NUMEX CORP, SB-2, 1999-10-19

NUMEX CORP
SB-2, 1999-10-19
BUSINESS SERVICES, NEC

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 18, 1999
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
NUMEX CORPORATION

(Exact Name of Registrant as Specified in its Charter)

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<S> <C> <C>
DELAWARE 7379 06-1034587
(State or Other Jurisdiction (Primary Standard (I.R.S. Employer
of Industrial Identification
Incorporation or Organization) Classification Code Number)
Number)
</TABLE>

11111 SANTA MONICA BOULEVARD
SUITE 210
LOS ANGELES, CALIFORNIA 90025
(310) 914-3007

(Address and Telephone Number of Principal Executive Offices)

JEFFREY A. STERN
11111 SANTA MONICA BOULEVARD
SUITE 210
LOS ANGELES, CALIFORNIA 90025
(310) 914-3007

(Name, Address, and Telephone Number of Agent For Service of Process)
--------------------------

Copies of all communications to:

DAVID L. FICKSMAN, ESQ.
CORINNA M. WONG, ESQ.
LOEB & LOEB LLP
1000 WILSHIRE BOULEVARD, SUITE 1800
LOS ANGELES, CALIFORNIA 90017
TELEPHONE: (213) 688-3400
FACSIMILE: (213) 688-3460
--------------------------

APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after
the Registration Statement becomes effective.
--------------------------

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) 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(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 effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
--------------------------

CALCULATION OF REGISTRATION FEE

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<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLES OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, par value $.10 per share........... 5,146,290 Shares $1.25 $6,432,863 $1,788.34
</TABLE>

(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457 under the Securities Act of 1933, as amended ("Securities Act")
using the last reported sale price reported on the OTC Electronic Bulletin
Board for the Registrant's Common Stock on October 18, 1999.
--------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY OUR 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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION ("COMMISSION"),
ACTING PURSUANT TO SAID SECTION 8(

a), MAY DETERMINE.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED OCTOBER 18, 1999

5,146,290 SHARES

NUMEX CORPORATION

COMMON STOCK
-------------------------------------------------------------------------

THE COMPANY:

- We operate an e-commerce shopping community that provides users with
information and interactive content centered around the Spanish language
and culture.

- We are also a media and marketing services company that has focused on
niche and underdeveloped markets.

- Numex Corporation
11111 Santa Monica Boulevard, Suite 210
Los Angeles, California 90401-1207
Telephone: (310) 914-3007

TRADING MARKET:

- Our common stock is quoted on the OTC Electronic Bulletin Board under the
symbol "NUMX." The last reported sale price of our common stock reported
on the OTC Electronic Bulletin Board on October 18, 1999 was $1.25 per
share.

THE OFFERING:

- The common stock in this offering is being sold by certain of our
securityholders.

- We will not receive any proceeds from the sale of the common stock in this
offering.

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

THIS INVESTMENT INVOLVES RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 4.
- --------------------------------------------------------------------------------

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THE COMMON STOCK OR DETERMINED THAT THIS
PROSPECTUS IS COMPLETE OR ACCURATE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------

THE DATE OF THIS PROSPECTUS IS , 1999
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------------------------

TABLE OF CONTENTS
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PAGE
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<S> <C>
Prospectus Summary............................. 1
Risk Factors................................... 4
Forward-looking Statements..................... 9
Use of Proceeds................................ 9
Market Price for the Common Stock.............. 9
Dividend Policy................................ 9
Capitalization................................. 10
Management's Discussion and Analysis or Plan of
Operation.................................... 11
Business....................................... 16
Management..................................... 21

<CAPTION>
PAGE
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Security Ownership of Certain Beneficial Owners
and Management............................... 25
Certain Transactions........................... 25
Description of Securities...................... 26
Plan of Distribution........................... 28
Selling Securityholders........................ 29
Shares Eligible for Future Sale................ 30
Legal Matters.................................. 30
Experts........................................ 30
Additional Information......................... 30
Index to Financial Statements.................. F-1
</TABLE>

------------------------
<PAGE>
PROSPECTUS SUMMARY

THIS SUMMARY HIGHLIGHTS INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS.
THIS SUMMARY IS NOT COMPLETE AND DOES NOT CONTAIN ALL THE INFORMATION THAT YOU
SHOULD CONSIDER BEFORE INVESTING IN OUR SECURITIES. YOU SHOULD READ THIS ENTIRE
PROSPECTUS CAREFULLY, INCLUDING THE "RISK FACTORS" SECTION AND OUR CONSOLIDATED
FINANCIAL STATEMENTS AND RELATED NOTES. UNLESS THE CONTEXT REQUIRES OTHERWISE,
"WE," "US," "OUR" AND SIMILAR TERMS, AS WELL AS REFERENCES TO THE "COMPANY" AND
"NUMEX" REFER TO NUMEX CORPORATION AND OUR SUBSIDIARIES. ALL REFERENCES HEREIN
TO INDUSTRY, FINANCIAL AND STATISTICAL INFORMATION ARE BASED ON TRADE ARTICLES,
INDUSTRY REPORTS AND OTHER SOURCES THAT WE BELIEVE TO BE RELIABLE BUT THAT WE
HAVE NOT INDEPENDENTLY VERIFIED.

OUR COMPANY

We are currently a media and marketing services company that has focused on
niche and underdeveloped markets. Our Spanish language division, JSA en espanol,
has created proprietary integrated marketing programs to help marketers reach
the rapidly growing Hispanic market in the United States. Our custom publishing
division, JSA Communications, develops retention marketing programs for
companies. We are also developing a Spanish-language e-commerce shopping
community focused on the US Hispanic market, which is expected to be our
principal business focus.

INTERNETMERCADO

We are building an Internet shopping community, called InternetMercado.com,
located at www.InternetMercado.com. InternetMercado.com will be a
Spanish-language shopping community online, designed with a Latin flavor and
sensitive to the needs of Hispanic consumers residing in the United States. It
will capitalize on the growth in Internet usage among Hispanics, but it is based
on the enduring popularity of community-based marketing--swap meets, flea
markets, small stores, and mercados.

We expect that InternetMercado.com will have a unique opportunity to
capitalize on our media presence in the Hispanic market to leverage it into
building a viable brand in the e-commerce market.

THE INTERNETMERCADO.COM STRATEGY

While the Hispanic market is rapidly coming online, research suggests that
the market is still somewhat intimidated by computers and the Internet. One
important reason is that most web sites are in English. InternetMercado.com
intends to embrace this opportunity by helping Latinos use the Internet
effectively. InternetMercado.com's simple interface is created to ensure ease of
use. In addition, emphasis is placed on the Spanish language, thereby easing the
initiation process onto the Internet.

The marketing strategy for InternetMercado.com is to develop brand
recognition by educating and informing Latinos about the benefits of using the
Internet. Our strategy is to build brand recognition among Latino Internet
users. As Latinos enter the Internet age, we hope that they will recognize
InternetMercado.com as the brand name that empowered them to use the Web.

USE OF PROCEEDS

We will not receive any proceeds from the sale of the common stock offered
in this prospectus. See "Use of Proceeds."

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RISK FACTORS

An investment in our securities involves a high degree of risk. You should
carefully consider all the information in this prospectus. In particular, you
should evaluate the specific risk factors set forth under "Risk Factors,"
beginning on page , for a discussion of certain risks involved with an
investment in our securities.

CORPORATE INFORMATION

We were incorporated as Numex Corporation in Delaware, on August 1, 1980.
Our corporate offices are located at 11111 Santa Monica Boulevard, Suite 210,
Los Angeles, California 90025. Our telephone number at that location is
(310) 914-3007.

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SUMMARY FINANCIAL INFORMATION

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<CAPTION>
YEARS ENDED THREE MONTHS ENDED
MARCH 31, JUNE 30,
---------------------- -------------------------
1998 1999 1998 1999
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(UNAUDITED) (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues..................................................... $ 5,546 $ 5,587 $ 1,142 $ 1,482
Gross profit................................................. 1,688 2,265 467 362
Loss from operations......................................... (231) (19) (83) (1,072)
Net loss..................................................... (508) (440) (172) (2,768)
Net loss per common share:
Net loss..................................................... $ (0.20) $ (0.17) $ (0.07) $ (0.19)
Weighted average common shares outstanding................... 2,538,000 2,538,000 2,538,000 14,267,052
</TABLE>

<TABLE>
<CAPTION>
MARCH 31, 1999 JUNE 30, 1999
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(UNAUDITED)
<S> <C> <C>
BALANCE SHEET DATA (IN THOUSANDS):
Working capital/(deficit).......................................................... $ (2,957) $ 122
Fixed assets, net.................................................................. 91 117
Total assets....................................................................... 744 1,992
Total liabilities.................................................................. 4,589 2,421
Stockholders' equity/(deficit)..................................................... (4,047) (430)
</TABLE>

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RISK FACTORS

Before you invest in our securities, you should be aware that there are
various risks, including the ones listed below. You should carefully consider
these risk factors, as well as the other information contained in this
prospectus, in evaluating an investment in our securities.

UNCERTAINTY AS TO ABILITY TO CONTINUE AS A GOING CONCERN.

Our independent certified public accountants have included an explanatory
paragraph in their report stating that our financial statements have been
prepared assuming that we will continue as a going concern and that our
recurring losses, working capital deficiency and shareholders' deficiency raise
substantial doubt as to our ability to continue as a going concern.

OUR OPERATING HISTORY IS EXTREMELY LIMITED; WE EXPECT FUTURE LOSSES AND WILL
NEED MORE CAPITAL.

We have focused on e-commerce, particularly as it pertains to marketing to
the Hispanic community only since April 1999 and have generated no revenue from
our InternetMercado.com Web site. Accordingly, e-commerce represents a new
business for us and we have no operating history upon which an investor can
evaluate us, and our prospects are subject to the risks and uncertainties
encountered by companies that operate in the new and rapidly evolving Internet
market.

As of June 30, 1999, we had an accumulated deficit of approximately
$6.816 million. Our limited operating history in and the uncertainty of the
Internet market in which we operate our business make any prediction of our
future results of operations difficult or impossible. We expect to increase
considerably our operating expenses in the future, particularly advertising
expenses to develop and extend our InternetMercado.com brand and expenses
relating to content and features that we intend to develop, purchase or
otherwise acquire and add to our Web site. We do not expect that our revenue
will cover those expenses. As a result, we will continue to incur significant
losses and will be required to raise additional capital. We cannot assure you
that we will be able to raise additional capital and we do not know what the
terms of such capital raising would be. Any future sale of our equity securities
would dilute the ownership and control of our stockholders if, to the extent we
are unable to raise capital, our ability to implement our business plan will be
adversely affected.

WE WILL BE UNABLE TO GENERATE SUFFICIENT REVENUE IF OUR TARGET AUDIENCE DOES NOT
ACCEPT OUR PRODUCTS AND SERVICES.

We have only recently begun to promote our site and we cannot give
assurances that the Spanish-speaking population will accept our products and
services or that we will attract repeat users to our Web site. Because the
market for our products and services is new and evolving, it is difficult to
predict the future growth rate, if any, and the size of the market we have
targeted. If the market develops more slowly than we expect or becomes saturated
with competitors, or if our products and services are not accepted by the
market, we will be unable to generate enough revenue to offset our expenses and
to earn profits.

OUR INABILITY TO DEVELOP THE INTERNETMERCADO.COM BRAND WILL SIGNIFICANTLY REDUCE
OUR REVENUE.

We expect to considerably increase our operating expenses to create and
sustain a distinct brand loyalty among our targeted population of Internet
users. We believe that establishing and maintaining the InternetMercado.com
brand is of critical importance to our efforts to attract and expand our
audience. We also believe that brand recognition will become more important due
to the increasing number of Internet sites. Promotion and enhancement of the
InternetMercado.com brand will depend largely on our success in providing high
quality products and services and Web site content that is of interest to the
Spanish-speaking population. We cannot assure that success. Even if our desired
results are achieved, it is likely that we will expend significant additional
amounts in further developing and

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maintaining brand loyalty. Failure to develop brand loyalty among our users
could result in our being unable to generate enough revenue to offset our
expenses and to earn profits.

IF WEB-BASED ADVERTISING IS NOT ACCEPTED BY ADVERTISERS OUR ADVERTISING REVENUE
MAY NOT BE SUFFICIENT TO OFFSET OUR EXPENSES.

We will need revenue from the sale of advertisements on our Web pages to
offset expenses. At the present time, Web advertisers generally enter into only
short-term advertising contracts. Because Web site advertising is a new
phenomenon, few advertisers have significant experience with the Web as an
advertising medium. Consequently, many advertisers have not devoted a
substantial portion of their advertising expenditures to Web-based advertising,
and may not find Web-based advertising to be effective for promoting their
products and services as compared to traditional print and broadcast media.

Although tools not available in traditional advertising media have been
developed to measure feedback on advertising campaigns, no standards have yet
been widely accepted for the measurement of the effectiveness of Web-based
advertising, and we can give no assurance that such standards will be developed
or adopted sufficiently to sustain Web-based advertising as a significant
advertising medium. We cannot give assurances that banner advertising, the
predominant revenue producing mode of advertising currently used on the Web,
will be accepted as an effective advertising medium or that we can effectively
transition to any other forms of Web-based advertising, should they develop.
Recently, software programs became available that limit or remove advertisements
from an Internet user's desktop. This software, if generally adopted by users,
may materially and adversely affect Web-based advertising.

OUR WEB SITE OPERATIONS COULD BE IMPAIRED IF WE LOSE THE SERVICES OF THIRD PARTY
TECHNOLOGY AND CONTENT PROVIDERS.

Our business will depend upon third parties, including providers of
technology, infrastructure, content and features.

We will depend upon third parties for ongoing maintenance and technical
support of our Web site. We will also rely upon third parties for our Internet
and e-mail connections. Any interruption in the Internet access provided by any
provider of access could disrupt our Web site operations and impair relations
with our users.

We license content, including technology and related databases, from third
parties for portions of our InternetMercado.com Web site. Any errors, delays or
failures experienced in connection with these third party technologies and
services could have a negative effect on our relationship with users of our Web
site, could materially and adversely affect our brand and our business and could
subject us to liability to third parties for business negligence such as
defamation or libel.

SYSTEM FAILURE COULD DISRUPT OUR WEB SITE OPERATIONS.

The continued and uninterrupted performance of our hardware and software is
critical to our reputation and our success in attracting traffic to our Web
site. Users of our site and our services, such as our e-mail services, may
become dissatisfied by system failures that may limit our Web site services.
Sustained or repeated system failures could significantly reduce the traffic on
our Web site and may impair our reputation and brand name. Our operations depend
on our ability to protect our computer systems from damage from fire, power
loss, water damage, telecommunications failures, vandalism and other malicious
acts, and similar unexpected adverse events. We may not carry enough business
interruption insurance to compensate for losses that may occur as a result of
any of these events. We also depend upon Internet browsers and Internet service
providers that provide users with access to the Internet and our Web site. Users
may experience difficulties due to system failures unrelated to our

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systems. Any disruption in Internet access by Internet service providers and
other third party access providers, or any failure of such providers to handle
higher volumes of user traffic, could disrupt our Web site operations and impair
relations with our users.

OUR MANAGEMENT IS INEXPERIENCED IN THE E-COMMERCE BUSINESS AND MAY NOT BE ABLE
TO MANAGE OUR GROWTH.

E-commerce is a new focus for our management team and none of our executive
officers has extensive experience managing a rapidly growing Internet business.
Any growth we experience will place a significant strain on our management and
financial resources. Any inability of our management to manage growth
effectively could significantly increase our operating expenses, impair our
marketing efforts and limit the development of our Web site.

GROWTH OF OUR WEB SITE MAY BE LIMITED BY GOVERNMENTAL REGULATIONS.

Laws and regulations may be adopted with respect to the Internet covering
issues ranging from user privacy and defamation to taxation and intellectual
property ownership. Any laws or regulations adopted in the future affecting the
Internet could subject us to substantial liability. Such laws or regulations
could also adversely affect the growth of the Internet generally, and decrease
the acceptance of the Internet as a communications and commercial medium. In
addition, the growing use of the Internet has burdened the existing
telecommunications infrastructure. Areas with high Internet use relative to the
existing telecommunications structure have experienced interruptions in phone
service leading local telephone carriers to petition regulators to govern
Internet service providers and impose access fees on them. Such regulations, if
adopted in the United States or other places, could increase significantly the
costs of communicating over the Internet, which could in turn decrease the
demand for our products and services. The adoption of various proposals to
impose additional taxes on the sale of goods and services through the Internet
could also reduce the demand for Web-based commerce.

WE MAY FACE LIABILITY FOR INFORMATION CONTENT AND COMMERCE-RELATED ACTIVITIES.

Because materials may be downloaded by the services that we operate or
facilitate and the materials may subsequently be distributed to others, we could
face claims for errors, defamation, negligence, or copyright or trademark
infringement based on the nature and content of such materials. We could also be
exposed to liability because of the listings that we select and make available
through our Web site, or through content and materials posted by users in chat
room and message board services that we provide. Even to the extent that claims
made against us do not result in liability, we may incur substantial costs in
investigating and defending such claims.

COMPETITION FOR INTERNET USERS MAY LIMIT TRAFFIC ON, AND THE VALUE OF, OUR WEB
SITE.

The market for Internet products and services and the market for Internet
advertising and electronic commerce arrangements are extremely competitive, and
we expect that competition will continue to intensify. We believe that the
principal competitive factors in these markets are name recognition,
distribution arrangements, functionality, performance, ease of use, the number
of services and features provided and the quality of support. Our primary
competitors are other companies providing portal or other online services,
especially to Spanish-language Internet users such as Yahoo!, America Online,
StarMedia Network, Prodigy, Microsoft, Lycos, Ole and Quepasa.com. Most of our
competitors, as well as a number of potential new competitors, have
significantly greater financial, technical and marketing resources than we do.
Our competitors may offer Internet products and services that are superior to
ours or that achieve greater market acceptance. There can be no assurance that
competition will not limit traffic on, and the value of, our Website.

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TECHNOLOGICAL CHANGES COULD IMPAIR OUR ABILITY TO COMPETE AND SUBJECT US TO
SIGNIFICANT EXPENDITURES.

The market for Internet products and services is characterized by rapid
technological developments, frequent new product introductions and evolving
industry standards. The emerging character of these products and services and
their rapid evolution will require that we continually improve the performance,
features and reliability of our Internet content, particularly in response to
competitive offerings. There can be no assurance that we will be successful in
responding quickly, cost effectively and sufficiently to these developments. In
addition, the widespread adoption of new Internet technologies or standards
could require substantial expenditures by us to modify or adapt our Web site and
services and could fundamentally affect the character, viability and frequency
of Web-based advertising, either of which could have a material adverse effect
on our business. In addition, new Internet services or enhancements offered by
us may contain design flaws or other defects that could require costly
modifications or result in a loss of consumer confidence.

FAILURE OF OUR COMPUTER SYSTEM OR THE SYSTEMS OF THIRD PARTIES TO ACHIEVE YEAR
2000 COMPLIANCE COULD ADVERSELY AFFECT OUR BUSINESS.

Many currently installed computer systems and software products are coded to
accept only two-digit entries to represent years in the date code field.
Computer systems and products that do not accept four-digit entries will need to
be upgraded or replaced to accept four-digit entries to distinguish years
beginning with 2000 from prior years. We are currently evaluating the Year 2000
issue as it relates to our entire internal computer system as well as computer
systems operated by third parties. We are incurring internal staff costs and may
incur consulting and other expenses related to making our computer systems Year
2000 compliant. We will expense these costs as incurred. In addition, computer
systems operated by third parties with which our systems interface may not
continue to properly interface with our systems or be compliant on a timely
basis with Year 2000 requirements. Any failure of our computer system or the
systems of third parties to achieve Year 2000 compliance could adversely affect
our business.

FUTURE SALES OF OUR COMMON STOCK OR SHARES ISSUABLE UPON EXERCISE OF STOCK
OPTIONS COULD ADVERSELY AFFECT OUR STOCK PRICE AND OUR ABILITY TO RAISE FUNDS
IN NEW STOCK OFFERINGS.

We currently have 18,018,507 shares of common stock outstanding (on a fully
diluted basis, including 2,400,040 shares of common stock issuable upon
conversion of the Series B Convertible Preferred Stock and 550,000 shares of
common stock issuable upon the exercise of currently exercisable stock options).
Approximately 14,999,080 shares, including 5,146,290 shares to be registered
hereunder, will have been registered under the Securities Act and/or otherwise
freely tradeable. Sale of substantial amounts of common stock, or the perception
that sales could occur, could reduce the market price of our common stock.

FORWARD-LOOKING STATEMENTS MAY BE UNRELIABLE.

This prospectus contains forward-looking statements regarding our intent,
belief or current expectations. Discussions in this prospectus under the
headings "Summary," "Risk Factors," "Management's Discussion and Analysis or
Plan of Operations" and "Our Business," as well as in other parts of this
prospectus include such forward-looking statements. These statements are subject
to a variety of risks and uncertainties, many of which are beyond our control,
which could cause our actual future results to differ materially from those
contemplated in the forward-looking statements. In particular, the risks and
uncertainties described under "Risk Factors" in this prospectus could cause our
actual future results to differ from what we contemplate. Investors are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date of this prospectus.

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ANTI-TAKEOVER EFFECTS OF CERTIFICATE OF INCORPORATION, BYLAWS AND DELAWARE LAW.

Certain provisions of our Certificate of Incorporation, as amended, Bylaws
and Delaware law could delay, defer or prevent a change in control of the
Company. The board of directors has the authority to issue shares of preferred
stock and to fix the rights, preferences, privileges and restrictions of those
shares, including voting rights, without any further vote or action by the
stockholders. The rights of the holders of the common stock will be subject to,
and may be adversely affected by, the rights of the holders of the preferred
stock that we may issued in the future. In addition, the Company is subject to
the anti-takeover provisions of Section 203 of the Delaware General Corporation
Law ("DGCL"), which will prohibit us from engaging in a "business combination"
with an "interested stockholder" for a period of three years after the date of
the transaction in which the person became an interested stockholder, unless the
business combination is approved in a prescribed manner under the DGCL. The
ability of the board of directors to issue shares of preferred stock without
further stockholder approval, as well as the aforementioned provision of
Delaware law, could have the effect of delaying, deferring or preventing a
change in control of the Company.

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FORWARD-LOOKING STATEMENTS

This prospectus contains statements that we believe are forward-looking
statements within the meaning of the federal securities laws. These include
statements about our expectations, beliefs, intentions or strategies for the
future, which we indicate by words or phrases such as "anticipate," "expect,"
"intend," "plan," "will," "we believe," "the company believes," "management
believes" and similar language. The forward-looking statements are based on our
current expectations and are subject to certain risks, uncertainties and
assumptions, including those set forth under "Risk Factors" and under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business." Our actual results may differ materially from
results anticipated in these forward-looking statements. We base our
forward-looking statements on information currently available to us, and we
assume no obligation to update them.

