
experience

- integrating a new business

- incorporating new personnel

</TABLE>

5
<PAGE> 10

<TABLE>
- costs associated with lay-offs of redundant
personnel

<S> <C>
Volatile Stock The market price for our stock has been highly volatile. Factors
Price such as our operating results and other announcements by us have
had a significant impact on our stock price, and these factors may
continue to have such an effect in the future. See "Market for
Common Equity and Related Stockholder Matters."

Effect of OTC Our stock is currently quoted on the Nasdaq OTC Bulletin Board,
Bulletin Board which was established for securities that do not meet Nasdaq
Quotation SmallCap Market listing requirements. Lower market prices and
larger spreads in bid and asked quotes are typical of securities
quoted on the OTC Bulletin Board. See "Market for Common
Equity and Related Stockholder Matters."

Penny Stock The SEC's regulations define a "penny stock" to be any equity
Regulations security that has a market price of less than $5.00 per share or an
exercise price of less than $5.00 per share, subject to certain
exceptions. The penny stock regulations will not apply to our stock
so long as it is quoted on the OTC Bulletin Board, and we provide
certain information on a current and continuing basis or meet
required minimum net tangible assets or average revenue criteria. We
cannot assure you that our shares will continue to qualify for
exemption from these restrictions. If our stock were subject to the
penny stock rules, the market liquidity for our stock could be
adversely affected.

No Dividends We do not pay dividends on our stock and it is not likely that we
will pay dividends in the foreseeable future. We have not paid
any dividends in the past. See "Market for Common Equity and
Related Stockholder Matters."

Shares Eligible As of September 23, 1998, we had 11,286,756 shares of Common
for Future Sales Stock outstanding. Of this amount, 4,025,506 shares are
"restricted securities" as the Securities and Exchange
Commission has defined that term under Rule 144, and all
of those shares are being registered in this offering.
It is likely that market sales of large numbers of
shares under this offering will depress the price of our
stock. However, we cannot predict the exact effect such
sales will have on the prevailing market price of our
shares. A depressed price for our stock could impair our
ability to raise capital through the sale of stock in
the future.

Possible Negative We are authorized to issue 10,000,000 shares of Preferred Stock
Effect of Preferred on terms that can be set by the Board of Directors without
Stock Issuances stockholder approval. Since the terms of Preferred Stock could
provide priority for the payment of dividends, special voting rights
or preferences if our company is liquidated, the
issuance of any Preferred Stock in the future could have
a negative effect the rights of holders of Common Stock.
In addition, the issuance of Preferred Stock could make
any takeover of the
</TABLE>

6
<PAGE> 11

company by another party more difficult or discourage
them from even trying to do so. It could also make it
harder for present management to be removed. We have no
current plans to issue Preferred Stock.

USE OF PROCEEDS

The stockholders selling their shares will receive the proceeds from any
sales, not our company. However, some stockholders may exercise options which
they already have, and if they do, our company could receive up to $738,750,
which it will use for general working capital purposes. See "Selling
Stockholders."

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our stock is quoted on the Nasdaq OTC Bulletin Board under the symbol
"NUMX." The closing bid price on September 28, 1998 was $0.5625. This table
shows the closing high and low bid and ask quotes as reported by the National
Quotation Bureau, Inc. for each quarter of our last two fiscal years and the
first two quarters of the current fiscal year.

<TABLE>
<CAPTION>
Fiscal Year Ended Closing Bid/Ask Quotes
High Low
March 31, 1997 Bid Ask Bid Ask
- -------------- --- --- --- ---
<S> <C> <C> <C> <C>
Quarter Ended June 30, 1996 $.625 $.938 $.438 $.688
Quarter Ended September 30, 1996 .625 .938 .375 .562
Quarter Ended December 31, 1996 .50 .75 .375 .625
Quarter Ended March 31, 1997 .594 .688 .375 .625

March 31, 1998

Quarter Ended June 30, 1997 .469 .625 .375 .50
Quarter Ended September 30, 1997 .50 .594 .312 .438
Quarter Ended December 31, 1997 1.469 1.531 .375 .46
Quarter Ended March 31, 1998 3.625 3.875 1.062 1.312

March 31, 1999

Quarter Ended June 30, 1998 1.25 .75 1.375 1.00
Quarter ended September 30, 1998 1.00 1.00 .625 .625
</TABLE>

These quotes are for dealer transactions and do not include retail
markup, markdown or commissions. They do not represent actual sale prices.

On September 23, 1998, there were about 416 holders of record of our
common stock. This number does not include about 1000 stockholders holding stock
in "street name" accounts.

We do not pay dividends on our stock and it is not likely that we will
pay dividends in the

7
<PAGE> 12

foreseeable future. We have not paid any dividends in the past.

SELLING STOCKHOLDERS

This table shows the names of the selling stockholders, how many shares
they own, the maximum number of shares they plan to sell in this offering, how
many shares they will own if they sell all the shares they own, and the
percentage of the total number of shares they will own before and after their
sales.

8
<PAGE> 13

<TABLE>
<CAPTION>
Shares Beneficially Shares Beneficially
Owned Owned
Prior to Offering Number of Shares After Offering
-------------------------- to be Sold --------------------
Number(1) Percent in Offering Number Percent
--------- ------- ----------- ------ -------
<S> <C> <C> <C> <C> <C>
Gerald A. Bagg 150,000(2) 1.3% 150,000(2) 0 --

Dafna Breines 324,361 2.9% 324,361 0 --

David Breines 343,888 3.0% 43,888 300,000 2.7%

Costa Oro Realty, Inc.
Defined Benefit Plan 42,015(3) * 42,015(3) 0 --

Bruce Falborn 8,381(5) * 8,381(5) 0 --

Adira Hulkower 193,865 1.7% 193,865 0 --

Judah Hulkower 100,000 * 100,000 0 --

Regina and Benjamin
Hulkower 250,000(4) 2.2% 250,000(4) 0 --

Ira Koplin 8,403(5) * 8,403(5) 0 --

Esther Kozienicki 665,760 5.9% 665,760 0 --

Malka Livne 327,289 2.9% 327,289 0 *

Ron Livne 134,889 1.2% 134,889 0 *

Manatt, Phelps
& Phillips 140,000 1.2% 140,000 0 --

Leonard Marmor 8,381(5) * 8,381(5) 0 --

Frank M. Naft 84,326(6) * 84,326(6) 0 --

Randy Naft 8,381(5) * 8,381(5) 0 --

Bram Roos 42,048(3) * 42,048(3) 0 --

Isaac S. Salzberg and
Susan S. Salzberg 246,500(7) 2.2% 246,500(7) 0 --

Jack I. Salzberg and
Anna S. Salzberg 2,247,831(8) 18.5% 2,247,831(8) 0 --

Stonepine Holdings,
Limited 100,000(9) * 100,000(9) 0 --

Tony Tanashian 84,188(6) * 84,188(6) 0 --

All executive officers
and directors as a group
(4 persons) 2,744,331 22.2% 2,744,331 0 --
</TABLE>

* Less than 1%

(1) Percentage of ownership for each holder is based on 11,116,756 shares of
common stock and 170,000 shares of preferred stock (convertible into
170,000 shares of common stock) outstanding on September 23, 1998,
together with applicable options and warrants for each stockholder.
Beneficial ownership is determined in accordance with the rules of the
SEC and generally includes shares over which the holder has voting or
investment power, subject to community property laws. Shares of common
stock subject to options or

9
<PAGE> 14

warrants that are currently exercisable or exercisable within 60 days
are deemed to be beneficially owned by the person holding the options or
warrants for computing such person's percentage, but are not treated as
outstanding for computing the percentage of any other person.

(2) Includes options to purchase 150,000 shares of Common Stock at a current
exercise price of $1.00 per share.

(3) Includes warrants to purchase 12,500 shares of common stock at a current
exercise price of $0.75 per share.

(4) Includes 100,000 shares held by Regina Hulkower as custodian for
Shoshana Hulkower under the Uniform Gift to Minors Act. Also includes
150,000 shares held by Benjamin and Regina Hulkower as trustees of the
Jack and Anna Salzberg 1989 Grandchildrens Trust for the benefit of Adam
Salzberg (50,000 shares), Matthew Salzberg (50,000 shares), and Jacob
Salzberg (50,000 shares).

(5) Includes warrants to purchase 2,500 shares of common stock at a current
exercise price of $0.75 per share.

(6) Includes warrants to purchase 25,000 shares of common stock at a current
exercise price of $0.75 per share.

(7) Includes 40,500 shares held as custodian under the Uniform Gift to
Minors Act for the benefit of Jacob Salzberg, 60,500 shares held as
custodian under the Uniform Gift to Minors Act for the benefit of Adam
D. Salzberg, and 60,500 shares held as custodian under the Uniform Gift
to Minors Act for the benefit of Matthew A. Salzberg; and 85,000 shares
held as trustees of the Isaac S. Salzberg and Susan S. Salzberg Living
Trust.

(8) Includes options issued to Jack I. Salzberg to purchase 850,000 shares
of Common Stock at an exercise price of $0.50 per share and 1,397,831
shares held as trustees of the Jack I. Salzberg and Anna S. Salzberg
Family Trust.

(9) Includes options to purchase 100,000 shares of Common Stock at a current
exercise price of $1.00 per share. Mr. Fabregas, a director of our
company, is the director, president and principal shareholder of
Stonepine Holdings, Limited.

PLAN OF DISTRIBUTION

The selling stockholders will be selling their stock over time through
dealers on the Nasdaq Bulletin Board at quoted prices or directly to buyers at
negotiated prices, or both.

Our company will pay the costs of registering these shares.

Offering these shares for sale does not guarantee that anyone will buy
them.

