Monogenesis Corporation
Audited Financial Statements
December 31, 1997
George E. Clark
CERTIFIED PUBLIC ACCOUNTANT
6309 ROSWELL ROAD, NE
SUITE 2-B
ATLANTA, GEORGIA 30326
(404) 256-1218 FAX (404) 256-5634
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
Monogenesis Corporation
Walker, West Virginia
I have audited the accompanying statement of assets and liabilities of
Monogenesis Corporation, including the schedule of portfolio investments, as
of December 31, 1997, and the related statements of operations, cash flows,
and changes in net assets for the year then ended, and the selected per share
data and ratios for each of the three years in the period then ended. These
financial statements and per share data and ratios are the responsibility of
the Company's management. My responsibility is to express an opinion on
these financial statements and per
share data and ratios based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I 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 finical statements. Our procedures
included confirmation of securities owned as of December 31, 1997, by
correspondence with the custodian and broker. An audit also includes assessing
the accounting principles used and significant estimates made by management
, as well as evaluating the overall financial statement presentation. I believe
that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements and selected per share data and ratios
referred to above present fairly, in all material respects, the financial
position of Monogenesis Corporation as of December 31, 1997, and the
results of its operations, its cash flows, and the changes in its net
assets for the year then ended, and the selected per share data and ratios
for each of the three years in the period then ended in conformity with
generally accepted accounting principles.
February 19, 1998
George E. Clark
MONOGENESIS CORPORATION
Statement of Assets and Liabilities
December 31, 1997
Assets
Investments in securities, at value-identified cost $18,457.83
$511, 584.38
Cash
67,329.70
Equipment, net of accumulated depreciation of $732,14
6,589.26
Total Assets
$585,503.34
Liabilities
Accounts payable
$426.52
Loans from shareholders
136.60
Total liabilities
$563.12
Net Assets
Net assets (equivalent to $286.88 per share based on 2,039 shares of
capital stock outstanding)(Note 5)
$584,940.22
The accompanying NOTES to the Financial Statements are an integral part of this
statement.
NOTES: "See Accountant's Report"
MONOGENESIS CORPORATION
Statement of Changes in Net Assets
For the years ended December 31, 1997 and 1996
Increase (Decrease) in Net Assets from Operations
1997
1996
Investment Income (Net)
$(44,202.68)
$(39,913.02)
Net realized gain on investments
154,987.18
- -
Change in unrealized appreciation
492,821.30
275.05
Net increase in net assets resulting from operations
603,605.80
39,637.97
Capital Share Transactions
- -
10,000.00
Net increase (decrease) in net assets
603,605.80
(29,637.97)
Net Assets
Beginning of the year
(18,665.58)
10,972.39
End of year
$584,940.22
$(18,665.58)
The accompanying NOTES to the Financial Statements are an integral part of this
statement.
NOTES: "See Accountant's Report"
MONOGENESIS CORPORATION
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
Investment Income
Income
Dividends
$ -
Interest
282.75
Other income
- -
Total income
282.75
Expenses
Officer salaries
6,200.00
Director's fees
1,000.00
Professional fees
6,489.30
Custodian, transfer agent and distribution fees
27,929.44
Other administration expenses
2,134.55
Depreciation
732.14
Total expenses
44,485.43
Investment Income-Net
(44,202.68)
Realized and Unrealized Gain on Investments
(Note 2)
Net realized gain on investments
154,987.18
Change in unrealized appreciation of investments for
the year
492,821.30
Net gain on investments
647,808.48
Net Increase in Net Assets Resulting From Operations
$603,605.80
The accompanying NOTES to the Financial Statements are an integral part of this
statement.
NOTES: "See Accountant's Report"
MONOGENESIS CORPORATION
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1997
Cash Flow From Operation Activities
Net increase in net assets
$603,605.80
Adjustments to reconcile net (decrease) in net assets resulting from
operations to net cash provided by operating activities
Depreciation
732.14
Increase in unrealized appreciation of investment securities
(523,863.20)
Decrease in accounts payable
(7,295.25)
Net cash provided by (used in) operating activities
73,179.49
Cash Flows From Financing Activities
Purchase of assets
(7,321.40)
Cash Flows From Investing Activities
- -
Net Increase In Cash And Cash Equivalents
65,858.09
Cash Balance, Beginning of Year
1,471.61
Cash Balance, End of Year
$67,329.70
The accompanying NOTES to the Financial Statements are an integral part of this
statement.
NOTES: "See Accountant's Report"
MONOGENESIS CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
(1) SIGNIFICANT ACCOUNTING POLICIES
Monogenesis Corporation (the Company) is registered under the Investment Company
Act of 1940 as a nondiversified management investment company. The Company's
investment objectives as well as the nature and risk of its investment
transactions are set forth in the Company's registration statement.
Depreciation- Equipment is depreciated using the straight-line method over a
ten year period.
Accrual of expenses- It is the Company's policy to accrue items of expense
recognized in the current period, but not paid until the subsequent period.
Security valuation- Investments in securities in ensuing public companies are
originally valued at cost until such time as the securities are publicly
traded. Securities traded on a national securities exchange or reported on the
NASDAQ national market are stated at the last reported sales price on the day
of valuation. Other securities traded in the over-the-counter market and
listed securities for which no sale was reported on that date are stated at
the last quoted bid price.
Security transaction and investments income- Investment transactions are
accounted for on the trade date. Gain or loss on sales of securities and
options is determined on the basis of
identified cost. Dividend income and distributions to shareholders are
recognized on the ex-dividend date, and interest income is recognized on the
accrual basis.