USE OF PROCEEDS

The common stock offered hereby is being issued by certain of our
securityholders. We will not receive any proceeds from the sale of the common
stock by our selling securityholders. We will receive the proceeds from the
exercise of the options held by certain of our selling securityholders, if any
of such options are exercised. We expect to use these proceeds, if any, for
working capital. See "Plan of Distribution."

MARKET PRICE FOR COMMON STOCK AND RELATED STOCKHOLDERS MATTERS

Our common stock is quoted on the OTC Electronic Bulletin Board under the
symbol "NUMX." The closing bid price on October 18, 1999 was $1.25. The
following table sets forth the high ask and low bid quotations on the OTC
Electronic Bulletin Board during the periods indicated.

<TABLE>
<CAPTION>
HIGH LOW
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<S> <C> <C>
FISCAL YEAR ENDED MARCH 31, 1998
First Quarter.................................................................................. $ .625 $ .375
Second Quarter................................................................................. .594 .312
Third Quarter.................................................................................. 1.531 .375
Fourth Quarter................................................................................. 3.875 1.062
FISCAL YEAR ENDED MARCH 31, 1999
First Quarter.................................................................................. 1.375 1.125
Second Quarter................................................................................. 1.000 .625
Third Quarter.................................................................................. .688 .375
Fourth Quarter................................................................................. 2.938 .400
FISCAL YEAR ENDING MARCH 31, 2000
First Quarter.................................................................................. 1.750 1.375
Second Quarter................................................................................. 1.313 1.125
Period from October 1, 1999 to October 18, 1999................................................ 1.313 1.031
</TABLE>

The above quotations represent prices between dealers and do not include
retail markup, markdown or commission, and do not represent actual transactions.

As of September 15, 1999 there were 15,068,458 shares of our common stock
outstanding and approximately 415 shareholders of record of our common stock.
This number does not reflect individual participants in security position
listings held in "street name" accounts which is approximately 1,000
shareholders.

DIVIDEND POLICY

We have not paid any cash or stock dividends on our common stock since our
incorporation and anticipate that, for the foreseeable future, any earnings will
be retained for use in our business.

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CAPITALIZATION

The following table sets forth the capitalization of Numex as of June 30,
1999, (i) on an actual basis, and (ii) as adjusted to reflect the sale of
5,146,290 shares of common stock offered by various existing securityholders of
Numex hereby and the related stock transactions; 2,400,040 shares of common
stock issuable upon conversion of the Series B Convertible Preferred Stock and
the 550,000 shares of common stock issuable upon the exercise of currently
exercisable stock options. The table should be read in conjunction with the
consolidated financial statements of Numex and the notes thereto and other
financial information included elsewhere in this prospectus.

<TABLE>
<CAPTION>
JUNE 30, 1999
-----------------------------
(ACTUAL) AS ADJUSTED
------------- --------------
<S> <C> <C>
Short term debt:................................................................... $ 178,903 $ 178,903
Long term debt:.................................................................... $ 939,594 939,594
Stockholder's equity:

Preferred stock, $1.00 par value, 10,000,000 shares authorized; 144,000 shares
issued and outstanding actual; no shares issued and outstanding as adjusted.... $ 144,000 $ --
Common stock, $.10 par value; 20,000,000 shares authorized; 15,145,967 shares
issued and 15,068,458 outstanding actual; 18,096,007 shares issued and
18,018,498 outstanding as adjusted............................................. 1,514,597 1,809,601
Treasury Stock, at cost, 77,509 shares........................................... (7,750) (7,750)
Additional paid-in capital....................................................... $ 4,735,493 $ 4,909,489
Accumulated deficit.............................................................. $ (6,815,922) $ (6,815,922)
------------- ------------
$ (429,582) $ (104,582)
------------- ------------
Total Capitalization............................................................... $ 688,915 $ 1,013,915
============= ============
</TABLE>

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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion should be read in conjunction with the Company's
consolidated financial statements and the notes thereto appearing elsewhere in
this prospectus. Certain statements contained herein that are not related to
historical results, including, without limitation, statements regarding the
Company's business strategy and objectives, future financial position,
expectations about pending litigation and estimated cost savings, are
forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Securities Exchange Act") and involve risks and uncertainties. Although the
Company believes that the assumptions on which these forward-looking statements
are based are reasonable, there can be no assurance that such assumptions will
prove to be accurate and actual results could differ materially from those
discussed in the forward looking statements. Factors that could cause or
contribute to such differences include, but are not limited to, regulatory
policies, competition from other similar businesses, and market and general
economic factors. All forward-looking statements contained in this prospectus
are qualified in their entirety by this statement.

OVERVIEW

On April 12, 1999, the Company acquired all of the outstanding capital stock
of Jeffrey A. Stern & Associates, Inc. ("JSA") in exchange for 3,046,875 shares
of common stock in of the Company (the "JSA Acquisition"). For accounting
purposes, the JSA Acquisition was treated as a recapitalization of JSA with JSA
as the acquirer (reverse acquisition). However, since the JSA Acquisition was
completed after the end of the Company's fiscal year, the discussion below
provides information with respect to the separate results of operations of each
of the Company (pre-JSA Acquisition) and JSA.

Following the JSA Acquisition, the Company plans to leverage its expertise
and proprietary media vehicles in the Hispanic market by developing an
electronic shopping mall for Hispanics. The Company will call the new venture
"InternetMercado.com", which will be a bilingual e-commerce web site
specializing in retail and service merchandising to the US Hispanic market. The
site leverages the Company's expertise in Hispanic marketing, entertainment
programming and direct response media to draw and retain loyal customers to a
unique and culturally relevant mix of retailers, products, services and
education elements. As indicated, the Company's ability to achieve its business
plan with respect to InternetMercado.com depends to a substantial extent on its
ability to obtain financing.

RESULTS OF OPERATIONS

JSA--12 MONTHS ENDED MARCH 31, 1999 COMPARED TO 12 MONTHS ENDED MARCH 31,
1998

JSA generated revenues of $5,587,291 for the 1999 fiscal year, which was a
$41,000 increase from $5,546,315 for the 1998 fiscal year. During the 1999
fiscal year, JSA introduced new programs with better margins to replace less
profitable programs. JSA also improved on the management of its production and
distribution costs. Consequently, gross profit increased by $576,211 or 34%
between the fiscal years of 1998 and 1999 although revenues remained relatively
constant.

Operating expenses increased by $336,623 or 19% from $1,919,179 in the 1998
fiscal year to $2,283,881 in the 1999 fiscal year. The change was primarily due
to the write-off of prepaid selling commissions of approximately $105,000 and
expenses incurred in the promotion and development of new programs.

Interest expense of $336,623 for the 1999 fiscal year was up from $328,674
for the 1998 fiscal year. JSA paid only interest on the outstanding bank
line-of-credit during both years.

Primarily as a result of the foregoing, JSA reported a net loss of
approximately $440,000 in 1999 versus a net loss of approximately $508,000 in
1998. The Company's independent certified public accountants have included an
explanatory paragraph in their report stating that the Company's financial

11
<PAGE>
statements have been prepared assuming that the Company will continue as a going
concern and that the Company's recurring losses, working capital deficiency and
shareholders' deficiency raise substantial doubt as to the Company's ability to
continue as a going concern.

NUMEX--12 MONTHS ENDED MARCH 31, 1999 COMPARED TO 12 MONTHS ENDED MARCH 31,
1998

Net sales for the fiscal year 1999 of $15,970, were 91% lower than fiscal
1998 of $176,513. The decrease is due to the Company ceasing the production and
sale of its "Therapy Plus" product during fiscal 1998.

Cost of sales decreased $72,347 or 87% between the fiscal years of 1998 and
1999, which can be attributed to the Company ceasing its manufacturing
operations in fiscal 1998.

Selling, general and administrative expenses decreased from approximately
$653,000 in 1998 to $454,000 in 1999 or 30%, which is due to approximately
$200,000 of professional and legal fees incurred in relation to finding an
acquisition target and $139,000 incurred for compensation expense.

Interest expense decreased from $129,000 in fiscal 1998 to $11,000 in fiscal
1999 due to conversions of notes payable, which were outstanding during fiscal
1998, into common stock during fiscal 1999.

Primarily as a result of the foregoing, Numex reported a net loss of
approximately $445,000 in 1999 versus a net loss of approximately $634,000 in
1998. The Company's independent certified public accountants have included an
explanatory paragraph in their report stating that the Company's financial
statements have been prepared assuming that the Company will continue as a going
concern and that the Company's recurring losses, working capital deficiency and
shareholders' deficiency raise substantial doubt as to the Company's ability to
continue as a going concern.

THREE MONTHS ENDED JUNE 30, 1999 COMPARED TO THREE MONTHS ENDED JUNE 30,
1998

Revenues for the three months ended June 30, 1999 increased by approximately
30% to $1,482,000 from $1,142,000 for the same period last year. This growth was
attributed to revenues generated from new advertising and media programs that
were introduced during the last fiscal year.

Cost of revenues for the three months ended June 30, 1999 was $1,120,000
compared to $676,000 for the three months ended June 30, 1998. As a percentage
of revenues, this cost accounted for 76% and 59% of revenues, respectively. The
higher percentage in 1999 is attributed to the lower margin from the recently
introduced advertising and media programs, which are still in their promotional
stages. The higher cost of revenues for the three months ended June 30, 1999
resulted in a decrease in gross profits to $362,000 compared to $467,000 for the
same period last year.

Operating expenses increased $884,000 to $1,434,000 for the three months
ended June 30, 1999 from $550,000 for the same period last year. This increase
was primarily due to employee compensation in the form of shares of common stock
of JSA issued to certain employees of JSA in connection with the JSA
Acquisition; increase in salary expenses; and finder's, legal and audit fees
incurred in respect of the JSA Acquisition. The JSA shares of common stock
issued to employees of JSA were subsequently exchanged for shares of common
stock of the Company. The aggregate value of the shares was approximately
$139,000 on the day the JSA shares were granted to the employees. Salary
expenses increased $172,000 between the two periods. The increase was attributed
mainly to employment agreements entered with Mr. Jack Salzberg as Non-executive
Chairman of the Company and Mr. Jeffrey Stern as President and CEO of the
Company, and also an increase in the number of sales personnel and the
employment of senior managers for the Company's e-commerce business. Finder's,
legal and audit fees incurred for the reverse merger were approximately
$564,000.

12
<PAGE>
Interest expense decreased by approximately $50,000 to $22,000 for the three
months ended June 30, 1999 from $72,000 for the same period last year. The
decrease was a result of the reduction in bank borrowing and the note held by
one of the Company's vendors.

Net loss for the three months ended June 30, 1999 was $1,039,000 compared to
$172,000 for the same period last year. The increase in net loss of $867,000 was
mainly due to the decrease in gross profit and higher operating expenses. The
decrease in gross profit was due to lower margin from recently introduced
advertising and media programs, which are still in their promotional stage. The
increase in operating expenses was attributed mainly to an increase in salary
expenses, and expenses related to the JSA Acquisition discussed above.

The Company recorded a deemed dividend on its preferred stock of $1,728,107
during the three months ended June 30, 1999 in connection with the private
placement discussed below. This amount represents the difference between the
issue price of the shares of preferred stock and the estimated market value of
the shares of common stock issuable upon conversion of the shares of preferred
stock, assuming that the shares of preferred stock were converted into shares of
common stock on the date of the private placement.

FINANCIAL CONDITION, LIQUIDITY, CAPITAL RESOURCES

JSA--12 MONTHS ENDED MARCH 31, 1999 COMPARED TO 12 MONTHS ENDED MARCH 31,
1998

Net cash received in the operations of JSA during fiscal year 1999 was
$146,293, which was a $674,438 increase from fiscal 1998. The increase is due to
better cash flow management by JSA executives. JSA used the cash received from
operating activities to fund investing activities of $21,946 and financing
activities of $39,261 for the fiscal year 1999.

Net cash used in operations of the Company (Numex) during fiscal year 1999
was $338,903, which is a $223,147 or 40% decrease from fiscal 1998. The Company
funded these operational cash flow deficits with proceeds from stock options
exercised and notes payable proceeds, which resulted in net cash from financing
activities of approximately $416,763 and $578,000 during fiscal 1999 and 1998.

NUMEX--12 MONTHS ENDED MARCH 31, 1999 COMPARED TO 12 MONTHS ENDED MARCH 31,
1998

During the year, the Company issued 140,000 shares of the Company's treasury
stock, valued at $1.23 per share, as payment for consulting services. The
Company issued 240,000 shares of its treasury stock, at $1.25 per share to
convert an accrued compensation bonus of $300,000 payable to Jack Salzberg, the
Company's then Chief Executive Officer. The Company also incurred additional
debt from related parties to meet operating expenses. These new debts and all
other outstanding notes payable totaling $506,700 were converted into shares of
common stock during the year (see Note 12 of the Notes to Consolidated Financial
Statements).

During the year the Company also issued 31,123 preferred shares as stock
dividends to its Preferred Stock shareholders, increasing the outstanding shares
of Preferred Stock from 170,000 to 201,123 shares. All outstanding Preferred
Shares were converted into shares of the Company's common stock, at $1.00 per
share.

THREE MONTHS ENDED JUNE 30, 1999 COMPARED TO THREE MONTHS ENDED JUNE 30,
1998

In connection with the JSA Acquisition, the Company completed a private
placement (the "Private Placement") of 144,000 shares of Series B 5% Convertible
Preferred Stock, priced at $25.00 per share. These shares are convertible into
2,400,040 shares of common stock of the Company. The gross proceeds from the
Private Placement were $3,600,000. Commissions and out-of-pocket expenses
incurred were $302,000. $1,800,000 of the proceeds were used to repay a portion
of JSA's outstanding bank line-of-credit of $2,739,594. The remaining balance of
the bank line-of-credit of approximately

13
<PAGE>
$939,000 was refinanced with a 5-year term loan with interest payments only
until June 2002. The rate of interest for the new term loan is LIBOR plus 3%.

The Company's total cash and cash equivalents at June 30, 1999 was $882,470
compared to $103,980 at June 30, 1998.

Net cash used in operating activities during the three months ended
June 1999 was $756,000. This was mainly attributed to the net loss incurred for
the period as a result of the low margins earned on the Company's new
advertising and media programs, reduction in accounts payable by $110,000, a
reduction in deferred revenue by $158,000 and an increase in accounts receivable
by $55,000. Operating activities provided $174,000 in net cash for the three
months ended June 30, 1998, principally through increases in accounts payable,
deferred revenues and capitalized production cost.

Net cash provided by investing activities in the three months ended
June 30, 1999 was $132,348. For accounting purposes, the JSA Acquisition
resulted in net assets of $185,441 being acquired. Cash used in investing
activities of approximately $53,000 was primarily for the acquisition of new
computer hardware and software, and the purchase of a trademark for the
Company's e-commerce business. Net cash used for the three months ended
June 30, 1998 was $1,390.

Net cash provided by financing activities during the three months ended
June 30, 1999 was approximately $1,421,000. This was primarily the net proceeds
of $3,319,000 received from the Private Placement less repayment of $1,800,000
of JSA's outstanding bank line-of-credit of $2,739,594. During the three months
ended June 30, 1999, the Company also paid $94,000 towards a note held by one of
its vendors, reducing the outstanding balance on that note to approximately
$180,000. Cash usage for the three months ended June 30, 1998 was $68,000, which
was attributed mainly to a reduction in bank overdraft by $54,000.

The Company's present operations are not expected to generate sufficient
cash inflow for its new e-commerce venture and it will have to rely upon
external financing sources to meet its cash requirements. Management is
currently seeking to raise additional funding in the form of equity or debt, or
a combination thereof. However, there is no guarantee that it will raise
sufficient capital to execute its business plan. To the extent that the Company
is unable to raise sufficient capital, the Company's business plan will be
substantially modified and operation curtailed.

INFLATION AND CHANGING PRICES

The Company does not foresee any adverse effects on its earnings as a result
of inflation or changing prices.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivatives and
Hedging Activities," which establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts (collectively referred to as derivatives), and for hedging
activities. This statement, as amended by SFAS No. 137, is effective for fiscal
years beginning after June 15, 2000. As the Company does not currently engaged
in derivative or hedging activities there will be no impact to the Company's
results of operations, financial position or cash flow upon the adoption of this
standard.

YEAR 2000 ISSUES

The "year 2000 problem" refers to the possible failure of many computer
systems that may arise as a result of existing computer programs using only the
last two digits to refer to a year. The Company has undertaken an initial review
of the potential effects of the year 2000 problem. These potential problems are
being addressed on a system-by-system basis.

14
<PAGE>
The Company has determined that its general accounting system, which
includes invoicing, accounts receivable and accounts payable must be upgraded to
make the system year 2000 compliant. The Company has assessed its information
technology hardware and software, including personal computers, application and
network software for year 2000 compliance readiness. Over the past two years,
the Company was in need and purchased various computer hardware and software,
all of which are year 2000 compliant. The Company believes it is year 2000
compliant and does not foresee the need for any additional purchases in relation
to the year 2000 problem. All equipment and software purchased was financed by
cash flows from operating activities. The Company expects that any expenses
incurred for the Company to be year 2000 compliant will be immaterial.

The most significant internal control risk posed by the year 2000 problem is
the possible failure of the Company's accounting systems. The Company has
appointed a special task force, which is currently addressing possible problems
and solutions to certain events that may take place. If the accounting system
were to fail, the Company would implement manual accounting process, which may
slow the timeliness of information needed to manage the business. As discussed
above, the Company has avoided this risk by upgrading and testing its accounting
systems before January 1, 2000. However, there can be no assurance that such
actions will avoid problems that may arise.

The most significant outside control risk is possible problems experienced
by the Company's financing institutions that maintain our depository accounts
and outstanding debt. The Company is in the process of confirming the state of
year 2000 readiness with these parties. It is anticipated that this process will
be completed prior to January 1, 2000.

The Company's task force is in the process of developing a contingency plan
to address other potential year 2000 problems and solutions. The plan will be
completed prior to January 1, 2000.

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<PAGE>
BUSINESS

OVERVIEW

Pursuant to that certain Agreement and Plan of Merger dated as of April 12,
1999 between us and Jeffrey A. Stern & Associates, Inc. ("JSA") and the
shareholders of JSA, we acquired all of the outstanding capital stock of JSA, in
consideration of the issuance to the JSA shareholders of an aggregate of
3,046,875 shares of our common stock. The acquisition of JSA is referred to
herein as the "JSA Acquisition." In connection with the closing, we completed a
private placement (the "Private Placement") of 132,000 shares of our Series B
Convertible Preferred Stock which is convertible into an aggregate of 2,200,044
shares of our common stock at any time. At the closing, we also issued
(a) 12,000 Preferred Shares (convertible into 200,004 shares of common stock) to
MCG Credit Corporation in connection with the restructuring of the existing bank
debt of JSA (the "Bank Restructuring") and (b) 156,250 shares of common stock as
a finder's fee for the acquisition of JSA. We also entered into an employment
agreement with Jeffrey Stern (the "Stern Employment Agreement") pursuant to
which Stern was granted options to purchase an aggregate of 2,000,000 shares
(the "Stern Options") of our common stock. The Stern Options vest equally over
three years commencing April 12, 2000. The first set (666,666 options) has an
exercise price of $3.50 per share, the second set (666,666 options) at $4.50 per
share, with the remainder at $6.50 per share. Under the Stern Employment
Agreement, Stern became our President and Chief Executive Officer.

As a result of the JSA Acquisition, we are currently a media and marketing
services company that has focused on niche and underdeveloped markets. Our
Spanish language division, JSA en espanol, has created proprietary integrated
marketing programs to help marketers reach the rapidly growing Hispanic market
in the United States. Our custom publishing division, JSA Communications,
develops retention marketing programs for companies. We are also developing a
Spanish-language e-commerce shopping community focused on the US Hispanic
market, which is expected to be our principal business focus. At the next Annual
Meeting of Stockholders, we will request stockholder approval to change our name
to InternetMercado Corp. to more accurately reflect such focus.

INDUSTRY BACKGROUND

THE HISPANIC MARKET IN THE US

The Hispanic market represents a fast growing, underdeveloped market.
Currently, one in ten Americans is Hispanic. According to the Bureau of the
Census, Hispanics are projected to number 31 million in 2000; by 2010, that
number will grow to approximately 40 million, and in 2050, approximately
88 million Hispanics are projected to live in the US. As a result, nearly one in
four Americans will be Hispanic. According to a study by the University of
Georgia's Selig Center for Economic Growth, the Latino purchasing power reached
$383 billion in 1999, up from $208 billion in 1990, a 84.4% increase.

Based on the growth of this market, marketers are increasing their
advertising commitment to the Hispanic market. In 1983, the Hispanic market
advertising expenditures were $224 million. In 1994, advertising expenditures
had increased to $952 million.

During the next thirty years, the Anglo US population will be flat. The most
substantial growth by far will be in the Hispanic market, leading US marketers
in that direction. We intend to establish a presence among Hispanics as that
transformation in marketing budgets takes place.

INTERNET COMMERCE

The Internet is a world wide series of interconnected electronic and/or
computer networks. Individuals and companies have recently recognized that the
technological capabilities of the Internet

16
<PAGE>
provide a medium for not only the promotion and communication of ideas and
concepts, but also for the presentation and sale of information, goods and
services.

Historically, the Internet has been accessible through personal computers.
Recently, several companies have announced "Web TV" products designed for
attachment to television sets for the purpose of allowing access to the Internet
without the need for a personal computer. Although these products do not permit
the full range of functions provided by personal computers, they do permit many
of the features of the Internet to be viewed on television sets. While no
assurance can be given, these new Web TV products are expected to substantially
increase the number of people who access the Internet.

The term "Internet commerce" encompasses the use of the Internet for selling
goods and services. The use of the Internet as a marketing and advertising tool
is enhanced by the ability to communicate information through the Internet to a
large number of individuals, businesses and other entities.

Because of the "virtual" nature of electronic commerce, the online presence
for certain merchants can significantly reduce or eliminate the costs of
maintaining a physical retail facility. Online merchants can also achieve
significant savings by eliminating traditional product packaging, print
advertising and other point of purchase materials. Marketing on the Internet can
be especially advantageous for smaller companies because it removes many
physical and capital barriers to entry and serves to level the competitive
playing field, by allowing smaller companies to effectively compete with larger
companies.

GROWTH OF INTERNET ADVERTISING AND INTERNET COMMERCE

With the growth in the number of Internet users and content providers, the
Internet is developing the attributes of a conventional mass medium, where
advertising subsidizes content delivered to users. In fact, technological
advances and the acceptance of the medium by businesses have led to rapid growth
in Internet advertising spending. Tools not available in traditional advertising
media, such as real-time measurement of consumers accessing an advertiser's Web
site through an advertising banner, further increase the attractiveness of Web
advertising by giving advertisers real-time feedback on advertising campaigns.
Forrester Research, Inc. estimates that spending on Web-based advertising will
increase from $2.8 billion in 1999 to more than $22.0 billion in 2004.