10
<PAGE> 15

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION

The following discussion contains forward-looking statements within the
meaning of Federal securities laws. Such statements can be identified by the use
of such words as "may," "will," "expect," "anticipate," "estimate" or other
similar words. Forward-looking statements discuss future expectations, contain
projections of results of operations or financial condition or state other
forward-looking information. When considering such forward-looking statements,
you should keep in mind the risk factors and other cautionary statements in this
Prospectus. Management believes that the expectations reflected in such
forward-looking statements are based on reasonable assumptions. However, there
are certain factors, such as our ability to acquire other businesses, obtain
financing for such acquisitions or for general corporate needs, market and
general economic conditions, that might cause a difference between actual
results and those forward-looking statements. This discussion should be read in
conjunction with our consolidated financial statements and the notes included in
this Prospectus beginning on page F-1. This statement applies to all
forward-looking statements that appear anywhere in this Prospectus.

Results of Operations

Three Months Ended June 30, 1998 Compared to Three Months Ended June 30, 1997

Net sales for the three months ended June 30, 1998 were $2,000, compared
to $30,000 for the same period in 1997. The decrease in sales is because sales
of our product, Therapy Plus, have ended.

Selling, general and administrative expenses for the three months ended
June 30, 1998 were $71,000, compared to $55,000 for the same period in 1997.
This increase was largely because of increases in legal fees and fees paid to
outside consultants, as well as a decrease in sublease rental income that offset
part of our rent expense.

Interest expense for the three months ended June 30, 1998 was $5,500,
compared to $44,800 for the same period in 1997. This decrease is because of the
conversion into shares of common stock of loans previously made to us by certain
individuals.

Fiscal Year Ended March 31, 1998 Compared to Fiscal Year Ended March 31,
1997

Net sales for fiscal 1998 were $176,000, or 41% less than net sales of
$296,00 in fiscal 1997.

Cost of sales as a percentage of net sales decreased from 52% in fiscal
1997 to 47% in fiscal 1998. This reflects a decrease in cost of production
because of a more efficient tooling used in the manufacture of Therapy Plus.

Selling, general and administrative expenses for fiscal 1998 were
$654,000, compared to $653,000 for fiscal 1997. However, for fiscal 1998, this
amount includes $362,000 in

11
<PAGE> 16

legal expenses relating to an acquisition which did not close. Not including
such expense results in selling, general and administrative expenses for fiscal
1998 in the amount of $292,000, a 55% decrease compared to fiscal 1997. This
decrease is the result of continued cost-savings measures which we have
undertaken.

As a result of the conversion of debt to equity by certain individuals,
our interests expense decreased by 37% in fiscal 1998 compared to fiscal 1997.

Other income in fiscal 1998 in the amount of $357,000 reflects the
reversal of the prior year's accrual on royalty payments. Other expense in
fiscal 1998 in the amount of $300,000 reflects compensation for Jack Salzberg.

Fiscal Year Ended June 30, 1997 Compared to Fiscal Year Ended June 30, 1996

Net sales for fiscal 1997 were $296,000, compared to $1,023,000 in
fiscal 1996. The amount for fiscal 1996 includes four months' operations of
ViaStar Marketing, Inc. (ViaStar) in the amount of $601,000. In comparing the
net difference of $422,000 for fiscal 1996 with fiscal 1997, the 30% decrease in
net sales reflects a significant decrease in wholesale sales in the amount of
$150,000, partially offset by a small increase in direct infomercial sales to
consumers in the amount of $24,000.

Cost of sales as a percentage of net sales increased from 45% in fiscal
1996 to 52% in fiscal 1997. The increase was mainly due to write-offs of
slow-moving inventories. ViaStar's portion for fiscal 1996 was $365,000.

Selling, general and administrative expenses for fiscal 1997 were
$653,000, compared to $864,000 in fiscal 1996. Of this amount, $422,000 was
allocated to ViaStar for fiscal 1996. Expenses in fiscal 1997 consisted of 20%
video production costs, 19% royalty payment requirements and 61% regular
operating expenses. The 52% overall increase in these expenses was mainly due to
the costs of new video production and royalty expenses. Regular operating
expenses of $398,000 for fiscal 1997 reflect a 10% decrease over operating
expenses of $442,000 for fiscal 1996, because of cost-cutting measures.

In August 1992, we signed a consent order with the Federal Trade
Commission which prohibited us from making or using certain claims or
endorsements in connection with our advertising of Therapy Plus. After a
three-year clinical study, the U.S. Food and Drug Administration gave us
permission to market Therapy Plus using only a limited number of the original
claims and endorsements.

In 1996, we produced new revised infomercials using the limited claims
and endorsements allowed by the FDA. However, the infomercial tested below
expectations and we discontinued media testing. This in turn took away our sales
momentum.

Ultimately, the FDA approval became moot for the following reasons:

12
<PAGE> 17

- Momentum had been lost

- The cost of media airtime during the interim had gone up
dramatically, which resulted in our abandoning the testing of
new infomercials in November and December 1996.

The license agreement between us and the German inventor of Therapy Plus
contains a provision that if our operations are halted by any government agency,
the minimum license fee of $125,000 does not have to be paid. Management
believes that the $125,000 minimum license fee does not have to be paid because
it is an outcome of the same government agency action causing us to abandon our
marketing program. Management believes that the liabilities related to actual
sales should be the only ones recognized, in the amount of $115,000.

Net loss from operations in fiscal 1997 was $512,000, compared to
$399,000 for fiscal 1996. For fiscal 1996, our loss was $213,000 and ViaStar's
loss was $186,000.

Net interest expense in fiscal 1997 was $204,000, compared to $183,000
for fiscal 1996. For fiscal 1996, our interest expense was $2,000 and ViaStar's
was $181,000. The increase in our interest expense in fiscal 1997 is because of
our increased borrowings to fund operations.

Other income in fiscal 1997 was $41,000, compared to $219,000 in fiscal
1996. The amount for fiscal 1997 reflects a $30,000 refund for product liability
insurance and cost recoveries, and $11,000 for reversal of accrued expenses.

Liquidity and Capital Resources

Cash used in the three month period ended June 30, 1998 was $91,000.
This was offset by a net increase in debt incurred of $137,000, resulting in an
increase of $46,000 in our cash position.

Net cash used for operating activities in fiscal 1998 was $562,000. We
funded this amount from borrowings we made from various private lenders,
including Jack Salzberg and certain of his relatives.

During 1997, Jack Salzberg converted $143,916 of debt owed to him, plus
accrued interest, into shares of common stock, at $.50 per share. An additional
$1,708,000 of debt owed to various relatives of Mr. Salzberg was also converted
into common stock at the same conversion rate.

On May 29, 1988, Jack Salzberg converted accrued compensation of
$300,000 into 240,000 shares of common stock at $1.25 per share. The bid price
of our stock at the time of the conversion was $.875 per share. Legal fees of
$172,000 and $280,000 of loans from three relatives of Mr. Salzberg were also
converted into shares of common stock at $1.25 per share.

After the end of fiscal 1998, we reached a settlement of our litigation
with former

13
<PAGE> 18

employees of ViaStar. This resulted in an extraordinary gain in the amount of
$337,500.

Because of the current low sales volume, we plan to continue to rely on
outside financing sources to meet cash requirements of our operations. In recent
years, our working capital has come from Jack Salzberg and some of his
relatives. They have provided loans or have guaranteed some of our obligations.
In the last four years, Mr. Salzberg has provided or arranged for over
$3,000,000 in working capital. The majority of this amount was converted into
shares of common stock. Because our operating expenses are now significantly
lower than before, Mr. Salzberg has informed the Board of Directors that he will
continue to provide funds for working capital needs until an acquisition is
completed or another financing has been conducted.

Current Plans

While we will still explore marketing Therapy Plus, the main emphasis of
management will be to acquire profitable businesses. We have $6,900,000 in
federal tax loss carry forward and $1,600,000 tax loss for California. Under
certain circumstances, these tax losses can be offset against profitable
business operations.

Inflation and Changing Prices

We do not foresee any adverse effects on our earning as a result of
inflation or changing prices.

Year 2000 Issues

We have not completed our review of Year 2000 compliance at this time.

BUSINESS

Numex Corporation was incorporated in Delaware on August 1, 1980. Since
January 1991, our main business had been to manufacture through subcontractors
and distribute a product called Therapy Plus, a patented, non-electric,
hand-held massaging device for relieving arthritis pain. The product is a series
of starwheels mounted on a shaft that a person rolls briskly over sore body
parts for a massage-like effect.

In order to obtain a license to manufacture the product, we paid the
patent owner a one-time fee of $120,000 in June 1992 and agreed to pay royalties
at a rate ranging from $.65 to $1.20 per

14
<PAGE> 19

unit, depending upon how we distributed the product. We treated the fee as an
intangible asset on our balance sheet and wrote off the remaining value of the
fee and related expenses in March 1997.

We believe that we do not have to pay royalties because the U.S.
government interfered with our marketing of the product. We also believe that we
have no liability of any kind under the license agreement. We base this
conclusion on our interpretation of the agreement's language, the passing of
time to file suit against us over the agreement, and the fact that the inventor
has moved to Cyprus and has not communicated with our company since February
1998. Accordingly, in March 1998 we adjusted the prior year's accrual on royalty
estimates to the licensor. See "Management's Discussion Analysis of Financial
Condition and Results of Operations" and "Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure."

From January 1991, when we obtained the license to sell the product,
until August 1992, we engaged in a major marketing campaign, selling the product
through an infomercial on television. An infomercial is a paid commercial
program broadcast on television in order to sell particular products. The
Federal Trade Commission forced our company to stop airing the infomercial in
1992. The FTC claimed that, among other things, the infomercial contained claims
about the product that were not backed with sufficient scientific evidence. In
response, we sponsored a clinical study of the product by an independent
hospital. In February 1996, the FTC told us that the product could be marketed
for "temporary relief of minor muscular pain associated with arthritis."

We produced a new infomercial between late July and November 1996 and
began media tests using the newly accepted claims regarding arthritis pain.
However, this new marketing strategy failed because of high costs of producing
the infomercial. From October 1997 through February 1998 we worked with QVC,
Inc., a cable shopping network, to promote the product. While sales were high
enough, many of the products that had been sold were returned, and we decided to
stop selling the product through QVC. We also marketed the product through
wholesale and export distributors. International sales through export
distributors accounted for most of the sales of the product.

