U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-KSB
(Mark One)

X Annual report under Section 13 or 15(d)of the Securities Exchange Act of 1934.

                    For the fiscal year ended March 31, 1998

                                       or


  Transition report under Section 13 or 15(d) of the Securities Exchange Act of
  1934.

                          Commission file number 0-9459


                                Numex Corporation
--------------------------------------------------------------------------------
                    (Name of Small Business Issuer in Its Charter)

         Delaware                                                   06-1034587
--------------------------------------------------------------------------------
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
 Incorporation or Organization)

           14115 S. Pontlavoy Ave., Santa Fe Springs, California 90670
--------------------------------------------------------------------------------
                    (Address of Principal Executive Offices)

Issuer's telephone number, including area code:      (562) 404-7176

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

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

Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the Registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.

    Yes    X     No  _____

Check if 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, 1998 were approximately $176,500.


The  aggregate  market value of the voting stock held by  non-affiliates  of the
registrant as of March 31, 1998, amounted to approximately $9,016,795.

Registrant  had  10,889,219  shares of its Common  Stock,  $.10 par  value,  and
170,000 of Preferred Stock, $1.00 par value outstanding as of June 30, 1998.

Documents Incorporated By Reference: None

Transitional Small Business Disclosure Format: Yes ___ No X


<PAGE>


                                     PART I.


ITEM 1.  DESCRIPTION OF BUSINESS

     The Company was organized and  incorporated  in Delaware on August 1, 1980.
The term  the  "Company"  as used  herein  includes  Numex  Corporation  and its
subsidiaries, unless the context otherwise requires.

     The  Company,  through  a  wholly  owned  subsidiary  was  engaged  in  the
remanufacturing   and  servicing  of  metal   cutting   machine  tools  and  the
retrofitting  of  such  tools  with  new  electronic  controls.   The  Company's
operations were substantially  eliminated during fiscal year 1988, and from that
time until January 1991, the Company was not an operating company. Since January
1991,   the   Company  has  been   operating   as  the   manufacturer,   through
subcontractors,  and the  distributor  of its primary  product  known as Therapy
Plus, a hand-held massage device used for the relief of muscular pain.

     Therapy Plus is a patented  non-electric,  cylinder-shaped  pain  relieving
device comprised of a series of starwheels, mounted on a shaft, with hundreds of
points  which do not  puncture  the  surface of the skin.  The product is rolled
briskly over the painful areas of the body for three to eight minutes.  The sale
of the product is permitted under a 510(k)  registration  with the Food and Drug
Administration  which  authorizes the following  claims to be made in connection
with the product:  "Provides  temporary relief of minor muscular pain associated
with  arthritis;  Temporarily  relieves  pain  from  overexertion  and  fatigue.
Increases blood  circulation.  Relaxes tense muscles." The product  produces the
therapeutic effect of a massage.

     The product has been manufactured for the Company by unaffiliated companies
in  conformity  with  the  Company's  instructions  and  specifications.   These
companies  have no right,  title or interest in or to the product and serve only
as the Company's  subcontractors  to manufacture  the product.  To the Company's
best  knowledge,  all of the  materials  used in making the  product are readily
available.

     Therapy Plus is currently being sold primarily to the general public either
through  wholesalers  or  export  distributors.  The  target  purchaser  is  any
individual who experiences muscular pain associated with arthritis, or caused by
fatigue or overexertion.

     All orders of the  product  are  shipped to  customers  from the  Company's
facilities  in  Santa  Fe  Springs,  California.  The  Company's  employees  are
available  to  respond  to  customer  questions  and  complaints,  and  offers a
thirty-day  unconditional  money back guarantee on retail sales in addition to a
one-year guarantee against defects in the Product.

Recent Developments
-------------------

     On  February  4, 1998,  the  Company  entered  into a Letter of Intent with
Modular  Structures   International  Inc  ("MSI"),  a  closely  held,   Southern
California-based,  manufacturing  company  of prefab  modular  office  units and
school  classrooms.  The Company and MSI  negotiated in good faith and processed
due diligence in  contemplation  of closing on February 28, 1998 which was later
extended to March 6, 1998. In the middle of March,  1998, all negotiations  with
MSI  were  suspended  due  to  the  inability  of the  Company,  and  one of the
institutional  financing  sources  (which  represented  less  than  15%  of  the
aggregate  acquisition  financing  requirement)  to  reach an  agreement  on the
definitive terms of proposed financing.


<PAGE>

ITEM 1.   DESCRIPTION OF BUSINESS (CONTINUED)

Competition
-----------

     Significant  competition  exists in the pain relief market as a whole. Most
of the  Company's  competition  in the general pain relief market is from pills,
creams and ointments. Competition from companies selling medical devices is more
limited. The Company is aware of several hand-held devices that are designed for
purposes of massage,  but is unaware of any other such  devices  legally sold in
the United States for the relief of pain associated with arthritis.


Trademarks, Licenses, Patents and Royalty Agreements
----------------------------------------------------

     As a condition for obtaining the License  Agreement to manufacture  Therapy
Plus, the Company paid the patent owner a one-time license fee of $120,000. This
payment was made in June 1992 and was  capitalized  as an intangible  asset.  On
March 31, 1997 the remaining value of the license fee and related  expenses were
written off. The License Agreement also provides for royalties at a rate ranging
from $.65 per unit to $1.20 per unit  depending  on the  method of  distribution
used.

     The  Company  maintains  that  due  to  government  intervention  into  the
marketing of the product from August 1992 to January 1996, the obligation to pay
minimum royalties is stayed. The Company further claims that it has no liability
of any kind  under the  License  Agreement  based on the  interpretation  of its
language of the License  Agreement  and  because the  limitation  period for the
bringing of any action thereunder has expired to a substantial extent. Moreover,
the Company  believes  that the  inventor  discontinued  business in Germany and
supposedly  moved to Cyprus.  Neither the Licensor nor any legal  representative
thereof has communicated with the Company for the last 4 months. Accordingly, on
March 31, 1998, the management made an adjustment of the prior year's accrual on
royalty  estimates  accrued  to  the  Licensor.  See  Item  8,  "Changes  in and
Disagreements with Accountants on Accounting and Financial Disclosure."

Employees
---------

     As of March  31,  1998,  Company  employed  2  full-time  employees.  These
employees  performed  services in administration,  marketing,  order processing,
shipping, customer service and accounting.  Company believes it is on good terms
with its employees and does not foresee any labor difficulties in the future.


