Our attached Report of Independent Certified Public Accountants is printed for you. We want you, our friends and donors, to see how your money is working.

The Mission of the Cancer Research Foundation is to help find the cures for cancer through funding laboratory and clinical research. Foundation grants fund this research. Foundation grants are invested in fine minds. Foundation grants pay for the laboratory supplies and equipment and technical support necessary to do the cancer research projects. The Foundation does not pay the salaries of grant recipients, nor for travel or other expenses not directly related to the particular projects.

During the fiscal year ending March 31, 1999, the trustees named Mark Hochstrasser, Ph.D., the 1998 Fletcher Scholar. The Fletcher Scholar award was created by an endowment to the Foundation. Income earned from this endowment funds a $100,000 research grant to support a senior cancer researcher who is doing distinctive laboratory research. Dr. Hochstrasser, a cell biologist, is the sixth Fletcher scholar in 11 years.

Research projects of five young laboratory scientists were funded: Carl C. Correll, Ph.D., Wei Du, Ph.D., Guido Franzoso, M.D., Ph.D., Lalitha Iyer, Ph.D., and Michael J. Thirman, M.D. For the eighth consecutive year, the Foundation supported the ovarian cancer research of Dr. John Lurain.

Each recipient of Foundation funds is doing exceptional science, highly recommended by a scientific reviewing body, research that can make a difference, that can help find the cures and save lives.

Accountants and
Management Consultants
The US Member Firm of
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Board of Trustees
The Cancer Research Foundation

We have audited the accompanying statement of financial position of The Cancer Research Foundation as of March 31, 1999, and the related statements of activities and changes in net assets and cash flows for the year ended March 31, 1999. These financial statements are the responsibility of the Foundation's management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of The Cancer Research Foundation as of and for the year ended March 31, 1998, were audited by other auditors whose report dated October 8, 1998, expressed an unqualified opinion on those statements.

`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 financial position of The Cancer Research Foundation as of March 31, 1999, and the results of its operations and its cash flows for the year then ended, in conformity with generally accepted accounting principles.

As discussed in note C to the financial statements, the Foundation restated its net assets as of April 1, 1998, to correct its accounting for split interest agreements as required by Statement of Financial Accounting Standards No. 117, "Financial Statements of Not-for-Profit Organizations."

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The Cancer Research Foundation
(An Illinois Corporation, Organized Not For Profit)
Statement of Financial Position
March 31, 1999

The Cancer Research Foundation
(An Illinois Corporation, Organized Not For Profit)
Statement of Activities and Changes in Net Assets
Year ended March 31, 1999

Cash flows from operating activities

Change in net assets $ (132,625)

Adjustment to reconcile change in net assets to net cash provided by operating activities

Net realized and unrealized loss on investments 210,110

Depreciation expense 450

Increase in accounts receivable (102,488)

Decrease in accrued interest receivable 8,767

Decrease in prepaid assets 493

Decrease in accrued expenses 160

Decrease in grants payable (350,362)

Total cash used in operating activities (365,495)

Cash flows from investing activities

Purchase of equipment (2,080)

Proceeds from sale of investments 1,741,403

Purchases of investments (1,306,083)

Total cash provided by investing activities 433,240

Increase in cash and cash equivalents 67,745

Cash and cash equivalents, beginning of year 31,316

Cash and cash equivalents, end of year $ 99,061

The Cancer Research Foundation
(An Illinois Corporation, Organized Not For Profit)
Notes to financial Statements
March 31, 1999

NOTE A - NATURE OF PROGRAM SERVICES
The purpose of The Cancer Research Foundation (the "Foundation") is to obtain and distribute funds to recognized doctors, hospitals, laboratories, institutes, and centers engaged in cancer research.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - The financial statements of the Foundation have been prepared on the accrual basis.
Classification of Net Assets - The Foundation's net assets have been grouped into the following two classes:
Unrestricted - Net assets that are not subject to donor-imposed stipulations. Unrestricted net assets may be designated for specific purposes by action of the Board of Trustees or may otherwise be limited by contractual agreements with outside parties.
Permanently Restricted - Net assets subject to donor-imposed stipulations that they be maintained permanently by the Foundation. Generally, the donors of these assets permit the Foundation to use all or part of the income earned on these assets. Permanently restricted assets consist of the Foundation's endowment fund.
Grants - Grants are recorded as expenses when the Board approves the grants. Grants approved by the Board, but not yet paid, are recorded as liabilities in the balance sheet.
Cash Equivalents- The Foundation considers all liquid investments purchased with an original maturity of three months or less and designated to be used to support daily operations to be cash equivalents.
Investments - Investments are carried at fair market value, based on quoted market prices. Interest and dividends are included in operating revenues as investment income. Realized and unrealized gains and loses are separately stated as other gains and losses on the statement of activities.
Equipment - Equipment purchased by the Foundation is stated at cost. Depreciation of assets begins when the assets are placed in service. Depreciation is computed using the straight-line method over the estimated useful life of equipment of five years.
Use of Estimates - The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may vary from those estimates.

NOTE C - PRIOR PERIOD RESTATEMENT
Generally accepted accounting policies require split interest agreements to be recognized as revenue in the period in which the organization is notified. The Foundation had previously recorded these contributions when received. During prior years the Foundation had been notified that it was the beneficiary of certain split interest agreements valued at $580,517 as of April 1, 1998.

Accordingly, the Foundation's beginning of the year net assets have been restated on the statement of activities to reflect the correction of an understatement of accounts receivable.

The restatement is as follows:
Net assets - April 1, 1998, previously reported $4,890,179
Correction of reporting for split interest agreements 580,517
Net assets - April 1, 1998, as restated $5,470,696

NOTE D - SPLIT INTEREST AGREEMENTS
The Cancer Research Foundation has been named the beneficiary of the following split interest agreements which have been recorded in accounts receivable and are considered temporarily restricted due to time restrictions:
Donor A $ 50,671
Donor B 76,345
Donor C 555,989
Total $683,005

NOTE E - INVESTMENTS
Investments are stated at fair value as of March 31, 1999. Cost of donated securities is determined at the fair value of the securities on the date of receipt. Investments consist of the following at March 31,1999: Money market fund $ 215,972 U.S. Government bonds 1,141,388 Corporate bonds and warrants 521,466 Stocks and securities 2,822,013 $4,700,839

NOTE F - PERMANENTLY RESTRICTED NET ASSETS The Foundation received endowments totaling $710,265 in fiscal 1989 and fiscal 1988 from the Eugene and Dorothy S. Fletcher Trust. The terms of the endowments require permanent investment of the principal, but permit the use of investment earnings for laboratory research.

NOTE G - TAX STATUS The United States Treasury Department has advised that the Foundation is a not-for-profit corporation organized and operated exclusively for charitable and scientific purposes, is exempt from Federal income tax under Section 501(c)(3) of the Internal Revenue Code, and is not a private foundation as defined in Section 509(a) of the Internal Revenue Code.

NOTE H - LEASE AGREEMENT The Foundation is obligated for rental expense under a non-cancelable operating lease for office space. The agreement provides for annual base rents plus additional rents relating to future increases in the building's operating expenses and real estate taxes. At March 31, 1999, future minimum rental commitments are as follows:

Fiscal year ending	Amount
2000	$12,516
2001	12,898
2002	13,220
2003	13,548
2004	2,267
Total	$54,449

During 1999, the Foundation incurred $8,993 in rent expense.