Note 1. Significant Accounting Policies
Engex Inc. ("The Fund") is registered under the Investment Company Act of 1940, as a nondiversified, closed-
end investment company (see Note 7). The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements:
(a) SECURITY VALUATION--Investments in securities traded on a national securities exchange are valued at
the last reported sales price on March 31, 2004. Securities traded on the over-the-counter market and listed
securities for which no sale was reported on that date are valued at the last reported bid price. Investments for
which quotations are not readily available are valued at fair value, as determined by the Board of Directors. The
estimated fair values may differ from the values that would have been used had a liquid market existed, and such
differences could be significant.
(b) FEDERAL INCOME TAXES--The Fund no longer qualifies under subchapter M of the Internal Revenue
Code as a regulated investment company, and, accordingly, is taxed as a regular corporation.
(c) OTHER--As is common in the industry, security transactions are accounted for on the trade date the
securities are purchased or sold. Dividend income and distributions to shareholders are recorded on the ex-
(d) USE OF ACCOUNTING ESTIMATES--The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts of increases and decreases in net assets
from operations during the reporting period. Actual results could differ from those estimates.
Note 2. Investment Advisor and Transactions with Affiliated Persons
The Fund has entered into an investment advisory agreement (the "Agreement") with American Investo