ITEM 2.  PROPERTIES

The Company operated from one facility during fiscal year 1998 as follows:

         14115 South Pontlavoy Avenue, Santa Fe Springs, California 90670

     The Company  moved into its current  location on February 1, 1995.  The new
office space is used for general office space,  customer service and shipment of
Product,  and until July  1995,  was used to provide  fulfillment  services  for
ViaStar.   The  facility  contains  12,460  square  feet,   including   shipping
facilities.  The  monthly  rental was $5,732  plus  taxes,  insurance  and other
maintenance  costs.  The Company occupied this facility under a three-year lease
which expired on January 31, 1998. The Company also subleased a certain  section
of the space for $2,250 per month from July 1997 through January 1998.

     In January,  1998 the Company negotiated with the lessor to amend the Lease
to provide  for a further  extension  of the term of the lease.  Under the First
Amendment to Lease,  the term of the lease was extended to January 31, 1999. The
monthly rental is $6,355, plus taxes, insurance and other maintenance costs. The
Company also extended a sublease for a certain  section of the space for $ 4,900
per month.  Accordingly,  the Company net cost for the space  occupied is $1,455
per month.


<PAGE>



ITEM 3.  LEGAL PROCEEDINGS

     Numex  Corporation,  a  Delaware  Corporation  v.  William  Lovell,  Robert
Circosta,  George  Simone and Ben White,  case no.  98-001276-AD  in the Circuit
Court of the Fifteenth Judicial Circuit in and for Palm Beach County, Florida.

     On February  11,1998,  a Complaint and Motion for Temporary  Injunction and
Request was filed by the Company against William Lovell, Robert Circosta, George
Simone, and Ben White (the "defendants"),  in the Fifteenth Judicial Circuit, in
and for Palm Beach County, Florida. The action stems from the acquisition by the
Company of ViaStar Marketing, Inc. (ViaStar) a Florida corporation, which became
the Company's wholly owned subsidiary,  and certain related Amended and Restated
Acquisition  Agreement and Employment  Agreements with William Lovell and Robert
Circosta,  as  well  as  a  Consulting  Contract  with  George  Simone,  whereby
five-hundred  thousand shares of the Company's restricted common stock was to be
"paid up front" to the defendants in connection with  aforementioned  agreements
and contract.

     A settlement  agreement has been signed between parties which will be filed
with the court.  Under the  contemplated  agreement,  the Under the contemplated
agreement,  the  defendants  will return  300,000  shares to the Company and the
remaining  200,000  shares will be reissued to the  defendants  in equal amounts
without restriction.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         Not applicable.


                                    PART II.

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The Company's stock is traded in the over the counter  market.  The closing
bid price on July 13,  1998 was  $.78125.  The  following  table  sets forth the
closing high and low bid and ask quotations for each of the fiscal  quarters for
the years ending March 31, 1997 and March 31, 1998,  as reported by the National
Quotation Bureau, Inc.

Fiscal Year Ended                     Closing Bid/Ask Quotes
                            High                           Low
March 31, 1997          Bid      Ask                Bid          Ask
--------------          ---      ---                ---          ---
First Quarter          .625      .938               .438         .688
Second Quarter         .625      .938               .375         .562
Third Quarter          .50       .75                .375         .625
Fourth Quarter         .594      .688               .375         .625

March 31, 1998
First Quarter          .469      .625               .375         .50
Second Quarter         .50       .594               .312         .438
Third Quarter         1.469     1.531               .375         .46
Fourth Quarter        3.625     3.875              1.062        1.312

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

 <PAGE>
ITEM 5    MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS (CONTINUED)

     As of March 31, 1998 there were approximately 419 shareholders of record of
Company's Common Stock. This number does not reflect individual  participants in
security position listings held in "street name" accounts which is approximately
1,000 shareholders.

     The Company has not paid any cash or stock  dividends  on its common  stock
since its incorporation and anticipates  that, for the foreseeable  future,  any
earnings will be retained for use in the Company's business.

Recent Sales of Unregistered Securities
---------------------------------------

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

     On March 31, 1997, Mr. Jack I. Salzberg converted his $300,000  convertible
note into  300,000  shares of common  stock.  He also  converted  the  remaining
outstanding  note and accrued  interest in the amount of $143,916  into  287,831
shares of common stock on September  10, 1997.  Mr.  Salzberg is the Chairman of
the Board,  President and CEO of the Company.  See Item 9 "Directors,  Executive
Officers,  Promoters and Control Persons" and Item 12 "Certain Relationships and
Related Transactions."

     On  August  11,  1997,  Ms.  Esther  Kozienicki  converted  her  long  term
convertible  note of $300,000  into  600,000  shares of common  stock.  She also
converted  some of her  demand  notes  and  accrued  interest  in the  amount of
$479,880 into 959,760 shares of common stock on December 31, 1997. Ms Kozienicki
is the sister of Jack Salzberg.  See Item 12 "Certain  Relationships and Related
Transactions."

     On August 11, 1997,  Ms. Malka Livne  converted  her long term  convertible
note of $300,000 into 600,000 shares of common stock. She also converted some of
her demand  notes and accrued  interest in the amount of $163,995  into  327,990
shares of common stock on December  31,  1997.  Ms Livne is the sister in law of
Jack Salzberg. See Item 12 "Certain Relationships and Related Transactions."

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

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

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

     Subsequent to the end of fiscal year 1998,  on May 29, 1998,  Jack Salzberg
converted his $300,000 accrued compensation into 240,000 shares of common stock;
Esther Kozienicki  converted  $160,000  outstanding notes into 128,000 shares of
common  stock;  Malka Livne  converted  $120,000  outstanding  notes into 96,000
shares of common stock;  Dafna Breines converted $26,250  outstanding notes into
21,000 shares of common stock. See Item 6 "Management Discussion and Analysis of
Financial Condition and Results of Operation" and Item 12 "Certain Relationships
and Related Transactions."

     Subsequent to the end of fiscal year 1998, on May 29, 1998, the law firm in
the  transaction  with MSI converted  $172,000 legal fees into 140,000 shares of
common  stock.  See Item 1  "Description  of  Business."  and Item 6 "Management
Discussion and Analysis of Financial Condition and Results of Operation."

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

<PAGE>

ITEM 6.  MANAGEMENT  DISCUSSION  AND  ANALYSIS OF FINANCIAL  CONDITION  AND
         RESULTS OF OPERATION

     The following  discussion  should be read in conjuction  with the Company's
consolidated  financial  statements and the notes thereto appearing elsewhere in
this Form 10-KSB.  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
policies,  competition  from other  similar  businesses,  and market and general
economic factors.  All forward-looking  statements contained in this Form 10-KSB
are qualified in their entirety by this statement.

Fiscal Year Ended March 31, 1998 Compared To Fiscal Year Ended March 31, 1997
-----------------------------------------------------------------------------

     Net sales for the fiscal year 1998 of approximately $176,000 were 41% lower
than last year's $296,000.