Federal income taxes- The Company does not qualify for the preferred tax
treatment of dividends paid to stockholders afforded by Subchapter M of the
Internal Revenue Code to most regulated investment companies. No provision
for income taxes is required for this year as there are sufficient tax net
operating loss carryforwards and Section 179 write-offs available to offset
any taxable income.
"SEE ACCOUNTANT'S REPORT"
MONOGENESIS CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
(2) INVESTMENT TRANSACTIONS
Purchases and sales of portfolio securities during the year were $20,250 and
$158,920, respectively. Net income on investments for the year ended December
31, 1997, was $282.75. That amount represents the net increase in value of the
investments held during the year. All investment decisions are made by the
Company's President. Purchases, when they occur, are made funds generated
through additional contributions to Paid-In Capital.
(3) DIVIDENDS
The Company paid no dividends during the year. The Company only distributes
property dividends of stock that it acquires in ensuring public companies.
Such acquisitions of stock are made from Paid-In Capital: therefore,
ensuing stock dividends are charges to Paid-In Capital.
(4) OFFICER/DIRECTOR COMPENSATION
The Company paid officer salaries of $6,200 during the year. $1,000 in director
fees were paid to two different directors.
(5) CAPITAL SHARE TRANSACTIONS
As of December 31, 1996, there were 3,000 shares of $.01 par value stock
authorized, 2,039 shares issued and outstanding, and Paid-In Capital
aggregated $89,297.39.
"SEE ACCOUNTANT'S REPORT"
MONOGENESIS CORPORATION
INVESTMENTS IN SECURITIES
DECEMBER 31, 1997
Number of shares
Value
Common Stocks- 100%
Health care- 100%
PML, Inc.
475
$950.00
Exigent International, Inc.
18,375
50,531.25
Exigent International, Inc. warrants 1/30/2000
19,200
12,000.00
Tice Tech, Inc.
32,875
242,453.13
Tice Tech, Inc. warrants
182,800
205,650.00
$511,584.38
The accompanying Notes to the Financial Statements are and integral part of
this statement.
MONOGENESIS CORPORATION
SUPPLEMENTARY INFORMATION- STATEMENT OF CHANGES IN SURPLUS
FOR THE YEAR ENDED DECEMBER 31, 1997
Common Stock
Paid-In Capital
Accumulated
Deficit
Total
Balance at beginning
of year
$20.50
$89,297.28
$ (108,288.61)
$ (18,970.83)
Additional stock
issued
- -
Stock cancelled
(.11)
.11
Additional capital
contributed
Net income
111,516.64
111,516.64
Balance at end of
year
$20.39
$89,297.39
$3,228.03
$92,545.81
"SEE ACCOUNTANT'S REPORT"
MONOGENESIS CORPORATION
SUPPLEMENTARY INFORMATION-SELECTED PER SHARE DATA AND RATIONS
1997
1996
1995
Per Share Data
Investment income
$.14
$-
$11.20
Expenses
21.82
19.03
9.30
Investment income-net
(21.68)
(19.03)
1.90
Additional contributions
- -
4.88
.03
Distributions from investment income-net
- -
- -
- -
Net realized & unrealized gain (loss) on
securities
317.67
.13
(.02)
Distributions from realized gains on
securities
- ----------
- ---------
- ------
Net increase/decrease in net asset value
295.99
(14.02)
1.91
Net asset value: Beginning of year
(9.11)
4.91
3.00
End of year
$286.88
$(9.11)
$4.91
Per share market value, End of period
$ ---
$ ---
$ ---
Total investment return
- -------
- -------
- -------
Ratios
Ratio of expenses to average net assets(%)
16
- -
235
Ratio of investment income-net to average
net assets (%)
- -
- -
48
Portfolio turnover ratio
- -
- -
- -
"SEE ACCOUNTANT'S REPORT"
GEORGE E. CLARK
Certified Public Accountant
6309 Roswell Road NE
Suite 2-B
Atlanta, Georgia 30328
(404) 256-1218 FAX (404) 256-5634
February 19, 1998
Board of Directors and Stockholders
Monogenesis Corporation
Walker, West Virginia
In planning and performing my audit of the financial statements of Monogenesis
Corporation for the year ended December 31, 1997, I considered its internal
control structure, including procedures for safeguarding securities, in order
to determine my auditing procedures for the purpose of expressing my
opinion on the financial statements and to comply with the requirements of
Form N-SAR, not to provide assurance on the internal control structure.
The management of Monogenesis Corporation is responsible for establishing
and maintaining an internal control structure. In fulfilling this
responsibility, estimates and judgments by management are required to assess
the expected benefits and related costs of control structure policies and
procedures. Two of the objectives of an internal control structure ate to
provide management with reasonable, but not absolute, assurance that assets
are safeguarded against loss from unauthorized use or disposition and that
transactions are executed in accordance with management's authorization and
recorded properly to permit preparation of financial abatements in
conformity with generally accepted accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and not be detected. Also, projection of any
evaluation of the structure to future periods is subject to the risk that
it may become inadequate because of changes in conditions or that the
effectiveness of the design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be
material weaknesses under standards established by the American Institute
of Certified Public Accountants. A material weakness is a condition in
which the design or operation of the specific internal control structure
elements does not reduce to a relatively low level the risk that errors or
irregularities in amounts that would be material in relation to the
financial statements being audited may occur and not be detected within a
timely period by employees in the normal course of performing their
assigned functions. However, I noted no matters involving the internal control
structure, including procedures for safeguarding securities, that I
consider to be material weaknesses above as of December 31, 1997.
This report is intended solely for the information and use of management and
the Securities and Exchange Commission.
George E. Clark
Certified Public Accountant