Sales of our only product, Therapy Plus, have been falling for some
time. There have been no sales of Therapy Plus since June 1998. We do not expect
to have any significant new sales of Therapy Plus. We do not have any other
products under development and we do not have plans to develop any new products.
Therefore, our future business plan depends on beginning new activities. Among
the things we are most actively considering is acquiring other businesses. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

In June 1994 we acquired ViaStar. Viastar marketed celebrity owned or
endorsed products. ViaStar was not profitable and used up the capital provided
by our company. ViaStar made an assignment for benefit of creditors in July 1995
and was dissolved on March 28, 1997.

Our company moved into its current offices on February 1, 1995, under a
three-year lease which expired on January 31, 1998. The monthly rental was
$5,732 plus taxes, insurance and other maintenance costs. We extended the lease
for one year, and the new rent is $6,335 a month, plus taxes, insurance and
maintenance costs. We also subleased part of the space for $2,250 per month

15
<PAGE> 20

from July 1997 through January 1998, and for $4,900 a month since then, leaving
us with a net cost of the space of $1,455 per month. The facility measures
12,460 square feet.

MANAGEMENT

This table lists our directors and executive officers.

<TABLE>
<CAPTION>
Name Age Current Position with Company
---- --- -----------------------------
<S> <C> <C>
Gerald A. Bagg 46 Director
J. Robert Fabregas 53 Director
Isaac S. Salzberg 46 Vice President, Secretary and Director
Jack I. Salzberg 75 Chairman of the Board, President, and Chief
Executive Officer
</TABLE>

The business experience of the individuals named above for at least the
past five years is described below. Other than what is described here, none of
these people is related to any of the others in any way. None of them has been
involved in significant legal proceedings.

GERALD A. BAGG was President, Chief Operating Officer, and a director of
our company from March 20, 1992 and as Chief Executive Officer from December 30,
1992. In February 1996, Mr. Bagg resigned as President and CEO but remains a
director. He is Senior Vice President of Account Management and Marketing with
Williams Worldwide, a major television media buying firm. From at least 1988,
Mr. Bagg served as President of Brentwood Marketing, a marketing and strategic
planning firm located in Los Angeles, California. Brentwood Marketing has
launched numerous entrepreneurial consumer products, including Epilady.

J. ROBERT FABREGAS has been a director of our company since March 11,
1998. From June, 1988 to the present, Mr. Fabregas has been the President of
Stonepine Holdings, Limited, a California corporation, an investment banking
firm. He has 25 years experience in corporate finance and commercial lending
with major domestic and foreign banks, one of the largest U.S. savings and
loans, a Fortune 500 manufacturing company, and privately held investment
banking firms. He has been a Member of Management in the Los Angeles office of
Credit Suisse, a major Swiss financial institution.

ISAAC S. SALZBERG has been a director of our company since March, 1989.
He had been President and Chief Executive Officer of our company from March,
1989 to March, 1992. He has been a director of First Charter Bank since 1988 and
an officer since 1989. Mr. Salzberg left the bank and all positions in October
1996. Mr. Salzberg is an investment broker with Prudential Securities. Mr.
Salzberg is the son of Jack I. Salzberg, the Chairman of the Board, Chief
Executive Officer and President of our company.

JACK I. SALZBERG has been Chairman of the Board since January, 1985,
Chief Executive Officer of our company since March, 1992 and has been President
since February 1996. He had

16
<PAGE> 21

been Chairman of the Board from 1983 and Chief Executive Officer from June, 1989
of First Charter Bank, N.A., a national bank which operates two branch offices
in the Los Angeles area, and of which he was also a major stockholder. Mr.
Salzberg retired from all positions with First Charter Bank and sold or gave
away all his stock in the bank in September 1995. Mr. Salzberg is the father of
Isaac S. Salzberg, a director of our company.

EXECUTIVE COMPENSATION

This table shows all of the compensation given to the Chief Executive
Officer and all other officers who were paid more than $100,000 during the
fiscal years ended March 31, 1998, 1997 and 1996.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
Long Term Compensation Awards

Restricted Securities Underlying
Name and Principal Position Year Salary Stock Award(s)
- --------------------------- ---- ------ --------------
<S> <C> <C> <C>
Jack I. Salzberg 1998 $300,000 (1) 850,000
Chairman of the Board, 1997 $0 0
President, CEO 1996 $0 0
</TABLE>

(1) Compensation awarded by the Directors to Jack I. Salzberg on December
18, 1997 because he served for six years of service without
compensation. On April 30, 1998, the Board authorized the conversion of
this accrued liability into common stock at $1.25 per share, which was
then converted on May 1998.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
Number of Percent of Total
Securities Options/ SARs
Underlying Granted to Exercise
Options/SARs Employees Price Expiration
Name Granted (#) in Fiscal Year ($/sh) Date
- ---- ----------- -------------- ------ ----
<S> <C> <C> <C> <C>
Jack I. Salzberg 850,000 (2) 100% $.50 none
</TABLE>

(2) Option granted by the Board of Directors on November 21, 1997 to Jack I.
Salzberg.

Arrangements with Directors

J. Robert Fabregas was appointed to the Board of Directors on March 11,
1998. During the fiscal year 1998, he received a total of $34,500 as
compensation through his company, Stonepine Holdings, Limited. Mr. Fabregas'
company provided services to our company unrelated to his services and duties as
a director of our company. See "Certain Relationships and Related Transactions."

17
<PAGE> 22

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In July and December 1997, our Board of Directors decided to eliminate
most of our company's debt. In connection with that decision, the following
individuals who had loaned money to us agreed to convert this debt into shares
of our common stock.

Jack I. Salzberg

Jack I. Salzberg converted all of the debt he was owed, plus accrued
interest, in the amount of $143,916 into 287,831 shares of common stock at $.50
per share. Last year, he converted his 2 1/2 year note for $300,000 into 300,000
shares of common stock at $1.00 per share. See "Selling Stockholders."

Esther Kozienicki

Esther Kozienicki is the sister of Jack I. Salzberg. At March 31, 1997,
we owed her $566,000. In addition, we issued new demand notes payable for
operating cash received in an aggregate amount of $227,000 during fiscal 1998.
She converted $779,880 of this amount and accrued interest through December 1997
into 1,559,760 shares of common stock at $.50 per share. Ms. Kozienicki has
provided our company with operating cash funds since 1993. On May 29, 1998, Ms.
Kozienicki converted $160,000 of the debt she was owed into 128,000 shares of
common stock at $1.25 per share. See "Selling Stockholders."

Malka Livne

Malka Livne is the sister in law of Jack I. Salzberg. We issued demand
notes payable to her in an aggregate amount of $149,000 for operating cash
received during fiscal 1998. At March 31, 1997 we owed her $350,000. During the
year, she converted $463,995 of this amount and accrued interest through
December 1997 into 927,990 shares of common stock at $.50 per share. Ms. Livne
has provided our company with operating cash funds since 1994. See "Selling
Stockholders".

In September 1998, we granted to Stonepine Holdings, Limited options to
purchase 100,000 shares of Common Stock at an exercise price of $1.00 per share.
Mr. Fabregas, a director of our company, and is the principal shareholder,
director and president of Stonepine Holdings, Limited. See "Selling
Stockholders".

SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

This table provides information about the stock ownership of our company on
September 30, 1998. It shows the holdings of each director, each person we know
to hold more than 5% of our stock, and all of our directors and officers as a
group.

18
<PAGE> 23

Amount and Nature
of
Beneficial Ownership

<TABLE>
<CAPTION>
Name of Beneficial Number of Percent of
Owner Title Shares Class
- ----- ----- ------ -----
<S> <C> <C> <C>
Gerald A. Bagg Director 150,000 (1) 1.3%
J. Robert Fabregas Director 100,000 (2) 0.9%
Isaac S. Salzberg Secretary and Director 246,500 (3) 2.2%
Jack I. Salzberg Chairman of the Board & President 2,247,831 (4) 18.5%
Esther Kozienicki (5) 665,760 5.9%
All Directors and Officers as a group (four persons) 2,744,331 22.2%
</TABLE>

(1) Includes options to purchase 150,000 shares of Common Stock at a current
exercise price of $1.00 per share.

(2) Consists of options to purchase 100,000 shares of Common Stock at a
current exercise price of $1.00 per share held by Stonepine Holdings,
Limited. Mr. Fabregas is the principal shareholder, director and
president of Stonepine Holdings, Limited.

(3) Includes 40,500 shares held as custodian under the Uniform Gift to
Minors Act for the benefit of Jacob Salzberg, 60,500 shares held as
custodian under the Uniform Gift to Minors Act for the benefit of Adam
D. Salzberg, and 60,500 shares held as custodian under the Uniform Gift
to Minors Act for the benefit of Matthew A. Salzberg; and 85,000 shares
held as trustees of the Isaac S. Salzberg and Susan S. Salzberg Living
Trust.

(4) Includes options issued to Jack I. Salzberg to purchase 850,000 shares
of Common Stock at an exercise price of $0.50 per share and 1,397,831
shares held as trustees of the Jack I. Salzberg and Anna S. Salzberg
Family Trust.

(5) Ms. Kozienicki is the sister of Jack I. Salzberg and the aunt of Isaac
S. Salzberg. Messrs. Salzberg disclaim beneficial ownership of any of
the shares owned by Ms. Kozienicki.

LEGAL PROCEEDINGS

On February 11, 1998, our company filed a Complaint and Motion for
Temporary Injunction and Request against William Lovell, Robert Circosta, George
Simone and Ben White in the Fifteenth Judicial Circuit, covering Palm Beach,
Florida. The case number of the suit is 98-001276-AD. The suit relates to our
acquisition of ViaStar, when we agreed to issue to the defendants 500,000 shares
of our restricted common stock. The parties have signed a settlement agreement
and filed it with the court. The defendants will return 300,000 shares of our
common stock to us, and they will keep 200,000 shares of our common stock
without restriction.