The growing acceptance and use of the Internet has created an opportunity
for businesses to conduct commerce over the Internet. International Data
Corporation estimates that transactions on the Internet are expected to increase
from approximately $32.0 billion in 1998 to more than $425.0 billion in 2002.
Businesses typically use the Internet to offer standard products and services
that can be easily described with graphics and text and that do not necessarily
require a physical presence for purchase of items, such as airline tickets,
books and investment securities. The focus of e-commerce transactions evolved
from companies facilitating Internet transactions between businesses to, more
recently, companies targeting business-to-consumer transactions. Internet
commerce enables these companies to develop relationships with customers on a
global basis without making significant investments in traditional sales and
distribution infrastructure.

INTERNET SECURITY.

Currently, one of the largest barriers to a potential customer's willingness
to conduct commerce over the Internet is the perceived ability of unauthorized
persons to access and use personal information about the user, such as credit
card account numbers, social security number and bank account information.
Concerns about the security of the Internet include concerns over the
authenticity of the user (i.e., is the user accurately identified), verification
and certification methods of who these users are, and privacy protection for
access to private information transmitted over the Internet. However, recent
advances in this area have greatly reduced the possibility of such unauthorized
access or use.

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<PAGE>
THE CURRENT BUSINESS

JSA EN ESPANOL.

Our Spanish language division, JSA en espanol, is a leading marketer
targeting the Hispanic community. JSA en espanol creates customized integrated
marketing programs for firms across the country which desire to target the
Hispanic Community. These programs are built around JSA en espanol's unique
distribution system, La Bolsita, and include proprietary publications such as
Promociones Hogarama and Mundo Deportivo.

La Bolsita (translation: the little bag) reaches three million Hispanic
households across the US, as determined by a sophisticated analysis of census
tract data. This distribution program provides opportunities for marketers to
distribute coupons, retail inserts and product samples on a door-to-door basis.

In addition, JSA en espanol publishes its own proprietary publications,
Promociones Hogarama and Mundo Deportivo. Promociones Hogarama is a Spanish
language free-standing insert program distributed door-to-door providing
recipients with coupons and sweepstakes offers. JSA en espanol also distributes
product samples, and inserts to Hispanic households. Mundo Deportivo is a
monthly sports magazine targeting Hispanic men.

JSA en espanol's clients include national and regional advertisers which are
focused on the Hispanic market. The JSA en espanol division is headquartered in
Los Angeles with a sales offices in New York.

JSA COMMUNICATIONS.

Our customized publishing division, JSA Communications, operates a full
service print and electronic custom publishing business and creates value-added
programs for major marketers. Each program focuses on relationship marketing and
is designed to help build customer loyalty. Since 1990, JSA Communications has
helped its clients create innovative custom communication and marketing programs
in the areas of entertainment, health care and retail. It has demonstrated an
ability to grow with its clients as well as develop new products and clients.
Recently, it added Website design to its capabilities, so that it can offer its
clients integrated communication programs.

INTERNETMERCADO

We are building an Internet shopping community, called InternetMercado.com,
to be located at www.InternetMercado.com. InternetMercado.com will be a
Spanish-language shopping community online, designed with a Latin flavor and
sensitive to the needs of Hispanic consumers residing in the United States. It
will capitalize on the growth in Internet usage among Hispanics, but it is based
on the enduring popularity of community-based marketing--swap meets, flea
markets, small stores, and mercados.

We expect that InternetMercado.com will have a unique opportunity to
capitalize on our media presence in the Hispanic market to leverage it into
building a viable brand in the e-commerce market.

As previously indicated, the US Hispanic population is rapidly increasing.
Similarly, computer ownership and Internet access among Hispanics are growing at
twice the national average. Currently 4.5 million US Hispanics are online.
Internet activity targeting the Hispanic and Latin American markets is
increasing significantly. At this point, virtually all of the activity is in the
general portal area. Starmedia Network, AOL en Espanol, Yahoo en Espanol, E-hola
and Que Pasa.com are all focusing on bringing the Spanish-speaking market
online.

We believe that InternetMercado.com is situated to benefit substantially
from this growth. First we can offer these portals significant media exposure
through our JSA en espanol division. In exchange for

18
<PAGE>
this, we envision that the portals will provide InternetMercado.com with
exposure and referrals on their sites. Second, InternetMercado.com is focused
solely on e-commerce, targeted to the US Hispanic market. Its purpose is not
diluted by having to be all things to all people. Consequently,
InternetMercado.com is not competitive with the portals, easing its ability to
create symbiotic relationships.

Implementation of the business plan for InternetMercado.com will depend on
our ability to obtain financing in the form of debt, equity or a combination
thereof. To the extent that we are unable to obtain sufficient funds, all or
part of our strategy in building the new business will be curtailed or modified.
We are actively seeking such financing. To date, however, we have has not
received any binding commitments for financing, and no assurance can be given
that such financing will be obtained on reasonable terms, or at all.

THE INTERNETMERCADO.COM STRATEGY

LEVERAGING JSA MEDIA

The plan for InternetMercado.com is leveraged by our existing strength in
the Hispanic print market. In 1998, we delivered 50 million magazines, coupons,
catalogs, and product samples directly to Hispanic homes, through our La Bolsita
direct distribution business. We have been a proven participant in this business
since 1993, and today are the leading national direct distributor to Hispanics.
Our long-established relationships with companies like Proctor & Gamble, Toys R
Us, Sears, Ford, General Motors, Philip Morris, AT&T, and Unilever make it
possible to ensure a strong initial product line-up for InternetMercado.com.
More importantly, we believe that our distribution network presents a
significant advantage in building brand awareness for the site.

In 1999, we are expected to direct deliver an average of 18 times to a
network of nearly three million Hispanic households--representing 54 million
homes in total--in the 19 leading Hispanic metro markets. Each direct
distribution will include a promotion for InternetMercado.com. Additionally, we
will run magazine advertising in our Mundo Deportivo and Promociones Hogarama
publications, which will include coupons and flyers.

STRATEGIC PARTNERSHIPS

We are currently developing strategic relationships with broadcast and
Internet companies. We will leverage our ability to help these companies build
their brands in the Hispanic market to create mutually beneficial relationships.
InternetMercado.com has already developed partnerships with the SBS radio
affiliate in Los Angeles (KLAX) and the El Dorado radio group in Texas. We will
expand these relationships in all major Latino markets.

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COMPETITION

The market for Internet products, services, advertising and commerce is
intensely competitive, and we expect that competition will continue to
intensify. The principal competitive factors in these markets are name
recognition, distribution arrangements, functionality, performance, ease of use,
the number of value-added services and features, and quality of support. Our
primary competitors are other companies providing shopping and e-commerce
services, especially to the Spanish-language Internet users.

Many of our existing competitors may have significantly greater financial,
technical and marketing resources than us. There can be no assurance that the
competitors will not offer Internet products and services that are superior to
ours or that achieve greater market acceptance. There can be no assurance that
we will be able to compete successfully against current or future competitors or
that competition will not have a material adverse effect on our business.

HISTORY OF THE COMPANY

On April 12, 1999, we completed the JSA Acquisition. Prior to June 1998, we
manufactured under license and distributed a massaging product for relieving
arthritis pain. From June 1997 to April 1999, we had no business operations and
was engaged solely in reviewing possible acquisition candidates.

EMPLOYEES

At August 31, 1999, we had 25 employees, all of whom are full-time
employees.

PROPERTIES

We lease approximately 3,300 square feet of space in Los Angeles, California
pursuant to a lease which expires February 28, 2000. We also maintain offices in
San Francisco and New York. The leases expire January 11, 2000 and June 30,
2000, respectively.

LEGAL PROCEEDINGS

1. Robert Beck v. JSA Publishing, American Arbitration Association Case
No. 72 143 01418 98

On September 10, 1998, Robert Beck filed an arbitration demand against JSA
Publishing arising from photographs which were submitted by Beck to JSA
Publishing and others that were subsequently lost. In the arbitration, Beck
seeks an award for $103,500 plus holding fees in the amount of $34,740, accruing
at the weekly rate of $455. An arbitrator has recently been selected, but no
discovery has yet taken place in the case. We intend to contest this matter in
arbitration.

2. Maurice Harmon v. JSA Publishing, et al., United States District Court,
District of New Jersey Case No. 2:98:cv03513.

Plaintiff Maurice Harmon, a professional photographer, has asserted claims
against JSA and two of its former employees, wherein Harmon alleges that 60
original photographs which were submitted for possible publication were lost or
destroyed. Harmon's complaint asserts claims for breach of contract, breach of
implied contract, negligence and fraud. Harmon seeks as compensatory damages,
the value of the 60 original photographs, punitive damages, costs and attorney's
fees. The Company's motion to transfer venue to the Central District of
California was recently granted by the Court. We intend to contest this matter.

20
<PAGE>
MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth the names and ages of all of our directors
and executive officers and the key management personnel as of August 31, 1999.
All directors will serve until the next annual meeting of stockholders and until
their successors are elected and qualified, or until their earlier death,
retirement, resignation or removal. Executive officers serve at the discretion
of the board of directors, and are appointed to serve until the first board of
directors meeting following the annual meeting of stockholders. Except as noted,
there are no family relationships among directors and executive officers.

<TABLE>
<CAPTION>
NAME AGE POSITION
- -------------------------------------------- ----------- ------------------------------------------
<S> <C> <C>
Jeffrey A. Stern............................ 40 President, Chief Executive Officer and
Director

Marc Strausberg............................. 64 Director

Felix Telado................................ 42 Secretary and Chief Financial Officer

Marcelino Miyares........................... 35 Division President, JSA en espanol

Barry Freilicher............................ 49 Division President, JSA Communications

Daniel Crowe................................ 40 Vice President, Sales & Marketing,
InternetMercado.com

Harry Abraham-Castillo...................... 41 Vice President, Creative Services,
InternetMercado.com
</TABLE>

BACKGROUND AND EXPERIENCE

JEFFREY A. STERN. Mr. Stern has served as a director and President and
Chief Executive Officer of the Company since April, 1999. Mr. Stern founded
Jeffrey A. Stern & Associates, Inc. ("JSA") in 1990, and, since that time, he
has been responsible for the creation of the publications Buy Rite, Rap Sheet,
Mundo Deportivo, and Hogarama. Prior to JSA, Mr. Stern was President and
Publisher of Details Magazine where he worked with venture capitalist Alan
Patricof. After leading the turnaround of Details, the publication was sold to
Conde Nast. Prior to Details Magazine, Mr. Stern served as business manager for
Newsweek Magazine, where he founded Newsweek on Campus. Prior to Newsweek,
Mr. Stern was employed at Ziff-Davis Publishing as general manager of the
Special Markets Group, running Unique Homes Magazine and University
Communications. Mr. Stern started his publishing career in 1980, when he founded
the magazine, City Limits, in Boston, shortly after his graduation from Harvard
College. Mr. Stern is the son-in-law of Marc Strausberg.

MARC STRAUSBERG. Mr. Strausberg has served as a director of the Company
since April, 1999. Mr. Strausberg, co-founder and Chairman of Edgar On-Line, has
worked in the area of computer-generated financial information for many years.
In 1992, Mr. Strausberg co-founded Internet Financial Network. Prior to IFN, he
published the Livermore Report, a newsletter focusing on overvalued IPO's, and
ran computer-based trading operations for Nomura Securities and the hedge funds
of Steinhardt Partners and EGS Partners. Mr. Strausberg is the father-in-law of
Jeffrey Stern.

FELIX TELADO, SECRETARY AND CHIEF FINANCIAL OFFICER. Mr. Telado has over
19 years of broad-based experience in accounting, banking, and management.
Before joining Jeffrey A. Stern & Associates, Inc. as its CFO in 1998, he held
various positions ranging from accountant to vice president of operations with
companies including Coopers & Lybrand and the Arab-Malaysian Merchant Bank in
Malaysia, and LA Dye & Print Works, Inc., and Ameritex in the United States.
Mr. Telado earned professional

21
<PAGE>
degrees in accounting and management from the UK's Chartered Institute of
Management Accountants and the Chartered Institute of Secretaries and
Administrators. He is a Certified Management Accountant (USA) as well as a
Chartered Management Accountant (UK).

MARCELINO MIYARES, DIVISION PRESIDENT, JSA EN ESPANOL. Mr. Miyares is an
experienced integrated marketer with over 10 years of experience in the Hispanic
market. As a graduate of Northwestern University in 1987 he went on to work as a
Media Director and Account Planner for UNIMAR in Chicago. He built extensive
retail marketing and telecommunications experience as Strategic Planner for
American Stores, Ameritech, McDonald's, and other accounts. In 1991 he founded
Tamayo-Miyares Advertising, an integrated marketing communications firm
specializing in Hispanic markets. In addition to managing the agency, Miyares
served as Strategic Planner and Management Supervisor for MCI
Telecommunications, Montgomery Ward, FHP HealthCare and other retail/service
accounts.

BARRY FREILICHER, DIVISION PRESIDENT, JSA COMMUNICATIONS. Mr. Freilicher
graduated from Cornell College and worked for Volume Services in Kansas City for
ten years, ultimately being promoted to president of the $120 million company.
He then moved to Los Angeles to work for Ticketmaster as vice president of
business development. Mr. Freilicher left Ticketmaster to head up JSA
Communications in 1995.

DANIEL CROWE, VICE PRESIDENT, SALES & MARKETING,
INTERNETMERCADO.COM. Mr. Crowe joined InternetMercado.com as Vice President of
Sales & Marketing in April 1999. Prior to InternetMercado.com, Mr. Crowe worked
at Liberman Broadcasting, where he participated in the purchase and start-up of
its first television property, KRCA TV. In 1995, Mr. Crowe was General Manager
of El Dorado Communications Los Angeles, and launched KRTO-FM, the country's
first major-market Rock en espanol radio station, before the profitable sale of
KRTO to Cox Broadcasting. From 1990 to 1993, Mr. Crowe was the Sales Director
for Univisa's Galavision, where he managed its most significant revenue growth
period until 1993, when he became the General Sales Manager of its Los Angeles
affiliate, KWHY TV. Prior to Univisa, he was a member of the Telemundo start-up
sales and rep team. Mr. Crowe started his career with Univision (SIN Television)
in 1981. He holds degrees in Spanish and Political Science from the University
of California, Santa Barbara.

HARRY ABRAHAM-CASTILLO, VICE PRESIDENT CREATIVE SERVICES,
INTERNETMERCADO.COM. Mr. Abraham-Castillo has over 15 years in the entertainment
industry, specializing in the Hispanic market. Mr. Abraham-Castillo presently
serves as Vice President of Creative Services at InternetMercado and oversees
all areas related to the design and content of InternetMercado.com. Prior to
InternetMercado, he worked with the management team at Telemundo Network Group
as head of programming and production, where his programming strategies achieved
sizeable audience levels and his concepts remain as top performers. From 1991 to
1995, Mr. Abraham-Castillo founded and operated Hispanic Showbiz, Inc., a
broadcast consulting firm that helped launch KWHY-TV. Prior to that,
Mr. Abraham-Castillo worked at Estrella Communications, Inc., where he served as
Executive Producer and Programming Director for KVEA-TV, the second Los Angeles
station to broadcast in Spanish. Mr. Abraham-Castillo graduated from The Art
Center College of Design in Pasadena, California.

22
<PAGE>
EXECUTIVE COMPENSATION

The following information is furnished for the person who served as Chief
Executive Officer of Numex during the year ended March 31, 1999. No other
persons who served as executive officers of Numex received salary and bonus in
excess of $100,000 during the year ended March 31, 1999.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SUMMARY COMPENSATION TABLE

<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION(1) LONG TERM COMPENSATION AWARDS
- -----------------------------------------------------------------------------------------------------------------
RESTRICTED SECURITIES
NAME AND PRINCIPAL SALARY BONUS STOCK UNDERLYING
POSITION YEAR ($) ($) AWARDS OPTIONS/SAR(#)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Jack I. Salzberg,(2) ................. 1999 $ -0- -- -- --
Chairman of the Board, President and 1998 $ 300,000(3) -- -- 850,000
Chief Executive Officer
- -----------------------------------------------------------------------------------------------------------------
(1) Does not include perquisites which did not exceed the lesser of $50,000 or 10% of salary and bonus.
(2) Mr. Jack I. Salzberg resigned as President and CEO and Mr. Jeffrey A. Stern became the President and CEO on
April 12, 1999. Mr. Salzberg resigned as Chairman of the Board in August 1999.
(3) Compensation awarded by the Board of Directors to Mr. Jack I. Salzberg on December 18, 1997 for his
extraordinary efforts and years of service to the Company without compensation. On April 30, 1998, the Board
of Directors authorized the conversion of this accrued liability into common stock at $1.25 per share which
was then converted in May 1998.
- -----------------------------------------------------------------------------------------------------------------
</TABLE>

1999 OPTION GRANTS

No stock options were granted to the executive officers of Numex in the
fiscal year 1999.

OPTION EXERCISE/VALUE TABLE

The following information with respect to options exercised during the
fiscal year ended March 31, 1999 and remaining unexercised at the end of the
fiscal year, is presented for Mr. Jack I. Salzberg.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES

<CAPTION>
- -------------------------------------------------------------------------------------------------------------

VALUE OF UNEXERCISED
IN-THE-MONEY
NUMBER OF UNEXERCISED OPTIONS AT FY-END
VALUE OPTIONS AT FY-END (#) ($)
SHARES ACQUIRED REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) ($) UNEXERCISABLE UNEXERCISABLE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Jack I. Salzberg.................. 400,000 200,000 450,000/-0- 225,000/-0-
- -------------------------------------------------------------------------------------------------------------
</TABLE>

EMPLOYMENT AGREEMENT

In April, 1999, the Company entered into a three year employment agreement
with Jeffrey A. Stern pursuant to which Mr. Stern will serve as President and
Chief Executive Officer of the Company. Mr. Stern will receive an initial salary
of $225,000 per annum. Additionally, Mr. Stern will be subject to a bonus
arrangement on the following basis: Using fiscal year 1999 final profit before
interest and taxes (ebt) of the JSA Group, the operating subsidiaries of the
Company, any increase thereof (exclusive of the Internet business) in the year
1999 will be subject to a 15% cash bonus. Mr. Stern will be eligible to receive
a similar bonus based on the Internet business with fiscal year 2000 as the base
year.

23
<PAGE>
However at Mr. Stern's discretion, he will be able to use the cash bonus to
acquire shares of common stock of the Company at a 40% discount from the
prevailing market price. Market price will be arrived at by determining the
average price for the previous 30 days. This escalated bonus and the base
earnings will be calculated for a minimum of three years in accordance with
Mr. Stern's employment contract.

Mr. Stern also received options to purchase an aggregate of 2,000,000 shares
subject to the following vesting provisions. 666,666 shares are subject to
vesting at an exercise price of $3.50 per share on first anniversary from the
date of his Employment Agreement. 666,666 shares are subject to vesting at an
exercise price of $4.50 per share on the second anniversary from the date of his
Employment Agreement and 666,667 shares are subject to vesting at an exercise
price of $6.50 per share on the third anniversary from the date of his
Employment Agreement.

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

During the year ended March 31, 1999, one meeting of the Board of Directors
was held; corporate actions were also conducted by unanimous written consent of
the Board of Directors.

DIRECTOR COMPENSATION

Directors, do not receive compensation for services provided as a director
or for participation on any committee of the Board of Directors. All directors
are reimbursed for their out-of-pocket expenses in serving on the Board of
Directors or any committee thereof.

LIMITATION ON LIABILITY AND INDEMNIFICATION MATTERS

Our certificate of incorporation limits the liability of directors to the
maximum extent permitted by Delaware law. In addition, our bylaws require us to
indemnify our directors and officers, and allow us to indemnify our other
employees and agents, to the fullest extent permitted by law. At present, there
is no pending litigation or proceeding involving any director, officer, employee
or agent where indemnification will be required or permitted. We are not aware
of any threatened litigation or proceeding that might result in a claim for such
indemnification. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
our company pursuant to the foregoing provisions, we have been informed 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.

24
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of the date of
August 31, 1999 with respect to the beneficial ownership of our common stock of
each of our directors, each of our executive officers and all of our executive
officers and directors as a group and the percentage of our common stock so
owned. We are not aware of any other beneficial owner of more than 5% of the
outstanding shares of common stock.

As used in this section, the term beneficial ownership with respect to a
security is defined by Rule 13d-3 under the Exchange Act as consisting of sole
or shared voting power (including the power to vote or direct the vote) and/or
sole or shared investment power (including the power to dispose of or direct the
disposition of) with respect to the security through any contract, arrangement,
understanding, relationship or otherwise, subject to community property laws
where applicable. Each person has sole voting and investment power with respect
to the shares of common stock, except as otherwise indicated. Beneficial
ownership consists of a direct interest in the shares of common stock, except as
otherwise indicated. The address of those individuals for which an address is
not otherwise indicated is: 11111 Santa Monica Boulevard, Suite 210, Los
Angeles, California 90025.

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
-----------------------
NUMBER OF PERCENTAGE
SHARES OF TOTAL
---------- -----------
<S> <C> <C>
DIRECTORS AND OFFICERS

Jeffrey A. Stern................................................... 2,540,006(1) 16.85%

Marc Strausberg.................................................... 7,000 *

Felix Telado....................................................... 25,000 *

Marcelino Miyares.................................................. 192,400 1.28%

Barry Freilicher................................................... 269,469 1.79%

All Directors and Executive Officers (5 persons)................... 3,001,875 19.82%

5% OR MORE BENEFICIAL OWNERSHIP

Jack I. Salzberg

120 S. Palm Drive, #402
Beverly Hills, CA 90212........................................ 2,070,000(2) 13.34%
</TABLE>

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

* Less than 1%.

(1) Does not include 2,000,000 shares issuable upon the exercise of the options
granted by the Company to Mr. Stern.

(2) Consists of 1,620,000 shares held as trustees of the Jack I. Salzberg and
Anna S. Salzberg Family Trust and 450,000 shares issuable upon the exercise
of warrants.

CERTAIN TRANSACTIONS

During 1999 and 1998, our subsidiary paid management and consulting fees to
the minority shareholder of JSA Communications, LLC totaling $130,128 and
$124,128.

Pursuant to that certain Agreement and Plan of Merger dated as of April 12,
1999 between the US and JSA Acquisition Corporation, a wholly owned subsidiary
of the Company, on the one hand; and Jeffrey A Stern and Associates, Inc. or JSA
and the shareholders of JSA, on the other hand, on

25
<PAGE>
April 12, 1999, the Company acquired all of the outstanding capital stock of
JSA, in consideration of the issuance to the JSA shareholders of an aggregate of
3,046,875 shares of the Company's common stock, of which Jeffrey A. Stern
received 2,540,006 shares. The Company also entered into an employment agreement
with Stern. During the year ended March 31, 1999, the Company liquidated the
notes payable--related parties, which were unsecured and due on demand and
totaled $305,000, through the issuance of the Company's common stock (treasury
stock).

