-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GzZ3wux8TwL9VWhGEIPFdL2d7A1aiv7s2//PwRiJCo9zu/Opb367A9eVELGFmJjB QKhO1bIs5cQywnkMEickNg== 0000945227-00-000023.txt : 20000516 0000945227-00-000023.hdr.sgml : 20000516 ACCESSION NUMBER: 0000945227-00-000023 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PROFUTURES LONG/SHORT GROWTH FUND LP CENTRAL INDEX KEY: 0001045702 STANDARD INDUSTRIAL CLASSIFICATION: [6221] IRS NUMBER: 742849862 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-25585 FILM NUMBER: 630430 BUSINESS ADDRESS: STREET 1: 1310 HIGHWAY 620 SOUTH STREET 2: SUITE 200 CITY: AUSTIN STATE: TX ZIP: 78734 BUSINESS PHONE: 5122633800 MAIL ADDRESS: STREET 1: 1310 HIGHWAY 620 SOUTH STREET 2: SUITE 200 CITY: AUSTIN STATE: TX ZIP: 78734 FORMER COMPANY: FORMER CONFORMED NAME: PROFUTURES BULL & BEAR FUND L P DATE OF NAME CHANGE: 19980827 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q X Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarter Ended March 31, 2000 -------------- Commission File Number 0-25585 ------- PROFUTURES LONG/SHORT GROWTH FUND, L.P. - --------------------------------------- (Exact name of registrant) Delaware 74-2849862 - ----------------------- ------------------------------------ (State of Organization) (I.R.S. Employer Identification No.) ProFutures, Inc. 11612 Bee Cave Road Suite 100 Austin, Texas 78733 - --------------------------------------- (Address of principal executive office) Registrant's telephone number (800) 348-3601 - -------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No PART I - FINANCIAL INFORMATION Item 1. Financial Statements. PROFUTURES LONG/SHORT GROWTH FUND, L.P. STATEMENTS OF FINANCIAL CONDITION March 31, 2000 (Unaudited) and December 31, 1999 (Audited) ------------- March 31, December 31, 2000 1999 ---- ---- ASSETS Equity in broker trading account Cash $32,902,985 $44,341,201 Unrealized gain (loss) on open contracts 1,154,925 (6,005,475) ------------ ----------- Deposits with broker 34,057,910 38,335,726 Cash 185,087 642,249 ----------- ----------- Total assets $34,242,997 $38,977,975 =========== =========== LIABILITIES Accounts payable $ 21,550 $ 18,894 Commissions and other trading fees on open contracts 1,448 3,018 General Partner management fee 85,371 95,836 Redemption payable 1,293,969 222,643 ----------- ----------- Total liabilities 1,402,338 340,391 ----------- ----------- PARTNERS' CAPITAL (Net Asset Value) General Partner - 61.4461 units outstanding at March 31, 2000 and December 31, 1999 93,595 101,567 Limited Partners - 21,496.9955 and 23,313.5041 units outstanding at March 31, 2000 and December 31, 1999 32,747,064 38,536,017 ----------- ----------- Total partners' capital (Net Asset Value) 32,840,659 38,637,584 ----------- ----------- $34,242,997 $38,977,975 =========== =========== See accompanying notes. PROFUTURES LONG/SHORT GROWTH FUND, L.P. STATEMENTS OF OPERATIONS For the Three Months Ended March 31, 2000 and 1999 (Unaudited) ------------- Three months ended March 31, 2000 1999 ---- ---- INCOME Trading gains (losses) Realized $(10,496,668) $ 1,578,905 Change in unrealized 7,160,400 (1,704,725) ------------ ------------ Gain (loss) from trading (3,336,268) (125,820) Interest income 499,638 231,233 ------------ ------------ Total income (loss) (2,836,630) 105,413 ------------ ------------ EXPENSES Brokerage commissions 9,286 3,108 General Partner management fee 257,008 144,005 Operating expenses 27,000 13,743 ------------ ------------ Total expenses 293,294 160,856 ------------ ------------ NET (LOSS) $ (3,129,924) $ (55,443) ============ ============ NET (LOSS) PER GENERAL AND LIMITED PARTNER UNIT (based on weighted average number of units outstanding during the period of 23,066.1407 and 9,948.2099, respectively) $ (135.69) $ (5.57) ============ ============ (DECREASE) IN NET ASSET VALUE PER GENERAL AND LIMITED PARTNER UNIT $ (129.62) $ (3.39) ============ ============ See accompanying notes. PROFUTURES LONG/SHORT GROWTH FUND, L.P. STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (NET ASSET VALUE) For the Three Months Ended March 31, 2000 and 1999 (Unaudited) -------------
Total Partners' Capital Number of ---------------------------------- Units General Limited Total ----------- -------- ----------- ----------- Balances at December 31, 1999 23,374.9502 $101,567 $38,536,017 $38,637,584 Net (loss) for the three months ended March 31, 2000 (7,972) (3,121,952) (3,129,924) Additions 548.1465 0 816,132 816,132 Redemptions (2,364.6551) 0 (3,483,133) (3,483,133) ----------- -------- ----------- ----------- Balances at March 31, 2000 21,558.4416 $ 93,595 $32,747,064 $32,840,659 =========== ======== =========== =========== Balances at December 31, 1998 9,772.1661 $116,671 $18,438,300 $18,554,971 Net (loss) for the three months ended March 31, 1999 (208) (55,235) (55,443) Additions 5,088.2753 0 9,674,650 9,674,650 Redemptions (225.9670) 0 (436,444) (436,444) ----------- -------- ----------- ----------- Balances at March 31, 1999 14,634.4744 $116,463 $27,621,271 $27,737,734 =========== ======== =========== =========== Net asset value per unit at December 31, 1998 $ 1,898.76 =========== March 31, 1999 $ 1,895.37 =========== December 31, 1999 $ 1,652.95 =========== March 31, 2000 $ 1,523.33 ===========