19
<PAGE> 24

CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Singer, Lewak, Grenbaum & Goldstein, LLP resigned as independent public
accountants for our company on April 30, 1998. Because we wanted to eliminate
the royalty accrued on our company's financial statements on the grounds that we
were not legally or contractually obligated to pay it, the Singer, Lewak firm
asked us when they were deciding whether to renew their engagement as our
auditors for the new fiscal year, to provide either a verification of our
potential liability under the Therapy Plus license agreement or a legal opinion
on the subject. We decided, for reasons unrelated to the audit, not to get a
verification, but we did try to obtain a legal opinion. Our lawyers, the
accountants and we were discussing the language of the opinion, but had not
completed the discussions when the accountants resigned. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

The report of these accountants on our financial statements for the
fiscal years ended March 31, 1995, 1996 and 1997 did not contain an adverse
opinion, disclaimer of opinion, or any qualification or modification as to
audit, scope, accounting principles, or uncertainty. It did, however, include an
explanatory paragraph relating to going concern considerations for those three
years. There were not any disagreements in the past two years that would have
caused the accountants to refer to the disagreements in their reports if the
issues were not resolved to the accountants' satisfaction.

Singer, Lewak, Greenbaum & Goldstein LLP did not audit or review our
financial statements for any period after the fiscal year ended March 31, 1997.

On May 18, 1998, our board of directors named Stonefield Josephson,
Inc., as our new independent public accountants.

DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
OF SECURITIES ACT LIABILITIES

Our certificate of incorporation allows us to indemnify our officers and
directors to the maximum extent allowed under Delaware law. The SEC takes the
position that any indemnification for securities law violations is against
public policy and is unenforceable.

LEGAL MATTERS

The law firm of Richman, Lawrence, Mann, Chizever & Phillips, of Beverly
Hills, California, will determine the validity of the securities offered by this
prospectus.

20
<PAGE> 25

EXPERTS

The financial statements in this prospectus are incorporated from our
Annual Report on Form 10-KSB in reliance on the report of Stonefield, Josephson,
Inc., independent certified public accountants, who are experts in auditing and
accounting.

21
<PAGE> 26

NUMEX CORPORATION AND SUBSIDIARY

CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED MARCH 31, 1998

CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
INDEPENDENT AUDITORS' REPORT F-2

FINANCIAL STATEMENTS:
Consolidated Balance Sheet F-3
Consolidated Statement of Operations F-4
Consolidated Statement of Stockholders' Deficiency F-5
Consolidated Statement of Cash Flows F-6
Notes to Consolidated Financial Statements F-7
</TABLE>

F-1
<PAGE> 27

[STONEFIELD JOSEPHSON, INC. LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholders
Numex Corporation
Santa Fe Springs, California

We have audited the accompanying consolidated balance sheet of Numex Corporation
and subsidiary as of March 31, 1998 and the related consolidated statements of
operations, stockholders' deficiency, and cash flows for the year then ended.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Numex Corporation
and subsidiary as of March 31, 1998, and the consolidated results of their
operations and their consolidated cash flows for the year ended March 31, 1998,
in conformity with generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As shown in the financial
statements, the Company has incurred net losses from operations, has negative
cash flows from operations, and has a net capital deficiency. These factors,
among others as discussed in Note 1 to the financial statements, raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 1. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

/s/ STONEFIELD JOSEPHSON, INC.

CERTIFIED PUBLIC ACCOUNTANTS

Santa Monica, California
May 29, 1998

F-2
<PAGE> 28

NUMEX CORPORATION AND SUBSIDIARY

CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
ASSETS June 30, March 31,
1998 1998
------------ ------------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 73,262 $ 27,218
Inventory 7,149 10,230
Prepaid expenses 496 --
------------ ------------
Total current assets 80,907 37,448
PROPERTY AND EQUIPMENT, net of
accumulated depreciation and amortization 15,765 17,046

DEPOSITS 7,158 7,158
------------ ------------

$ 103,830 $ 61,652
============ ============

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 57,911 $ 77,210
Notes payable 180,789 --
Current maturities of notes payable, others -- 45,039
Current maturities of notes payable, related parties -- 58,750
------------ ------------

Total current liabilities 238,700 180,999
------------ ------------

LOAN PAYABLE, other -- 171,930
------------ ------------

LOAN PAYABLE, officer-stockholder -- 300,000
------------ ------------

NOTES PAYABLE, RELATED PARTIES, less current maturities -- 246,250
------------ ------------

STOCKHOLDERS' DEFICIENCY:
Preferred stock; $1.00 par value, 10,000,000 shares
authorized, 170,000 shares issued and outstanding 170,000 170,000
Common stock; $.10 par value, 20,000,000 shares
authorized, 11,189,219 issued and 10,564,219
shares outstanding 1,118,922 1,118,922
Treasury stock, at cost, 625,000 shares -- (705,824)
Additional paid-in capital 10,043,222 9,970,866
Deficiency (11,467,014) (11,391,491)
------------ ------------

Total stockholders' deficiency (134,870) (837,527)
------------ ------------

$ 103,830 $ 61,652
============ ============
</TABLE>

See accompanying independent auditors' report and notes to consolidated
financial statements.

F-3
<PAGE> 29

NUMEX CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
Three months Three months
ended ended Year ended
June 30, 1998 June 30, 1997 March 31, 1998
------------- ------------- --------------
(unaudited) (unaudited)
<S> <C> <C> <C>
NET SALES $ 2,084 $ 30,414 $ 176,513

COST OF SALES 626 12,450 83,605
------------ ------------ ------------

GROSS PROFIT 1,458 17,964 92,908

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 71,505 55,269 653,734
------------ ------------ ------------

LOSS FROM OPERATIONS (70,047) (37,305) (560,826)
------------ ------------ ------------

OTHER INCOME (EXPENSE):
Officer-stockholder compensation -- -- (300,000)
Interest expense, net (5,476) (44,760) (128,572)
Other income -- -- --
Adjustment of the prior years accruals on
royalty estimates -- -- 356,600
Loss on intangible assets in excess of net
present value -- -- --
------------ ------------ ------------

Total other expense (5,476) (44,760) (71,972)
------------ ------------ ------------

LOSS BEFORE PROVISION FOR INCOME TAXES (75,523) (82,065) (632,798)

PROVISION FOR INCOME TAXES -- -- 800
------------ ------------ ------------

NET LOSS $ (75,523) $ (82,065) $ (633,598)
============ ============ ============

NET LOSS PER SHARE (.01) (.01) (.08)
============ ============ ============

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING USED TO CALCULATE LOSS PER SHARE 10,783,999 5,967,750 7,601,295
============ ============ ============
</TABLE>

See accompanying independent auditors' report and notes to consolidated
financial statements.

F-4
<PAGE> 30

NUMEX CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY
FOR THE YEAR ENDED MARCH 31, 1998

<TABLE>
<CAPTION>
Preferred stock Common stock Treasury stock at cost
------------------- ---------------------- ----------------------
Shares Amount Shares Amount Shares Amount
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Balance at March 31, 1997 170,000 $170,000 6,592,750 $659,275 625,000 ($705,824)

Common stock issued
for conversion of debt 4,596,469 459,647

Net loss
------- -------- ---------- ---------- -------- ----------

Balance at March 31, 1998 170,000 170,000 11,189,219 1,118,922 625,000 (705,824)

Treasury stock issued for
conversion of debt and
services rendered (625,000) 705,824

Net loss for the three months
ended June 30, 1998 (unaudited)
------- -------- ---------- ---------- -------- ----------
170,000 $170,000 11,189,219 $1,118,922 -- --
======= ======== ========== ========== ======== ==========
</TABLE>

<TABLE>
<CAPTION>
Unearned portion
of restricted Additional paid in Accumulated
stock issued capital deficit Total
------------ ------- ------- -----
<S> <C> <C> <C> <C>
Balance at March 31, 1997 -- $8,132,280 ($10,757,893) ($2,502,162)

Common stock issued
for conversion of debt 1,838,586 2,298,233

Net loss (633,598) (633,598)
--------- --------------- ------------- -----------

Balance at March 31, 1998 -- 9,970,866 (11,391,491) (837,527)

Treasury stock issued for
conversion of debt and
services rendered 72,356 778,180

Net loss for the three months (75,523) (75,523)
ended June 30, 1998 (unaudited)
--------- --------------- ------------- -----------
-- $10,043,222 ($11,467,014) ($134,870)
========= =============== ============= ===========
</TABLE>

See accompanying independent auditors' report and notes to consolidated
financial statements.

F-5
<PAGE> 31

NUMEX CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CASH FLOWS

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

<TABLE>
<CAPTION>
Three months Year ended
ended June 30, March 31, 1998
-------------- --------------
1998 1997
---- ----
(unaudited) (unaudited)
<S> <C> <C> <C>
CASH FLOWS PROVIDED BY (USED FOR) OPERATING ACTIVITIES:
Net loss $ (75,523) $ (82,065) $(633,598)

ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH
PROVIDED BY (USED FOR) OPERATING
ACTIVITIES:
Depreciation and amortization 1,281 1,316 5,916
Adjustment of the prior years accruals on royalty estimates -- -- (356,600)
Legal fees and interest expense accrued as loan payable, other -- -- 171,930
Officer-stockholder compensation accrued as loan payable,
officer-stockholder -- -- 300,000

CHANGES IN ASSETS AND LIABILITIES:
(INCREASE) DECREASE IN ASSETS:
Accounts receivable (139) 7,964 9,058
Inventory 3,081 (1,935) (1,406)
Prepaid expenses and other current assets (496) (2,427) --
Restricted cash -- 4,756 --
Deposits -- -- 5,233

INCREASE (DECREASE) IN LIABILITIES:
Accounts payable and accrued expenses (19,160) 3,421 (62,583)
Customer deposits -- (28,000) --
--------- --------- ---------

Total adjustments (15,433) (14,905) 71,548
--------- --------- ---------

Net cash used for operating activities (90,956) (96,970) (562,050)
--------- --------- ---------

CASH FLOWS USED FOR INVESTING ACTIVITIES -
payments to acquire property and equipment -- -- (4,051)

CASH FLOWS PROVIDED BY (USED FOR) FINANCING ACTIVITIES:
Cash restricted -- -- 5,775
Proceeds from loans and notes payable, net 137,000 83,500 572,563
Proceeds from issuance of preferred stock -- -- --
Offering costs -- -- --
--------- --------- ---------

Net cash provided by financing activities 137,000 83,500 578,338
--------- --------- ---------

NET INCREASE (DECREASE) IN CASH 46,044 (13,470) 12,237
CASH AND CASH EQUIVALENTS, beginning of year 27,218 14,981 14,981
--------- --------- ---------

CASH AND CASH EQUIVALENTS, end of year $ 73,262 $ 1,511 $ 27,218
========= ========= =========
</TABLE>

See Note (16) for supplemental disclosures of non-cash investing and financing
activities.

