-----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, PsMHb6dAJAHT4b6suhWAq1cf/HQutGNw/UcQ5jr/FrFAin/j6vaGmDaOH6dOtmQ0 789j+sy3ErwNJm4E3peeBQ== 0000945227-04-000047.txt : 20040813 0000945227-04-000047.hdr.sgml : 20040813 20040813155510 ACCESSION NUMBER: 0000945227-04-000047 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20040630 FILED AS OF DATE: 20040813 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: 1934 Act SEC FILE NUMBER: 000-25585 FILM NUMBER: 04974340 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 jun04-10q.txt Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Re: ProFutures Long/Short Growth Fund, L.P. Commission File Number 0-25585 Dear Sirs: This filing contains Form 10-Q for the quarter ended June 30, 2004. Very truly yours, PROFUTURES LONG/SHORT GROWTH FUND, L.P. 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 June 30, 2004 -------------- 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 78738 --------------------------------------- (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 Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes No X PART I - FINANCIAL INFORMATION Item 1. Financial Statements. PROFUTURES LONG/SHORT GROWTH FUND, L.P. STATEMENTS OF FINANCIAL CONDITION June 30, 2004 (Unaudited) and December 31, 2003 (Audited) ------------- June 30, December 31, 2004 2003 ---- ---- ASSETS Equity in broker trading accounts Cash $ 7,954,358 $ 9,431,077 Net option premiums (received) (116,350) (96,000) Unrealized gain (loss) on open contracts (1,464) 325,895 ----------- ----------- Deposits with broker 7,836,544 9,660,972 Cash 2,861 3,490 ----------- ----------- Total assets $ 7,839,405 $ 9,664,462 =========== =========== LIABILITIES Accounts payable $ 11,549 $ 13,775 Commissions and other trading fees on open contracts 6,479 4,193 Incentive fees payable 46,623 158,749 Management fees payable 26,148 31,412 Redemptions payable 140,254 507,201 ----------- ----------- Total liabilities 231,053 715,330 ----------- ----------- PARTNERS' CAPITAL (Net Asset Value) General Partner - 61 units outstanding at June 30, 2004 and December 31, 2003 63,123 66,976 Limited Partners - 7,345 and 8,149 units outstanding at June 30, 2004 and December 31, 2003 7,545,229 8,882,156 ----------- ----------- Total partners' capital (Net Asset Value) 7,608,352 8,949,132 ----------- ----------- $ 7,839,405 $ 9,664,462 =========== =========== See accompanying notes. PROFUTURES LONG/SHORT GROWTH FUND, L.P. CONDENSED SCHEDULE OF INVESTMENTS June 30, 2004 (Unaudited) and December 31, 2003 (Audited) ----------- June 30, 2004 December 31, 2003 ------------------ ------------------- % of % of Net Asset Net Asset Description Value Value Value Value ----------- ----- --------- ----- --------- LONG FUTURES CONTRACTS - ---------------------- Agricultural $(25,282) (0.33)% $ 27,330 0.30 % Currency (19,135) (0.25)% 201,070 2.25 % Energy (10,886) (0.15)% 8,020 0.09 % Interest rate (5,889) (0.08)% 5,830 0.07 % Metal (33,640) (0.44)% 73,905 0.82 % Stock index 30,221 0.40 % 0 0.00 % -------- ------- -------- ------- Total long futures contracts $(64,611) (0.85)% $316,155 3.53 % -------- ------- -------- ------- SHORT FUTURES CONTRACTS - ----------------------- Agricultural $ 34,520 0.46 % $ (1,260) (0.01)% Currency 975 0.01 % 0 0.00 % Interest rate (15,226) (0.20)% 0 0.00 % Metal 7,777 0.10 % 0 0.00 % Stock index 164 0.00 % 0 0.00 % -------- ------- -------- ------- Total short futures contracts $ 28,210 0.37 % $ (1,260) (0.01)% -------- ------- -------- ------- Total futures contracts $(36,401) (0.48)% $314,895 3.52 % ======== ======= ======== ======= WRITTEN OPTIONS ON FUTURES CONTRACTS - ------------------------------------ Interest rate options $(60,125) (0.79)% $ 0 0.00 % Stock index options (21,288) (0.28)% (85,000) (0.95)% -------- ------- -------- ------- Total written options on futures contracts (premiums received - $116,350 and $96,000, respectively) $(81,413) (1.07)% $(85,000) (0.95)% ======== ======= ======== ======= See accompanying notes. PROFUTURES LONG/SHORT GROWTH FUND, L.P. STATEMENTS OF OPERATIONS For the Three Months Ended June 30, 2004 and 2003 (Unaudited) ------------- Three months ended June 30, 2004 2003 ---- ---- TRADING GAINS (LOSSES) Gain (loss) from trading Realized $ (41,347) $ 222,534 Change in unrealized (420,744) (155,000) Brokerage commissions (69,957) (73,904) ------------ ------------ Total trading (losses) (532,048) (6,370) ------------ ------------ NET INVESTMENT INCOME (LOSS) Income Interest income 26,050 27,051 ------------ ------------ Expenses Incentive fees 46,623 0 Management fees 53,040 80,196 Operating expenses 26,880 26,474 ------------ ------------ Total expenses 126,543 106,670 ------------ ------------ Net investment (loss) (100,493) (79,619) ------------ ------------ NET (LOSS) $ (632,541) $ (85,989) ============ ============ NET (LOSS) PER GENERAL AND LIMITED PARTNER UNIT (based on weighted average number of units outstanding during the period of 7,594 and 10,113, respectively) $ (83.29) $ (8.50) ============ ============ (DECREASE) IN NET ASSET VALUE PER GENERAL AND LIMITED PARTNER UNIT $ (82.80) $ (9.53) ============ ============ See accompanying notes. PROFUTURES LONG/SHORT GROWTH FUND, L.P. STATEMENTS OF OPERATIONS For the Six Months Ended June 30, 2004 and 2003 (Unaudited) ----------- Six months ended June 30, 2004 2003 ---- ---- TRADING GAINS (LOSSES) Gain (loss) from trading Realized $ 243,261 $ 1,415,059 Change in unrealized (327,359) (922,787) Brokerage commissions (127,165) (153,607) ------------ ------------ Total trading gains (losses) (211,263) 338,665 ------------ ------------ NET INVESTMENT INCOME (LOSS) Income Interest income 42,799 57,840 ------------ ------------ Expenses Incentive fees 139,747 0 Management fees 109,541 166,575 Operating expenses 60,575 51,037 ------------ ------------ Total expenses 309,863 217,612 ------------ ------------ Net investment (loss) (267,064) (159,772) ------------ ------------ NET INCOME (LOSS) $ (478,327) $ 178,893 ============ ============ NET INCOME (LOSS) PER GENERAL AND LIMITED PARTNER UNIT (based on weighted average number of units outstanding during the period of 7,809 and 10,335, respectively) $ (61.25) $ 17.31 ============ ============ INCREASE (DECREASE) IN NET ASSET VALUE PER GENERAL AND LIMITED PARTNER UNIT $ (62.71) $ 13.57 ============ ============ See accompanying notes. PROFUTURES LONG/SHORT GROWTH FUND, L.P. STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (NET ASSET VALUE) For the Six Months Ended June 30, 2004 and 2003 (Unaudited) ------------- Total Partners' Capital Number of ---------------------------------- Units General Limited Total --------- -------- ----------- ----------- Balances at December 31, 2003 8,210 $ 66,976 $ 8,882,156 $ 8,949,132 Net (loss) for the six months ended June 30, 2004 (3,853) (474,474) (478,327) Redemptions (804) 0 (862,453) (862,453) ------ -------- ----------- ----------- Balances at June 30, 2004 7,406 $ 63,123 $ 7,545,229 $ 7,608,352 ====== ======== =========== =========== Balances at December 31, 2002 10,704 $ 63,353 $10,973,670 $11,037,023 Net income for the six months ended June 30, 2003 834 178,059 178,893 Redemptions (1,012) 0 (1,090,464) (1,090,464) ------ -------- ----------- ----------- Balances at June 30, 2003 9,692 $ 64,187 $10,061,265 $10,125,452 ====== ======== =========== =========== Net asset value per unit at December 31, 2002 $ 1,031.12 =========== June 30, 2003 $ 1,044.69 =========== December 31, 2003 $ 1,090.08 =========== June 30, 2004 $ 1,027.37 =========== 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 futures and option contracts. B. Regulation As a registrant with the Securities and Exchange Commission, the Partnership is subject to the regulatory requirements under the Securities Act of 1933 and the Securities Exchange Act of 1934. As a commodity investment pool, the Partnership is subject to the regulations of the Commodity Futures Trading Commission, an agency of the 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 accounting principles generally accepted in the United States of America, 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 trade 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. E. Income Taxes The Partnership prepares calendar year U.S. and applicable state information tax returns and reports to the partners their allocable shares of the Partnership's income, expenses and trading gains or losses. PROFUTURES LONG/SHORT GROWTH FUND, L.P. NOTES TO FINANCIAL STATEMENTS (CONTINUED) (Unaudited) ------------- Note 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) ----------- F. Foreign Currency Transactions The Partnership's functional currency is the U.S. dollar; however, it transacts business in currencies other than the U.S. dollar. Assets and liabilities denominated in currencies other than the U.S. dollar are translated into U.S. dollars at the rates in effect at the date of the statement of financial condition. Income and expense items denominated in currencies other than the U.S. dollar are translated into U.S. dollars at the rates in effect during the period. Gains and losses resulting from the translation to U.S. dollars are reported in income currently. 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 June 30, 2004, and the results of operations for the three and six months ended June 30, 2004 and 2003. 