During the year ended March 31, 1998, the board of directors of the Company
approved a bonus in the amount of $300,000 to Jack I. Salzberg, the then
Chairman of the Board, President and Chief Executive Officer of the Company,
payable at such time as funds became available and would not be detrimental to
the financial position of the Company. On April 30, 1998, the board of directors
of the Company approved and issued 240,000 shares of its treasury stock, valued
at 1.25 per share, to convert the accrued officer-stockholder compensation
obligation of $300,000. Salzberg resigned as President and Chief Executive
Officer of the Company in April, 1999.

In August 1999, pursuant to a Settlement Agreement, Jack I. Salzberg
resigned as Chairman of the Board of the Company. Payments due Salzberg under
the Settlement Agreement totalled $114,400 and his Employment Agreement with the
Company was terminated. Pursuant to the terms of the Settlement Agreement, the
Company agreed to include the common stock held by Salzberg and the shares of
common stock issuable upon exercise of his stock options in the registration
statement covering the resale of the common stock upon the conversion of the
Series B Convertible Preferred Stock.

DESCRIPTION OF SECURITIES

GENERAL

Our authorized capital stock consists of (i) 20,000,000 shares of common
stock, par value $.10 per share and (ii) 10,000,000 shares of preferred stock,
par value $1.00 per share, which preferred stock may be issued with such rights,
designations and privileges (including redemption and voting rights) as our
board of directors may from time to time determine.

The following summary descriptions are qualified in their entirety by
reference to our Certificate of Incorporation.

COMMON STOCK

We are authorized to issue 20,000,000 shares of $.10 par value common stock.
As of August 31, 1999, 15,145,967 shares of common stock were issued and
15,068,458 shares were outstanding. All shares have equal voting rights. Voting
rights are not cumulative, and, therefore, the holders of more than 50% of the
common stock could, if they chose to do so, elect all of the directors.

Holders of common stock are entitled to share equally in dividends when, as
and if declared by our board of directors, out of funds legally available
therefor. We have not paid any cash dividends on our Common Stock, and it is
unlikely that any such dividends will be declared in the foreseeable future.

PREFERRED STOCK

Our Certificate of Incorporation, as amended, authorizes our board of
directors to issue 10,000,000 shares of preferred stock, $1.00 par value. The
preferred stock may be issued in series from time to time with such designation,
rights, preferences and limitations as our board of directors may determine by
resolution. The rights, preferences and limitations of separate series of
preferred stock may differ with respect to such matters as may be determined by
our board of directors, including, without limitation, the rate of dividends,
method and nature of payment of dividends, terms of redemption,

26
<PAGE>
amounts payable on liquidation, conversion rights (if any), and voting rights.
The potential exists, therefore, that preferred stock might be issued which
would grant dividend preferences and liquidation preferences to preferred
shareholders. Unless the nature of a particular transaction and applicable
statutes require such approval, our board of directors has the authority to
issue these shares without shareholder approval. The issuance of preferred stock
may have the affect of delaying or preventing a change in control of Numex
without any further action by shareholders.

SERIES B CONVERTIBLE PREFERRED STOCK

Of our 10,000,000 shares of authorized preferred stock, 200,000 shares are
designated as Series B Convertible Preferred Stock. Holders of our Series B
preferred shares will receive, when as and if declared by the board of
directors, a cumulative dividend of $1.25 share per annum payable semi-annually
in cash, although there is no obligation on the part of the board of directors
to declare a dividend. In the event of voluntary or involuntary liquidation,
dissolution or winding up of the affairs, the holders of the Series B
Convertible Preferred Stock are entitled to receive out of our assets available
for distribution to our stockholders, before any payment or distribution shall
be made on the common stock, an amount per share equal to $25.00 per share. The
holders of Series B Convertible Preferred Stock will have no voting rights
except that any change to the rights, preference and privilege thereof will
require the approval of 2/3 in liquidation amount of the holders.

Each share of the Series B Convertible Preferred Stock may be converted at
any time into 16.667 shares of our common stock reflecting an initial conversion
ratio. The conversion ratio will be subject to adjustment in the event of a
stock split of, stock dividend on, or a subdivision, combination or
recapitalization of our common stock. The Series B preferred shares will be
subject to mandatory conversion on the effective date of the Registration
Statement covering the resale of the common stock. See--"Registration Rights."

REGISTRATION RIGHTS

We have agreed to file a registration statement under the Securities Act
covering all of the shares of common stock issuable upon the conversion of the
Series B Convertible Preferred Stock. Pursuant to a Settlement Agreement, dated
August 16, 1999, by and between Numex and Jeffrey A. Stern, on the one hand, and
Jack I. Salzberg and Isaac S. Salzberg, on the other hand, we have also agreed
to include the shares of common stock held by Jack Salzberg individually or in
his capacity as trustee, the shares of common stock issuable upon the exercise
of his stock options and common stock held by certain of our stockholders in
such registration statement. We have filed a registration statement, of which
this prospectus constitutes a part of, under the Securities Act with respect to
the common stock underlying the Series B Convertible Preferred Stock and Jack
Salzberg's common stock and the common stock underlying his stock options. We
will use our best efforts to cause the registration statement to become
effective as soon as practicable. The registration statement covering the resale
of the common stock offered hereby will be maintained effective until all the
common stock underlying the Series B Convertible Preferred Stock have been sold,
or all the common stock underlying the Series B Convertible Preferred Stock may
be sold under Rule 144 without regard to volume limitations. We will pay all
registration expenses incurred in connection with the registration of the
securities. In addition, we will comply with all necessary state securities laws
so as to permit the sale by the investors of the securities.

TRANSFER AGENT

U.S. Stock Transfer Corporation, 1745 Gardena Avenue, Glendale, California
91204-2991, serves as Transfer Agent for our common stock.

27
<PAGE>
PLAN OF DISTRIBUTION

The sale or distribution of the common stock may be effected directly to
purchasers by the selling securityholders or by pledgees, donees, transferees or
other successors in interest, as principals or through one or more underwriters,
brokers, dealers or agents from time to time in one or more transactions (which
may involve crosses or block transactions) (i) on any stock exchange or in the
over-the-counter market, (ii) in transactions otherwise than on any stock
exchange or in the over-the-counter market, or (iii) through the writing of
options (whether such options are listed on an options exchange or otherwise)
on, or settlement of short sales, of the common stock. The common stock may also
be sold pursuant to Rule 144. Any of such transactions may be effected at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices, at varying prices determined at the time of sale or at negotiated
or fixed prices, in each case as determined by the selling securityholder or by
agreement between the selling securityholder and underwriters, brokers, dealers
or agents, or purchasers. If the selling securityholders effect such
transactions by selling the common stock to or through underwriters, brokers,
dealers or agents, such underwriters, brokers, dealers or agents may receive
compensation in the form of discounts, concessions or commissions from the
selling securityholders or commissions from purchasers of the common stock for
whom they may act as agent (which discounts, concessions or commissions as to
particular underwriters, brokers, dealers or agents may be in excess of those
customary in the types of transactions involved).

The selling securityholders and any brokers, dealers or agents that
participate in the distribution of the common stock may be deemed to be
underwriters, and any profit on the sale of the common stock by them and any
discounts, concessions or commissions received by any such underwriters,
brokers, dealers or agents may be deemed to be underwriting discounts and
commissions under the Securities Act.

Under the securities laws of certain states, the common stock may be sold in
such states only through registered or licensed brokers or dealers. In addition,
in certain states the common stock may not be sold unless the common stock have
been registered or qualified for sale in such state or an exemption from
registration or qualification is available and is complied with.

We will pay all the expenses incident to the registration, offering and sale
of the common stock to the public hereunder other than commissions, fees and
discounts of underwriters, brokers, dealers and agents. We have agreed to
indemnify the selling securityholders and their controlling persons against
certain liabilities, including liabilities under the Securities Act. We estimate
that the expenses of this offering to be borne by us will be approximately
$35,000. We will not receive any proceeds from the sale of any of the common
stock by the selling securityholders.

28
<PAGE>
SELLING SECURITYHOLDERS

The following table sets forth certain information regarding beneficial
ownership of common stock of each selling securityholder and as adjusted to give
effect to the sale of the common stock offered hereby. Information concerning
the selling securityholders may change from time to time; any changes of which
we are advised will be set forth in a prospectus supplement to the extent
required.

<TABLE>
<CAPTION>
BEFORE OFFERING AFTER OFFERING
------------------- NUMBER OF SHARES OF -------------------
NUMBER OF SHARES OF COMMON STOCK BEING NUMBER OF SHARES OF
NAME OF BENEFICIAL OWNER COMMON STOCK(1) OFFERED COMMON STOCK
- -------------------------------------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C>
L. Dianne Alexander............................... 30,000 30,000 -0-
Gerald Bagg....................................... 100,000 100,000 -0-
Ray L. Bell....................................... 55,001 55,001 -0-
Thomas Berna...................................... 33,334 33,334 -0-
Michael J. Callahan............................... 250,000 250,000 -0-
Robin Lee Callahan................................ 200,004 200,004 -0-
Robert H. Cancro.................................. 33,334 33,334 -0-
Michael Crawford.................................. 23,333 23,333 -0-
David Duquette.................................... 33,334 33,334 -0-
Edward Epstein, D.D.S. (P. Plan).................. 33,334 33,334 -0-
Fayrock Inv. LTD.................................. 33,334 33,334 -0-
Frank M. Forman................................... 80,001 80,001 -0-
Neal A. Forman.................................... 250,005 250,005 -0-
Alan Goldstein.................................... 10,000 10,000 -0-
Meir Hayon........................................ 33,334 33,334 -0-
Gregory P. Kusnick................................ 33,334 33,334 -0-
Douglas Lennard................................... 125,000 125,000 -0-
Greg Lowney....................................... 33,334 33,334 -0-
Magiworth International LTD....................... 60,001 60,001 -0-
MCG Finance Corporation........................... 200,004 200,004 -0-
Donald J. Merlino................................. 33,334 33,334 -0-
Mid America Capital Corp.......................... 31,250 31,250 -0-
George E. Mohler.................................. 33,334 33,334 -0-
National Securities Corp. C/F William A. Scwartz
IRA............................................. 33,334 33,334 -0-
Jerry Y. Oren..................................... 33,334 33,334 -0-
Christopher Phillips.............................. 66,668 66,668 -0-
James Polack...................................... 33,334 33,334 -0-
Bruce S. Potash................................... 33,334 33,334 -0-
Peter Rettman..................................... 133,336 133,336 -0-
Pickney K. Ridley................................. 55,001 55,001 -0-
Diane Rosencrantz................................. 33,334 33,334 -0-
Jack I. Salzberg & Anna S. Salzberg Family Trust
(2)............................................. 2,070,000 2,070,000 -0-
Joseph Schames.................................... 200,004 200,004 -0-
Nichola A. St. Laurent............................ 100,002 100,002 -0-
Jack J. Spitzer................................... 33,334 33,334 -0-
Robert B. Spitzer................................. 33,334 33,334 -0-
Gregory T. Stern.................................. 20,000 20,000 -0-
Jeffrey A. Stern (3).............................. 2,540,006 400,000 2,140,006
Stonepine Holdings Ltd............................ 20,000 20,000 -0-
Wolfgang Struss................................... 66,668 66,668 -0-
Dr. Andrew Willner................................ 33,334 33,334 -0-
----------- ----------- -----------
7,286,296 5,146,290 2,140,006
</TABLE>

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

(1) The Series B Convertible Preferred Stock will be subject to mandatory
conversion on the effective date of the Registration Statement covering the
resale of the common stock offered hereby.

(2) Mr. Jack Salzberg resigned as President and CEO of Numex on April 12, 1999
and as Chairman of Numex in August 1999.

(3) Mr. Jeffrey Stern is the President, Chief Executive Officer and a director
of Numex.

29
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE

The market price of our common stock could decline as a result of sales of a
large number of shares of our common stock in the market after this offering, or
the perception that such sales could occur. Such sales also might make it more
difficult for us to sell equity securities in the future at a time and price
that we deem appropriate. After this offering, 18,018,507 shares of common stock
(which include 2,400,040 shares issuable upon conversion of the Series B
Convertible Preferred Stock and 550,000 shares of common stock issuable upon
exercise of currently exercisable stock options) will be outstanding, and 77,509
shares will be held as treasury stock. Of the 18,018,507 outstanding shares, the
5,146,290 shares being offered hereby will be freely tradable. This leaves
12,872,217 shares eligible for sale in the public market as follows:

<TABLE>
<CAPTION>
Number of Shares Date
- ---------------- ---------------------------------------------------------
<S> <C>
9,852,790 After the date of this prospectus
3,019,427 At various times after the date of this prospectus
(Rule 144)
</TABLE>

In general, under Rules 144, as currently in effect, an affiliate of Numex
or a person (or persons whose shares are required to be aggregated) who has
beneficially owned shares for at least one year is entitled to sell, within any
three-month period, a number of shares that does not exceed the greater of
(1) 1% of the then outstanding shares of common stock (approximately 1,801,851
shares immediately after this offering) or (2) the average weekly trading volume
in the common stock during the four calendar weeks preceding the date on which
notice of such sale is filed, subject to certain restrictions. In addition, a
person who is not deemed to have been our affiliate at any time during the
90 days preceding a sale, and who has beneficially owned the shares proposed to
be sold for at least two years, would be entitled to sell such shares under
Rule 144(k) without regard to the requirements described above. To the extent
that shares were acquired from one of our affiliates, such person's holding
period for the purpose of effecting a sale under Rule 144 commences on the date
of transfer from the affiliate.

LEGAL MATTERS

The validity of the shares of our common stock offered hereby will be passed
upon for Numex by Loeb & Loeb LLP, Los Angeles, California.

EXPERTS

The financial statements of Numex at March 31, 1999 and for the year ended
March 31, 1999 and the financial statements of Jeffrey A. Stern & Associates,
Inc. and subsidiary as of March 31, 1999 and for each of the years in the
two-year period ended March 31, 1999, have been included in this registration
statement in reliance upon the report of BDO Seidman, LLP, independent certified
public accountants appearing therein and elsewhere in the registration
statement, upon the authority of said firm as experts in accounting and
auditing.

The financial statements of Numex Corporation as of March 31, 1998 and for
the year ended March 31, 1998 have been included therein and in the registration
statement in reliance upon the report of Stonefield Josephson, Inc., independent
certified public accountants, appearing therein and elsewhere in the
registration statement upon the authority of said firm as experts in accounting
and auditing.

30
<PAGE>
ADDITIONAL INFORMATION

We have filed with the Commission, a registration statement on Form SB-2
under the Securities Act with respect to the common stock offered hereby. This
prospectus, which constitutes a part of the registration statement, omits
certain of the information set forth in the registration statement in accordance
with the rules and regulations of the Commission. For further information with
respect to Numex and the common stock offered hereby, reference is made to such
registration statement and such exhibits filed as a part thereof. Statements
contained in this prospectus as to the content of any contract or other document
referred to are not necessarily complete, and in each instance, reference is
made to the copy of such contract or other document filed as an exhibit to the
registration statement, each such statement being qualified in all respects by
such reference. The registration statement and exhibits can be inspected and
copied at the public reference section at the Commission's principal office, 450
5th Street, N.W., Judiciary Plaza, Washington, D.C. 20549, the Commission's
Regional Offices located at the Northwestern Atrium Center, Suite 1400, 500 West
Madison Street, Chicago, Illinois 60661-2511, and 7 World Trade Center, 13th
Floor, New York, New York 10048 and through the Commission's Web site
(http://www.sec.gov). Copies may be obtained from the Commission's principal
office upon payment of the fees prescribed by the Commission.

CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT

Effective April 15, 1999, Numex dismissed Stonefield Josephson, Inc., Santa
Monica, California, as its independent accountants, and engaged BDO Seidman LLP
as Numex's new independent accountants. The dismissal of Stonefield and the
retention of Seidman were approved by Numex's Board of Directors.

Prior to the engagement of Seidman, neither Numex nor anyone of its behalf
consulted with such firm regarding the application of accounting principles to a
specified transaction, either completed or uncompleted, or type of audit opinion
that might by rendered on Numex's financial statements.

Stonefield audited Numex's financial statements for the year ended
March 31, 1998. Stonefield's report for such period did not contain an adverse
opinion or a disclaimer of opinion, nor was the report qualified or modified as
to uncertainty, audit scope or accounting principles except as to Numex's
ability to continue as a going concern.

During the period from April 1, 1998 to April 15, 1999 and the year ended
March 31, 1998, there were no disagreements with Stonefield on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope procedure, which disagreements, if not resolved to the satisfaction of
Stonefield, would have caused such firm to make reference to the subject matter
of the disagreements in connection with its reports on Numex's financial
statements. In addition, there were no such events as described under
Item(a)(1)(IV)(B) of Regulation S-B during the fiscal year ended March 31, 1998
and the subsequent interim periods through April 15, 1999.

Numex has provided Stonefield with a copy of the disclosures contained
herein, and has requested that it furnish Numex with a letter addressed to the
Securities and Exchange Commission stating whether it agrees with the statements
made by Numex in response to Item 304(a) regarding its involvement with Numex as
independent accountants and, if not, stating the respects in which it does not
agree. A copy of Stonefield's letter is attached as an exhibit to this
registration statement.

31
<PAGE>
NUMEX CORPORATION
INDEX TO FINANCIAL STATEMENTS
JEFFREY A. STERN & ASSOCIATES, INC. AND SUBSIDIARY
AUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

<TABLE>
<S> <C>
Report of Independent Certified Public Accountant.................................... F-2
Consolidated Financial Statements
Balance Sheet...................................................................... F-3
Statements of Operations........................................................... F-4
Statements of Stockholders' Deficit................................................ F-5
Statements of Cash Flows........................................................... F-6
Notes to Consolidated Financial Statements........................................... F-7
</TABLE>

NUMEX CORPORATION

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS AS OF MARCH 31, 1999 AND
AND FOR THE YEAR ENDED MARCH 31, 1999

<TABLE>
<S> <C>
Unaudited Pro Forma Condensed Consolidated Financial Information..................... F-14
Unaudited Pro Forma Condensed Consolidated Statement of Operations................... F-15
Notes to Unaudited Condensed Consolidated Statement of Operations.................... F-16
</TABLE>

NUMEX CORPORATION AND SUBSIDIARY
AUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

<TABLE>
<S> <C>
Report of Independent Certified Public Accountant.................................... F-20
Consolidated Financial Statements
Balance Sheet...................................................................... F-22
Statements of Operations........................................................... F-23
Statements of Stockholders' Equity................................................. F-24
Statements of Cash Flows........................................................... F-25
Notes to Consolidated Financial Statements........................................... F-26
</TABLE>

NUMEX CORPORATION AND SUBSIDIARY
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 1999 AND FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998

<TABLE>
<S> <C>
Consolidated Financial Statements
Balance Sheet...................................................................... F-34
Statements of Operations........................................................... F-35
Statements of Cash Flows........................................................... F-36
Notes to Consolidated Condensed Financial Statements................................. F-37
</TABLE>

F-1
<PAGE>
REPORT OF CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors
Jeffrey A. Stern & Associates, Inc. and Subsidiary
Santa Monica, California

We have audited the accompanying consolidated balance sheet of Jeffrey A.
Stern & Associates and Subsidiary as of March 31, 1999 and the related
consolidated statements of operations, stockholders' deficit and cash flows for
the years ended March 31, 1999 and 1998. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 these 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 audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Jeffrey A.
Stern & Associates and Subsidiary as of March 31, 1999 and the results of their
operations and cash flows for each of the years ended March 31, 1999 and 1998,
in conformity with generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared
assuming the Company will continue as a going concern. As discussed in Note 1 to
the consolidated financial statements, the Company has suffered recurring
operating losses and, at March 31, 1999, had negative working capital and a
stockholder's deficit. These conditions raise substantial doubt about its
ability to continue as a going concern. Management's plans in regard to these
matters are also described in Note 1. The consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.

/s/ BDO Seidman, LLP

Los Angeles, CA
May 25, 1999

F-2
<PAGE>
JEFFREY A. STERN & ASSOCIATES, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
MARCH 31,
1999
-------------
<S> <C>
ASSETS (Note 5)

CURRENT ASSETS
Cash............................................................................................. $ 85,086
Accounts receivable, net of allowance for doubtful accounts of $120,480.......................... 422,980
Capitalized production costs..................................................................... 114,828
Employee advances................................................................................ 21,719
-------------
Total current assets............................................................................... 644,613

PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization of $165,716 (Notes 2 and
3)............................................................................................... 90,962

OTHER ASSETS....................................................................................... 8,683
-------------
$ 744,258
=============

LIABILITIES AND SHAREHOLDER'S DEFICIT

CURRENT LIABILITIES
Accounts payable and accrued expenses............................................................ $ 798,669
Advances on bank line-of-credit (Notes 5 and 8).................................................. 1,800,000
Deferred revenues................................................................................ 755,897
Current portion of capital lease obligations (Note 3)............................................ 11,031
Current portion of note payable (Note 4)......................................................... 236,250
-------------
Total current liabilities 3,601,847

LONG-TERM PORTION OF BANK LINE-OF-CREDIT (Notes 5 and 8)........................................... 939,594

NOTE PAYABLE, net of current portion (Note 4)...................................................... 36,903

CAPITAL LEASE OBLIGATIONS, net of current portion (Note 3)......................................... 10,839
-------------
Total liabilities.................................................................................. 4,589,183
-------------

MINORITY INTEREST.................................................................................. 201,589

COMMITMENTS AND CONTINGENCIES (Note 5 and 7)

SHAREHOLDER'S DEFICIT
Common stock, no par value, 10,000 shares authorized; 1,000 shares issued and outstanding........ 1,500
Accumulated deficit.............................................................................. (4,048,014)
-------------
Total shareholder's deficit........................................................................ (4,046,514)
-------------
$ 744,258
=============
</TABLE>

See accompanying notes to consolidated financial statements.

F-3
<PAGE>
JEFFREY A. STERN & ASSOCIATES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
MARCH 31,
--------------------------
1999 1998
------------ ------------
<S> <C> <C>
REVENUES.............................................................................. $ 5,587,291 $ 5,546,315

COST OF REVENUES...................................................................... 3,322,767 3,858,002
------------ ------------

GROSS PROFIT.......................................................................... 2,264,524 1,688,313

OPERATING EXPENSES.................................................................... 2,283,881 1,919,179
------------ ------------

OPERATING LOSS........................................................................ (19,357) (230,866)
------------ ------------

OTHER INCOME (EXPENSE)
Gain on dispositions of property and equipment...................................... -- 96,904
Interest expense, net............................................................... (336,623) (328,674)
------------ ------------

Total other expense................................................................... (336,623) (231,770)
------------ ------------

LOSS BEFORE MINORITY INTEREST......................................................... (355,980) (462,636)

MINORITY INTEREST IN INCOME OF CONSOLIDATED SUBSIDIARY................................ (83,810) (45,556)
------------ ------------

NET LOSS.............................................................................. $ (439,790) $ (508,192)
============ ============
</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE>
JEFFREY A. STERN & ASSOCIATES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF SHAREHOLDER'S DEFICIT

FOR YEARS ENDED MARCH 31, 1998 AND 1999

<TABLE>
<CAPTION>
COMMON STOCK
---------------------- ACCUMULATED
SHARES AMOUNT DEFICIT TOTAL
----------- --------- ------------- -------------
<S> <C> <C> <C> <C>
BALANCE, April 1, 1997........................................... 1,000 $ 1,500 $ (3,100,032) $ (3,098,532)

NET LOSS......................................................... -- -- (508,192) (508,192)
--------- --------- ------------- -------------

BALANCE, March 31, 1998.......................................... 1,000 1,500 (3,608,224) (3,606,724)

NET LOSS......................................................... -- -- (439,790) (439,790)
--------- --------- ------------- -------------

BALANCE, March 31, 1999.......................................... 1,000 $ 1,500 $ (4,048,014) $ (4,046,514)
========= ========= ============= =============
</TABLE>

See accompanying notes to consolidated financial statements.