See accompanying independent auditors' report and notes to consolidated
financial statements.

F-6
<PAGE> 32

NUMEX CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED MARCH 31, 1998

(1) ORGANIZATION AND MANAGEMENT'S PLANS:

Numex Corporation (the "Company") was incorporated in the state of
Delaware in August 1980. The Company is engaged in the business of
manufacturing and distributing a hand-held mechanical patterned
coetaneous nerve stimulator (the "Product"), which the Company markets
under the name "Therapy Plus." The Product was sold primarily through
an infomercial (the "Infomercial") on television from March 1991 though
August 1992. An Infomercial is a one-half hour paid commercial program
broadcast on television, the primary purpose of which is to sell one or
more products.

In September 1992, the Company voluntarily discontinued the airing of
the Infomercial as a result of an investigation by the United States
Federal Trade Commission (the "FTC"). The FTC concluded that the
Infomercial contained certain advertising claims which were not
supported by reliable scientific evidence.

In October 1992, the Company signed an agreement with the FTC
consenting to refrain from making certain advertising claims concerning
the Product, the signing of which did not constitute an admission of a
law violation. Since the discontinuance of the airing of the
Infomercial in September 1992, the Company has sold the Product
primarily to distributors and has not been engaged in any television
marketing campaign to sell the Product.

In October 1993, the Company completed a controlled clinical study to
serve as the basis for the Food and Drug Administration ("FDA")
authorization to make certain claims relative to the efficacy of the
Product in relieving pain due to arthritis and to comply with the FTC's
requirements.

In November 1993, the Company submitted a 501(k) notification to the
FDA advising the agency of the Company's intention to add the word
"arthritis" to its labeling claims. In February 1996, the Company
received a FDA notification that the Product could be marketed as a
"temporary relief of minor muscular pain associated with arthritis."

In June 1994, a subsidiary of the Company acquired ViaStar Marketing,
Inc. ("ViaStar"). ViaStar was in the business of outbound telemarketing
of celebrity-owned or endorsed products. The purchase price was
1,000,000 shares of the common stock of the Company in exchange for all
of the issued and outstanding shares of ViaStar. Subject to ViaStar's
achieving certain earnings goals, 500,000 of the shares issued were
held in escrow (the "Escrow Shares"). The value of those shares, in the
amount of $562,500, was shown as a reduction of the stockholders'
equity as of March 31, 1996. Insofar as ViaStar is no longer in
business, the 500,000 shares held in escrow were released back to the
Company, and the Company placed the shares, at cost, in Treasury stock
as of March 31, 1997.

On August 2, 1995, ViaStar filed, and was granted, a petition
commencing an assignment for the benefit of creditors, pursuant to
Chapter 727 of the Florida State Statutes. The book value of the assets
in the amount of $399,352 was assigned to the trustee for the benefit
of the creditors and was charged to earnings. As a result of the
petition, the Company determined that there had been a permanent
impairment in the carrying value of goodwill, and the remaining
unamortized balance of $533,474 was charged to earnings for the year
ended March 31, 1996. On March 28, 1997, the shareholders of ViaStar
dissolved the corporation under Delaware State law.

See accompanying independent auditors' report.

F-7
<PAGE> 33

NUMEX CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

YEAR ENDED MARCH 31, 1998

(1) ORGANIZATION AND MANAGEMENT'S PLANS, CONTINUED:

The Company's consolidated financial statements have been presented on
the basis that the Company will continue as a going concern, which
contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company incurred net
losses during 1997 after airing a new infomercial, and has a net
capital deficiency as presented on the balance sheet. Also, during the
fiscal years 1998 and 1997, the Company experienced insufficient cash
flows from operations, and funds for operations were obtained through
the issuances of notes payable and preferred stock. These factors raise
substantial doubt about the Company's ability to continue as a going
concern.

The Company's continued existence is dependent upon its ability to
achieve a new operating plan and its success of selling Therapy Plus
through wholesale distributors. Management's plans in connection with
this uncertainty are as follow:

The Company plans to continue marketing Therapy Plus through wholesale
distributors and exporters.

Management has been aggressively pursuing several profitable businesses
as acquisition candidates. In anticipation of possible acquisitions,
the Company has established a relationship with a medium-size
investment banking house which specializes in private placements of
securities and notes with institutional investors. Included in selling,
general and administrative expenses for the year ended March 31, 1998,
are approximately $362,000 related to accounting, legal and financing
costs associated with an acquisition target.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

PRINCIPLES OF CONSOLIDATION:

The consolidated financial statements include the accounts of
the Company and its subsidiary. All intercompany accounts and
transactions have been eliminated.

CASH AND CASH EQUIVALENTS:

Equivalents

For purposes of the statement of cash flows, cash equivalents
include all highly liquid debt instruments with original
maturities of three months or less which are not securing any
corporate obligations.

The carrying amounts of these assets approximate fair value
due to the short maturity of the instruments.

See accompanying independent auditors' report.

F-8
<PAGE> 34

NUMEX CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

YEAR ENDED MARCH 31, 1998

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:

CASH AND CASH EQUIVALENTS, CONTINUED:

Concentration

The Company maintains its cash in bank deposit accounts which,
at times, may exceed federally insured limits. The Company has
not experienced any such losses in such accounts.

INVENTORIES:

Inventories are stated at the lower of cost or market value.
Cost is determined using the first-in, first-out ("FIFO")
method.

PROPERTY AND EQUIPMENT:

Property and equipment are stated at cost. Expenditures for
maintenance and repairs are charged to earnings as incurred,
whereas, additions, renewals, and betterments are capitalized.
When property and equipment are retired or otherwise disposed
of, the related cost and accumulated depreciation are removed
from the respective accounts, and any gain or loss is included
in operations. Depreciation is computed using the
straight-line method over the estimated useful lives of the
related assets

IMPAIRMENT OF LONG-LIVED ASSETS:

In 1997, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of."

SFAS No. 121 requires that long-lived assets be reviewed for
impairment whenever events or changes in circumstances
indicate that the carrying amounts of such assets may not be
recoverable. Impairment losses would be recognized if the
carrying amounts of the assets exceed the fair value of the
asset. The impact of such adoption resulted in the write-off
of $392,398 for the purchased intangibles and the costs of
obtaining a licensing agreement from the patent holder of the
Product during the year ended March 31, 1997 (see Note 1).

See accompanying independent auditors' report.

F-9
<PAGE> 35

NUMEX CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

YEAR ENDED MARCH 31, 1998

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:

ADVERTISING:

The Company expenses the cost of advertising the first time
the advertising takes place, except for direct-response
advertising. Direct-response advertising consists primarily of
the cost to produce a television infomercial. The cost of
direct-response advertising is deferred and amortized over the
expected revenue stream of approximately six to twelve months.

REVENUE RECOGNITION:

Sales and related cost of sales are recorded upon shipment of
the Product. The Company has an unconditional money-back
guarantee policy under which the full sale price is returned
to retail customers if the Product is returned within 30 days
from the date of sale. The Company has estimated a provision
for future returns for sales to retail customers.

STOCK OPTION PLANS:

The Company has elected to follow Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees"
(APB 25), and related interpretations in accounting for the
employee stock options, rather than adopt the alternative fair
value accounting provided under The Financial Accounting
Standards Board issued Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation."

INCOME TAXES:

The Company uses the liability method of accounting for income
taxes pursuant to SFAS No. 109, "Accounting for Income Taxes."

Deferred income tax assets result from temporary differences
when certain amounts are deducted for financial statement
purposes and when they are deducted for income tax purposes.

NET LOSS PER SHARE:

The Company has adopted Statement of Financial Accounting
Standard No. 128, Earnings per Share ("SFAS No. 128"), which
is effective for annual and interim financial statements
issued for periods ending after December 15, 1997. SFAS No.
128 was issued to simplify the standards for calculating
earnings per share ("EPS") previously in APB No. 15, Earnings
Per Share. SFAS No. 128 replaces the presentation of primary
EPS with a presentation of basic EPS. The new rules also
require dual presentation of basic and diluted EPS on the face
of the statement of operations. Common equivalent shares,
consisting of outstanding stock options, are not included,
since they are anti-dilutive. Net loss per common share is
computed based on the weighted average number of common shares
outstanding.

See accompanying independent auditors' report.

F-10
<PAGE> 36

NUMEX CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

YEAR ENDED MARCH 31, 1998

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:

FAIR VALUE OF FINANCIAL INSTRUMENTS:

The Company measures its financial assets and liabilities in
accordance with generally accepted accounting principles.
Certain of the Company's financial instruments, including
cash, accounts receivable, accounts payable, and accrued
expenses, the carrying amounts approximate fair value due to
their short maturities. The amounts shown for debt also
approximate fair value because current interest rates offered
to the Company for debt of similar maturities are
substantially the same.

USE OF ESTIMATES:

In preparing financial statements in conformity with generally
accepted accounting principles, management makes estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements, as well
as the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.

INTERIM FINANCIAL STATEMENTS (UNAUDITED):

The accompanying unaudited condensed financial statements for
the interim periods ended June 30, 1998 and 1997 have been
prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to Regulation SB. Accordingly, they do not
include all of the information and footnotes required by
generally accepted accounting principles for complete
financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been
included. Operating results for the three months ended June
30, 1998 are not necessarily indicative of the results that
may be expected for the year ending March 31, 1999.

(3) CASH:

The Company had $56 of restricted cash to serve as collateral for a
credit card reserve, as of March 31, 1998.