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 June 30, 2004 and December 31, 2003, the capital accounts of the General Partner and/or its principals and affiliates totaled $539,309 and $583,537, respectively. The Limited Partnership Agreement was amended effective February 16, 1999 and generally requires that the General Partner maintain a net worth of up to $1,000,000. ProFutures, Inc. has callable subscription agreements with ABN AMRO Incorporated (ABN), the Partnership's broker, whereby ABN has subscribed to purchase (up to $7,000,000 subject to the conditions set forth in the subscription agreement as amended effective May 20, 2002) the number of shares of common stock of ProFutures, Inc. necessary to maintain the General Partner net worth requirements. PROFUTURES LONG/SHORT GROWTH FUND, L.P. NOTES TO FINANCIAL STATEMENTS (CONTINUED) (Unaudited) ------------- Note 2. GENERAL PARTNER (CONTINUED) --------------------------- The Partnership pays the General Partner a monthly management fee equal to 1/6 of 1% (2% annually) of month-end Net Assets (as defined in the Limited Partnership Agreement). Total management fees earned by ProFutures, Inc. for the six months ended June 30, 2004 and 2003 were $83,643 and $111,040, respectively. Such management fees earned for the three months ended June 30, 2004 and 2003 were $39,828 and $53,466, respectively. Management fees payable to ProFutures, Inc. as of June 30, 2004 and December 31, 2003 were $12,936 and $15,787, respectively. Note 3. COMMODITY TRADING ADVISORS -------------------------- The Partnership has advisory contracts with several commodity trading advisors to furnish investment management services to the Partnership. Certain advisors receive management fees equal to 1% annually of Allocated Net Asset Value (as defined in each respective trading advisory contract). In addition, the trading advisors receive quarterly incentive fees ranging from 20% to 25% of Trading Profits (as defined). Note 4. DEPOSITS WITH BROKER -------------------- The Partnership deposits funds with ABN 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 June 30, 2004 and December 31, 2003, the initial margin requirement of $2,096,142 and $1,822,556, respectively, is satisfied by the deposit of cash with such broker. Note 5. SUBSCRIPTIONS, DISTRIBUTIONS AND REDEMPTIONS -------------------------------------------- Investments in the Partnership were made by subscription agreement, subject to acceptance by the General Partner. Effective November 2000, the Partnership is closed to new investment; however, the General Partner may reopen the Partnership to new investments in the future. 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 U.S. and foreign futures contracts and options on futures contracts (collectively, "derivatives"). 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 and options on 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. Open contracts generally mature within three months, however, the Partnership intends to close all contracts prior to maturity. At June 30, 2004, the latest maturity date for open contracts is June 2005. 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 notional contract value of futures contracts purchased and unlimited liability on such contracts sold short. As both a buyer and seller of options, the Partnership pays or receives a premium at the outset and then bears the risk of unfavorable changes in the price of the contract underlying the option. Written options expose the Partnership to potentially unlimited liability, and purchased options expose the Partnership to a risk of loss limited to the premiums paid. 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. 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 trading activity of the various trading advisors, with the actual market risk controls being applied by the advisors themselves. 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. PROFUTURES LONG/SHORT GROWTH FUND, L.P. NOTES TO FINANCIAL STATEMENTS (CONTINUED) (Unaudited) ------------- Note 7. FINANCIAL HIGHLIGHTS -------------------- The following information presents per unit operating performance data and other supplemental financial data for the three months and six months ended June 30, 2004 and 2003. This information has been derived from information presented in the financial statements. Three months ended June 30, 2004 2003 (Unaudited) (Unaudited) ----------- ----------- Per Unit Performance (for a unit outstanding throughout the entire period) ----------------------------------------------------- Net asset value per