     Cost of sales as a percentage  of net sales  decreased  from 52% during the
fiscal year 1997 to 47% in 1998.  The 5% decrease in product cost  resulted from
the  use  of the  newly  completed  tooling  which  was  more  efficient  in the
manufacture of Therapy Plus.

     During the year,  the  Company  incurred  approximately  $362,000  of legal
expense and other services related to the due diligence process  associated with
an  acquisition  target company and the financial  institutions.  These expenses
were incorporated with company's selling,  general and administrative  expenses.
Normal  operating  expenses  this year of  approximately  $291,000,  versus last
year's  $653,000,  reflects a 55%  decrease in expenses as a result of continued
cost cutting measures.

     Due to Mr. Jack I. Salzberg's  effort to reduce the Company's  indebtedness
and converting them into equity, interest expense decreased by 37%.

     The  Company's  other income for the fiscal year 1998 of $356,600  resulted
from the adjustment on prior year's accrual on royalty estimates.  Other expense
of $300,000 was accrued as  officer/stockholder  compensation to the Chairman of
the Board.

<PAGE>

ITEM 6.  MANAGEMENT  DISCUSSION  AND  ANALYSIS OF FINANCIAL  CONDITION  AND
         RESULTS OF OPERATION (CONTINUED)


Financial Condition, Liquidity and Capital Resources
----------------------------------------------------

     Net cash used in  operations  during  fiscal  year 1998 was  $562,000.  The
Company funded this usage from notes payable proceeds which resulted in net cash
flows from financing activities of 556,000.

     During  the  year,  Jack  I.  Salzberg  converted  $143,916  of  his  notes
receivable  and accrued  interest  into common stock at $0.50 per share.  At the
same rate,  $1,708,000 of Company  indebtedness to the Mr. Salzberg's  relatives
were also  converted  into  equity.  See Item 5 "Market  for  Common  Equity and
Related  Stockholder  Matters"  and Item 12 "Certain  Relationships  and Related
Transactions."

     Subsequent  to the year ended March 1998,  Jack I.  Salzberg  converted his
accrued  compensation  of $300,000 into 240,000  shares of common stock at $1.25
per share.  The bid price at the time of  conversion  was  $.875.  Legal fees of
$172,000 of the law firm in the  transaction  with MSI which was not consummated
(see Item 1 "Description of Business"),  and $280,000 outstanding notes of three
relatives of the Mr.  Salzberg,  elected to convert this obligation into 385,000
shares of common stock at $1.25 per share.  See Item 5 "Market for Common Equity
and Related Stockholder Matters" and Item 12 "Certain  Relationships and Related
Transactions."

     Subsequent  to the fiscal  year ended March  1998,  the  Company  reached a
settlement  agreement with former employees of ViaStar Marketing resulting in an
extraordinary gain in the amount of $337,500. See Item 3 "Legal Proceedings."

     Due to the current low sales volume,  the Company plans to continue to rely
upon  external  financing  sources to meet the cash  requirement  of its ongoing
operation.  In the past,  Jack I.  Salzberg has  provided  the  Company,  either
directly or indirectly  through  guarantees,  with the necessary working capital
needed to continue  operating.  In the last 4 years,  Mr.  Salzberg has provided
operating funds either directly or indirectly over $3,000,000 in loans, majority
of  which  were  converted  into  common  stock.  In view of the  fact  that the
operating  expenses  are now  significant  less than  they  were,  Mr.  Salzberg
informed the Board of Directors  that he will continue to provide such funds for
the  continuance  of business  until an  acquisition  is  completed or a private
placement of securities has been made.

Current Plans
-------------

     While the Company is  continuing  to explore the marketing of Therapy plus,
the main emphasis of management  is directed to acquiring  profitable  operating
companies.  The  Company  has  $6,900,000  federal  tax loss carry  forward  and
$1,600.000  tax  loss for the  State  that can be  utilized  against  profitable
operations.

     The  Company's  management  has been  pursuing  acquisition  of  profitable
businesses whose revenues range from $10 - $30 million annual sales. The Company
is currently in discussion with several acquisition  candidates but no agreement
has been reached with any of them. In anticipation of possible acquisitions, the
Company has  established a relationship  with a medium size  investment  banking
house  which  specializes  in private  placements  of  securites  and notes with
institutional investors. Although there is no guarantee that any of the proposed
acquisitions will materialize,  there is reasonable  anticipation that funds can
be  obtained  to  finalize  such an  acquisition  once  the  target  company  is
definitely established and meets all the criteria.

<PAGE>

ITEM 6.  MANAGEMENT  DISCUSSION  AND  ANALYSIS OF FINANCIAL  CONDITION  AND
         RESULTS OF OPERATION (CONTINUED)

Inflation and Changing Prices
-----------------------------

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

Year 2000 Issues
----------------

     The nature of the Company's  business systems is such that the year 2000 is
expected  to have a minimal  impact on the  Company's  operations  or  financial
performance.  However,  there  can be no  assurance  that the  systems  or other
parties upon which the Company's businesses also rely will address the year 2000
problem adequately.

Proforma Balance Sheet
----------------------

     The proforma  balance sheet below is based upon the  following  assumptions
and subsequent to year end 1988 events:  (a) conversion of debt and  obligations
into  common  stock on May 29,  1998 (see Item 5 "Market  for Common  Equity and
Related  Stockholder  Matters"),  (b)  receipt of 300,000  shares  from  ViaStar
employees per settlement  agreement (see Item 3 "Legal  Proceedings"),  and, (c)
exercise  of vested  stock  options  of Mr.  Salzberg  (see  Item 10  "Executive
Compensation").  Mr Salzberg  notified  the Company  that he will  exercise  his
option of 850,000 shares within the next fiscal year.

<TABLE>
<CAPTION>
                                                  March 31, 1998                     March 31, 1998
Assets                                               Historical       Adjustment         Proforma
------                                               ----------       ----------         --------
<S>                                               <C>                 <C>              <C>
  Current Assets                                        37,448           425,000          462,448
  Fixed Assets                                          17,046                             17,046
  Deposits                                               7,158                 0            7,158
                                                         -----                 -            -----

     Total Assets                                       61,652           425,000          486,652
                                                        ======           =======          =======

Liabilities
  Current Liabilities                                  180,999                            180,999
  Loan payable, other                                  171,930         (171,930)                0
  Accrued salaries, officer - stockholder              300,000         (300,000)                0
  Notes payable, other less current maturities         246,250         (246,250)                0
                                                       -------         ---------                -
                                                       899,179         (718,180)          180,999

Stockholders' Equity
  Preferred stock                                      170,000                            170,000
  Common stock                                       1,118,922            55,000        1,173,922
  Treasury stock                                      (705,824)          705,824                0
  Additional paid in capital                         9,970,866           104,856       10,075,722
  Deficiency                                       (11,391,491)          277,500      (11,113.991)
                                                   ------------          -------     ------------
                                                      (837,527)        1,143,180          305,653

