NUMEX CORP, 10KSB40/A, 1999-07-27

NUMEX CORP
10KSB40/A, 1999-07-27
BUSINESS SERVICES, NEC

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<PAGE>

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-KSB/A

(MARK ONE)
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

FOR THE FISCAL YEAR ENDED MARCH 31, 1999

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

For the transition period from __________ to __________
Commission file number 0-7722

NUMEX CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE 06-1034587
(State of other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)

11111 SANTA MONICA BOULEVARD, SUITE 210
LOS ANGELES, CALIFORNIA 90025
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (310) 914-3007

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par
value $.10 per share

INDICATE BY CHECKMARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORT(S)), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS.

YES |X| NO

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. |X|

Revenues for the fiscal year ended March 31, 1999 were $15,970.

The aggregate market value of the common equity held by non-affiliates of the
registrant as of May 28, 1999. amounted to approximately $23,946,021.

Registrant had 15,145,697 shares of Common Stock, $.10 par value per share, and
144,000 shares of Series B Convertible Preferred Stock, $1.00 par value per
share, outstanding as of June 30, 1999.

Transitional Small Business Disclosure Format: YES NO |X|

Filed herewith by amendment is Part III of Form 10-KSB.

<PAGE>

PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

The following table sets forth the names of the current directors. Also
set forth is certain other information with respect to each such person's age,
principal occupation(s) during the past five years, the year he first became a
director and positions currently held with the Company.

Position(s) Held Year First Elected or
NAME AGE(A) WITH THE COMPANY APPOINTED DIRECTOR
---- ------ ---------------- ---------------------
<S> <C> <C> <C>
Isaac S. Salzberg 47 Secretary and Director 1989

Jack I. Salzberg 76 Director 1985

Jeffrey A. Stern 40 President, Chief 1999
Executive Officer and
Director

Marc Strausberg 64 Director 1999

</TABLE>

PRINCIPAL OCCUPATIONS OF THE DIRECTORS

The principal occupation of each director of the Company is set forth
below.

ISAAC S. SALZBERG. Mr. Salzberg has served as a director of the Company since
March, 1989. He was President and Chief Executive Officer of the Company from
March, 1989 to March, 1992. He was a director of First Charter Bank from 1988 to
1996 and an officer from 1989 to 1996. Mr. Salzberg is an investment broker with
Prudential Securities. Mr. Salzberg is the son of Jack I. Salzberg.

JACK I. SALZBERG. Mr. Salzberg served as Chairman of the Board from January,
1985 to July 1999, Chief Executive Officer of the Company from March, 1992 to
April, 1999 and was President from February 1996 to April, 1999. He was Chairman
of the Board from 1983 to 1995 and Chief Executive Officer from 1989 to 1995 of
First Charter Bank, N.A., a national bank which operates two branch offices in
the Los Angeles area, and of which he was also a major stockholder. Mr. Salzberg
divested himself of all stock ownership in the bank in September 1995. Mr.
Salzberg is the father of Isaac S. Salzberg.

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 in 1990. At the company, he launched JSA en espanol, a
publishing and marketing firm focusing on the US Hispanic market and JSA
Communications, a custom publishing company. Prior to JSA, Mr. Stern was
president and publisher of Details Magazine. In addition he has held senior
executive positions at Ziff-Davis Publishing and Newsweek Magazine. Mr. Stern
is a graduate of Harvard College.

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.

<PAGE>

ARRANGEMENT WITH DIRECTORS

In April, 1999, the Company entered into a one year employment
agreement with Jack Salzberg pursuant to which Mr. Salzberg will serve as
Chairman of the Board, will receive a salary of $150,000 per year plus
approximately $1,800 per month car allowance and reimbursement for certain
medical insurance payments. Mr. Salzberg resigned as Chairman of the Board in
July 1999.

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'S COMPENSATION

Directors, other than Mr. Jack I. Salzberg, receive no compensation for
serving on the Board of Directors, but are reimbursed for any out-of-pocket
expenses incurred in attending board meetings.

OTHER EXECUTIVE OFFICERS/KEY EMPLOYEES

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
started his career with Univision (SIN Television) in 1981. He joined the 1986
Telmundo start-up sales and rep team, and was recruited by by Univisa as the
sales director for Galavision, where he worked from 1990 to 1993. In 1993 Mr.
Crowe was the sales manager of KWHY TV, Galavision's Los Angeles affiliate. In
1995, Mr. Crowe was hired as general manager of El Dorado Communication's Los
Angeles AM/FM radio combo, and launched DRTO-FM, the country's first
major-market Rock en Espanol radio station. After the sale of KRTO to Cox
Broadcasting, Mr. Crowe joined Liberman Broadcasting as general manager. He
participated in the purchase and startup of its first television property, KRCA
TV. Mr. Crowe earned his bachelor degrees in Spanish and political science from
the University of California, Santa Barbara. Mr. Crowe has been Vice President
of Sales and Marketing of InternetMercado.com since April 1999.