See accompanying notes. PROFUTURES LONG/SHORT GROWTH FUND, L.P. NOTES TO FINANCIAL STATEMENTS (Unaudited) ------------- Note 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ----------------------------------------------------------- A. General Description of the Partnership ProFutures Long/Short Growth Fund, L.P. (the Partnership) is a Delaware limited partnership which operates as a commodity investment pool. The Partnership engages in the speculative trading of stock index futures contracts. B. Regulation As a registrant with the Securities and Exchange Commission, the Partnership is subject to the regulatory requirements under the Securities Acts of 1933 and 1934. As a commodity investment pool, the Partnership is subject to the regulations of the Commodity Futures Trading Commission, an agency of the United States (U.S.) government which regulates most aspects of the commodity futures industry; rules of the National Futures Association, an industry self- regulatory organization; and the requirements of commodity exchanges and Futures Commission Merchants (brokers) through which the Partnership trades. C. Method of Reporting The Partnership's financial statements are presented in accordance with generally accepted accounting principles, which require the use of certain estimates made by the Partnership's management. Transactions are accounted for on the trade date. Gains or losses are realized when contracts are liquidated. Unrealized gains or losses on open contracts (the difference between contract purchase price and quoted market price) are reflected in the statement of financial condition as a net gain or loss, as there exists a right of offset of unrealized gains or losses in accordance with Financial Accounting Standards Board Interpretation No. 39 - "Offsetting of Amounts Related to Certain Contracts." Any change in net unrealized gain or loss from the preceding period is reported in the statement of operations. For purposes of both financial reporting and calculation of redemption value, Net Asset Value Per Unit is calculated by dividing Net Asset Value by the total number of units outstanding. D. Brokerage Commissions Brokerage commissions include other trading fees and are charged to expense when contracts are opened. PROFUTURES LONG/SHORT GROWTH FUND, L.P. NOTES TO FINANCIAL STATEMENTS (CONTINUED) (Unaudited) ------------- Note 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) ----------- E. Income Taxes The Partnership prepares calendar year U.S. and state information tax returns and reports to the partners their allocable shares of the Partnership's income, expenses and trading gains or losses. F. Organizational Charge The General Partner pays all organizational and offering costs of the Partnership. As reimbursement for such costs, the General Partner (or the Distributor, ProFutures Financial Group, Inc., a broker/dealer affiliate of the General Partner) receives an organizational charge of 1% of the subscription amount of each subscriber to the Partnership. Additions are reflected in the statement of changes in partners' capital (net asset value) net of such organizational charge totaling $8,161 for the three months ended March 31, 2000 and $96,746 for the three months ended March 31, 1999. G. Statements of Cash Flows The Partnership has elected not to provide statements of cash flows as permitted by Statement of Financial Accounting Standards No. 102 - "Statement of Cash Flows - Exemption of Certain Enterprises and Classification of Cash Flows from Certain Securities Acquired for Resale." H. Interim Financial Statements In the opinion of management, the unaudited interim financial statements reflect all adjustments, which were of a normal and recurring nature, necessary for a fair presentation of financial position as of March 31, 2000, and the results of operations for the three months ended March 31, 2000 and 1999. Note 2. GENERAL PARTNER --------------- The General Partner of the Partnership is ProFutures, Inc., which conducts and manages the business of the Partnership. The Limited Partnership Agreement requires the General Partner and/or its principals and affiliates to maintain capital accounts equal to at least 1% of the total capital of the Partnership.At March 31, 2000 and December 31, 1999, the capital accounts of the General Partner and/or its principals and affiliates totaled $574,040 and $617,408, respectively. PROFUTURES LONG/SHORT GROWTH FUND, L.P. NOTES TO FINANCIAL STATEMENTS (CONTINUED) (Unaudited) ------------- Note 2. GENERAL PARTNER (CONTINUED) --------------------------- The Limited Partnership Agreement was amended effective February 16, 1999 and generally required that the General Partner maintain a net worth of at least $1,000,000. ProFutures, Inc. has callable subscription agreements with Internationale Nederlanden (U.S.) Securities, Futures & Options, Inc. (ING), the Partnership's broker, whereby ING has subscribed to purchase (up to $14,000,017) the number of shares of common stock of ProFutures, Inc. necessary to maintain the General Partner net worth requirements. The General Partner is paid a monthly management fee equal to 1/4 of 1% (3% annually) of month-end Net Assets (as defined in the Limited Partnership Agreement). Note 3. COMMODITY TRADING ADVISOR ------------------------- The Partnership has an advisory contract with Hampton Capital Management, Inc. (Hampton), pursuant to which the Partnership pays a quarterly incentive fee equal to 20% of New Trading Profits (as defined in the advisory contract). Note 4. DEPOSITS WITH BROKER -------------------- The Partnership deposits funds with ING to act as broker subject to Commodity Futures Trading Commission regulations and various exchange and broker requirements. The Partnership earns interest income on its assets deposited with the broker. At March 31, 2000 and December 31, 1999, the initial margin requirement of $4,148,438 and $8,648,438, respectively, is satisfied by the deposit of cash with such broker. Note 5. SUBSCRIPTIONS, DISTRIBUTIONS AND REDEMPTIONS -------------------------------------------- Investments in the Partnership are made by subscription agreement, subject to acceptance by the General Partner. The Partnership is not required to make distributions, but may do so at the sole discretion of the General Partner. A Limited Partner may require the Partnership to redeem any or all of such Limited Partner's units at Net Asset Value as of the close of business on the last day of any month upon advance written notice to the General Partner. The Limited Partnership Agreement contains a complete description of the Partnership's redemption policies and procedures. PROFUTURES LONG/SHORT GROWTH FUND, L.P. NOTES TO FINANCIAL STATEMENTS (CONTINUED) (Unaudited) ------------- Note 6. TRADING ACTIVITIES AND RELATED RISKS ------------------------------------ The Partnership engages in the speculative trading of stock index futures contracts ("derivatives") on U.S. exchanges. The Partnership is exposed to both market risk, the risk arising from changes in the market value of the contracts, and credit risk, the risk of failure by another party to perform according to the terms of a contract. Purchase and sale of futures contracts requires margin deposits with the broker. Additional deposits may be necessary for any loss on contract value. The Commodity Exchange Act requires a broker to segregate all customer transactions and assets from such broker's proprietary activities. A customer's cash and other property (for example, U.S. Treasury bills) deposited with a broker are considered commingled with all other customer funds subject to the broker's segregation requirements. In the event of a broker's insolvency, recovery may be limited to a pro rata share of segregated funds available. It is possible that the recovered amount could be less than total cash and other property deposited. The Partnership has assets on deposit with a financial institution in connection with its cash management activities. In the event of a financial institution's insolvency, recovery of Partnership assets on deposit may be limited to account insurance or other protection afforded such deposits. In the normal course of business, the Partnership does not require collateral from such financial institution. For derivatives, risks arise from changes in the market value of the contracts. Theoretically, the Partnership is exposed to a market risk equal to the value of futures contracts purchased and unlimited liability on such contracts sold short. Open contracts generally mature within three months, however, the Partnership intends to close all contracts prior to maturity. At March 31, 2000, the maturity date for all open contracts is June 2000, and at December 31, 1999, the maturity date for all open contracts is March 2000. The General Partner has established procedures to actively monitor market risk and minimize credit risk, although there can be no assurance that it will, in fact, succeed in doing so. The General Partner's basic market risk control procedures consist of continuously monitoring Hampton's trading activity with the actual market risk controls being applied by Hampton itself. The General Partner seeks to minimize credit risk primarily by depositing and maintaining the Partnership's assets at financial institutions and brokers which the General Partner believes to be creditworthy. The Limited Partners bear the risk of loss only to the extent of the market value of their respective investments and, in certain specific circumstances, distributions and redemptions received. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. A. LIQUIDITY: Substantially all of the Partnership's assets are highly liquid, such as cash and open futures contracts. It is possible that extreme market conditions or daily price fluctuation limits at exchanges could adversely affect the liquidity of open futures contracts. There are no restrictions on the liquidity of these assets except for amounts on deposit with the broker needed to meet margin requirements on open futures contracts. B. CAPITAL RESOURCES: The Partnership raises additional capital only through the sale of Units and trading profits (if any) and does not engage in borrowing. The Partnership sells no securities other than the Units. C. RESULTS OF OPERATIONS: Due to the speculative nature of trading stock index futures, the Partnership's income or loss from operations may vary widely from period to period. Management cannot predict whether the Partnership's future Net Asset Value per Unit will increase or experience a decline. For the three months ended March 31, 2000, the Partnership had a net loss of $(3,129,924), as compared to a net loss of $(55,443) for the three months ended March 31, 1999. The Partnership engages in the speculative trading of stock index futures contracts on U.S. exchanges; therefore, operating results will fluctuate from period to period. The first quarter of 2000 was a period of extreme volatility in the U.S. equity markets. For most of the quarter the Advisor generally maintained a long market position. The net trading losses occurred primarily early in the quarter as the S&P 500 index was declining partially offset by trading gains later in the quarter as the index was rising. At March 31, 2000, partners' capital totaled $32,840,659, a net decrease of $5,796,925 from December 31, 1999 primarily due to net capital redemptions of $2,667,001 as well as a net loss for the quarter. The General Partner has established procedures to actively monitor market risk and minimize credit risk, although there can be no assurance that it will, in fact, succeed in doing so. The General Partner's basic market risk control procedures consist of continuously monitoring the Advisor's trading activity with the actual market risk controls being applied by the Advisor itself. The General Partner seeks to minimize credit risk primarily by depositing and maintaining the Partnership's assets at financial institutions and brokers which the General Partner believes to be creditworthy. D. POSSIBLE CHANGES: The General Partner reserves the right to terminate certain and/or engage additional trading advisors or change any of the Partnership's clearing arrangements. Item 3. Quantitative and Qualitative Disclosure About Market Risk There has been no material change during the three months ended March 31, 2000, in the sources of the Partnership's exposure to market risk. The relationship of the total Value at Risk as a percentage of total capitalization declined in the first quarter from 17.9% at December 31, 1999 to 10.1% at March 31, 2000. Market movements result in frequent changes in the fair market value of the Partnership's open positions and, consequently, in its earnings and cash flow. The Partnership's market risk is influenced by a wide variety of factors, including general economic conditions, equity price levels, the market value of financial instruments and contracts and the liquidity of the markets in which it trades. PART II - OTHER INFORMATION Item 1. Legal Proceedings. None. Item 2. Changes in Securities. The Partnership filed a registration statement with the U.S. Securities and Exchange Commission under the Securities Act of 1933 for the public offering of $60,000,000 of additional Limited Partnership Units which became effective February 16, 1999. The General Partner later registered $40,000,000 of additional Limited Partnership Units with the Securities and Exchange Commission under the Securities Act of 1933 which was effective November 17, 1999. This registration carried forward $35,218,153 of unsold units from the previous registration. Therefore, unsold Limited Partnership Units totaled $75,218,153 as of the effective date of the registration. The offering of Limited Partnership Units is continuing. The General Partner pays all offering costs and receives 1% of the subscription price of each unit as reimbursement. Such reimbursement of offering costs totaled $8,161 and $96,746 for the three months ended March 31, 2000 and 1999, respectively. Item 3. Defaults Upon Senior Securities. Not Applicable. Item 4. Submission of Matters to a Vote of Security Holders. None. Item 5. Other Information. None. Item 6. Exhibits and Reports on Form 8-K. There were no reports filed on Form 8-K. Exhibits filed herewith: None. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Partnership has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PROFUTURES LONG/SHORTH GROWTH FUND, L.P. (Partnership) By /s/ Gary D. Halbert --------------------------------- Gary D. Halbert, President ProFutures, Inc., General Partner EX-27 2 ARTICLE 5 FDS FOR 1ST QUARTER 2000
5 1 3-MOS DEC-31-2000 MAR-31-2000 33,088,072 0 0 0 0 34,242,997 0 0 34,242,997 1,402,338 0 0 0 0 32,840,659 34,242,997 0 (2,836,630) 0 0 293,294 0 0 (3,129,924) 0 (3,129,924) 0 0 0 (3,129,924) (135.69) (135.69)
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