Total Liabilities & Stockholders Equity                $61,652           425,000          486,652
                                                       =======           =======          =======

</TABLE>


<PAGE>



ITEM 7.  FINANCIAL STATEMENTS










                        NUMEX CORPORATION AND SUBSIDIARY

                        CONSOLIDATED FINANCIAL STATEMENTS

                       YEARS ENDED MARCH 31, 1998 AND 1997







                                    CONTENTS

                                                                     Page

Independent Auditors' Report                                           10

Financial Statements:
  Consolidated Balance Sheets                                          12
  Consolidated Statements of Operations                                13
  Consolidated Statement of Stockholders' Deficiency                   14
  Consolidated Statements of Cash Flows                                15
  Notes to Consolidated Financial Statements                         16-26


<PAGE>





                          (Accounting firm letterhead)









                          INDEPENDENT AUDITORS' REPORT


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


We have audited the accompanying consolidated balance sheet of Numex Corporation
and subsidiary as of March 31, 1998 and the related  consolidated  statements of
operations,  stockholders'  deficiency,  and cash flows for the year then ended.
These financial  statements are the responsibility of the Company's  management.
Our responsibility is to express an opinion on these financial  statements based
on our audit.  The  consolidated  financial  statements  as of March 31, 1997 as
presented,  were  audited by other  auditors  whose  report  dated June 3, 1997,
included an explanatory  paragraph which expressed  substantial  doubt about the
Company's ability to continue as a going concern.

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

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

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




/s/  Stonefield Josephson, Inc.
CERTIFIED PUBLIC ACCOUNTANTS

Santa Monica, California
July 13, 1998

<PAGE>



                          (Accounting firm letterhead)





               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



Board of Directors and Stockholders
Numex Corporation


We  have  audited  the  accompanying   consolidated  statements  of  operations,
stockholders',  and cash flows of Numex  Corporation and subsidiary for the year
ended March 31, 1997. 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 consolidated  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,
1997, in conformity with generally accepted accounting principles.

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


                                 /s/  Singer Lewak Greenbaum & Goldstein LLP
                                      SINGER LEWAK GREENBAUM & GOLSTEIN LLP

Los Angeles, California
June 3, 1997




<PAGE>
<TABLE>

                        NUMEX CORPORATION AND SUBSIDIARY

                   CONSOLIDATED BALANCE SHEET - MARCH 31, 1998

<CAPTION>

                         ASSETS
<S>                                                    <C>
Current assets:
  Cash                                                  $         27,218
  Inventory                                                       10,230
                                                         ----------------

          Total current assets                            $       37,448

Property and equipment, net of
  accumulated depreciation and amortization                       17,046

Deposits                                                           7,158
                                                         ----------------
                                                          $       61,652
                                                         ================

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current liabilities:
  Accounts payable and accrued expenses                   $       77,210
  Current maturities of notes payable, others                     45,039
  Current maturities of notes payable, related parties            58,750
                                                         ----------------

          Total current liabilities                       $      180,999

Loan payable, other                                              171,930

Loan payable, officer-stockholder                                300,000

Notes payable, related parties, less current maturities          246,250

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

          Total stockholders' deficiency                        (837,527)
                                                          ----------------
                                                          $       61,652
                                                          ================

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

</TABLE>
<PAGE>

<TABLE>
                        NUMEX CORPORATION AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF OPERATIONS


<CAPTION>
                                                                    Year ended                Year ended
                                                                 March 31, 1998              March 31, 1997
                                                                 --------------              --------------
<S>                                                             <C>                        <C>
Net sales                                                        $      176,513             $       296,357

Cost of sales                                                            83,605                     155,203
                                                                 --------------             ---------------

Gross profit                                                             92,908                     141,154

Selling, general and administrative expenses                            653,734                     653,447
                                                                 --------------             ---------------

Loss from operations                                                   (560,826)                   (512,293)
                                                                 --------------             ---------------

Other income (expense):
  Officer-stockholder compensation                                     (300,000)                      -
  Interest expense, net                                                (128,572)                   (203,766)
  Other income                                                             -                         40,618
  Adjustment of the prior years accruals on royalty estimates           356,600                        -
  Loss on intangible assets in excess of net present value                 -                       (392,398)
                                                                 --------------             ---------------

          Total other expense                                           (71,972)                   (555,546)
                                                                 --------------             ---------------

Loss before provision for income taxes and
  extraordinary item                                                   (632,798)                 (1,067,839)

Provision for income taxes                                                  800                         800
                                                                 --------------             ---------------

Loss before extraordinary item                                         (633,598)                 (1,068,639)

Extraordinary item, gain on extinguishment of debt                         -                        603,565
                                                                 --------------             ---------------

Net loss                                                         $     (633,598)            $      (465,074)
                                                                 ==============             ===============

Loss per share before extraordinary item                                   (.08)                       (.18)

Gain per share attributable to extraordinary item                         -                             .10
                                                                 --------------            ----------------

Net loss per share                                                         (.08)                       (.08)
                                                                 ==============             ===============

Weighted average number of common shares
  outstanding used to calculate loss per share                        7,601,295                   6,166,031
                                                                 ==============             ===============

</TABLE>


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


<PAGE>



<TABLE>

                        NUMEX CORPORATION AND SUBSIDIARY
               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY
               FOR THE FISCAL YEARS ENDED MARCH 31, 1998 AND 1997

<CAPTION>
                                                                                    Unearned
                                                                 Treasury stock    portion of  Additional
                       Preferred stock        Common stock           at cost       restricted   paid in    Accumulated
                     Shares     Amount    Shares      Amount    Shares    Amount  stock issued  capital      deficit       Total

<S>                 <C>         <C>       <C>         <C>       <C>     <C>        <C>        <C>         <C>           <C>
Balance at
March 31, 1996         -        $ -       6,270,600   $627,060  125,000 $(143,324) $(562,500) $7,882,903 $(10,292,819)  $(2,488,680)

Preferred stock
issued for cash      170,000    170,000                                                              850                    170,850

Offering costs                                                                                   (30,602)                   (30,602)

Common stock issued
for conversion of debt                      322,150     32,215                                   279,129                    311,344

Conversion of restricted
Stock to Treasury stock                                         500,000  (562,500)   562,500                                   -

Net loss                                                                                                     (465,074)     (465,074)
                    ----------------------------------------------------------------------------------------------------------------

Balance at
March 31, 1997       170,000    170,000   6,592,750    659,275  625,000  (705,824)    -        8,132,280  (10,757,893)   (2,502,162)

Common stock issued
for conversion of debt                    4,596,469    459,647                                 1,838,586                  2,298,233