(4) MAJOR CUSTOMERS:

During the year ended March 31, 1998, the Company did business with two
customers whose sales comprised approximately 22% and 65% of net sales,
respectively.

See accompanying independent auditors' report.

F-11
<PAGE> 37

NUMEX CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

YEAR ENDED MARCH 31, 1998

<TABLE>
<S> <C>
(5) INVENTORY:

A summary is as follows:

Finished goods $ 7,731
Supplies and packaging 2,499
--------------

$ 10,230
==============

(6) PROPERTY AND EQUIPMENT:

A summary is as follows:

Furniture and fixtures $ 37,620
Office and computer equipment 144,937
Tools and dies 38,259
--------------

220,816
Less accumulated depreciation 203,770
--------------

$ 17,046
==============

(7) ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

A summary is as follows:

Accounts payable $ 36,354
Accrued interest 3,441
Other 37,415
--------------

$ 77,210
==============
</TABLE>

During the year ended March 31, 1998, approximately $76,176 of the
Company's purchases were made from two vendors. No amounts were due to
these vendors as of March 31, 1998.

See accompanying independent auditors' report.

F-12
<PAGE> 38

NUMEX CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

YEAR ENDED MARCH 31, 1998

(8) LOAN PAYABLE, OTHER:

During the year ended March 31, 1998, the Company received legal
services related to an acquisition target. Subsequent to the year ended
March 31, 1998 the board of directors of the Company approved and
issued 140,000 shares of its treasury stock, at approximately $1.23, to
this vendor for legal services rendered in the amount of $ 171,930 (see
Note 17).

(9) LOAN PAYABLE, OFFICER-STOCKHOLDER:

During the year ended March 31, 1998, the board of directors of the
Company approved a bonus in the amount of $300,000 to an
officer-stockholder, payable at such time as funds became available and
would not be detrimental to the financial position of the Company.
Subsequent to the year ended March 31, 1998, the board of directors of
the Company approved and issued 240,000 shares of its treasury stock,
at $1.25, to convert the accrued officer-stockholder compensation
obligation of $300,000 (see Note 17).

(10) NOTES PAYABLE, OTHERS:

A summary is as follows:
<TABLE>
<CAPTION>
1998
----
<S> <C>

Promissory note, at prime plus 2% (10.5% at March 31, 1998), payable in
monthly principal payments of $2,000 plus interest,
due on December 18, 1995. $ 23,000
Promissory note, non-interest bearing, due on January 11, 1999.
This note may be converted at the holder's option into shares of
$0.10 par value common stock on or before due date at the rate
of $0.50 per share. 22,039
--------------

45,039
Less current maturities 45,039
--------------
$ --
==============
</TABLE>

See accompanying independent auditors' report.

F-13
<PAGE> 39

NUMEX CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

YEAR ENDED MARCH 31, 1998

(11) NOTES PAYABLE, RELATED PARTIES:

A summary is as follows:
<TABLE>
<CAPTION>
1998
----

<S> <C>
Promissory note, bearing interest at 8%, unsecured and due
on demand. $ 25,000
Promissory note, bearing interest at 8%,
unsecured and due on demand (see Note 17). 60,000
Promissory notes, bearing interest at 8%,
unsecured and due on demand (see Note 17). 105,000
Promissory note, bearing interest at 8%,
unsecured and due on demand (see Note 17). 115,000
--------------

305,000
Less current maturities 58,750
--------------
$ 246,250
==============
</TABLE>

Subsequent to March 31, 1998, the board of directors of the Company
approved and issued 197,000 shares of its treasury stock, at $1.25 per
share, to convert certain notes payable, related parties in the amount
of $246,250 into equity (see Note 17).

(12) INCOME TAXES:

The current provision for income taxes in fiscal year 1998 is related
to the minimum corporate state income taxes. As of March 31, 1998, the
Company had net federal operating loss carryforwards and net state
operating loss carryforwards totaling approximately $6,900,000 and
$1,600,000, respectively. The net federal operating loss carryforwards
expire in various years through 2013 and net state operating loss
carryforwards expire in various years through 2003.

The primary components of temporary differences which give rise to the
Company's net deferred tax asset at March 31, approximate as follows:

<TABLE>
<S> <C>
Deferred tax asset (liability):
Net operating losses $ 2,500,000
Valuation allowance (2,500,000)
--------------

Net deferred tax asset (liability) $ --
==============
</TABLE>

The valuation allowance increased by approximately $250,000 in 1998.

See accompanying independent auditors' report.

F-14
<PAGE> 40

NUMEX CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

YEAR ENDED MARCH 31, 1998

(13) STOCK OPTION PLANS:

On September 30, 1992, the stockholders approved a non-qualified stock
option plan and an incentive stock option plan, pursuant to which a
maximum aggregate of 1,000,000 shares of common stock have been
reserved for grant to officers and key employees. Under both plans, the
option price may not be less than the fair market value of the common
stock on the date of grant. Options are exercisable over a five-year
period beginning one year after the date of grant, and the option
exercise period is not to exceed ten years from that date.

As of March 31, 1998, the Company had 1,000,000 options granted under
the non-qualified option plan to the Company's Chairman of the Board
and a former officer, of which 970,000 options were fully vested and
unexercised. These options may be exercised at prices ranging from
$0.50 to $1.00 per share.

Proforma information regarding net income and earnings per share under
the fair value method has not been presented, as the amounts are
immaterial.

(14) RELATED PARTY TRANSACTIONS:

During the year ended March 31, 1998, certain notes payable, related
parties, in the amount of $1,672,290, were converted to 3,344,581
shares of restricted and unrestricted common stock. Interest expense to
related parties was approximately $83,954 for the year ended March 31,
1998.

(15) COMMITMENTS AND CONTINGENCIES:

The inventor of the Product obtained a United States patent for the
Product in February 1991. The Company and the patent owner entered into
a license agreement (the "License Agreement") as of January 1, 1992.
The License Agreement grants the Company an exclusive license to
market, manufacture, and sell the Product in the United States and its
possessions and territories for the remaining life of the patent which
is currently twelve years. Thereafter, the design of the Product will
be in the public domain, and the Company, as well as other companies,
will have the right to market, manufacture, and sell the Product.

The License Agreement also provides for royalties at rates ranging from
$.50 per unit to $1.20 per unit depending on the method of distribution
used. However, a minimum royalty of $125,000 is required to be paid
during each calendar year of the term of the License Agreement whether
or not the Company sells any units of the Product.

See accompanying independent auditors' report.

F-15
<PAGE> 41

NUMEX CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

YEAR ENDED MARCH 31, 1998

(15) COMMITMENTS AND CONTINGENCIES, CONTINUED:

At March 31, 1998, the Company owed the patent owner an aggregate of
$356,600 in accrued royalties. Pursuant to the agreement, the
obligations of the Company to pay royalty shall be stayed pending such
period of governmental prohibition and as such, management made an
adjustment of the prior year accruals on royalty estimates and
recognized a gain as of March 31, 1998 in the amount of $356,600.

The Company has obtained legal advice in support of the defenses
available to them regarding the royalty estimate adjustment.

(16) SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Supplemental cash flow information for the year ended March 31 are as
follows:

<TABLE>
<CAPTION>
Three months Year ended
ended June 30, March 31, 1998
-------------- --------------
1998 1997
---- ----
(unaudited) (unaudited)
<S> <C> <C> <C>
Cash paid for interest $ 590 $ 10,025 $ 43,610
Cash paid for income taxes -- -- 800
</TABLE>

Non-cash financing activities for the year ended March 31 were as
follows:

<TABLE>
<CAPTION>
Three months Year ended
ended June 30, March 31, 1998
-------------- --------------
1998 1997
---- ----
(unaudited) (unaudited)
<S> <C> <C> <C>
Conversion of promissory notes payable,
related party, to 3,344,581 and 300,000
shares of common stock, respectively. $ -- $ -- $ 1,672,290
Conversion of promissory notes payable,
others, to 1,251,888 shares of common
stock. -- -- 625,943
Conversion of accounts payable to 22,150
shares of common stock -- -- --
Issuance of common stock in payment of
legal services at $1.23 per share 171,930 -- --
Conversion of accrued compensation of a
related party into common stock at $1.25
per share 300,000 -- --
Conversion of notes payable into shares of
common stock at $1.25 per share 306,250 -- --
</TABLE>

See accompanying independent auditors' report.

F-16
<PAGE> 42

NUMEX CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

YEAR ENDED MARCH 31, 1998

(17) SUBSEQUENT EVENTS:

The Company has entered into an agreement with the original owners and
an independent consultant (prior to acquisition by Numex Corporation)
of ViaStar Marketing, Inc., to reacquire 300,000 shares, at cost, of
the Company's common stock outstanding as of March 31, 1998. The
Company had originally presented the issuance of restricted common
stock as Goodwill purchased in excess of fair market value from the
acquisition of ViaStar Marketing, Inc. The unamortized carrying value
of purchased goodwill (see Note 1) was charged against earnings for the
year ended March 31, 1996.

The board of directors of the Company approved and issued 140,000
shares of its treasury stock, at approximately $1.23, to a vendor for
legal services rendered related to an acquisition target in the amount
of $171,930 (see Note 8).

The board of directors of the Company approved and issued 240,000
shares of its treasury stock, at $1.25, to convert the accrued
officer-stockholder compensation obligation of $300,000 (see Note 9).

The board of directors of the Company approved and issued 197,000
shares of its treasury stock, at $1.25 per share, to convert $246,250
of notes payable, related parties, as presented in the balance sheet,
into equity (see Note 11).

The Company also issued 48,000 shares of treasury stock, at $1.25 per
share, to convert $60,000 of additional notes payable, related parties
issued after March 31, 1998.

See accompanying independent auditors' report.