F-5
<PAGE>
JEFFREY A. STERN & ASSOCIATES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE YEARS ENDED
MARCH 31,
------------------------
1999 1998
----------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss.............................................................................. $ (439,790) $ (508,192)
Adjustments to reconcile net loss to net cash provided by (used in) operating
activities:
Depreciation and amortization....................................................... 49,788 47,015
Minority interest in net income of subsidiary....................................... 83,810 45,559
Gain on sale of assets.............................................................. -- (96,904)
Loss on retirement of fixed assets.................................................. -- 74,002
Write off of debt issued to employees............................................... -- (6,501)
Write off of prepaid selling commissions............................................ 94,932 --
Allowance for uncollectible receivables............................................. 66,841 3,039
Changes in operating assets and liabilities:
Accounts receivable................................................................. 72,084 (239,352)
Other liabilities................................................................... (13,502) 13,502
Prepaid expenses.................................................................... -- (29,989)
Capitalized production costs........................................................ 106,817 (221,646)
Accounts payable and accrued expenses............................................... 206,327 (178,674)
Deferred revenues................................................................... (81,014) 559,396
Deposits............................................................................ -- 10,600
----------- -----------
Net cash provided by (used in) operating activities..................................... 146,293 (528,145)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Debt issued to employees.............................................................. (15,217) --
Purchase of equipment................................................................. (6,729) --
----------- -----------
Net cash used in investing activities................................................... (21,946) --
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in bank overdraft................................................. (54,463) 54,463
Proceeds from bank line of credit..................................................... -- 199,179
Debt received from (paid to) officers................................................. 80,003 (33,024)
Proceeds (repayment) on note payable.................................................. (32,500) 305,653
Payments for obligations under capital leases......................................... (17,051) (31,980)
Distributions to minority shareholder................................................. (15,250) (42,000)
----------- -----------
Net cash provided by (used in) financing activities..................................... (39,261) 452,291
----------- -----------
NET INCREASE (DECREASE) IN CASH......................................................... 85,086 (75,854)
CASH, beginning of year................................................................. -- 75,854
----------- -----------
CASH, end of year....................................................................... $ 85,086 $ --
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION
Cash paid during the year for the following:
Interest............................................................................ $ 255,393 $ 288,722
=========== ===========
</TABLE>

See accompanying notes to consolidated financial statements.

F-6
<PAGE>
JEFFREY A. STERN & ASSOCIATES, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND NATURE OF BUSINESS

Jeffrey A. Stern & Associates, Inc., ("JSA"), a California corporation
incorporated in January 1990, and its majority-owned subsidiary, JSA
Communications, LLC ("LLC" and collectively the "Company") provide distributing
and publishing services to various commercial customers throughout the United
States. In addition, the Company is engaged in publishing, circulating and
selling advertisements in its own print publications. On April 9, 1999, the
Company issued 106.09 shares of common stock to acquire all the minority
interest shares of common stock of LLC (see Note 8). On April 12, 1999, Numex
Corporation acquired all the outstanding capital stock of the Company (see
Note 8).

GOING CONCERN UNCERTAINTY

The accompanying consolidated financial statements have been prepared
assuming 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 carrying amounts of assets and liabilities presented in
the financial statements do not purport to represent realizable or settlement
values. However, the Company has suffered recurring operating losses and has a
working capital and stockholders deficit that impair its ability to obtain
additional financing. These factors raise substantial doubt about the Company's
ability to continue as a going concern.

The Company intends to manage short-term liquidity concerns through its
renegotiation of the notes payable and line-of-credit terms. The Company
believes additional funding from Numex (see Note 8) and the modified financing
arrangement will provide the necessary funding and improve working capital
needed to operate the Company and enter into new business which management
believes will significantly improve the Company's operating results. There can
be no assurance, however that the additional financing and the new business will
result in higher operating cash flows.

In addition, the Company is continuing its efforts to secure working capital
for operations, expansion and possible acquisitions, mergers, joint ventures,
and/or other business combinations. However, there can be no assurance that the
Company will be able to secure additional capital, or that if such capital is
available, whether the terms or conditions would be acceptable to the Company.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of JSA and its
majority-owned subsidiary, JSA Communications, LLC. All significant intercompany
accounts and transactions have been eliminated in consolidation. The minority
interest in subsidiary in the accompanying consolidated balance sheets
represents the minority shareholder's equity in JSA Communications, LLC. On
April 9, 1999, the Company issued 106.09 shares of its common stock to acquire
all the minority interest shares of common stock (see Note 8).

REVENUE RECOGNITION

Revenue from publishing services is recognized when the printed publications
are shipped to the customers. Revenue from advertisements is recognized when the
publication is distributed to the general public.

F-7
<PAGE>
JEFFREY A. STERN & ASSOCIATES, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
ACCOUNTING ESTIMATES

The preparation of the Company's financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reported
periods. Actual results may differ from these estimates.

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost. Depreciation and amortization have
been provided over the estimated useful lives of the assets using the
straight-line method. Major renewals and betterments are capitalized.
Maintenance, minor renewals and repairs are charged to expense when incurred.

LONG-LIVED ASSETS

Long-lived assets, such as property and equipment, are evaluated for
impairment when events or changes in circumstances indicate that the carrying
amount of the assets may not be recoverable through the estimated undiscounted
future cash flows from the use of these assets. When any such impairment exists,
the related assets will be written down to fair value.

CONCENTRATIONS OF CREDIT AND BUSINESS RISK

The Company's receivables are unsecured and are generally due upon receipt.
For the year ended March 31, 1999, the Company had two customers which accounted
for 46% of the Company's consolidated revenues. For the year ended March 31,
1998, the Company had two customers which accounted for 36% of the Company's
consolidated revenues.

The Company has exposure to credit risk to the extent that its cash and cash
equivalents exceed amounts covered by federal deposit insurance. The Company
believes that its credit risk is not significant.

The Company's customer contracts are subject to performance audits. In the
event that the customer believes the Company did not perform under the terms of
the contracts, the Company may be at risk to collect its customer receivables or
be required to refund payments back to the customer.

COMPUTATION OF EARNINGS PER SHARES

For the year ended March 31, 1998, the Company adopted Statements of
Financial Accounting Standards ("SFAS") No. 128, which requires the presentation
of basic and dilutive earnings per share, which replaces primary and fully
diluted earnings per share. Basic net loss per share is computed using the
weighted average number of common shares outstanding during the period. Dilutive
net loss per share is computed using the weighted average number of common
shares outstanding during the period, plus the dilutive effect of potential
common stock. The Company has no potential common stock outstanding as of
March 31, 1999 and 1998.

F-8
<PAGE>
JEFFREY A. STERN & ASSOCIATES, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES

The Company has elected S corporation status for federal and California
income tax purposes. As a result of this election the tax attributes of the
Company pass through to its shareholder and the Company does not record a
provision for federal income taxes. California has partially conformed to the
federal provisions recognizing S corporations as pass through entities, however,
California still imposes a 1 1/2% tax at the corporate level.

The provision for state income taxes is based upon reported earnings before
income taxes at the applicable state tax rate under the asset and liability
approach. Deferred income taxes are recognized for income and expense items that
are reported for financial reporting purposes in different years than for income
tax reporting purposes at the applicable state tax rate. Deferred tax assets and
related valuation reserves and deferred tax liabilities were not material as of
March 31, 1999 and 1998.

STATEMENTS OF CASH FLOWS

For purposes of the statements of cash flows, the Company considers all
highly liquid investments with an original maturity of three months or less to
be cash equivalents.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of financial instruments, including cash, accounts
receivable and accounts payable approximate fair value due to their short
maturities. The carrying amounts of the line-of-credit and capital lease
obligations approximate fair value because the interest rates on these
instruments approximate the rate at which the Company could borrow at March 31,
1999.

RECLASSIFICATIONS

Certain reclassifications have been made to prior year amounts to conform to
current year consolidated financial statement presentation.

RECENT ACCOUNTING PRONOUNCEMENT

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivatives and
Hedging Activities", which establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, (collectively referred to as derivatives) and for hedging
activities. SFAS No. 133 is effective for all fiscal quarters of fiscal years
beginning after June 15, 1999. As the Company does not currently engage in
derivative or hedging activities there will be no impact to the Company's
results of operations, financial position or cash flow upon the adoption of this
standard.

In October 1998, the FASB issued SFAS No. 134, Accounting for
Mortgage-Backed Securities Retained after the Securitization of Mortgage Loans
Held for Sale by a Mortgage Banking Enterprise (SFAS No. 134), which establishes
standards for certain activities of mortgage banking enterprises. SFAS No. 134
is effective for fiscal years beginning after December 15, 1998. The adoption of
SFAS No. 134 will not have an impact on the Company's results of operations,
financial position or cash flows.

F-9
<PAGE>
JEFFREY A. STERN & ASSOCIATES, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. PROPERTY AND EQUIPMENT

Property and equipment consist of:

<TABLE>
<CAPTION>
USEFUL
1999 LIVES
---------- -----------
<S> <C> <C>
Furniture and office equipment...................................... $ 78,027 5-7 Years
Computer equipment.................................................. 144,072 2-3 Years
Vehicle............................................................. 34,579 3-5 Years
----------
256,678
Less: Accumulated depreciation and amortization..................... 165,716
----------
$ 90,962
==========
</TABLE>

Included in equipment is $23,280 of equipment under capital lease and
related accumulated amortization of $14,384.

3. CAPITAL LEASE OBLIGATIONS

The Company leases certain equipment under capital leases. The following is
a schedule of future minimum lease payments required under the capital leases,
together with the present value of future minimum payments.

<TABLE>
<CAPTION>
YEAR ENDING MARCH 31, AMOUNT
- ----------------------------------------------------------------------------------- ---------
<S> <C>
2000......................................................................... $ 14,965
2001......................................................................... 10,018
---------
24,983
Less: Amount representing interest................................................. 3,113
---------
Present value of minimum lease payments............................................ 21,870
Less: Current portion.............................................................. 11,031
---------
Long-term portion.................................................................. $ 10,839
=========
</TABLE>

4. NOTE PAYABLE

On November 1, 1997, the Company entered into a promissory note payable
arrangement with a vendor for an original principal amount of $351,903. The note
is unsecured, and calls for an interest rate of 10% (per annum) for all payments
10 days overdue. Any remaining unpaid principal balance as of May 1, 1999 and
thereafter, will bear an interest rate of 6% per annum. The Lender waived its
right (as defined in the agreement) to accelerate the note repayment caused by
the change in the Company ownership. The Company reached an agreement with the
vendor which amended the original terms of this agreement. The amended agreement
requires repayment of the $64,250 past due as follows: $25,000 on April 15,
1999, $39,250 on May 15, 1999, thereafter quarterly calendar payments of $30,000
on June 30, 1999, $46,000 on September 30, 1999 and $48,000 on December 31, 1999
through maturity. The balance outstanding at March 31, 1999 was $273,153.

F-10
<PAGE>
JEFFREY A. STERN & ASSOCIATES, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. NOTE PAYABLE (CONTINUED)
Minimum future payments under the note payable are as follows:

<TABLE>
<CAPTION>
MARCH 31, AMOUNT
- ------------------------------------------------------------------------ ----------
<S> <C>
2000.................................................................. $ 236,250
2001.................................................................. 36,903
----------
$ 273,153
==========
</TABLE>

5. ADVANCES UNDER BANK LINE-OF-CREDIT

The Company has an available line-of-credit with a bank for borrowings up to
$2,790,000. The credit agreement requires reductions in available borrowings
throughout the term of the agreement, which expires October 1, 1999. The
line-of-credit bears interest at the bank's prime rate (7.75% at March 31, 1999)
plus 1%, secured by substantially all assets of the Company. Additionally, the
Company's shareholder has personally guaranteed $500,000 under this
line-of-credit. Also, the Company agreed to pay the bank additional interest
based on a minimum internal rate of return of 17.5%, up to a maximum of 25%, if
the Company does not meet certain bank required financial covenants, beginning
with the quarter ending March 31, 1998. The additional interest will no longer
accrue when the Company has satisfied all financial covenants and is current
with its interest payments. As of March 31, 1999, the Company was not in
compliance with any of the financial covenants and had an outstanding loan
balance of $2,739,594. See Note 8.

6. RELATED PARTY TRANSACTIONS

During 1999 and 1998, the Company's subsidiary paid management and
consulting fees to the minority shareholder of JSA Communications, LLC totaling
$130,128 and $124,128.

7. COMMITMENTS AND CONTINGENCIES

In June 1997, the Company entered into a lease for its offices that expire
February 2000 and June 2001. The Company's noncancelable future minimum lease
commitments at March 31, 1999 are as follows:

<TABLE>
<CAPTION>
YEAR ENDING MARCH 31, AMOUNT
- ------------------------------------------------------------------------- ---------
<S> <C>
2000............................................................... $ 80,446
2001............................................................... 4,750
---------
$ 85,196
=========
</TABLE>

Rental and storage expense, including charges for operating expenses, was
$87,174 and $116,601 for the years ended May 31, 1999 and 1998.

The Company is subject to various lawsuits and claims arising out of the
normal course of its business. In the opinion of management, the ultimate
liability to the Company as a result of any legal proceedings will not
materially effect the financial position of the Company.

F-11
<PAGE>
JEFFREY A. STERN & ASSOCIATES, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. SUBSEQUENT EVENT

On April 9, 1999, the Company issued 93.464 shares of no par value common
stock, to certain employees as compensation. The total value of shares issued
was $563,378.

On April 9, 1999 the Company elected to dissolve and liquidate its
subsidiary, JSA, LLC and transfer all of the assets and liabilities to the
Company. Pursuant to the transaction, the Company issued 106.09 shares of the
common stock to acquire the minority's interest in the subsidiary.

On April 12, 1999, the Company merged with and into Numex Corporation
("Numex") under a plan of reorganization. The shareholders of the Company
received 3,046,875 shares of Numex common stock (or approximately 26% of Numex's
common stock on the effective date of the merger) in exchange for all of the
issued and outstanding stock of the Company.

Numex also completed a private placement of 144,000 shares of Series B
Convertible Preferred stock. Concurrent with this placement and the above
merger, the Company reached an agreement with the Lender (Note 5) to amend the
line of credit. In accordance with the amendment, the Company paid $1,800,000 to
refinance the outstanding balance of $2,739,594 to approxima,tely $939,000. The
amendment requires calendar quarter principal payments beginning with the
quarter ending June 30, 2002 through March 31, 2006 at the rate of 6.25% of the
outstanding principal balance and 12.5% of the outstanding principal balance
from March 31, 2004 through March 31, 2005. Interest is payable monthly and the
interest rate is based on an adjusted LIBOR rate plus 3% or on the Prime rate
plus 1% (as defined in the agreement).

F-12
<PAGE>
NUMEX CORPORATION

CONTENTS

<TABLE>
<S> <C>
Unaudited pro forma condensed consolidated financial information..................... F-14

Unaudited pro forma condensed consolidated statement of operations................... F-15

Notes to unaudited pro forma condensed consolidated statement of operations.......... F-16
</TABLE>

F-13
<PAGE>
NUMEX CORPORATION

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

In April 1999, all of the outstanding common stock of Jeffrey A. Stern &
Associates, Inc. ("JSA") was acquired by Numex Corporation ("Numex"). Listed
below are the various events occurring within JSA and Numex in conjunction with
this acquisition (all transactions referred to collectively as the "Merger
Transaction"):

(a) On April 9, 1999, JSA issued 93.464 shares of no par value common stock,
to certain employees as compensation. Additionally, JSA elected to
dissolve and liquidate its subsidiary, JSA, LLC, and transfer all of the
assets and liabilities to JSA. Pursuant to the transaction, JSA issued
106.09 shares of the common stock to acquire the minority's interest in
this subsidiary.

(b) On April 12, 1999, JSA merged with and into Numex under a plan of
reorganization. In conjunction with the merger the former officers of JSA
became officers of Numex. The shareholders of the Company received
3,046,875 shares of Numex common stock (or approximately 26% of Numex's
common stock on the effective date of the merger).

For accounting purposes, this transaction was accounted for as an
acquisition of Numex by JSA (reverse acquisition). The shares held by the
shareholders of Numex prior to the acquisition have been recognized as if
they were issued in connection with the acquisition of Numex by Jsa.

(c) Numex also completed a private placement of 144,000 shares of Series B
Convertible Preferred stock. Concurrent with this placement and the above
merger, the Company reached an agreement with its Lender to amend the
line of credit. In accordance with the amendment, the Company paid
$1,800,000 to finance the outstanding balance of $2,739,594 to
approximately $939,000.

The accompanying condensed consolidated financial statements illustrate the
effect of the Merger Transaction ("Pro Forma") on Numex's results of operations.
The pro forma condensed consolidated statement of operations for the year ended
March 31, 1999 is based on the historical statements of JSA and Numex and
assumes the merger Transaction took place on April 1, 1998.

The pro forma condensed consolidated financial statements may not be
indicative of the actual results of the merger and there can be no assurance
that the foregoing results will be obtained, nor are they indicative of future
operations.

The accompanying pro forma condensed consolidated financial statements
should be read in connection with the historical financial statements of
Jeffrey A. Stern & Associates, Inc. and Numex Corporation.

F-14
<PAGE>
NUMEX CORPORATION

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
JSA NUMEX PRO FORMA
MARCH 31, MARCH 31, PRO FORMA CONSOLIDATED
1999 1999 ADJUSTMENTS AMOUNT
------------ ------------ ----------------- -------------
<S> <C> <C> <C> <C>
Revenue............................................ $ 5,587,291 $ 15,970 $ $ 5,603,261
Cost of revenue.................................... 3,322,767 11,258 3,334,025
------------ ------------ ------------- -------------
Gross profit....................................... 2,264,524 4,712 2,269,236
Operating expenses................................. 2,283,881 453,899 539,657 (a) 3,365,016
87,579 (c)
------------ ------------ ------------- -------------
Operating profit (loss)............................ (19,357) (449,187) (627,236) (1,095,780)
Interest expense, net.............................. (336,623) (10,555) 165,060 (e) (182,118)
Miscellaneous income............................... -- 5,745 5,745
Gain on sale....................................... -- 10,135 10,135
Minority interest in subsidiary.................... (83,810) -- 83,810 (b) --
Provision for income tax (expense)................. -- (800) (800)
------------ ------------ ------------- -------------
Net loss........................................... (439,790) (444,662) (378,366) (1,262,818)
Cumulative preferred stock dividend................ -- 31,123 180,000 (d) 211,123
Deemed dividend on cumulative Preferred Stock...... 1,728,107 (f) 1,728,107
------------ ------------ ------------- -------------
Net loss allocable to common shareholders.......... (439,790) (475,785) (2,286,473) (3,202,048)
============ ============ ============= =============
Basic and diluted loss per common share............ (0.04) (.21)
============ =============
Weighted average number of common shares
outstanding used to calculate basic and diluted
loss per common share............................ 11,123,351 14,954,333
============ =============
</TABLE>

See Notes to Pro Forma Financial Statements.

F-15
<PAGE>
NUMEX CORPORATION

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

PRO FORMA ADJUSTMENTS: INCOME STATEMENT

The adjustments to the pro forma condensed consolidated statement of operations
are as follows:

(a) To reflect the expense incurred from the issuance of JSA common stock to
employees as calculated below:

<TABLE>
<S> <C>
Number of JSA common stock shares issued to employees....................... 93.464
Multiplied by: number of Numex common stock shares issued for JSA common
stock shares in relation to the reverse merger............................ 2,538
---------
Total number of shares issued............................................... 237,212
Multiplied by: fair market value of Numex stock on date of issuance......... $ 2.375
---------
Fair market value of shares issued to employees............................. $ 563,378
Less: Numex common stock par value ($0.10 per share)........................ 23,721
---------
Additional paid-in-capital.................................................. $ 539,657
=========
</TABLE>

(b) To eliminate the minority interest in JSA, LLC, in conjunction with JSA's
acquisition of such minority interest.

<TABLE>
<S> <C>
Goodwill recognized from acquisition of JSA, LLC............................ $ 437,894
Divided by: amortization period (in years).................................. 5
---------
Amortization per year....................................................... $ 87,579
=========
</TABLE>

(d) To reflect annual dividend payment for preferred stock:

<TABLE>
<S> <C>
Outstanding shares of preferred stock....................................... 144,000
Multiplied by: annual dividend payment...................................... $ 1.25
---------
Total annual dividend payment............................................... $ 180,000
=========
</TABLE>

(e) To reflect the reduction of interest expense due to refinancing of bank line
of credit:

<TABLE>
<S> <C>
Payment of outstanding balance.............................................. $1,800,000
Multiplied by: annual interest rate......................................... 9.17%
---------
Interest expense saved...................................................... $ 165,060
=========
</TABLE>

F-16
<PAGE>
NUMEX CORPORATION

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(CONTINUED)

PRO FORMA ADJUSTMENTS: INCOME STATEMENT (CONTINUED)
(f) To reflect the deemed dividend in conjunction with the Private Placement:

<TABLE>
<S> <C>
FMV of Numex common stock on 3/10/99 (date of private placement)............ $ 2.22
Conversion ratio of preferred shares to common shares....................... 16.667
---------
Common stock value of preferred shares issued............................... $ 37.00
Less: Preferred share offering price........................................ 25.00
---------
Preferred share deemed dividend............................................. $ 12.00
Preferred shares issued in private placement................................ 144,000
---------
Deemed dividend on cumulative preferred stock............................... 1,728,107
=========
</TABLE>

F-17
<PAGE>
NUMEX CORPORATION AND SUBSIDIARY

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

CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

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

F-18
<PAGE>
NUMEX CORPORATION AND SUBSIDIARY
CONTENTS

<TABLE>
<S> <C>
Report of Independent Certified Public Accountants................................... F-20

Consolidated Financial Statements
Balance Sheet...................................................................... F-22
Statements of Operations........................................................... F-23
Statements of Stockholders' Equity................................................. F-24
Statements of Cash Flows........................................................... F-25

Notes to consolidated financial statements........................................... F-26
</TABLE>

F-19
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Numex Corporation and Subsidiary
Beverly Hills, California

We have audited the accompanying consolidated balance sheet of Numex
Corporation and Subsidiary as of March 31, 1999 and the related consolidated
statements of operations, stockholders' equity and cash flows for the year then
ended. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated 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 these 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Numex
Corporation and Subsidiary as of March 31, 1999 and the results of their
operations and cash flows for the year then ended, in conformity with generally
accepted accounting principles.