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

Balance at
March 31, 1998       170,000   $170,000  11,189,219 $1,118,922  625,000 $(705,824)  $ -       $9,970,866 $(11,391,491)    $(837,527)
                     ===============================================================================================================

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


</TABLE>
<PAGE>



<TABLE>

                                              NUMEX CORPORATION AND SUBSIDIARY
                                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                                      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

<CAPTION>
                                                                    Year ended           Year ended
                                                                  March 31, 1998       March 31, 1997
                                                                  --------------       --------------
<S>                                                              <C>                   <C>
Cash flows provided by (used for) operating activities:
  Net loss                                                       $     (633,598)       $    (465,074)
                                                                  --------------        -------------

Adjustments to reconcile net loss to net cash provided
by (used for) operating activities:
  Depreciation and amortization                                           5,916                3,249
  Write-off of intangible assets                                           -                 392,398
  Gain on extinguishment of debt                                           -                (603,565)
  Adjustment of the prior years accruals on royalty estimates          (356,600)                -
  Legal fees and interest expense accrued as loan payable, other        171,930               57,778
  Officer-stockholder compensation accrued as loan payable,
     officer-stockholder                                                300,000                 -

Changes in assets and liabilities:
  (Increase) decrease in assets:
   Accounts receivable                                                    9,058               (8,384)
   Inventory                                                             (1,406)              41,106
   Prepaid expenses and other current assets                               -                  36,600
   Deposits                                                               5,233                   40

Increase (decrease) in liabilities -
   accounts payable and accrued expenses                                (62,583)             341,976
                                                                  --------------        -------------

          Total adjustments                                              71,548              261,198
                                                                  --------------        -------------

          Net cash used for operating activities                       (562,050)            (203,876)
                                                                  --------------        -------------

Cash flows used for investing activities -
  payments to acquire property and equipment                             (4,051)             (17,866)
                                                                  --------------        -------------

Cash flows provided by (used for) financing activities:
  Cash restricted                                                         5,775               (1,454)
  Proceeds from loans and notes payable, net                            572,563               86,000
  Proceeds from issuance of preferred stock                                -                 170,850
  Offering costs                                                           -                 (30,602)
                                                                  --------------        -------------

          Net cash provided by financing activities                     578,338              224,794
                                                                  --------------        -------------

Net increase in cash                                                     12,237                3,052
Cash and cash equivalents, beginning of year                             14,981               11,929
                                                                  --------------        -------------

Cash and cash equivalents, end of year                           $       27,218        $      14,981
                                                                  ==============        =============
</TABLE>
See Note (17) for supplemental  disclosures of non-cash  investing and financing
activities.


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


<PAGE>


                        NUMEX CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       YEARS ENDED MARCH 31, 1998 AND 1997


(1)      Organization and Management's Plans:

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

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

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

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

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

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

     On August 2, 1995, ViaStar filed, and was granted, a petition commencing an
     assignment  for the  benefit of  creditors,  pursuant to Chapter 727 of the
     Florida  State  Statutes.  The book  value of the  assets in the  amount of
     $399,352 was assigned to the trustee for the benefit of the  creditors  and
     was  charged  to  earnings.  As a  result  of  the  petition,  the  Company
     determined that there had been a permanent impairment in the carrying value
     of goodwill,  and the remaining unamortized balance of $533,474 was charged
     to  earnings  for the year ended March 31,  1996.  On March 28,  1997,  the
     shareholders of ViaStar  dissolved the corporation under Delaware state law
     (see Note 13).

See accompanying independent auditors' report.


<PAGE>


                        NUMEX CORPORATION AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       YEARS ENDED MARCH 31, 1998 AND 1997



(1)      Organization and Management's Plans, Continued:

     The Company's  consolidated financial statements have been presented on the
     basis that the Company will continue as a going concern, which contemplates
     the realization of assets and the satisfaction of liabilities in the normal
     course of  business.  The  Company  incurred  net losses  during 1997 after
     airing a new infomercial,  and has a net capital deficiency as presented on
     the balance sheet. Also, during the fiscal years 1998 and 1997, the Company
     experienced  insufficient  cash  flows  from  operations,   and  funds  for
     operations  were  obtained  through  the  issuances  of notes  payable  and
     preferred stock.  These factors raise substantial doubt about the Company's
     ability to continue as a going concern.
     
     The Company's  continued existence is dependent upon its ability to achieve
     a new  operating  plan and its  success of  selling  Therapy  Plus  through
     wholesale   distributors.   Management's  plans  in  connection  with  this
     uncertainty are as follow:

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


(2)      Summary of Significant Accounting Policies:

         Principles of Consolidation:

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

         Cash and Cash Equivalents:

               Equivalents 
               ------------

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

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



See accompanying independent auditors' report.


<PAGE>


                        NUMEX CORPORATION AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       YEARS ENDED MARCH 31, 1998 AND 1997




(2)      Summary of Significant Accounting Policies, Continued:

         Cash and Cash Equivalents, Continued:

               Concentration
               -------------

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

         Inventories:

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

         Property and equipment:

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

         Impairment of Long-Lived Assets:

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

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




See accompanying independent auditors' report.


<PAGE>


                        NUMEX CORPORATION AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       YEARS ENDED MARCH 31, 1998 AND 1997




(2)      Summary of Significant Accounting Policies, Continued:

         Advertising:

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

               For the year ended March 31,  1997,  direct-response  advertising
               costs  of  approximately   $113,000  were  expensed  due  to  the
               unsuccessful  attempt of a direct-response  advertising  campaign
               during 1997.

         Revenue Recognition:

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

         Stock Option Plans:

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

         Income Taxes:

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

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




See accompanying independent auditors' report.


<PAGE>


                        NUMEX CORPORATION AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       YEARS ENDED MARCH 31, 1998 AND 1997




(2)      Summary of Significant Accounting Policies, Continued:

         Net Loss Per Share:

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

         Fair Value of Financial Instruments:

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

         Use of Estimates:

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


(3)      Cash:

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


(4)      Major Customers:

         During the year ended March 31, 1998, the Company did business with two
         customers whose sales comprised approximately 22% and 65% of net sales,
         respectively.  During the year ended  March 31,  1997,  the Company did
         business with two customers whose sales comprised approximately 56% and
         28% of net sales, respectively.



See accompanying independent auditors' report.


<PAGE>


                        NUMEX CORPORATION AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       YEARS ENDED MARCH 31, 1998 AND 1997




(5)      Inventory:

         A summary is as follows:                              1998

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

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

(6)      Property and Equipment:

         A summary is as follows:
                                                               1998

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

                                                                220,816
                  Less accumulated depreciation                 203,770
                                                         --------------
                                                         $       17,046
                                                         ==============
(7)      Accounts Payable and Accrued Expenses:

         A summary is as follows:
                                                               1998

                  Accounts payable                       $       36,354
                  Accrued interest                                3,441
                  Other                                          37,415
                                                         --------------
                                                         $       77,210
                                                         ==============

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




See accompanying independent auditors' report.