unit at beginning of period $1,110.17 $1,054.22 --------- --------- Income (loss) from operations: Total trading (losses) (1) (69.57) (1.66) Net investment (loss) (1) (13.23) (7.87) --------- --------- Total (loss) from operations (82.80) (9.53) --------- --------- Net asset value per unit at end of period $1,027.37 $1,044.69 ========= ========= Total Return (3) (7.46)% (0.90)% ======= ======= Supplemental Data Ratios to average net asset value: Expenses prior to incentive fees (4) 4.07 % 4.09 % Incentive fees (3) 0.59 % 0.00 % ------- ------- Total expenses 4.66 % 4.09 % ======= ======= Net investment (loss) (2), (4) (2.74)% (3.05)% ======= ======= Six months ended June 30, 2004 2003 (Unaudited) (Unaudited) ----------- ----------- Per Unit Performance (for a unit outstanding throughout the entire period) ----------------------------------------------------- Net asset value per unit at beginning of period $1,090.08 $1,031.12 --------- --------- Income (loss) from operations: Total trading gains (losses) (1) (28.51) 29.03 Net investment (loss) (1) (34.20) (15.46) --------- --------- Total income (loss) from operations (62.71) 13.57 --------- --------- Net asset value per unit at end of period $1,027.37 $1,044.69 ========= ========= Total Return (3) (5.75)% 1.32 % ======= ======= Supplemental Data Ratios to average net asset value: Expenses prior to incentive fees (4) 4.15 % 3.99 % Incentive fees (3) 1.70 % 0.00 % ------- ------- Total expenses 5.85 % 3.99 % ======= ======= Net investment (loss) (2), (4) (3.10)% (2.93)% ======= ======= Total returns are calculated based on the change in value of a unit during the period. An individual partner's total returns and ratios may vary from the above total returns and ratios based on the timing of redemptions. -------------------- (1) The net investment (loss) per unit is calculated by dividing the net investment (loss) by the average number of units outstanding during the period. Total trading gains (losses)is a balancing amount necessary to reconcile the change in net asset value per unit with the other per unit information. Such balancing amount may differ from the calculation of total trading gains (losses) per unit due to the timing of trading gains and losses during the period relative to the number of units outstanding. (2) Excludes incentive fees. (3) Not annualized. (4) Annualized. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Critical Accounting Policies ---------------------------- The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make 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 and the reported amounts of income and expense during the reporting period. Management believes that the estimates utilized in preparing the financial statements are reasonable and prudent; however, actual results could differ from those estimates. The Partnership's significant accounting policies are described in detail in Note 1 to the Financial Statements. The Partnership records all investments at fair value in its financial statements, with changes in fair value reported as a component of realized and change in unrealized trading gain (loss) in the Statements of Operations. Generally, fair values are based on market prices; however, in certain circumstances, estimates are involved in determining fair value in the absence of an active market closing price (e.g., swap and forward contracts which are traded in the inter-bank market). A. LIQUIDITY: Substantially all of the Partnership's assets are highly liquid, such as cash and open futures and option 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: Since the Partnership's business is the purchase and sale of various commodity interests, it will make few, if any, capital expenditures. 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. Effective November 2000, the Partnership is closed to new investment; however, the General Partner may reopen the Partnership to new investments in the future. C. RESULTS OF OPERATIONS: The Partnership's net income for the six months ended June 30, 2004 and 2003 consisted of the following: 2004 2003 ---- ---- Three months ended March 31 $ 154,214 $ 264,882 Three months ended June 30 (632,541) (85,989) ---------- ---------- Six months ended June 30 $ (478,327) $ 178,893 ========== ========== At June 30, 2004, partners' capital totaled $7,608,352, a net decrease of $1,340,780 from December 31, 2003, due to redemptions of limited partner units and a net loss for the six months ended ended June 30, 2004. At June 30, 2003, partners' capital totaled $10,125,452, a net decrease of $911,571 from December 31, 2002, due to redemptions of limited partner units exceeding