The accompanying consolidated financial statements have been prepared
assuming the Company will continue as a going concern. As discussed in Note 1 to
the consolidated financial statements, the Company has suffered recurring
operating losses that raise substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are also described
in Note 1. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

BDO Seidman, LLP

Los Angeles, California
May 25, 1999

F-20
<PAGE>
INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying consolidated statements of operations,
stockholders' deficiency and cash flows of Numex Corporation and subsidiary for
the year ended March 31, 1998. 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 results of operations and cash flows
of Numex Corporation and subsidiary 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.

Stonefield Josephson, Inc.
CERTIFIED PUBLIC ACCOUNTANTS

Santa Monica, California
July 13, 1998

F-21
<PAGE>
NUMEX CORPORATION AND SUBSIDIARY

BALANCE SHEET

<TABLE>
<CAPTION>
MARCH 31,
1999
--------------
<S> <C>
ASSETS (NOTE 1)

Current assets
Cash............................................................................................ $ 123,692
Accounts receivable............................................................................. 21,310
Stock subscription receivable................................................................... 89,900
Prepaids........................................................................................ 496
--------------
Total current assets.............................................................................. 235,398
Property and equipment, net of accumulated depreciation (Note 4).................................. 8,197
Deposits.......................................................................................... 7,991
--------------
$ 251,586
==============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Accounts payable and accrued expenses (Note 5).................................................. $ 66,145
--------------
Total current liabilities......................................................................... 66,145
--------------
Stockholders' equity (Notes 11 & 12):
Preferred stock; $1.00 par value, 10,000,000 shares authorized, no shares issued and
outstanding................................................................................... --
Common stock; $.10 par value, 20,000,000 shares authorized, 11,940,342 issued and
11,862,833 shares outstanding................................................................. 1,194,034
Treasury stock, at cost, 77,509 shares.......................................................... (7,750)
Additional paid-in-capital...................................................................... 10,866,433
Accumulated deficit............................................................................. (11,867,276)
--------------
Total stockholders' equity........................................................................ 185,441
--------------
$ 251,586
==============
</TABLE>

See accompanying notes to consolidated financial statements.

F-22
<PAGE>
NUMEX CORPORATION AND SUBSIDIARY

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEARS ENDED MARCH 31,
--------------------------
<S> <C> <C>
1999 1998
------------- -----------
Net sales (Note 3)................................................................... $ 15,970 $ 176,513
Cost of sales........................................................................ 11,258 83,605
------------- -----------
Gross profit......................................................................... 4,712 92,908
Selling, general and administrative expenses......................................... 453,899 653,734
------------- -----------
Loss from operations................................................................. 449,187 560,826
------------- -----------
Other income (expense)
Officer-stockholder compensation................................................... -- (300,000)
Interest expense, net.............................................................. (10,555) (128,572)
Other income....................................................................... 5,745 --
Adjustment of the prior years accruals on royalty estimates........................ -- 356,600
Gain on sale of fixed assets....................................................... 10,135 --
------------- -----------
Total other income (expense)......................................................... 5,325 (71,972)
------------- -----------
Loss before provision for income taxes............................................... (443,862) (632,798)
Provision for income taxes........................................................... 800 800
------------- -----------
Net loss............................................................................. $ (444,662) $ (633,598)
Preferred stock dividend............................................................. 31,123 --
Net loss available to shareholders................................................... $ (475,985) $ (633,598)
============= ===========
Basic and diluted loss per common share.............................................. $ (0.04) $ (0.08)
============= ===========
Weighted average number of common shares outstanding used to calculate basic and
diluted loss per common share...................................................... 11,123,351 7,601,295
============= ===========
</TABLE>

See accompanying notes to consolidated financial statements

F-23
<PAGE>
NUMEX CORPORATION AND SUBSIDIARY

STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
TREASURY STOCK
PREFERRED STOCK COMMON STOCK AT COST ADDITIONAL
-------------------- ------------------------ --------------------- PAID-IN
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL
--------- --------- ----------- ----------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, April 1, 1997........... 170,000 $ 170,000 6,592,750 $ 659,275 625,000 $ (705,824) $ 8,132,280
Common stock issued for
conversion of debt............. -- --....... 4,596,469 459,647 -- -- 1,838,586
Net loss......................... -- -- -- -- -- -- --
--------- --------- ----------- ----------- --------- ---------- -------------
BALANCE, March 31, 1998.......... 170,000 170,000 11,189,219 1,118,922 625,000 (705,824) 9,970,866
Preferred stock dividend......... 31,123 31,123 -- -- -- -- --
Treasury stock re-issued for
conversion of notes payable.... -- -- -- -- (467,491) 298,940 207,760
Treasury stock re-issued for
payment of legal fees.......... -- -- -- -- (140,000) 158,102 13,828
Treasury stock re-issued for
payment of accrued bonus--
officer........................ -- -- -- -- (240,000) 271,032 28,968
Stock options issued as
compensation for consulting
services....................... -- -- -- -- -- -- 139,000
Common stock returned due to
settlement..................... -- -- -- -- 300,000 (30,000) 30,000
Conversion of preferred shares to
common stock................... (201,123) (201,123) 201,123 20,112 -- -- 181,011
Options exercised................ -- -- 550,000 55,000 -- -- 295,000
Net loss......................... -- -- -- -- -- -- --
--------- --------- ----------- ----------- --------- ---------- -------------
BALANCE, March 31, 1999.......... -- $ -- 11,940,342 $ 1,194,034 77,509 $ (7,750) $ 10,866,433
========= ========= =========== =========== ========= ========== =============

ACCUMULATED
DEFICIT TOTAL
------------- ------------
<S> <C> <C>
BALANCE, April 1, 1997........... $ (10,757,893) $ (2,502,162)
Common stock issued for
conversion of debt............. -- 2,298,233
Net loss......................... (633,598) (633,598)
------------- ------------
BALANCE, March 31, 1998.......... (11,391,491) (837,527)
Preferred stock dividend......... (31,123) --
Treasury stock re-issued for
conversion of notes payable.... -- 506,700
Treasury stock re-issued for
payment of legal fees.......... -- 171,930
Treasury stock re-issued for
payment of accrued bonus--
officer........................ -- 300,000
Stock options issued as
compensation for consulting
services....................... -- 139,000
Common stock returned due to
settlement..................... -- --
Conversion of preferred shares to
common stock................... -- --
Options exercised................ -- 350,000
Net loss......................... (444,662) (444,662)
------------- ------------
BALANCE, March 31, 1999.......... $ (11,867,276) $ 185,441
============= ============
</TABLE>

See accompanying notes to consolidated financial statements.

F-24
<PAGE>
NUMEX CORPORATION AND SUBSIDIARY

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEARS ENDED MARCH 31,
------------------------
1999 1998
----------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN CASH

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss.............................................................................. $ (444,662) $ (633,598)
Adjustments to reconcile net loss to net used in operating activities:
Depreciation and amortization....................................................... 370 5,916
Stock options issued as compensation for consulting services........................ 139,000 --
Adjustment of the prior year 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............................ -- 300,000
Gain on sale of fixed assets........................................................ (10,135) --
Changes in assets and liabilities:
Accounts receivable................................................................. (21,310) 9,058
Inventory........................................................................... 10,230 (1,406)
Deposits............................................................................ 5,233
Other............................................................................... (1,331) --
Accounts payable and accrued expenses............................................... (11,065) (62,583)
----------- -----------
Net cash used in operating activities................................................... (338,903) (562,050)
----------- -----------
Cash flows from investing activities
Payments to acquire property and equipment............................................ -- (4,051)
Proceeds from sale of property and equipment.......................................... 18,614 --
----------- -----------
Net cash provided by (used in) investing activities..................................... 18,614 (4,051)
----------- -----------
Cash flows from financing activities:
Cash restricted....................................................................... -- 5,775
Proceeds from loans and notes payable................................................. 338,338 572,563
Payments on loans and notes payable................................................... (181,675) --
Proceeds from exercise of stock options............................................... 260,100 --
----------- -----------
Net cash provided by financing activities............................................... 416,763 578,338
----------- -----------
NET INCREASE IN CASH.................................................................... 96,474 12,237
CASH AND CASH EQUIVALENTS, beginning of year............................................ 27,218 14,981
----------- -----------
CASH AND CASH EQUIVALENTS, end of year.................................................. $ 123,692 $ 27,218
=========== ===========
</TABLE>

See accompanying notes to consolidated financial statements.

F-25
<PAGE>
NUMEX CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION

Numex Corporation (the "Company") was incorporated in the state of Delaware
in August 1980. Currently management is 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. Effective March 31, 1999, the Company has discontinued selling its
only product and has ceased operations. On April 12, 1999, the Company acquired
all the outstanding capital stock of Jeffrey A. Stern & Associates, Inc.
("JSA"), with the issuance of 3,046,875 shares of the Company's common stock.
JSA is a media and marketing services company that has focused on niche and
underdeveloped markets. Its Spanish language division, JSA en espanol, has
created proprietary integrated marketing programs to help marketers reach the
rapidly growing Hispanic market in the United States. Its custom publishing
division, JSA Communications, develops retention marketing programs for
companies. Additionally, on April 12, 1999, the Company completed a private
placement of 132,000 shares of Series B 5% Convertible Preferred stock which
were sold at $25 per share. The proceeds will be used to refinance JSA's
long-term debt and to provide necessary working capital. See Note 15.

GOING CONCERN UNCERTAINTY

The accompanying consolidated financial statements have been prepared
assuming 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 carrying amounts of assets and liabilities presented in
the financial statements do not purport to represent realizable or settlement
values. However, the Company has suffered recurring operating losses and
discontinued its operations. These factors raise substantial doubt about the
Company's ability to continue as a going concern.

The Company believes that the additional funding from the private placement
and the acquisition of JSA, Inc. will result in improved operating results.
There can be no assurance, however, that the Company, with the additional
financing and the new business, will result in higher cash flows provided by
operations.

NOTE 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

For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments with original maturities of three months or less
to be cash equivalents.

F-26
<PAGE>
NUMEX CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CONCENTRATION OF CREDIT RISK

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.

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. Depreciation is computed using the straight-line
method over the estimated useful lives of the related assets.

LONG-LIVED ASSETS

REVENUE RECOGNITION

Sales and related cost of sales are recorded upon shipment of 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 a provision for future returns
for sales to retail customers.

STOCK-BASED COMPENSATION

The Company accounts for its stock option awards under the intrinsic value
method of accounting, prescribed by Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees." Under the intrinsic value based
method, compensation cost is the excess, if any, of the quoted market price of
the stock at grant date or other measurement date over the amount an employee
must pay to acquire the stock. The Company makes pro forma disclosures of net
income and earnings per share as if the fair value based method of accounting
had been applied as required by SFAS No. 123, "Accounting for Stock-based
Compensation."

INCOME TAXES

The Company provides for income taxes in accordance with Statements of
Financial Accounting Standards, ("SFAS") No. 109, "Accounting for Income Taxes."
Deferred income taxes are provided on the difference in earnings determined for
tax and financial reporting purposes.

COMPUTATION OF EARNINGS PER SHARES

For the year ended March 31, 1998, the Company adopted SFAS No. 128, which
requires the presentation of basic and dilutive earnings per share, which
replaces primary and fully diluted earnings per share. Basic net loss per share
is computed using the weighted average number of common shares outstanding
during the period. Dilutive net loss per share is computed using the weighted
average number of common shares outstanding during the period, plus the dilutive
effect of potential common

F-27
<PAGE>
NUMEX CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
stock. Shares outstanding for dilutive earnings per share consist of preferred
stock and stock options. The dilutive computations do not include preferred
stock and stock options for the years ended March 31, 1998 and 1999 as their
inclusion would be antidilutive.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying value of financial instruments including cash, accounts
receivable and accounts payable, approximate fair value due to their short
maturities.

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.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivatives and
Hedging Activities (SFAS No. 133)", which establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts, (collectively referred to as derivatives) and for
hedging activities. SFAS No. 133 is effective for all fiscal quarters of fiscal
years beginning after June 15, 1999. As the Company does not currently engage in
derivative or hedging activities there will be no impact to the Company's
results of operations, financial position or cash flow upon the adoption of this
standard.

In October 1998, the FASB issued SFAS No. 134, Accounting for
Mortgage-Backed Securities Retained after the Securitization of Mortgage Loans
Held for Sale by a Mortgage Banking Enterprise (SFAS No. 134), which establishes
standards for certain activities of mortgage banking enterprises. SFAS No. 134
is effective for fiscal years beginning after December 15, 1998. The adoption of
SFAS No. 134 did not have an impact on the Company's results of operations,
financial position or cash flows.

NOTE 3. 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. The Company ceased operations during the 1999 fiscal year.

F-28
<PAGE>
NUMEX CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 4. PROPERTY AND EQUIPMENT

As of March 31, 1999, property and equipment consist of the following:

<TABLE>
<CAPTION>
AMOUNT
-------
<S> <C>
Furniture and fixtures...................................... $ 8,500
Less accumulated depreciation............................... 303
-------
$ 8,197
=======
</TABLE>

NOTE 5. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

As of March 31, 1999, accounts payable and accrued expenses consist of the
following:

<TABLE>
<CAPTION>
AMOUNT
---------
<S> <C>
Accounts payable............................................ $ 40,941
Accrued expenses............................................ 25,204
---------
$ 66,145
=========
</TABLE>

NOTE 6. LOAN PAYABLE--OTHER

During the year ended March 31, 1998, the Company received legal services
related to an acquisition target. In May 1998, the board of directors of the
Company approved and issued 140,000 shares of its treasury stock, valued at
$1.23 per share, to this vendor for legal services rendered in the amount of
$171,930.

NOTE 7. ACCRUED BONUS--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. On April 30, 1998, the board of directors of
the Company approved and issued 240,000 shares of its treasury stock, valued at
$1.25 per share, to convert the accrued officer-stockholder compensation
obligation of $300,000.

NOTE 8. NOTES PAYABLE--OTHER

During the year ended March 31, 1999, the Company liquidated the notes
payable--other, which were due on demand and totaled $45,039, through the
issuance of the Company's common stock (treasury stock). See Note 12.

NOTE 9. NOTES PAYABLE--RELATED PARTIES

During the year ended March 31, 1999, the Company liquidated the notes
payable--related parties, which were unsecured and due on demand and totaled
$305,000, through the issuance of the Company's common stock (treasury stock).
See Note 12.

Interest expense to related parties was approximately $10,555 and $83,954
for the years ended March 31, 1999 and 1998.

F-29
<PAGE>
NUMEX CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 10. INCOME TAXES

The current provision for income taxes in both fiscal years 1999 and 1998 is
related to the minimum corporate state income taxes. As of March 31, 1999, the
Company had net federal operating loss carryforwards and net state operating
loss carryforwards totaling approximately $7,376,000 and $2,061,500. The net
federal operating loss carryforwards expire in various years through 2019 and
net state operating loss carryforwards expire in various years through 2004.

The primary components of temporary differences which give rise to the
Company's net deferred tax asset at March 31, 1999 are as follows:

<TABLE>
<CAPTION>
MARCH 31,
1999
-------------
<S> <C>
Deferred tax asset:
Net operating losses.................................... $ 2,690,000
Valuation allowance..................................... (2,690,000)
-------------
Net deferred tax asset...................................... $ --
=============
</TABLE>

NOTE 11. STOCK OPTION PLANS

On September 30, 1992, the Company's 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.

During March 1999, one officer-stockholder acquired 400,000 shares of common
stock as a result of exercising stock options at an exercise price of $.50 per
share. A second officer-stockholder acquired 50,000 shares of common stock as a
result of exercising stock options at an exercise price of $1.00 per share. On
September 8, 1998, an investment company had been issued 100,000 stock options
as compensation to locate possible acquisition candidates. The options where
recorded at their fair market value and was charged to an expense and recorded
in paid-in capital in the amount of $139,000. These options were exercised
during fiscal year 1999.

<TABLE>
<CAPTION>
WEIGHTED
OPTIONS AVERAGE
OUTSTANDING PRICE
----------- -----------
<S> <C> <C>
BALANCE, outstanding at March 31, 1997................................ 150,000 $ .50
Option granted...................................................... 850,000 $ 1.00
--------- ---------
BALANCE, outstanding at March 31, 1998................................ 1,000,000 $ .58
Options exercised................................................... (550,000) $ .63
Options granted..................................................... 100,000 $ 1.00
--------- ---------
BALANCE, outstanding at March 31, 1999................................ 550,000 $ .60
========= =========
</TABLE>

All currently outstanding options are fully vested and have a weighted
average remaining contractural life of 3.8 years. Pro forma information
regarding net loss and loss per share for stock

F-30
<PAGE>
NUMEX CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 11. STOCK OPTION PLANS (CONTINUED)
options issued to employees under SFAS No. 123 has not been presented, as the
amounts are immaterial.

NOTE 12. STOCKHOLDERS' EQUITY

PREFERRED STOCK

On September 15, 1998, the board of directors of the Company approved a
31,123 stock dividend, which increased the shares of Preferred Stock outstanding
from 170,000 to 201,123, and the conversion of 201,123 Preferred Stock shares
into shares of the Company's common stock, at $1.00 per share, for a total of
201,123 shares of common stock.

COMMON STOCK

On April 30, 1998, the board of directors of the Company approved and issued
245,000 shares of its treasury stock, at $1.25 per share, to convert certain
notes payable--related parties into equity, for a total amount of $306,250. On
August 10, 1998, the board of directors of the Company approved and issued
152,525 shares of its common stock, at $1.00 per share, to convert certain notes
payable--related parties into equity, for a total amount of $152,525. On
August 10, 1998, the board of directors of the Company approved and issued
25,889 shares of its common stock, at $1.00 per share, to convert a
note--payable -other into equity, for a total amount of $25,889. On
September 3, 1998, a Lender exercised the option to convert the note payable to
44,077 shares of its common stock, at $0.50 per share, to convert notes
payable--other into equity for a total amount of $22,036. The notes payable
converted to equity was recorded as additional paid-in capital which totaled
$506,700.

A settlement agreement has been signed between Viastar Marketing, Inc.
(Viastar) former stockholders and the Company regarding shares of common stock
issued to acquire Viastar. Under the agreement, these stockholders' returned
300,000 shares of common stock to the Company, which were recorded as treasury
stock.

For the year ended March 31, 1998, certain notes payable to related parties,
were converted to 3,344,581 shares of restricted and unrestricted common stock
in the amount of $1,672,290.

NOTE 13. COMMITMENTS AND CONTINGENCIES

The inventor of the "Therapy Plus" 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.

F-31
<PAGE>
NUMEX CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 13. 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 patent agreement, the obligations
of the Company to pay royalty are 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.

NOTE 14. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Supplemental cash flow information for the years ended March 31, 1999 and
1998 are as follows:

<TABLE>
<CAPTION>
MARCH 31,
--------------------
<S> <C> <C>
1999 1998
--------- ---------
Cash paid for interest................................................... $ 7,668 $ 43,610
Cash paid for income taxes............................................... 800 800
========= =========
</TABLE>

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

<TABLE>
<CAPTION>
MARCH 31,
------------------------
1999 1998
---------- ------------
<S> <C> <C>
Conversion of notes payable--related parties, to 397,525 and 3,344,581 shares of common
stock................................................................................. $ 458,775 $ 1,672,290
Conversion of notes payable--others, to 69,966 and 1,251,888 shares of common stock..... 47,925 625,943
Conversion of loan payable--other to 140,000 shares of common stock..................... 171,930 --
Conversion of loan payable--officer and stockholder to 240,000 shares of common stock... 300,000 --
Conversion of preferred stock into 201,123 shares of common stock....................... 201,123 --
Stock subscription receivable........................................................... 39,920 --
</TABLE>

F-32
<PAGE>
NUMEX CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 15. SUBSEQUENT EVENTS

On April 12, 1999, the Company through a wholly owned subsidiary, acquired
all of the outstanding capital stock of Jeffrey A. Stern and Associates, Inc.
("JSA"), a media and marketing services company that has focused on niche and
underdeveloped markets. Pursuant to the acquisition, the Company paid
approximately $1.8 million to refinance JSA's outstanding bank debt of
approximately $2.7 million. These payments were funded through the completion of
the sale of 144,000 shares of Series B 5% Convertible Preferred Stock, priced at
$25.00 per share. Each share is convertible into 16.667 shares of Common Stock
at any time and no shares issued have voting rights.

F-33
<PAGE>
NUMEX CORPORATION AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEET
(UNAUDITED)

<TABLE>
<CAPTION>
MARCH 31 JUNE 30
1999 * 1999
---------- ----------
<S> <C> <C>
ASSETS

Current assets
Cash................................................................................... $ 85,086 $ 882,470
Accounts receivable, net of allowance for doubtful.....................................
accounts of $120,480 and $120,480, respectively...................................... 422,980 462,254
Capitalized production costs........................................................... 114,828 48,151
Employee advances...................................................................... 21,719 27,019
---------- ----------

Total current assets..................................................................... 644,613 1,419,894

Property and equipment, net of accumulated depreciation and amortization of $165,716 and
$175,118, receptively.................................................................. 90,962 117,353

Other assets............................................................................. 8,683 38,614

Goodwill, net of amortization of $21,895................................................. 0 415,999
---------- ----------
Total Assets........................................................................... $ 744,258 $1,991,860
---------- ----------

LIABILITIES AND SHAREHOLDER'S DEFICIT

Current liabilities
Accounts payable and accrued expenses.................................................. $ 798,669 $ 688,585
Advances on bank line-of-credit........................................................ 1,800,000 0
Deferred revenues...................................................................... 755,897 598,135
Current portion of capital lease obligations........................................... 11,031 11,031
Current portion of note payable........................................................ 236,250 178,903
---------- ----------
Total current liabilities................................................................ 3,601,847 1,476,654
---------- ----------
Long-term portion of bank line-of-credit................................................. 939,594 939,594

Note payable, net of current portion..................................................... 36,903 0
Capital lease obligations, net of current portion........................................ 10,839 5,194
---------- ----------
Total liabilities........................................................................ 4,589,183 2,421,442
---------- ----------
Minority interest........................................................................ 201,589 0
---------- ----------
Shareholder's deficit
Preferred stock; $1.00 par value, 10,000,000 shares authorized 144,000 shares issued
and outstanding...................................................................... 0 144,000
Common stock, $0.10 par value, 20,000,000 shares authorized; 2,538,000 and 15,145,967
shares issued and 2,538,000 and 15,068,458 outstanding............................... 253,800 1,514,597
Treasury stock, at cost, 77,509 shares................................................. 0 (7,750)
Additional paid-in-capital............................................................. (252,300) 4,735,493
Accumulated deficit.................................................................... (4,048,014) (6,815,922)
---------- ----------
Total shareholder's deficit.............................................................. (4,046,514) (429,582)
---------- ----------
$ 744,258 $1,991,860
---------- ----------
</TABLE>

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

* Derived from JSA's March 31, 1999 audited financial statements

See accompanying notes to consolidated condensed financial statements.