<PAGE>


                        NUMEX CORPORATION AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       YEARS ENDED MARCH 31, 1998 AND 1997




(8)      Loan Payable, Other:

         During  the year ended  March 31,  1998,  the  Company  received  legal
         services related to an acquisition target. Subsequent to the year ended
         March 31,  1998 the board of  directors  of the  Company  approved  and
         issued 140,000 shares of its treasury  stock,  at $1.23, to this vendor
         for legal services rendered in the amount of $ 171,930 (see Note 18).


(9)      Loan Payable, Officer-Stockholder:

         During the year ended March 31,  1998,  the board of  directors  of the
         Company   approved   a  bonus  in  the   amount  of   $300,000   to  an
         officer-stockholder, payable at such time as funds became available and
         would not be  detrimental  to the  financial  position of the  Company.
         Subsequent to the year ended March 31, 1998,  the board of directors of
         the Company  approved and issued 240,000 shares of its treasury  stock,
         at $1.25,  to  convert  the  accrued  officer-stockholder  compensation
         obligation of $300,000 (see Note 18).


(10)     Notes Payable, Others:

         A summary is as follows:
                                                                         1998

         Promissory  note, at prime (8.5% at March 31, 1998)
         plus 2%, payable in monthly principal payments of
         $2,000 plus interest, due on December 18, 1995.        $       23,000

         Promissory note, non-interest bearing, due on
         January 11, 1999.  This note may be  converted
         at the  holder's  option  into shares of $0.10
         par value common stock on or before due date at
         the rate of $0.50 per share.                                   22,039
                                                                 --------------

                                                                        45,039
         Less current maturities                                        45,039
                                                                 --------------
                                                                $            -
                                                                 ==============




See accompanying independent auditors' report.


<PAGE>


                        NUMEX CORPORATION AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       YEARS ENDED MARCH 31, 1998 AND 1997




(11)     Notes Payable, Related Parties:

         A summary is as follows:
                                                                 1998

         Promissory note, bearing interest at 8%,
           unsecured and due on demand.                        $       25,000
         Promissory note, bearing interest at 8%,
           unsecured and due on demand (see Note 18).                  60,000
         Promissory notes, bearing interest at 8%,
           unsecured and due on demand (see Note 18).                 105,000
         Promissory note, bearing interest at 8%,
           unsecured and due on demand (see Note 18).                 115,000
                                                                --------------

                                                                      305,000
         Less current maturities                                       58,750
                                                               ---------------
                                                               $      246,250
                                                               ===============

         Subsequent  to March 31,  1998,  the board of  directors of the Company
         approved and issued 197,000 shares of its treasury  stock, at $1.25 per
         share, to convert certain notes payable,  related parties in the amount
         of $246,250 into equity (see Note 18).


(12)     Income Taxes:

          The current  provision  for income taxes in both fiscal years 1998 and
          1997 is related to the minimum  corporate  state income  taxes.  As of
          March  31,  1998,   the  Company  had  net  federal   operating   loss
          carryforwards  and net state  operating  loss  carryforwards  totaling
          approximately $6,900,000 and $1,600,000, respectively. The net federal
          operating loss carryforwards  expire in various years through 2013 and
          net state operating loss carryforwards expire in various years through
          2003.

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

                  Deferred tax asset (liability):
                    Net operating losses                     $    2,500,000
                    Valuation allowance                          (2,500,000)
                                                             --------------

                        Net deferred tax asset (liability)   $         -
                                                             ==============
         The valuation allowance increased by approximately $250,000 in 1998.




See accompanying independent auditors' report.


<PAGE>


                        NUMEX CORPORATION AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       YEARS ENDED MARCH 31, 1998 AND 1997




(13)     Gain on Extinguishment of Debt:

          On March 28,  1997,  the  shareholders  of ViaStar  filed a  corporate
          dissolution  under Delaware law. Since the  corporation  was dissolved
          and the  shareholders are not responsible for the debt of the Company,
          the  unpaid  debts of  $603,565  were  extinguished,  and the  Company
          recognized  a gain.  There  is no tax  effect  of the gain  since  the
          Company  has no  current  tax  expense  given its  utilization  of net
          operating loss carryforwards.


(14)     Stock Option Plans:

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

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

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


(15)     Related Party Transactions:

          During the year ended March 31, 1998,  certain notes payable,  related
          parties,  in the amount of  $1,672,290,  were  converted  to 3,344,581
          shares of restricted and unrestricted  common stock.  Interest expense
          to related parties was approximately $83,954 and $38,345 for the years
          ended March 31, 1998 and 1997, respectively.




See accompanying independent auditors' report.


<PAGE>


                        NUMEX CORPORATION AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       YEARS ENDED MARCH 31, 1998 AND 1997




(16)     Commitments and Contingencies:

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

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

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

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


(17)     Supplemental Disclosure of Cash Flow Information:

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

                                                       1998                1997
                                                       ----                ----

               Cash paid for interest           $       43,610    $      73,958
               Cash paid for income taxes                  800              800


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

                                                       1998                1997
                                                       ----                ----
      Conversion of promissory notes payable,
       related party, to 3,344,581 and 300,000
       shares of common stock, respectively.    $    1,672,290    $     300,000
      Conversion of promissory notes payable,
       others, to 1,251,888 shares of common
       stock.                                          625,943             -
      Conversion of accounts payable to 22,150
       shares of common stock                             -              11,344



See accompanying independent auditors' report.


<PAGE>


                        NUMEX CORPORATION AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                       YEARS ENDED MARCH 31, 1998 AND 1997




(18)     Subsequent Events:

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

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

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

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

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




See accompanying independent auditors' report.



<PAGE>


ITEM 8   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS  ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

     Singer,  Lewak,  Greenbaum & Goldstein,  LLP resigned as independent public
accountants for the Company as of April 30, 1998.

     In considering whether to renew its engagement as the Company's independent
auditors for the fiscal year ended March 31, 1998,  Singer,  Lewak,  Greenbaum &
Goldstein,  LLP requested  that, if the Company  sought to eliminate a liability
from the  Company's  financial  statements  because  the Company had no legal or
contractual  obligation  to pay such  liability,  the  Company  obtain  either a
verification  from a party as to the  Company's  potential  liability  under the
terms of a licensing  agreement  as part of its auditing  procedures  or a legal
opinion regarding such potential liability. For business reasons unrelated to an
audit,  the Company  preferred not to request such a verification  and sought to
instead  provide a form of legal  opinion  which would  satisfy  Singer,  Lewak,
Greenbaum  &  Goldstein  LLP's  auditing  procedures   regarding  the  potential
liability.  The Company had engaged its  corporate  counsel to prepare a form of
opinion to address this issue.  Discussions  regarding the form of opinion,  and
the potential  elimination of the liability,  were not completed as of April 30,
1998.