F-17
<PAGE> 43

We have not authorized any dealer, salesperson or other person to give any
information or represent anything not contained in this Prospectus. You must not
rely on any unauthorized information. This Prospectus does not offer to sell any
shares in any jurisdiction where it is unlawful. The information in this
prospectus is current as of _________, 1998.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Where You Can Find More Information ..... 1
Summary ................................. 2
Risk Factors ............................ 3
Use Of Proceeds ......................... 7
Market For Common Equity And Related
Stockholder Matters ............. 7
Selling Stockholders .................... 8
Plan Of Distribution .................... 10
Management's Discussion And Analysis Of
Financial Condition And Results
Of Operation .................... 10
Business ................................ 14
Management .............................. 16
Executive Compensation .................. 17
Certain Relationships And Related
Transactions .................... 17
Security Ownership Of Certain Beneficial
Owners And Management ........... 18
Legal Proceedings ....................... 19
Changes In And Disagreements With
Accountants On Accounting and
Financial Disclosure ............ 19
Disclosure Of Commission Position On
Indemnification Of Securities Act
Liabilities ..................... 20
Legal Matters ........................... 20
Experts ................................. 20
</TABLE>

UNTIL ______________, 1998 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS THAT BUY, SELL OR TRADE THESE SECURITIES MAY BE REQUIRED TO DELIVER A
PROSPECTUS.

5,210,506 Shares of Common Stock

NUMEX CORPORATION

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

PROSPECTUS

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

<PAGE> 44

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 145 of the General Corporation Law of the State of Delaware
grants corporations the right to indemnify their directors, officers, employees
and agents in accordance with the provisions therein set forth. The Company's
Certificate of Incorporation provides for indemnification of such persons to the
fullest extent allowable under applicable law. In addition, the Company has
entered into indemnity agreements with each of its Directors, which generally
provide contractual indemnity protection which is coextensive with the indemnity
provisions of the General Corporation Law of the State of Delaware and the
Company's Certificate of Incorporation.

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following is a schedule of the estimated expenses (all of which will
be borne by the Company) incurred in connection with the offering of the
securities registered hereby, other than underwriting discounts and commissions,
if any. All of the amounts shown are estimates, except the SEC Registration Fee.

<TABLE>
<S> <C>
SEC registration fee............................................ $ 960.69
Blue Sky fees and expenses...................................... 5,000.00*
Accounting fees and expenses.................................... 5,000.00*
Legal fees and expenses......................................... 20,000.00*
Miscellaneous................................................... 2,039.31*
--------------
Total........................................................... $33,000.00*
===========
</TABLE>
-----------------
* estimated

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES

In April and May 1996, the Company issued 22,150 shares of common stock
to Friedman and Phillips, the Company's corporate counsel at that time, in lieu
of $11,344 legal fees incurred.

On March 31, 1997, Jack I. Salzberg converted his $300,000 convertible
note into 300,000 shares of common stock. He also converted the remaining
outstanding note and accrued interest in the amount of $143,916 into 287,831
shares of common stock on September 10, 1997. Mr. Salzberg is the Chairman of
the Board, President and CEO of the Company.

On August 11, 1997, Esther Kozienicki converted her long term
convertible note of $300,000 into 600,000 shares of common stock. She also
converted some of her demand notes and accrued interest in the amount of
$479,880 into 959,760 shares of common stock on

II-1
<PAGE> 45

December 31, 1997. Ms. Kozienicki is the sister of Jack Salzberg.

On August 11, 1997, Malka Livne converted her long term convertible note
of $300,000 into 600,000 shares of common stock. She also converted some of her
demand notes and accrued interest in the amount of $163,995 into 327,990 shares
of common stock on December 31, 1997. Ms. Livne is the sister-in-law of Jack
Salzberg.

On December 31, 1997, Dafna Breines converted outstanding notes in an
aggregate amount of $161,000 into 322,000 shares of common stock; Adira Hulkower
converted outstanding notes for $80,000 into 160,000 shares of common stock; Ron
Livne converted his notes in an aggregate amount of $42,500 into 85,000 shares
of common stock; Frank Naft converted outstanding notes for $50,000 into 100,000
shares of common stock; Miriam Salzberg converted outstanding notes for $50,000
into 100,000 shares of common stock; 1989 Jack and Anna Salzberg Grandchildren
Trust for the Benefit of Adam Salzberg converted outstanding note of $40,500
into 81,000 shares of common stock; and, 1989 Jack and Anna Salzberg
Grandchildren Trust for the Benefit of Matthew Salzberg converted outstanding
note of $40,500 into 81,000 shares.

On December 31, 1997, the Company issued 443,888 shares of common stock,
of which 43,888 shares were restricted, to David Breines who purchased a 1992
convertible promissory note from an unaffiliated party in the amount of
$221,994.

On February 24, 1998, a note in the amount of $224,000 which had been
assumed by a family member of Jack Salzberg, was converted into 448,000 shares
of Common Stock and issued as follows: Regina Hulkower as custodian for Shoshana
Hulkower under the Uniform Gift to Minors Act 100,000 shares, Judah Hulkower
100,000 shares, Ron Livne 98,000 shares, 1989 Jack and Anna Salzberg
Grandchildren Trust FBO Adam Salzberg 50,000 shares, 1989 Jack and Anna Salzberg
Grandchildren Trust FBO Jacob Salzberg 50,000 shares and 1989 Jack and Anna
Salzberg Grandchildren Trust FBO Matthew Salzberg 50,000 shares.

On May 29, 1998, Jack Salzberg converted his $300,000 accrued
compensation into 240,000 shares of common stock; Esther Kozienicki converted
$160,000 outstanding notes into 128,000 shares of common stock; Malka Livne
converted $120,000 outstanding notes into 96,000 shares of common stock; Dafna
Breines converted $26,250 outstanding notes into 21,000 shares of common stock.

On May 29, 1998, the law firm in the transaction with MSI converted
$172,000 legal fees into 140,000 shares of common stock.

In September 1998, the Company issued options to purchase 100,000 shares
of Common Stock at an exercise price of $1.00 per share to Stonepine Holdings,
Limited. In September 1998, the Company also issued 201,123 shares of Common
Stock to eight persons in exchange for certain rights these persons had in the
Company. In April 1996, the Company conducted a private offering of units,
consisting of an aggregate of 170,000 shares of convertible Preferred Stock and
stock purchase warrants to purchase 85,000 shares of the Company's Common Stock,

II-2
<PAGE> 46

in which the Company received a total of approximately $350,000 from these eight
investors. However, the Company recently determined that a filing with respect
to the Preferred Stock had not been made under Delaware law at the time of that
offering. In lieu of taking corrective action regarding the lack of a filing, in
September 1998 the Company offered these persons the opportunity to exchange
their rights in the Company for shares of Common Stock at a conversion price of
$1.00 per share, including dividends accrued but not paid on the Preferred
Stock. The stock purchase warrants previously issued by the Company to these
persons were not affected and remain outstanding and exercisable at $.75 per
share. As a condition of issuing the shares of Common Stock, the Preferred Stock
was cancelled and the Company received releases from the eight investors with
respect to the April 1996 transactions. None of the eight persons had previously
been a stockholder in the Company and all are non-affiliates of the Company. See
"Selling Stockholders".

Each of the foregoing transactions was exempt from the registration
provisions of the Securities Act of 1933, as amended (the "Securities Act"),
pursuant to section 4(2) thereof for issuance of securities not involving any
public offering. See also "Selling Stockholders".

ITEM 27. EXHIBITS.

<TABLE>
<CAPTION>
Exhibit No.
- -----------
<S> <C>
3.1 Certificate of Incorporation. Incorporated by reference to exhibit 2.1
to Company's Registration Statement on Form S-18, filed on August 14,
1980.

3.2 Certificate of Amendment to the Certificate of Incorporation filed
August 30, 1985. Incorporated by reference to exhibit 3.3 to Company's
Form 10-K for fiscal year ending March 31, 1988.

3.3 Certificate of Amendment to the Certificate of Incorporation filed March
31, 1986. Incorporated by reference to exhibit 10.4 to Company's Form
10-K for fiscal year ending March 31, 1986.

3.4 Certificate of Amendment to the Certificate of Incorporation filed
October 14, 1992. Incorporated by reference to exhibit 3.4 to Company's
Form 10-KSB for fiscal year ending March 31, 1993.

3.5 Certificate of Amendment to the Certificate of Incorporation filed April
16, 1996. Previously filed with Company's Registration Statement on Form
SB-2, File No. 65249, filed on October 2, 1998.

3.6 Bylaws. Incorporated by reference to exhibit 2.2 to Company's
Registration Statement on Form S-18, filed on August 14, 1980.

3.7 Amendment to Bylaws dated March 19, 1992. Incorporated by reference to
exhibit 3.6 to Company's Form 10-KSB for fiscal year ending March 31,
1993.
</TABLE>

II-3
<PAGE> 47

<TABLE>
<S> <C>
3.8 Amendment to Bylaws dated March 30, 1992. Incorporated by reference to
exhibit 3.7 to Company's Form 10-KSB for fiscal year ending March 31,
1993.

3.9 Amendment to Bylaws dated July 15, 1992. Incorporated by reference to
exhibit 3.8 to Company's Form 10-KSB for fiscal year ending March 31,
1993.

3.10 Amendment to Bylaws dated December 30, 1992. Incorporated by reference
to exhibit 3.9 to Company's Form 10-KSB for fiscal year ending March 31,
1993.

4 Specimen Common Stock Certificate. Incorporated by reference to exhibit
3.0 to Company's Registration Statement on Form S-18, filed on August
14, 1980 (by amendment).

5.1 Opinion of Richman, Lawrence, Mann, Chizever & Phillips.*

10.1 License agreement dated as of January 1, 1992 between the Company and
Gunter Schweisfurth concerning Therapy Plus. Incorporated by reference
to exhibit 10.1 to Company's Form 10-KSB for fiscal year ending March
31, 1993.

10.8 1992 Stock Option Plan. Incorporated by reference to exhibit 10.8 to
Company's Form 10-KSB for fiscal year ending March 31, 1993.

10.9 Stock Option Agreement with Gerald A. Bagg. Incorporated by reference to
exhibit 10.9 to Company's Form 10-KSB for fiscal year ending March 31,
1993.

10.16 Settlement Agreement and Release of All Claims dated December 29, 1997
between the Company and Jacob M.M. Graff. Incorporated by reference to
exhibit 10.16 to Company's Form 10-KSB for fiscal year ending March 31,
1998.