F-34
<PAGE>
NUMEX CORPORATION AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
----------------------------
1998 1999
------------ --------------
<S> <C> <C>
Revenues............................................................................ $ 1,142,266 $ 1,481,797
Cost of revenues.................................................................... 675,706 1,119,971
------------ --------------
Gross profit........................................................................ 466,560 361,826
Operating expenses.................................................................. 549,718 1,434,237
------------ --------------
Operating loss...................................................................... (83,158) (1,072,411)
------------ --------------
Other income (expense)
Proceeds from bad debts written off in prior year............................... 55,000
Interest expense, net........................................................... (72,272) (22,390)
------------ --------------
Total other expense................................................................. (72,272) 32,610
------------ --------------
Loss before minority interest....................................................... (155,430) (1,039,801)
Minority interest in income of consolidated subsidiary.............................. (16,125) 0
------------ --------------
Net loss............................................................................ (171,555) (1,039,801)
Deemed dividend..................................................................... 0 1,728,107
------------ --------------
Net loss to applicable to common stock.............................................. $ (171,555) $ (2,767,908)
============ ==============
Basic and diluted loss per common share............................................. $ (0.07) $ (0.19)
============ ==============
Weighted average number of common shares outstanding used to calculate basic and
diluted loss per common share..................................................... 2,538,000 14,267,052
============ ==============
</TABLE>

See accompanying notes to consolidated condensed financial statements.

F-35
<PAGE>
NUMEX CORPORATION AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS

(UNAUDITED)

<TABLE>
<CAPTION>
FOR THE THREE
MONTHS
ENDED JUNE 30TH
1998 1999
------------ -------------------
<S> <C> <C>
Cash flows from operating activities
Net loss.................................................................. $ (171,555) $ (1,039,801)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization....................................... 12,186 33,221
Minority interest in net income of subsidiary....................... 16,125 0
Employee compensation paid in common stock.......................... 0 139,338
Finder's Fee paid in common stock................................... 0 371,094
Changes in operating assets and liabilities:
Accounts receivable................................................... 16,439 (54,753)
Other liabilities..................................................... 2,082 0
Capitalized production costs.......................................... 106,903 66,677
Accounts payable and accrued expenses................................. 43,768 (110,084)
Deferred revenues..................................................... 147,698 (157,762)
Deposits.............................................................. 0 (4,375)
------------ ---------------
Net cash provided by (used in) operating activities........................... 173,646 (756,445)
------------ ---------------
Cash flows from investing activities
Debt issued to employees.................................................. 450 (5,300)
Purchase of trade-mark.................................................... 0 (12,000)
Purchase of computer equipment............................................ (1,840) (35,793)
Acquisition of business................................................... 0 185,441
------------ ---------------
Net cash provided by (used in) investing activities........................... (1,390) 132,348
------------ ---------------
Cash flows from financing activities
Increase (decrease) in bank overdraft..................................... (54,462) 0
Repayment on bank line of credit.......................................... 0 (1,800,000)
Debt received from (paid to) officers..................................... 17,000 0
Proceeds (repayment) on note payable...................................... (15,500) (94,249)
Payments for obligations under capital leases............................. (6,314) (5,645)
Distributions to minority shareholder..................................... (9,000) 0
Net proceeds from issue of preferred stock................................ 0 3,319,500
Net proceeds from exercise of warrants.................................... 0 1,875
------------ ---------------
Net cash provided by (used in) financing activities........................... (68,276) 1,421,481
------------ ---------------
Net increase in cash.......................................................... 103,980 797,384
Cash, at beginning of the period.............................................. 0 85,086
------------ ---------------
Cash, at end of period........................................................ $ 103,980 $ 882,470
============ ===============
</TABLE>

See accompanying notes to consolidated condensed financial statements.

F-36
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

ORGANIZATION AND BUSINESS

Numex Corporation (the "Company") was incorporated under the laws of the
State of Delaware in August 1980.

Effective March 31, 1999, the Company discontinued the manufacture and sales
of its only product and ceased operations. On April 12, 1999, Numex acquired all
the outstanding capital stock of Jeffrey A. Stern & Associates, Inc.

(JSA), a company incorporated under the laws of the State of California,
with the issuance of 3,046,875 shares of Numex's common stock (the JSA
Acquisition). JSA is the remaining operating entity after the acquisition (see
Note 2), which provides distributing and publishing services to various
commercial customers throughout the United States. In addition, JSA is engaged
in publishing, circulating and selling advertisements in its own print
publications. Following the JSA Acquisition, the Company plans to leverage its
expertise and proprietary media vehicles in the Hispanic market by developing an
electronic shopping mall for Hispanics. The Company will call the new venture
"InternetMercado.com", which will be a bilingual e-commerce web site
specializing in retail and service merchandising to the US Hispanic market. The
site leverages the Company's expertise in Hispanic marketing, entertainment
programming and direct response media to draw and retain loyal customers to a
unique and culturally relevant mix of retailers, products, services and
education elements.

NOTE 1 -- BASIS OF PRESENTATION

The accompanying unaudited consolidated condensed financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10QSB and
Article 10 of Regulation S-X. All significant inter-company accounts and
transactions have been eliminated in consolidation.

The unaudited consolidated condensed financial statements do not include all
the information and footnotes required by generally accepted accounting
principles for complete financial statements. All of the financial statements
were prepared on the accrual basis of accounting. In the opinion of the
management, all adjustments (consisting of normal recurring adjustments)
considered necessary for fair presentation have been included. Operating results
for the three months period ended June 30, 1999 are not necessarily indicative
of the results that may be expected for the year ending March 31, 2000. For
further information, refer to the audited financial statements of both the
Company and JSA, and the footnotes thereto, for the year ended March 31, 1999.

NOTE 2 -- MERGER

In April 1999, the Company acquired all of the outstanding common stock of
JSA. Listed below are the various events occurring within JSA and Numex in
conjunction with this acquisition:

(a) On April 9, 1999, JSA issued 93.464 shares of no par value common stock, to
certain employees as compensation. These shares were granted to the
employees on January 5, 1999 in connection with the merger.

Additionally, JSA elected to dissolve and liquidate its subsidiary, JSA
Communications LLC, and transfer all of the assets and liabilities to JSA.
Pursuant to the transaction, JSA issued 106.09 shares of the common stock to
acquire the minority's interest in this subsidiary. JSA accounted for the
acquisition using the purchase method of accounting with the assets acquired
and liabilities assumed recorded at fair values, and the results of the
acquired business will be included in the consolidated financial statements
from the closing date of the JSA Acquisition. JSA recorded

F-37
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

goodwill of $437,894 representing the excess of the purchase price over the
fair value of the assets acquired.

(b) On April 12, 1999, JSA merged with and into a newly found subsidiary of the
Company under a plan of reorganization. In conjunction with the merger, the
former officers of JSA became officers of the Company. The shareholders of
the JSA received 3,046,875 shares of the Company's common stock (or
approximately 26% of the Company's common stock on the effective date of the
merger).

For accounting purposes, this transaction was accounted for as an acquisition
of the Company by JSA (reverse acquisition). The shares held by the
shareholders of the Company prior to the acquisition have been recognized as
if they were issued in connection with the acquisition of the Company by
JSA. The Company accounted for the acquisition using the purchase method of
accounting with the assets acquired and liabilities assumed recorded at fair
values, and the results of the acquired business will be included in the
consolidated financial statements from the closing date of the merger. No
goodwill was recognized since the purchase price equaled to the fair value
of the assets acquired.

NOTE 3 -- PRIVATE PLACEMENT

In conjunction of the merger, the Company also completed a private placement
of 144,000 shares of 5% Series B Convertible Preferred stock for $25.00 per
share on April 12, 1999. These shares are convertible into 2,400,048 shares of
common stock. Concurrent with this placement and the above merger, the Company
reached an agreement with JSA's lender to amend the line of credit. In
accordance with the amendment, the Company paid $1,800,000 to refinance the
outstanding balance of $2,739,594 to approximately $939,000.

The Company recorded deemed dividend of $1,728,107 in connection with the
private placement. This amount represents the difference between the issue price
of the shares of preferred stocks and the market value of the shares of common
stocks issuable upon conversion of the shares of preferred stock, assuming that
the shares of preferred stock were converted into shares of common stock on the
date of the private placement.

F-38
<PAGE>
NUMEX CORPORATION
---------------

PROSPECTUS
------------------
<PAGE>
PART II

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Company's Certificate of Incorporation includes provisions which limit
the liability of our directors. As permitted by applicable provisions of the
Delaware Law, directors will not be liable to the Company for monetary damages
arising from a breach of their fiduciary duty as directors in certain
circumstances. This limitation does not affect liability for any breach of a
director's duty to the Company or our stockholders (i) with respect to approval
by the director of any transaction from which he or she derives an improper
personal benefit, (ii) with respect to acts or omissions involving an absence of
good faith, that the director believes to be contrary to the best interests of
the Company or our stockholders, that involve intentional misconduct or a
knowing and culpable violation of law, that constitute an unexcused pattern or
inattention that amounts to an abdication of his or her duty to the Company or
our stockholders, or that show a reckless disregard for duty to the Company or
our stockholders in circumstances in which he or she was, or should have been
aware, in the ordinary course of performing his or her duties, of a risk of
serious injury to the Company or our stockholders, or (iii) based on
transactions between the Company and our directors or another corporation with
interrelated directors or based on improper distributions, loans or guarantees
under applicable sections of Delaware Law. This limitation of directors'
liability also does not affect the available of equitable remedies, such as
injunctive relief or rescission.

The Company has been advised that it is the position of the Commission that
insofar as the provision in the Company's Restated Certificate of Incorporation
may be invoked for liabilities arising under the Securities Act, the provision
is against public policy and is therefore unenforceable.

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The estimated expenses for the issuance and distribution of the Units
registered hereby, other than underwriting commissions, fees and
Representative's nonaccountable expense allowance are set forth in the following
table:

<TABLE>
<CAPTION>
ITEM AMOUNT
- ----------------------------------------------------------------------------------- ---------
<S> <C>
SEC Registration Fee............................................................... 1,287
Transfer Agent Fees................................................................ 500
Legal Fees......................................................................... 15,000
Accounting Fees.................................................................... 5,000
Printing and Engraving Costs....................................................... 10,000
Miscellaneous...................................................................... 3,213
---------
Total.......................................................................... $ 35,000
=========
</TABLE>

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES

The following is information for all securities that the Company has sold
within the past three years without registering the securities under the
Securities Act:

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; and Dafna Breines
converted $26,250 outstanding notes into 21,000 shares of common stock.

On May 29, 1998, the Company's then law firm converted $172,000 legal fees
into 140,000 shares of common stock.

II-1
<PAGE>
On April 12, 1999, the Company issued an aggregate of 3,046,875 shares of
common stock to the JSA Shareholders in connection with the JSA Acquisition.

On April 12, 1999, the Company issued 144,000 shares of Series B Convertible
Preferred Stock, par value $1.00 per share, each convertible into 16.667 shares
of common stock. This transaction was exempt from registration under
Section 4(2) of the Securities Act and Regulation D thereunder as an issuance
not involving a public offering. The placement agent on this transaction
received a fee of $231,000, plus expenses, and 156,250 shares of common stock.

ITEM 27. EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER TITLE
- ------ --------------------------------------------------------------------------
<S> <C>
3.1 Certificate of Incorporation. Incorporated by reference to exhibit 2.1 to
the 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 the
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 the
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 the
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. Incorporated by reference to exhibit 3.5 to the
Company's Registration Statement on Form SB-2 filed on October 2, 1998.

3.6 Bylaws. Incorporated by reference to exhibit 2.2 to the 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 the 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 the 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 the 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 the Company's Form 10-KSB for fiscal year ending
March 31, 1993.

3.11 Certificate of Designations of Preferences and Rights of Series B
Convertible Preferred Stock filed April 12, 1999.

5.1 Opinion of Loeb & Loeb LLP.*

10.1 Settlement and Release Agreement, dated August 16, 1999, by and between
the Company and Jeffrey A. Stern, on the one hand and Jack I. Salzberg
and Isaac S. Salzberg, on the other hand.

16.1 Letter of Stonefield Josephson, Inc., Certified Public Accountants.
Incorporated by reference to exhibit 16.1 to the Company's Form 8-K,
filed April 20, 1999.

21 Subsidiaries of Registrant.
</TABLE>

II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER TITLE
-- --------------------------------------------------------------------------
<S> <C>
23.1 Consent of Loeb & Loeb LLP (included in Exhibit 5.1).*

23.2 Consent of BDO Seidman, LLP, Certified Public Accountants.

23.3 Consent of Stonefield Josephson, Inc., Certified Public Accountants.

24 Powers of Attorney (included on the signature page in Part II of this
Registration Statement).
</TABLE>

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

* To be filed by amendment.

ITEM 28. UNDERTAKINGS

The undersigned Registrant hereby undertakes as follows:

(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;

(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; and

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement.

(2) To provide to the Underwriters at the closing specified in the
Underwriting Agreement (filed herewith as Exhibit 1.1) certificates in such
denominations and registered in such names as required by the Underwriters
to permit prompt delivery to each purchaser.

(3) 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 provisions described above in Item
24, or otherwise, the Registrant has been advised that in the opinion of the
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 with the securities being registered, the
Registrant will, unless in the opinion of our counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction of 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.

(4) For purposes of determining any liability under the Securities Act,
to treat the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1), or
(4), or 497(h) under the Securities Act as part of this Registration
Statement as of the time the Commission declared it effective.

(5) For the purpose of determining any liability under the Securities
Act, to treat each post-effective amendment that contains a form of
prospectus as a new registration statement for the securities offered in the
Registration Statement, and the offering of such securities at that time as
the initial bona fide offering of those securities.

II-3
<PAGE>
SIGNATURES

In accordance with 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 Form SB-2 and authorized this Registration
Statement to be signed on our behalf by the undersigned, in the City of Los
Angeles, State of California, on the 19th day of October, 1999.

<TABLE>
<S> <C> <C>
NUMEX CORPORATION

By: /s/ JEFFREY A. STERN
-----------------------------------------
Jeffrey A. Stern
PRESIDENT AND CHIEF EXECUTIVE OFFICER
</TABLE>

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Jeffrey A. Stern, as his true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this Registration
Statement on Form SB-2 of Numex Corporation, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, grant unto said attorney-in-fact and agent,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the foregoing, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his substitutes, may
lawfully do or cause to be done by virtue hereof.

In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date stated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------

<C> <S> <C>
President, Chief Executive
/s/ JEFFREY A. STERN Officer and Director
- ------------------------------ (Principal Executive October 19, 1999
Jeffrey A. Stern Officer)

/s/ MARC STRAUSBERG
- ------------------------------ Director October 19, 1999
Marc Strausberg
</TABLE>

II-4

<PAGE>

EXHIBIT 3.11

CERTIFICATE OF DESIGNATIONS OF PREFERENCES AND
RIGHTS OF SERIES B CONVERTIBLE PREFERRED STOCK
OF
NUMEX CORPORATION

Pursuant to Section 151 of the General Corporation Law
of the State of Delaware

The undersigned, being the duly elected Chief Executive Officer and
Secretary of Numex Corporation, a corporation organized and existing under the
General Corporation Law of the State of Delaware in accordance with the
provisions of Section 103 thereof (the "Corporation"), DO HEREBY CERTIFY:

That pursuant to the authority conferred upon the Board of Directors by
the Certificate of Incorporation of the Corporation, as amended, the Board of
Directors has duly adopted the following recitals and resolutions:

"WHEREAS, the Certificate of Incorporation of this corporation, as
amended, provides for a class of shares known as Preferred Stock, par
value $1.00 per share, of the Corporation (the "Preferred Stock"),
issuable from time to time in one or more series;

WHEREAS, the Board of Directors of this corporation is authorized to
determine or alter the rights, preferences, privileges and restrictions
granted to or imposed upon any wholly unissued series of Preferred
Stock, to fix the number of shares constituting any such series, and to
determine the designation thereof, or any of them; and

WHEREAS, the Board of Directors of this corporation desires, pursuant
to its authority, to determine and fix the rights, preferences,
privileges and restrictions relating to this series of Preferred Stock
and the number of shares constituting and the designation of such
series;

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby
fixes and determines the designation of, the number of shares
constituting, and the rights, preferences, privileges and restrictions
relating to, a new series of Preferred Stock as follows:

a. DESIGNATION. This series of Preferred Stock shall be designated
"Series B Preferred Stock".

b. NUMBER. The number of shares constituting the Series B Preferred
Stock shall be 200,000. None of the Series B Preferred Stock have been issued.

c. DIVIDENDS. Commencing on the date of issuance (the "Issuance Date"),
each issued and outstanding share of Series B Preferred Stock shall entitle the
holder of record thereof to receive, when, as and if declared by the Board of
Directors, out of any funds legally available therefor, dividends in preference
to the holders of Common Stock, par value $0.10 per

<PAGE>

share (the "Common Stock"), of the Corporation, and any other junior stock,
until conversion, at the rate (the "Dividend Rate") of $1.25 per annum per
share of Series B Preferred Stock, subject to adjustment in each case as
hereinafter set forth, payable semi-annually on each October 15 and April 15
(the "Dividend Payment Date"), to holders of record on September 30 and March
31 ("Dividend Record Date"). Dividends shall accrue from the Issuance Date
and shall accrue from day to day, whether or not earned or declared.
Dividends shall be paid on the Series B Preferred Stock only when, as and if
declared by the Board of Directors, out of funds legally available therefor.
Dividends shall be cumulative so that, if such dividends in respect of any
previous or current semi-annual period, at the annual rate specified above
(subject to adjustment as herein provided), shall not have been paid or
declared and a sum sufficient for payment thereof set apart, the deficiency
shall first be fully paid before any dividend or other distribution shall be
paid on or set apart for any equity securities of the Corporation which is
junior to the Series B Preferred Stock. Any accumulation of dividends on the
Series B Preferred Stock shall not bear interest. Unless full cumulative
dividends on the Series B Preferred Stock for all past dividend periods and
the then current dividend period shall have been paid or declared and a sum
sufficient for the payment thereof set apart: (i) no dividend whatsoever
shall be paid or declared, and no distribution shall be made, on any equity
security of the Corporation which is junior to the Series B Preferred Stock,
and (ii) no shares of any equity security which are junior to the Series B
Preferred Stock of the Corporation shall be purchased, redeemed, or acquired
by the Corporation and no funds shall be paid into or set aside or made
available for a sinking fund for the purchase, redemption, or acquisition
thereof. If any dividend previously due on the Series B Preferred Stock has
not been paid in full, then no dividends shall be paid or declared upon any
shares of any class or series of stock of the Corporation ranking on a parity
with the Series B Preferred Stock in the payment of dividends for any period
unless a like proportionate dividend for the current period, ratably in
proportion to the respective annual dividend rates fixed thereupon, shall be
paid upon or declared for the Series B Preferred Stock then issued and
outstanding. In the event of a split or subdivision of the outstanding shares
of Series B Preferred Stock, or the combination or the outstanding shares of
Series B Preferred Stock, as the case may be, the dividends provided for
herein shall automatically and without any further action be decreased, in
the case of a split or subdivision, or increased, in the case of a
combination, in proportion to the increase or decrease in the number of
shares of Series B Preferred Stock outstanding immediately before such split,
subdivision or combination.

d. LIQUIDATION PREFERENCE.

(i) In the event of any liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, the holders of the Series
B Preferred Stock shall each be entitled to receive, prior and in preference
to any distribution of any of the assets or surplus funds of the Corporation
to the holders of the Common Stock or any class or series of shares except
any class or series of shares which is entitled to priority over the Series B
Preferred Stock, by reason of their ownership thereof, a liquidation
preference (the "Liquidation Preference") in the amount of $25.00 per share
(as adjusted for any stock dividends, combinations or splits with respect to
such shares). If upon the occurrence of such event, the remaining assets and
funds thus distributed (after taking into account any payment to any class or
series of shares having priority over or parity with the Series B Preferred
Stock) among the holders of the Series B Preferred Stock shall be
insufficient to permit the payment to such holders of the full Liquidation
Preference, then the entire assets and funds of the Corporation

2
<PAGE>

legally available for distribution shall be distributed ratably among the
holders of the Series B Preferred Stock in proportion to the shares of Series
B Preferred Stock then held by them.

(ii) For purposes of this Section (d), (A) any acquisition of the
Corporation by means of merger or other form of corporate reorganization in
which outstanding shares of the Corporation are exchanged for securities or
other consideration issued, or caused to be issued, by the acquiring
corporation or its subsidiary (other than a mere reincorporation transaction)
or (B) a sale of all or substantially all of the assets of the Corporation,
shall be treated as a liquidation, dissolution or winding up of the
Corporation and shall entitle the holders of Series B Preferred Stock and
Common Stock to receive at the closing in cash, securities or other property
(valued as provided in Section (d)(iii) below) amounts as specified in
Section (d)(i) above.

(iii) Whenever the distribution provided for in this Section (d)
shall be payable in securities or property other than cash, the value of such
distribution shall be the fair market value of such securities or other
property as determined in good faith by the Board of Directors.

e. VOTING RIGHTS.

Except as otherwise expressly provided by law or this Certificate
of Designation, the holders of the Series B Preferred shall have no voting
rights. Notwithstanding the foregoing, so long as any shares of the Series B
Preferred Stock remain outstanding, the consent of two-thirds of the holders
of the then outstanding Series B Preferred Stock, voting as one class, either
expressed in writing or at a meeting called for that purpose, shall be
necessary to repeal, amend or otherwise change this Certificate of
Designation, or the Certificate of Incorporation of the Company, as amended,
in a manner which would alter or change the powers, preferences, rights,
privileges, restrictions and conditions of the Series B Preferred Stock so as
to adversely affect the Series B Preferred Stock. Each share of the Series B
Preferred Stock shall entitle the holder thereof to one vote on all matters
to be voted on by the holders of the Series B Preferred Stock, as set forth
above.

f. CONVERSION. The holders of the Series B Preferred Stock shall have
conversion rights as follows (the "Conversion Rights"):

(i) RIGHT TO CONVERT. Each share of Series B Preferred Stock
shall be convertible, at the option of the holder thereof, at any time, at
the office of the Corporation or any transfer agent for such stock, into
16.667 fully paid and nonassessable shares of Common Stock on and subject to
the terms and conditions hereinafter set forth. The conversion rate in effect
at any time herein is hereinafter referred to as the "Conversion Rate".