     The report of the Company's  prior  accountants,  Singer Lewak  Greenbaum &
Goldstein  LLP, on the financial  statements of the Company for the fiscal years
ended March 31,  1995,  March 31, 1996,  and March 31, 1997,  did not contain an
adverse  opinion,  disclaimer  of opinion nor was it qualified or modified as to
audit, scope accounting principles or uncertainty,  except that the accountants'
report   included  an   explanatory   paragraph   relating   to  going   concern
considerations for fiscal years ended March 31, 1995, 1996 and 1997.

     There were no  disagreements  with Singer Lewak  Greenbaum & Goldstein  LLP
within the two most recent years, nor subsequently,  on any matter of accounting
principles or practices,  financial statement  disclosure,  or auditing scope or
procedure,  which  disagreements,  if not resolved to the satisfaction of Singer
Lewak  Greenbaum & Goldstein  LLP would have cause it to make  reference  to the
subject matter of the disagreement in its reports.

     Singer Lewak  Greenbaum & Goldstein LLP did not,  however,  audit or review
the Company's financial  statements for any period subsequent to the fiscal year
ended March 31, 1997.

     On  May  18,  1998,  the  Board  of  Directors  of  the  Company   approved
management's proposal to engage Stonefield Josephson, Inc., as the Company's new
independent public accountants.


                                                      PART III.


ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS


     The following  table sets forth the  directors  and  executive  officers of
Registrant as of March 31, 1998.

Name                    Age       Current Position with Company
----                    ---       -----------------------------
Gerald A. Bagg          46        Director
Robert J. Fabregas      52        Director
Isaac S. Salzberg       46        Vice President, Secretary and Director
Jack I. Salzberg        75        Chairman of the Board, President,  and
                                   Chief Executive Officer


<PAGE>

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS (CONTINUED)

     Listed below are  descriptions of the business  experience for at least the
past five years for each director and executive  officer listed in the preceding
table. Unless otherwise described below, none of these individuals is related in
any way, or has been  involved  in certain  legal  proceedings  in the past five
years, except as described in the legal proceedings section of this report.

     GERALD A. BAGG served as President, Chief Operating Officer, and a director
of the  Company  since  March  20,  1992 and as Chief  Executive  Officer  since
December 30, 1992. As of February  1996,  Mr. Bagg resigned as President and CEO
but remains a director.  He is Senior Vice  President of Account  Management and
Marketing with Williams Worldwide, a major television media buying firm. From at
least 1988, Mr. Bagg served as President of Brentwood Marketing, a marketing and
strategic planning firm located in Los Angeles, California.  Brentwood Marketing
has launched numerous entrepreneurial consumer products, including Epilady which
produced sales in excess of $100,000,000  in its first year and  $400,000,000 in
its third year.

     J. ROBERT  FABREGAS has served as a director of the Company since March 11,
1998.  From June,  1988 to the present,  Mr.  Fabregas has been the President of
Stonepine  Holdings,  Limited,  a  California  corporation  which is a  boutique
investment  banking  firm.  He has twenty  five years  experience  in  corporate
finance and commercial lending with major domestic and foreign banks, one of the
largest  U.S.  savings  and loans,  a Fortune  500  manufacturing  company,  and
privately held investment banking firms. He has served as a Member of Management
in the Los Angeles office of Credit Suisse, a major Swiss financial institution.
He presently  maintains NASD Series 7, and 63 General  Securities  Licenses,  in
addition, to an SEC Series 65 License as a Registered Investment Advisor.

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

     JACK I. SALZBERG has been Chairman of the Board since January, 1985 and has
served as Chief Executive Officer of Registrant from March, 1992 until December,
1992.  He assumed the  additional  office of President in February  1996. He had
been  Chairman of the Board since 1983 and Chief  Executive  Officer since June,
1989 of First  Charter  Bank,  N.A., a national  bank which  operates two branch
offices in the Los Angeles area,  and of which he was also a major  stockholder.
Mr.  Salzberg  retired from all  positions  with First Charter Bank and divested
himself all stock ownership on September 30, 1995. Mr. Salzberg is the father of
Isaac S. Salzberg, a director of the Company.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

     Section  16(a)  of the  Securities  Exchange  Act  requires  the  Company's
officers  and  directors,  and  person who  beneficially  own more than 10% of a
registered  class  of the  Company's  equity  securities,  to  file  reports  of
beneficial  ownership  and  changes in  beneficial  ownership  of the  Company's
Securities with the Securities and Exchange Commission.  Officers, directors and
beneficial owners of more than 10% of the Company's Common Stock are required by
Commission  regulations  to furnish the Company with copies of all Section 16(a)
forms  that they  file.  Based  solely on  review  of the  copies of such  forms
furnished to the Company, or written  representations  that no reports on Form 5
were  required,  the  Company  believes  that for the period  from April 1, 1997
through March 31, 1998, all officers,  directors and greater-than-10% beneficial
owners complied with all Section 16(a) filing requirements applicable to them.

<PAGE>



ITEM 10. EXECUTIVE COMPENSATION

     The following table sets forth all compensation awarded to or earned by the
Chief  Executive  Officer and all  officers of the  Company  whose  compensation
exceeded  $100,000  for all services  rendered to the Company  during the fiscal
years ending March 31, 1998, 1997, and 1996 (Named Executive Officers).

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

     (1)  Compensation  awarded by the  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 authorized the
     conversion  of this accrued  liability  into common stock @ $1.25 per share
     which was then converted on May 1998.




                      OPTION/SAR GRANTS IN LAST FISCAL YEAR

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

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


Arrangements with Directors
---------------------------

     J. Robert  Fabregas  was  appointed  to the Board of directors on March 11,
1998.  During  the  fiscal  year  1998,  he  received  a  total  of  $34,500  as
compensation  through his company,  Stonepine Holdings,  Limited, for consulting
services  rendered  to the Company  unrelated  to his  services  and duties as a
director.



<PAGE>



ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The  following  table sets forth  information  concerning  ownership of the
Company's Common Stock as of March 31, 1998 by (a) each director of the Company;
(b) each  person  known to the Company to be the  beneficial  owner of more than
five percent (5%) of its Common Stock; and (c) all directors and officers of the
Company as a group.