net income for the six months ended June 30, 2003. Second Quarter 2004 ------------------- The economic recovery continued in the second quarter of 2004, and most economic news was positive, though there was a little slowdown in June. The futures markets were again volatile, especially in energy, interest rates and currencies. The Partnership had a loss of 5.63% in April. There were gains in interest rates, equities and energy. However, these were offset by losses in metals, foreign currencies and agriculture. The Partnership had a gain of 1.80% in May. There were gains in energy, interest rates and metals. There were losses in agriculture, equities and foreign currencies. Clarke Capital had a stellar month, up nearly 9%, which was partially offset by losses from Meyer Capital. The Partnership had a loss of 3.67% in June. There were losses in all sectors except equities. The largest losses were in foreign currencies and energy. Overall, the Partnership's total return was (7.46)% for the quarter and (5.75)% for the six months ended June 30, 2004. The majority of the Partnership's trading gains were in the energy sector and the largest loss was in agricultural commodities. First Quarter 2004 ------------------ The economy continued to improve in the first quarter of 2004, and most economic news was positive. The futures markets continued to be volatile, especially energy and currencies. The Partnership had a loss of 1.79% in January 2004. There were gains in stock indexes, metals and energy. These were offset by losses in agricultural commodities, foreign currencies and interest rates. The Partnership had a gain of 1.92% in February 2004. There were large gains in stock indexes, with smaller gains in interest rates, metals, energy and grains. There were some losses in agricultural commodities and foreign currencies. The Partnership had a gain of 1.75% in March 2004. There were gains in metals, interest rates and equities, with smaller gains in certain agricultural commodities. There were some losses in energy and foreign currencies. Overall, the Partnership ended the quarter with a total return of 1.84%. The majority of the trading gains were in equities and metals and the largest loss was in foreign currencies. Second Quarter 2003 ------------------- Futures were somewhat more stable in the second quarter as compared to the first. The war with Iraq ended, and the stock markets began a steady climb that lasted through the end of the quarter. In April 2003, the Partnership had a loss of 0.11%. There were gains in grains and currencies. However, these were mostly offset by losses in other sectors, including stock indexes. In May 2003, the Partnership had a gain of 1.47%. There were gains in currencies and interest rates, especially bonds and stock indexes. There were losses in agricultural commodities, metals and energy. In June 2003, the Partnership had a loss of 2.23%. There were losses in agricultural commodities, bonds, metals, energy and currencies. There were gains in stock indexes and short-term interest rates. Overall, the Partnership's rate of return was (0.90)% for the quarter and 1.32% for the six months ended June 30, 2003. The majority of the Partnership's trading gains for the second quarter were in foreign currencies and equities and the largest loss was in agricultural commodities. First Quarter 2003 ------------------ The futures markets were volatile in the first quarter of 2003. The looming war with Iraq caused energy prices to skyrocket. Many other markets were choppy due to this uncertainty. Consumer confidence dropped dramatically. The traders were able to capitalize on the volatility in the markets. In January 2003, the Partnership had a gain of 7.02%. There were very large gains in the energy, foreign currencies, stock indexes, precious and base metals, and certain agricultural commodities. The losses were primarily limited to grains and short-term interest rates. In February 2003, the Partnership had a gain of .45%. There were large gains in energy, with smaller gains in currencies and interest rates. These gains were primarily offset by losses in stock indexes and metals. In March 2003, the Partnership had a loss of 4.90%. There were some small gains in stock indexes and short-term interest rates. However, the losses in other sectors, especially energy, were far greater. Overall, the Partnership had a total return of 2.24% for the quarter. The majority of the Partnership's trading gains were in energy and foreign currencies and the largest loss was in metal futures. Market and Credit Risk ---------------------- 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 trading activity of the various advisors with the actual market risk controls being applied by the advisors themselves. 