(ii) AUTOMATIC CONVERSION. Each share of Series B Preferred Stock
then outstanding shall, by virtue of such conditions and without any action
on the part of the holder thereof, be deemed automatically converted into
that number of Common Stock into which the Series B Preferred Stock would
then be converted at the then effective Conversion Rate as of the date that a
registration statement covering the shares of Common Stock issuable

3
<PAGE>

upon conversion of the Series B Preferred Stock has been declared effective
by the Securities and Exchange Commission.

(iii) MECHANICS OF CONVERSION. Before any holder of Series B
Preferred Stock shall be entitled to receive certificates for shares of
Common Stock, he shall surrender the certificate or certificates therefor,
duly endorsed, at the office of the Corporation or of any transfer agent for
such stock, and shall give written notice to the Corporation at such office
that he elects to convert the same and shall state therein the name or names
in which he wishes the certificate or certificates for shares of Common Stock
to be issued. The Corporation shall, as soon as practicable thereafter, issue
and deliver at such office to such holder of Series B Preferred Stock, a
certificate or certificates for the number of shares of Common Stock to which
he shall be entitled as aforesaid. Such conversion shall be deemed to have
been made immediately prior to the close of business on the date of surrender
of the shares of Series B Preferred Stock to be converted, and the person or
persons entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders
of such shares of Common Stock on such date. Upon receipt of evidence
reasonably satisfactory to the Corporation of the loss, theft, destruction or
mutilation of certificate or certificates representing the Series B Preferred
Stock from any holder therefor, and (if lost, stolen or destroyed) of
indemnity reasonably satisfactory to the Corporation, and (if mutilated) upon
surrender and cancellation of the certificate or certificates, each such
holder shall be entitled to convert the Series B Preferred Stock held by such
holder into Common Stock in the manner as aforesaid.

(iv) ADJUSTMENTS TO CONVERSION RATE FOR COMBINATIONS OR
SUBDIVISIONS OF COMMON STOCK. In the event that this Corporation at any time
or from time to time after the original issue date of the Series B Preferred
Stock shall effect a subdivision of the outstanding shares of Common Stock
into a greater number of shares of Common Stock (by stock split,
reclassification or otherwise than by payment of a dividend in Common Stock
or in any right to acquire Common Stock), or in the event the outstanding
shares of Common Stock shall be combined or consolidated, by reclassification
or otherwise, into a lesser number of shares of Common Stock, then the
Conversion Rate in effect immediately prior to such event shall, concurrently
with the effectiveness of such event, be proportionately decreased or
increased, as appropriate.

(v) ADJUSTMENT FOR RECLASSIFICATION AND REORGANIZATION. If the
Common Stock issuable upon conversion of the Series B Preferred Stock shall
be changed into the same or a different number of shares of any other class
or classes of stock, whether by capital reorganization, reclassification or
otherwise (other than a subdivision or combination of shares provided for in
Section (f)(iv) above or a merger or other reorganization referred to in
Section (d)(ii) above), the Conversion Rate then in effect shall,
concurrently with the effectiveness of such reorganization or
reclassification, be proportionately adjusted so that the Series B Preferred
Stock shall be convertible into, in lieu of the number of shares of Common
Stock which the holders would otherwise have been entitled to receive, a
number of shares of such other class or classes of stock equivalent to the
number of shares of Common Stock that would have been subject to receipt by
the holders upon conversion of the Series B Preferred Stock immediately
before that change.

4
<PAGE>

(vi) NO IMPAIRMENT. The Corporation will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by the
Corporation, but will at all times in good faith assist in the carrying out
of the provisions of this Section (f) and in the taking of all such action as
may be necessary or appropriate in order to protect the Conversion Rights of
the holders of the Series B Preferred Stock against impairment.

(vii) CERTIFICATES AS TO ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment of any Conversion Rate pursuant to this Section
(f), the Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to
each holder of Series B Preferred Stock a certificate executed by the
Corporation's President or Chief Financial Officer setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Corporation shall, upon the written
request at any time of any holder of Series B Preferred Stock, furnish or
cause to be furnished to such holder a like certificate setting forth (A)
such adjustments and readjustments, (B) the Conversion Rate for the Series B
Preferred Stock at the time in effect, and (C) the number of shares of Common
Stock and the amount, if any, of other property which at the time would be
received upon the conversion of the Series B Preferred Stock.

(viii) NOTICES OF RECORD DATE. In the event that the Corporation
shall propose at any time (A) to effect any reclassification or
recapitalization of its Common Stock outstanding involving a change in the
Common Stock, or (B) to merge or consolidate with or into any other
corporation, or sell, lease or convey all or substantially all of its assets,
or to liquidate, dissolve or wind up; then, in connection with each such
event, the Corporation shall send to the holders of Series B Preferred Stock:

(x) at least twenty (20) days' prior written notice of the
date on which a record shall be taken for determining rights to vote, if any,
in respect of the matters referred to in (A) and (B) above;

(y) in the case of the matters referred to in (A) and (B)
above, at least twenty (20) days' prior written notice of the date when the
same shall take place (and specifying the date on which the holders of Common
Stock shall be entitled to exchange their Common Stock for securities or
other property deliverable upon the occurrence of such event).

(ix) ISSUE TAXES. The Corporation shall pay any and all issue and
other taxes that may be payable in respect of any issue or delivery of shares
of Common Stock on conversion of Series B Preferred Stock pursuant hereto;
provided, however, that the Corporation shall not be obligated to pay any
transfer taxes resulting from any transfer requested by any holder in
connection with any such conversion.

(x) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The
Corporation shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock, solely for the purpose of
effecting the conversion of the shares of the Series B Preferred

5
<PAGE>

Stock, such number of its shares of Common Stock as shall from time to time
be sufficient to effect the conversion of all outstanding shares of the
Series B Preferred Stock; and if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to effect the
conversion of all then outstanding shares of the Series B Preferred Stock,
the Corporation will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such
purpose, including, without limitation, engaging in best efforts to obtain
the requisite stockholder approval of any necessary amendment to this
Certificate of Designation.

(xi) FRACTIONAL SHARES. No fractional share shall be issued upon
the conversion of any share or shares of Series B Preferred Stock. All shares
of Common Stock (including fractions thereof) issuable upon conversion of
more than one share of Series B Preferred Stock by a holder thereof shall be
aggregated for purposes of determining whether the conversion would result in
the issuance of any fractional share. If, after the aforementioned
aggregation, the conversion would result in the issuance of a fraction of a
share of Common Stock, the Corporation shall, in lieu of issuing any
fractional share, pay the holder otherwise entitled to such fraction a sum in
cash equal to the fair market value of such fraction on the date of
conversion (as determined in good faith by the Board of Directors).

(xii) NOTICES. Any notice required by the provisions of this
Section (f) to be given to the holders of shares of Series B Preferred Stock
shall be deemed given if deposited in the United States mail, postage
prepaid, and addressed to each holder of record at such holder's address
appearing in the records of the Corporation.

g. RANK.

The Series B Preferred Stock shall rank, with respect to the payment
of dividends and the distribution of assets, prior and superior to all series
of the Corporation's Preferred Stock and any other class of the Corporation's
securities, including the Common Stock.

RESOLVED FURTHER, that the Chief Executive Officer or any Vice
President, and the Secretary or the Chief Financial Officer of this
corporation be, and each of them hereby is, authorized, empowered and
directed, for and on behalf of this corporation, to execute, verify and
file a certificate of determination of preferences with respect to the
Series B Preferred Stock in accordance with Delaware law; and

RESOLVED FURTHER, that any officer of this corporation, acting alone,
be, and hereby is, authorized, empowered and directed, for and on
behalf of this corporation, to execute any and all further documents or
instruments and to take any further actions as may be necessary, proper
or advisable in order to effectuate the intent and purposes of the
foregoing resolutions."

6
<PAGE>

The undersigned further declare under penalty of perjury under the laws
of the State of Delaware that the matters set forth in this Certificate of
Designation of Preferences and Rights are true and correct of our own knowledge.

DATED: April 12, 1999

/s/ JACK I. SALZBERG
--------------------------------
Jack I. Salzberg, President and
Chief Executive Officer

/s/ ISAAC S. SALZBERG
--------------------------------
Isaac S. Salzberg, Secretary

<PAGE>

EXHIBIT 10.1

SETTLEMENT AND RELEASE AGREEMENT

This Settlement and Release Agreement (the "Agreement") is made and
entered into as of August 16, 1999, by and between Numex Corporation, a Delaware
corporation (the "Company"), and Jeffrey A. Stern, an individual ("Stern"), on
the one hand; and Jack I. Salzberg, an individual ("Jack Salzberg"), and Isaac
S. Salzberg, an individual ("Isaac. Salzberg"), on the other hand; with
reference to the following:

A. Jack Salzberg is currently a director of the Company and the
Company's Chairman pursuant to that certain Employment Agreement, dated as of
April 12, 1999, between the Company and Jack Salzberg (the "Employment
Agreement").

B. Isaac Salzberg currently holds the positions of Secretary and a
director with the Company.

C. Stern, Jack Salzberg and Isaac Salzberg are stockholders of the
Company and have entered entered into that certain Stockholders Agreement, dated
as of April 12, 1999, by and among the Company, Stern, Jack Salzberg and Isaac
Salzberg, to provide for the orderly management of the Company.

D. Jack Salzberg and Isaac Salzberg and the Company have agreed that
Jack Salzberg and Isaac Salzberg shall resign all positions they each
respectively hold with the Company and the Employment Agreement shall be
terminated, effective as of the date hereof.

E. The Company, Stern, Jack Salzberg and Isaac Salzberg have agreed
that the Stockholders Agreement shall be terminated, effective as of the date
hereof.

F. Jack Salzberg and Isaac Salzberg and the Company desire to resolve
(i) any claims or potential claims Jack Salzberg and Isaac Salzberg may have
against the Company, and (ii) any claims or potential claims the Company may
have against Jack Salzberg and Isaac Salzberg.

NOW, THEREFORE, in consideration of the foregoing, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereby agree as follows:

1. TERMINATION OF EMPLOYMENT. The Employment Agreement and the
employment of Jack Salzberg under the Employment Agreement is hereby terminated
in all respects and shall be of no further force or effect.

2. RESIGNATION. Upon execution hereof, Jack Salzberg and Isaac Salzberg
shall each sign and submit to the Company the form of resignation attached
hereto as Exhibit A.

3. TERMINATION OF STOCKHOLDERS AGREEMENT. The Stockholders Agreement is
hereby terminated in all respects and shall be of no further force or effect.

<PAGE>

4. PAYMENTS. The Company shall make the following payments (which
payments aggregate $114,400) to Jack Salzberg:

(a) $58,150 upon the execution hereof;

(b) $6,250 on or before August 16, 1999; and

(c) $50,000 on the earlier of: (i) November 30, 1999, or (ii) the
closing of a financing for the Company with gross proceeds of an amount in
excess of $2,500,000.

5. REGISTRATION RIGHTS. The Company shall use its best efforts to
ensure that the resale of (i) the common stock, par value $.10 per share, of the
Company (the "Common Stock") held by Jack Salzberg individually or in his
capacity as trustee, as of the date hereof, and (ii) and the Common Stock
issuable upon the exercise of the stock options (the "Options") of the Company
granted to Jack Salzberg on December 18, 1997, shall be included in the
registration statement covering the resale of the shares of Common Stock
issuable upon conversion of the Company's Series B Preferred Stock issued in
April 1999, which registration statement shall be filed as soon as reasonably
practicable after the date hereof.

6. TRANSFER OF OPTIONS. Upon satisfactory assurances to the Company
(which may include an opinion of counsel acceptable to the Company) that
registration under the Act and applicable state laws is not required for the
transfer of the Options covered by this Section 6, the Company shall cause the
transfer of the Options of the Company currently registered in the name of Jack
Salzberg to Isaac Salzberg on the books and records of the Company.

7. INDEMNIFICATION. The Company shall indemnify, defend and hold
harmless and in all respects make whole Jack Salzberg and Isaac Salzberg from
and against any and all claims, demands, liabilities, damages, judgments and
payments, including reasonable attorney fees ("Losses"), which may be incurred
or suffered by Jack Salzberg or Isaac Salzberg or to which either one of them
may be subject, which may arise out of or result from their acting in the
capacities of officers and/or directors of the Company, for the period
commencing April 12, 1999 and ending as of the date hereof. Such indemnification
shall include, but is not limited to, any Losses suffered as a result of the
Company's Form 10-KSB as filed with the Securities and Exchange Commission on
July 13, 1999.

8. RELEASE BY JACK SALZBERG AND ISAAC SALZBERG.

(a) Excepting obligations of the Company under this Agreement, Jack
Salzberg and Isaac Salzberg, for themselves and their respective successors and
assigns, do hereby unconditionally release and forever discharge the Company and
each of its subsidiaries, parents, affiliates and related entities and each of
their respective directors, officers, shareholders, partners, limited partners,
members, managers, supervisors, employees, administrators, attorneys and agents
(collectively, "Company Releasees") from all rights, claims, actions and suits
of all kinds and

2
<PAGE>

descriptions whatsoever (collectively, "Claims"), whether known or unknown,
that Jack Salzberg or Isaac Salzberg may have against Company Releasees
arising prior to the date hereof.

(b) Jack Salzberg and Isaac Salsberg agree that the releases contained
in Section 8(a) include all Claims of every kind and nature, past or present,
known or unknown, suspected or unsuspected, which Jack Salzberg or Isaac
Salzberg now has against any Company Releasee and that Jack Salzberg and Isaac
Salzberg further expressly waive any and all rights, to the fullest possible
extent, that he may have under Section 1542 of the California Civil Code, which
provides:

"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor
at the time of executing the release, which if known by
him must have naturally affected his settlement with the
debtor."

(c) The filing or bringing by Jack Salzberg or Isaac Salzberg of any
claim, demand, obligation or cause of action against any Company Releasee
hereunder in connection with any matter released hereunder shall constitute a
breach of this Agreement.

9. RELEASE BY THE COMPANY.

(a) Excepting obligations of Jack Salzberg and Isaac Salzberg under
this Agreement, the Company on its own behalf and on behalf of its successors
and assigns, parents, affiliates and related entities and each of their
respective directors, officers, shareholders, partners, limited partners,
members, managers, supervisors, employees, administrators, attorneys and agents,
hereby releases Jack Salzberg and Isaac Salzberg and their dependents, heirs,
executors, successors and assigns ("Salzberg Releasees"), from all Claims
whether known or unknown, that the Company may have against Jack Salzberg and
Isaac Salzberg arising prior to the date hereof.

(b) The Company agrees that the releases contained in Section 9(a)
include all Claims of every kind and nature, past or present, known or unknown,
suspected or unsuspected, which the Company now has against any Salzberg
Releasee and that the Company further expressly waives any and all rights, to
the fullest possible extent, that it may have under Section 1542 of the
California Civil Code, which provides:

(c) The filing or bringing by the Company of any claim, demand,
obligation or cause of action against any Salzberg Releasee hereunder in

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connection with any matter released hereunder shall constitute a breach of this
Agreement.

10. ABSENCE OF ASSIGNMENT. Each of Jack Salzberg, Isaac Salzberg and
the Company represents and warrants that he or it has not in any way heretofore
transferred by agreement, operation of law or otherwise any Claim against any
Company Releasee or Salzberg Releasee, as the case may be, which is to be
released hereunder.

11. ACKNOWLEDGEMENT. Jack Salzberg and Isaac Salzberg and the Company
acknowledge that neither this Agreement nor anything contained herein shall be
admissible in any proceeding as evidence of or an admission by the Company, Jack
Salzberg, Isaac Salzberg any other Company Releasee or any other Salzberg
Releasee of any wrongdoing or violation of its respective policies and
procedures, or of any law or regulation. Notwithstanding the foregoing, this
Agreement may be introduced into a proceeding solely for the purpose of
enforcing this Agreement.

12. CONFIDENTIALITY. Jack Salzberg, Isaac Salzberg, Stern and the
Company each hereby covenant and agree to keep all of the terms and conditions
of this Agreement confidential except as required by any federal, state or local
law, and to cause their respective dependents, heirs, executors, successors,
assigns, agents, representatives and attorneys, as applicable, to maintain the
confidentiality thereof.

13. NO ADMISSION. Jack Salzberg and Isaac Salzberg acknowledge and
agree that this Agreement is not to be construed as an admission by the Company
of any liability whatsoever. The Company acknowledges and agrees that this
Agreement is not to be construed as an admission by Jack Salzberg or Isaac
Salzberg of any liability whatsoever.

14. NOTICES. Any and all notices or other communications required or
permitted to be given under any of the provisions of this Agreement shall be in
writing and shall be deemed to have been duly given when personally delivered or
mailed by first class registered mail, return receipt requested, or by
commercial courier or delivery service, or by facsimile, addressed to the
parties at the addresses set forth below (or at such other address as any party
may specify by notice to all other parties given as aforesaid):

(a) if to the Company or Stern, to:

Numex Corporation
11111 Santa Monica Blvd., Suite 210
Los Angeles, California 90025
Attention: Jeffrey A. Stern

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With a copy to:

Loeb & Loeb LLP
1000 Wilshire Blvd., Suite 1800
Los Angeles, California 90017
Attention: David L. Ficksman, Esq.

(b) if to Jack Salzberg to:

120 S. Palm Drive, #402
Beverly Hills, California 90212

With a copy to:

Richman, Lawrence, Mann, Chizever & Phillips
9601 Wilshire Blvd., Penthouse
Beverly Hills, California 90210
Attention: Jerry S. Phillips, Esq.

433 N. June Street
Los Angeles, California 90004

15. FURTHER ASSURANCES. The parties to this Agreement shall, from time
to time, promptly execute and deliver such further instruments, documents and
papers and perform such further acts as may be necessary to carry out and effect
the terms of this Agreement.

16. SUCCESSORS AND ASSIGNS; THIRD PARTY BENEFICIARIES. This Agreement
is binding upon and shall inure to the benefit of the parties hereto and their
respective assignors, predecessors in interest, successors, assigns, heirs and
personal representatives. Nothing in this Agreement, whether express or implied,
is intended to confer any rights or remedies under or by reason of this
Agreement on any persons other than the parties to this Agreement and their
respective successors and assigns, nor is anything in this Agreement intended to
relieve or discharge the obligation or liability of any third persons to any
party to this Agreement.

17. ATTORNEYS' FEES. Should any party to this Agreement institute any
action or proceeding (including, without limitation, any arbitration proceeding)
to enforce any provision hereof, or for damages by reason of any alleged breach
of any provision of this Agreement, or for a declaration of such party's rights
or obligations hereunder, or for any other judicial remedy, the prevailing party
shall recover from the losing party all attorneys' fees, costs and expenses
actually paid by the prevailing party to its attorneys for the services rendered
the party prevailing in any such action or proceeding.

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<PAGE>

18. WAIVER; AMENDMENT. No provision in this Agreement may be waived
unless in writing signed by all parties to this Agreement. Waiver of any one
provision shall not be deemed to be a waiver of any other provision. This
Agreement may be modified or amended only by a written agreement executed by all
of the parties to this Agreement.

19. SEVERABILITY. If any provision of this Agreement is determined by a
court of competent jurisdiction to be invalid or unenforceable, in whole or in
part, the remaining provisions, and any partially invalid or unenforceable
provisions, to the extent valid and enforceable, shall nevertheless be binding
and valid and enforceable. Notwithstanding the foregoing severability provision,
the parties reserve the right to rescind this Agreement in the event that a
court of competent jurisdiction holds that a provision of this Agreement is
unenforceable, in whole or in part, provided that such unenforceability
constitutes a material failure of consideration for the parties to this
Agreement entering into this Agreement.

20. ENTIRE AGREEMENT. This Agreement contains the entire agreement and
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes any and all prior and contemporaneous oral and written
agreements and understandings with respect to such subject matter. No party may
rely on any representation, warranty, condition, understanding or agreement of
any kind with respect to the subject matter hereof other than those contained
herein.

21. GOVERNING LAW; VENUE. This Agreement shall be construed in
accordance with the internal laws of the State of California, without regard to
the conflicts of laws principles thereof. Any and all legal proceedings to
enforce this Agreement shall be brought in the state or federal courts sitting
in Los Angeles, California, the parties hereto hereby waiving any claim or
defense that such forum is not convenient or proper. Each party hereby agrees
that any such court shall have in personam jurisdiction over it and consents to
service of process in any manner authorized by California law.

22. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which,
together, shall be deemed to constitute a single document.

23. CONSTRUCTION. When necessary herein, all terms used in the singular
shall apply to the plural, and vice versa; the present tense shall include the
past and future tense, and vice versa; and the masculine shall include the
feminine and the neuter, and vice versa. The language in all parts of this
Agreement shall in all cases be construed simply, according to its fair meaning,
and not strictly for or against any of the

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parties hereto. Without limitation, there shall be no presumption against any
party on the ground that such party was responsible for drafting this Agreement
or any part thereof.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

NUMEX CORPORATION,
a Delaware corporation

By: /s/ Jeffrey A. Stern
--------------------
Its: President
--------------------

/s/ Jeffrey A. Stern
--------------------
JEFFREY A. STERN

/s/ Jack I. Salzberg
--------------------
JACK I. SALZBERG

/s/ Isaac S. Salzberg
---------------------
ISAAC S. SALZBERG

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EXHIBIT A

, 1999

To the Board of Directors of
Numex Corporation

I hereby resign all positions with Numex Corporation effective as of
the date hereof.

----------------------------------
Jack I. Salzberg/Isaac S. Salzberg

<PAGE>

EXHIBIT 21

Subsidiaries of the Registrant

SUBSIDIARIES

1. Jeffrey A. Stern & Associates, Inc., California corporation

<PAGE>

EXHIBIT 23.2

Consent of Independent Certified Accountants
To the Board of Directors and Stockholders
Numex Corporation

We hereby consent to the use in the Prospectus constituting a part of this
Registration Statement of the following, which is contained in that
Prospectus:

- - Our report dated May 25, 1999, relating to the consolidated financial
statements of Numex Corporation and Subsidiary, for the year ended March 31,
1999. Our Report contains an explanatory paragraph regarding the Company's
ability to continue as a going concern;

- - Our report dated May 25, 1999, relating to the consolidated financial
statements of Jeffrey A. Stern & Associates, Inc. and Subsidiary, for the
year ended March 31, 1999. Our Report contains an explanatory paragraph
regarding the Company's ability to continue as a going concern.

We also consent to the reference to us under the caption "Experts" in the
Prospectus.

/s/ BDO SEIDMAN, LLP
Los Angeles, California
October 19, 1999

<PAGE>

EXHIBIT 23.3

CONSENT OF STONEFIELD JOSEPHSON, INC.

CERTIFIED PUBLIC ACCOUNTANTS

The undersigned independent certified public accounting firm hereby
consents to the inclusion of its report on the financial statements of Numex
Corporation for the year ended March 31, 1998 and to the reference to it as
experts in accounting and auditing relating to said financial statements, in
the Registration Statement for Numex Corporation.

- -------------------------------
STONEFIELD JOSEPHSON, INC.
Certified Public Accountants
Santa Monica, California

Dated: October 19, 1999
------------------------