                                Amount and Nature
                                       of
                              Beneficial Ownership


                                                                     
Name of Beneficial                                      Number of    Percent of
Owner                Title                              Shares       Class      
-----                -----                              ------       -------    
Gerald A. Bagg       Director                            150,000 (1)     1.27%
J. Robert Fabregas   Director                                  0            0%
Isaac S. Salzberg    Corporate Secretary and Director    246,500 (2)     2.09%
Jack I. Salzberg     Chairman of the Board & President 2,247,800 (3)    19.04%

All Directors and Officers as a group (four) persons   2,644,300        22.4%

Esther Kozienicki (4)                                    759,760         6.44%




(Footnotes)

(1)      Consists  of 150,000  shares  which Mr.  Bagg has the right to acquire
         through stock option plan which became exercisable on June 1, 1998

(2)      Includes  85,000  shares  are held by Isaac S.  Salzberg  and  Susan S.
         Salzberg as trustees for the Isaac S.  Salzberg  and Susan S.  Salzberg
         Living  Trust.  The balance of these shares is held by Mr.  Salzberg as
         custodian for his minor  children.  Mr.  Salzberg has the power to both
         vote and direct the disposition of his children's shares.

(3)      Includes  850,000 stock option of Mr J. Salzberg  exercisable  at the
         option of the holder at $.50 per share,  and 240,000 shares issued on
         May, 1998 on conversion of accrued salaries of $300,000 at $1.25 per
         share.  The bid price at the time of conversion was 7/8.

(4)      Ms. Kozienicki is the sister of Jack I. Salzberg.  Mr. Salzberg
         disclaims beneficial ownership of any of the shares owned by Ms.
         Kozienicki.




<PAGE>


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     In connection  with the July, 1997 and December,  1997 Board  resolution to
eliminate most of the existing  indebtedness,  the following noteholders elected
to convert their receivables into common stock:

Jack I Salzberg
---------------
 
     Jack I.  Salzberg,  the  Company's  Chairman  of the Board  and  President,
converted  all  accrued  interests  and notes  payable  due him in the amount of
$143,916  into 287,831  shares of common stock at $.50 per share.  Last year, he
converted his 2 1/2 year note for $300,000  into 300,000  shares of common stock
at $1.00 per share. See Item 5 "Market for Common Equity and Related Stockholder
Matter", Item 9 "Directors,  Executive Officers, Promoters and Control Persons",
and, Item 10 "Executive Compensation".

Esther Kozienicki
-----------------

     Esther Kozienicki is the sister of Jack I. Salzberg. At March 31, 1997, she
had $566,000  outstanding  notes receivable from the Company.  In addition,  the
Company  issued new demand  notes  payable  for  operating  cash  received in an
aggregate amount of $227,000 during the fiscal year 1998. She converted $779,880
of outstanding  notes and accrued interests through December 1997 into 1,559,760
shares  of  common  stock at $.50 per  share.  Ms.  Kozienicki  had  continually
provided  the Company  with  operating  cash fund since 1993.  On May 29,  1998,
subsequent to the fiscal year,  Ms.  Kozienicki  converted  $160,000  notes into
128,000 shares of common stock at $1.25 per share. See Item 5 "Market for Common
Equity and Related Stockholder Matters".

Malka Livne
-----------

     The Company  issued new demand notes payable to Malka Livne,  sister in law
of Jack I. Salzberg, an aggregate amount of $149,000 for operating cash received
during the fiscal year ended  March,  1998.  At March 31, 1997 she had  $350,000
outstanding  notes  receivable from the Company.  During the year, she converted
outstanding  notes and accrued  interests  through  December  1997  amounting to
$463,995  into 927,990  shares of common stock at $.50 per share.  Ms. Livne had
continually provided the Company with operating cash fund since 1994. See Item 5
"Market for Common Equity and Related Stockholder Matters".


                                    PART IV.

ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K

         (a)(1)   Exhibits

                  See  Index  to  Exhibits.  The  exhibits  therein  listed  and
                  attached  hereto,  and the Exhibits  therein  incorporated  by
                  reference, are filed as a part of this report.

         (a)(2)   List

                  See exhibits.

         (b)      Reports on Form 8-K

                  No reports on Form 8-K were filed during the last quarter of
                  the period covered by this report.


<PAGE>


                                   SIGNATURES

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


                                      NUMEX CORPORATION


                                      By /s/  JACK I. SALZBERG
                                              Jack I. Salzberg
                                              Chairman of the Board & President







Dated:   June 29, 1998

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report has been signed by the following  persons on behalf of the Registrant and
in the capacities and on the dates indicated.


/s/   JACK I. SALZBERG
Jack I. Salzberg
Chairman of the Board & President

/s/ ISAAC S. SALZBERG
Isaac S. Salzberg
Secretary and Director

/s/ GERALD A. BAGG
Gerald A. Bagg
Director

/s/ J. ROBERT FABREGAS
J. Robert Fabregas
Director


Dated:  June 29, 1998





<PAGE>



                                                  INDEX TO EXHIBITS

Exhibit No.

3.1  Certificate of Incorporation.  Incorporated by reference to exhibit 2.1 to
     Company's  Registration  Statement on Form S-18, filed on August 14, 1980.

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

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

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

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

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

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

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

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

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

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

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

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

10.16     Settlement Agreement and Release of All Claims dated December 29,1997
          between the Company and Jacob M.M. Graff.  Filed herewith.

10.17     Settlement  Agreement and Release of All Claims dated January 29, 1998
          between the Company and Belin  Rawlings and Badal LLP.  Filed
          herewith.

10.18     Settlement  Agreement  and Release of All Claims  dated  February 5,
          1998  between  the Company and Barnes  Morris Wolf P.C..  Filed
          herewith

<PAGE>
INDEX TO EXHIBITS, cont.


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

21   Subsidiaries of Registrant.  Filed herewith

27   Financial Data Schedule


<PAGE>



                       INDEX TO ANNUAL REPORT ON FORM 10-K
                                  10-K Contents
                                                                   PAGE
PART I
             Item 1.   Business                                      2

             Item 2.  Properties                                     3

             Item 3.  Legal Proceedings                              4

             Item 4.  Submission of Matters to Vote of
                      Security Holders                               4
PART II.
             Item 5.  Market for Common Equity and Related
                      Stockholder Matters                            4

             Item 6.  Management's Discussion  and  Analysis
                      of Financial Conditions  and Results of
                      Operations                                     6

             Item 7.  Financial Statements and Supplementary Data    9-26

             Item 8.  Changes in and disagreements with
                      Accountants on Accounting and Financial
                      Disclosure                                     27
PART III
             Item 9.  Directors and Executive Officers of the
                      Company                                        27

             Item 10. Executive Compensation                         29

             Item 11. Security Ownership of Certain Beneficial
                      Owners and Management .                        30

             Item 12. Certain Relationships and Related
                      Transactions                                   31
PART IV
             Item 13. Exhibits, List and Reports on Form 8-K         31

             SIGNATURES                                              32

             INDEX TO EXHIBITS                                      33-34