10.17 Settlement Agreement and Release of All Claims dated January 29, 1998
between the Company and Belin Rawlings and Badal LLP. Incorporated by
reference to exhibit 10.17 to Company's Form 10-KSB for fiscal year
ending March 31, 1998.

10.18 Settlement Agreement and Release of All Claims dated February 5, 1998
between the Company and Barnes Morris Wolf P.C., Incorporated by
reference to exhibit 10.18 to Company's Form 10-KSB for fiscal year
ending March 31, 1998.

11 Statement regarding computation of per share earnings. Set forth on
Consolidated Statements of Operations, above, as the Company has a
simple capital structure.

21 Subsidiaries of Registrant. Incorporated by reference to exhibit 21 to
Company's Form 10-KSB for the fiscal year ended March 31, 1998.

23.1 Consent of Richman, Lawrence, Mann, Chizever & Phillips (included in
Exhibit 5.1).
</TABLE>

II-4
<PAGE> 48

<TABLE>
<S> <C>
23.2 Consent of Stonefield Josephson, Inc., Independent Public Accountants.
Previously filed with Company's Registration Statement on Form SB-2,
File No. 65249, filed on October 2, 1998.

24 Powers of Attorney (included on the signature page in Part II of this
Registration Statement) Previously filed with Company's Registration
Statement on Form SB-2, File No. 65249, filed on October 2, 1998.
</TABLE>

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

* filed herewith

ITEM 28. UNDERTAKINGS.

The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement;

(i) To include any Prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended (the
"Securities Act");

(ii) To reflect in the Prospectus any facts or events
which, individually or together, represent a fundamental change
in the information set forth in the Registration Statement;
however, notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) of the
Securities Act if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;

(iii) To include any additional or changed material
information on the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement.

provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
section 13 or 15(d) of the Exchange Act that are incorporated by reference in
this registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment shall be deemed to be a
new Registration Statement

II-5
<PAGE> 49

relating to the securities offered therein, and the offering of such
securities at the time shall be deemed to be the initial bona fide
offering thereof.

(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.

The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the Registrant's Certificate of Incorporation, By-Laws or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection which the Securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

II-6
<PAGE> 50

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and has duly caused this Amendment
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Santa Fe Springs, State of California,
on October 20, 1998.

NUMEX CORPORATION

By /s/ Jack I. Salzberg
----------------------------------
Jack I. Salzberg
Chairman of the Board and
President

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Jack I. Salzberg his attorney-in-fact with power
of substitution for him in any and all capacities, to sign any amendments,
supplements, subsequent registration statements relating to the offering to
which this Amendment to the Registration Statement relates, or other
instructions he deems necessary or appropriate, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact or his substitute may do or cause to be done by virtue
hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed by the following persons
in the capacities and on October 20, 1998.

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Jack I. Salzberg Chairman of the Board,
---------------------- President
Jack I. Salzberg and Director

*/s/ Gerald A. Bagg Director
-----------------------
Gerald A. Bagg

*/s/ J. Robert Fabregas Director
-----------------------
J. Robert Fabregas

</TABLE>

II-7
<PAGE> 51

<TABLE>
<S> <C>
*/s/ Isaac S. Salzberg Director
----------------------
Isaac S. Salzberg

*By */s/ Jack I. Salzberg Attorney-in-Fact
---------------------
Jack I. Salzberg
</TABLE>

II-8
<PAGE> 52

INDEX TO EXHIBITS

3.2 Certificate of Amendment to the Certificate of Incorporation filed
August 30, 1985. Incorporated by reference to exhibit 3.3 to Company's
Form 10-K for fiscal year ending March 31, 1988.

3.3 Certificate of Amendment to the Certificate of Incorporation filed March
31, 1986. Incorporated by reference to exhibit 10.4 to Company's Form
10-K for fiscal year ending March 31, 1986.

3.4 Certificate of Amendment to the Certificate of Incorporation filed
October 14, 1992. Incorporated by reference to exhibit 3.4 to Company's
Form 10-KSB for fiscal year ending March 31, 1993.

3.5 Certificate of Amendment to the Certificate of Incorporation filed April
16, 1996. Previously filed with Company's Registration Statement on Form
SB-2, File No. 65249, filed on October 2, 1998.

3.6 Bylaws. Incorporated by reference to exhibit 2.2 to Company's
Registration Statement on Form S-18, filed on August 14, 1980.

3.7 Amendment to Bylaws dated March 19, 1992. Incorporated by reference to
exhibit 3.6 to Company's Form 10-KSB for fiscal year ending March 31,
1993.

3.8 Amendment to Bylaws dated March 30, 1992. Incorporated by reference to
exhibit 3.7 to Company's Form 10-KSB for fiscal year ending March 31,
1993.

3.9 Amendment to Bylaws dated July 15, 1992. Incorporated by reference to
exhibit 3.8 to Company's Form 10-KSB for fiscal year ending March 31,
1993.

3.10 Amendment to Bylaws dated December 30, 1992. Incorporated by reference
to exhibit 3.9 to Company's Form 10-KSB for fiscal year ending March 31,
1993.

4 Specimen Common Stock Certificate. Incorporated by reference to exhibit
3.0 to Company's Registration Statement on Form S-18, filed on August
14, 1980 (by amendment).

5.1 Opinion of Richman, Lawrence, Mann, Chizever & Phillips.*

10.1 License agreement dated as of January 1, 1992 between the Company and
Gunter
</TABLE>

<PAGE> 53

<TABLE>
<S> <C>
Schweisfurth concerning Therapy Plus. Incorporated by reference to
exhibit 10.1 to Company's Form 10-KSB for fiscal year ending March 31,
1993.

10.8 1992 Stock Option Plan. Incorporated by reference to exhibit 10.8 to
Company's Form 10-KSB for fiscal year ending March 31, 1993.

10.9 Stock Option Agreement with Gerald A. Bagg. Incorporated by reference to
exhibit 10.9 to Company's Form 10-KSB for fiscal year ending March 31,
1993.

11 Statement regarding computation of per share earnings. Set forth on
Consolidated Statements of Operations, above, as the Company has a
simple capital structure.

21 Subsidiaries of Registrant. Incorporated by reference to exhibit 21 to
Company's Form 10-KSB for the fiscal year ended March 31, 1998.

23.1 Consent of Richman, Lawrence, Mann, Chizever & Phillips (included in
Exhibit 5.1). Incorporated by reference to Company's Form SB-2 filed on
October 2, 1998.

23.2 Consent of Stonefield Josephson, Inc., Independent Public Accountants.
Previously filed with Company's Registration Statement on Form SB-2,
File No. 65249, filed on October 2, 1998.

24 Powers of Attorney (included on the signature page in Part II of this
Registration Statement). Previously filed with Company's Registration
Statement on Form SB-2, File No. 65249, filed on October 2, 1998.
</TABLE>

- ----------

* filed herewith

<PAGE> 1

EXHIBIT 5.1

October 2, 1998

Numex Corporation
14115 South Pontlavoy Avenue
Santa Fe Springs, California 90670

Re: Registration Statement on Form SB-2

Gentlemen:

We have acted as securities counsel to Numex Corporation, a Delaware
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Securities Act'), of a Registration Statement on Form SB-2 (the
"Registration Statement"). The Registration Statement relates to the public
offering by certain selling stockholders named therein (the "Selling
Stockholders") of up to 5,210,506 shares of Common Stock of the Company (the
"Shares").

The Shares are to be sold by the Selling Stockholders. This opinion is
being furnished in accordance with the requirements of Item 601(b)(5) of
Regulation S-B under the Securities Act.

In connection with this opinion, we have examined and are familiar with
originals or copies, certified or otherwise identified to our satisfaction, of
such documents, corporate records and other instruments as we have deemed
necessary or appropriate as a basis for the opinions set forth herein, including
(i) the Registration Statement of the Company filed with the Securities and
Exchange Commission; (ii) the Certificate of Incorporation and the Bylaws of the
Company; (iii) the form of Common Stock Certificate; (v) copies of certain
resolutions adopted by the Board of Directors of the Company relating to the
filing of the Registration Statement and any amendments of supplements thereto
and related matters; and (vi) such other documents as we have deemed necessary
or appropriate as a basis for the opinions set forth below.

In our examination, we have assumed the genuineness of all signatures,
the legal capacity of all natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. In making our
examination of documents executed by parties other than the Company, we have
assumed that such parties had the power, corporate or other, to enter into and
perform all obligations thereunder and have also assumed the due authorization
by all requisite action, corporate or other, and execution and delivery by such
parties of such documents and the validity and binding effect thereof. As to any
facts material to the opinions expressed herein which were not independently
established or verified, we have relied upon oral or written statements and
representations of officers and other representatives of the Company and others.

Members of our firm are admitted to the bar in the State of California,
and we do not

<PAGE> 2

Numex Corporation
October 2, 1998
Page 2

express any opinion as to the laws of any other jurisdiction, other than the
corporate laws of the State of Delaware and the laws of the United States of
America to the extent referred to specifically herein.

Based on the foregoing, it is our opinion that, subject to effectiveness
with the Securities and Exchange Commission of the Registration Statement and to
registration or qualification under the securities laws of the states in which
securities may be sold, the Shares are duly and validly authorized and
constitute legally issued, fully paid and nonassessable shares of Common Stock
of the Company.

We consent to the use of our name under the caption "Legal Matters" in
the Registration Statement, and to the filing of this opinion as an exhibit to
the Registration Statement. By giving you this opinion and consent, we do not
admit that we are experts with respect to any part of the Registration Statement
within the meaning of the term "expert" as used in Section 11 of the Securities
Act or the rules and regulations promulgated thereunder, nor do we admit that we
are in the category of persons whose consent is required under Section 7 of the
Securities Act.

Very truly yours,

/s/ RICHMAN, LAWRENCE, MANN, CHIZEVER & PHILLIPS
------------------------------------------------
RICHMAN, LAWRENCE, MANN, CHIZEVER & PHILLIPS