HARRY ABRAHAM-CASTILLO, VICE PRESIDENT CREATIVE SERVICES,
INTERNETMERCADO.COM. Mr. Abraham-Castillo has over 15 years experience in the
entertainment industry, specializing in the Hispanic market. After graduating
from The Art Center Colledge of Design in Pasadena, California, in 1984, Mr.
Abraham-Castillo joined Estrella Communications, Inc., as part of the team
that launched KVEA-TV, the second Los Angeles station to broadcast in
Spanish. After KVEA became a Telemundo station, he became executive producer
and programmin director. In 1991, Mr. Abraham-Castillo founded Hispanic
Showbiz, Inc., a broadcast consulting firm that helped launch KWHY-TV. He
then joined the management team at Telemundo Network Group in 1995 as head of
programming and production. Mr. Abraham-Castillos has served as the head of
creative services of InternetMercado.com since April 1999 and oversees all
areas related to the design and content of InternetMercado.com.

<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

The following information is furnished for the person who served as
Chief Executive Officer of the Company during the year ended March 31, 1999. No
other persons who served as executive officers of the Company received salary
and bonus in excess of $100,000 during the year ended March 31, 1999.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------------------------------------------
Annual Compensation(1) Long Term Compensation Awards
- --------------------------------------------------------------------------------------------------------------------
Securities
Name and Principal Salary Bonus Restricted Stock Underlying
Position Year ($) ($) Awards Options/SAR (#)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Jack I. Salzberg,(2) 1999 $-0- -- -- --
Chairman of the Board, 1998 $300,000(3) -- -- 850,000
President and Chief
Executive Officer
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------

</TABLE>

(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 July 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.

1999 OPTION GRANTS

No stock options were granted to the executive officers of the Company
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.

Name Shares Acquired on Value Number of Unexercised Value of Unexercised
Exercise (#) Realized ($) Options at FY-End (#) In-the-Money
Options at FY-End ($)

Exercisable/ Exercisable/
Unexercisable Unexercisable
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Jack I. Salzberg 400,000 200,000 450,000/-0- 225,000/-0-
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

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. 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. 66,666 shares are subject to
vesting at an exercise price of $3.50 per share on first anniversary from the
date of his Employment Agreement, 66,666 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 66,667 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.

5
<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the
ownership of the Company's Common Stock as of June 30, 1999 by: (i) each
director; (ii) each of the executive officers; and (iii) all executive officers
and directors of the Company as a group. The Company is not aware of any person,
group or investment company owning more than 5% of the outstanding shares of
Common Stock at June 30, 1999. Unless stated otherwise in the notes to the
table, each person named below has sole authority to vote and dispose of the
shares shown. Under Rule 13d-3(d)(1) of the Securities Exchange Act of 1934, as
amended, in calculating percentage ownership, each person named below is deemed
to beneficially own securities that such person has the right to acquire within
sixty days through the exercise of any option or warrant or through the
conversion of any security, but securities subject to options, warrants or
conversion rights owned by others (even if exercisable or convertible within
sixty days) are not deemed to be outstanding shares.

BENEFICIAL OWNERSHIP
--------------------

Number of Percentage
BENEFICIAL OWNER SHARES OF TOTAL
- ---------------- --------- ----------
<S> <C> <C>
Isaac S. Salzberg............................... 296,500(1) 1.96%

Jack I. Salzberg................................ 2,240,000(2) 14.36%

Jeffrey A. Stern................................ 2,540,006(3) 16.77%

Marc Strausberg................................. -- --%

Marcelino Miyares............................... 192,400 1.27%

Barry Freilicher................................ 269,469 1.78%

All Directors and Executive
Officers (6 persons)............................ 5,538,375 35.51%

</TABLE>

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

(1) Includes 60,500 shares held as custodian under the Uniform Gift to
Minors Act for the of Jacob Salzberg, 70,500 shares held as custodian
under the Uniform Gift to Minors Act for the benefit of Adam D.
Salzberg, and 60,500 shares held as custodian under the Uniform Gift to
Minors Act for the benefit of Matthew A. Salzberg; 85,000 shares held
as trustees of the Isaac S. Salzberg and Susan S. Salzberg Living Trust
and 10,000 held by Susan S. Salzberg.

(2) Consists of 1,790,000 shares held as trustees of the Jack I. Salzberg
and Anna S. Salzberg Family Trust and 450,000 shares issuable upon the
exercise of options.

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

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED 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.

6
<PAGE>

Pursuant to that certain Agreement and Plan of Merger dated as of April
12, 1999 (the "Merger Agreement") between the "Company" and JSA Acquisition
Corporation, a wholly owned subsidiary of the Company, on the one hand; and
Jeffrey A Stern and Associates, Inc. ("JSA") and the shareholders of JSA (the
"JSA Shareholders"), on the other hand, on April 12, 1999, the Company acquired
all of the outstanding capital stock of JSA (the "Closing"), 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 ("Stern") received 2,540,006
shares. The Company also entered into an employment agreement with Stern. See
"EXECUTIVE COMPENSATION - Employment Agreement."

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.

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 Salzberg, 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.

7
<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this Amendment
to be signed on its behalf by the undersigned, thereonto duly authorized.

Dated: July 27, 1999 NUMEX CORPORATION

By: /S/ JEFFREY A. STERN
--------------------
Jeffrey A. Stern
President, Chief Executive Officer