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. Due to the speculative nature of trading derivatives, 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. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. 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 Disclosures About Market Risk Not Applicable. Item 4. Controls and Procedures ProFutures, Inc., as General Partner of ProFutures Long/Short Growth Fund, L.P., with the participation of the General Partner's President and Chief Financial Officer, has evaluated the effectiveness of the design and operation of its disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) with respect to the Partnership as of the end of the period covered by this quarterly report. Based on their evaluation, the President and Chief Financial Officer have concluded that these disclosure controls and procedures are effective. There were no changes in the General Partner's internal control over financial reporting applicable to the Partnership identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting applicable to the Partnership. PART II - OTHER INFORMATION Item 1. Legal Proceedings. None. Item 2. Changes in Securities. None. 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: 31.01 Certification of Gary D. Halbert, President, pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934. 31.02 Certification of Debi B. Halbert, Chief Financial Officer, pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934. 32.01 Certification of Gary D. Halbert, President, pursuant to 18 U.S.C. Section 1350 as enacted by Section 906 of The Sarbanes- Oxley Act of 2002. 32.02 Certification of Debi B. Halbert, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350 as enacted by Section 906 of The Sarbanes-Oxley Act of 2002. SIGNATURES Pursuant to the requirements 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. PROFUTURES LONG/SHORT GROWTH FUND, L.P. (Registrant) August 10, 2004 By /s/ GARY D. HALBERT - ------------------------ ----------------------------------------- Date Gary D. Halbert, President and Director ProFutures, Inc. General Partner August 10, 2004 By /s/ DEBI B. HALBERT - ------------------------ ----------------------------------------- Date Debi B. Halbert, Chief Financial Officer, Treasurer and Director ProFutures, Inc. General Partner EXHIBIT 31.01 CERTIFICATION ------------- I, Gary D. Halbert, certify that: 1. I have reviewed this quarterly report on Form 10-Q of ProFutures Long/Short Growth Fund, L.P.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 10, 2004 ---------------------------------- /s/ GARY D. HALBERT - ----------------------------------------- Gary D. Halbert, President ProFutures, Inc., General Partner EXHIBIT 31.02 CERTIFICATION ------------- I, Debi B. Halbert, certify that: 1. I have reviewed this quarterly report on Form 10-Q of ProFutures Long/Short Growth Fund, L.P.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 10, 2004 ---------------------------------- /s/ DEBI B. HALBERT - ----------------------------------------- Debi B. Halbert, Chief Financial Officer ProFutures, Inc., General Partner EXHIBIT 32.01 CERTIFICATION ------------- I, Gary D. Halbert, the President of ProFutures, Inc., as General Partner of ProFutures Long/Short Growth Fund, L.P., certify that (i) the Form 10-Q for the quarter ended June 30, 2004 of ProFutures Long/Short Growth Fund, L.P. fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Form 10-Q for the quarter ended June 30, 2004 fairly presents, in all material respects, the financial condition and results of operations of ProFutures Long/Short Growth Fund, L.P. PROFUTURES LONG/SHORT GROWTH FUND, L.P. By: ProFutures, Inc., General Partner By: /s/ GARY D. HALBERT ---------------------------------- Gary D. Halbert President August 10, 2004 EXHIBIT 32.02 CERTIFICATION ------------- I, Debi B. Halbert, the Chief Financial Officer of ProFutures, Inc., as General Partner of ProFutures Long/Short Growth Fund, L.P., certify that (i) the Form 10-Q for the quarter ended June 30, 2004 of ProFutures Long/Short Growth Fund, L.P. fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Form 10-Q for the quarter ended June 30, 2004 fairly presents, in all material respects, the financial condition and results of operations of ProFutures Long/Short Growth Fund, L.P. PROFUTURES LONG/SHORT GROWTH FUND, L.P. By: ProFutures, Inc., General Partner By: /s/ DEBI B. HALBERT ---------------------------------- Debi B. Halbert Chief Financial Officer August 10, 2004 -----END PRIVACY-ENHANCED MESSAGE-----