10-Q 1 a10q9-01.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 -------------- FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2001 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ Commission file number ____333-61217______ Atlas Futures Fund, Limited Partnership --------------------------------------- (Exact Name of Registrant as Specified in Its Charter) Delaware 51-0380494 ------- ---------- (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 5916 N. 300 West, Fremont, IN 46737 ---------------------------------------- ----- (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code (219) 833-1505 ------------------------------------------------------------------------ Former Name, Address and Fiscal Year, if Changed, Since Last Report No such changes occurred Indicate by check [X] 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 1 - FINANCIAL INFORMATION Item 1. Financial Statements. The unaudited financial statements for the Registrant for the third quarter ended September 30, 2001, nine months ended September 30, 2001, and audited results for the calendar year 2000 are attached hereto and made a part hereof. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. During the past quarter and in the future, Registrant, did and will, pursuant to the terms of the Limited Partnership Agreement, engage in the business of speculative trading of commodity futures and options markets through the services of its commodity trading advisor, Clarke Capital Management, Inc. The Units are sold through the broker dealer selected by the General Partner, Futures Investment Company, at the Net Asset Value per Unit as of the close of business on the last day of the month in which subscriptions are received by the General Partner. The Registrant will continue to offer Units for sale to the public via its fully amended and restated prospectus dated August 10, 2001 until the total amount of registered securities, $15,000,000, is sold or the offering terminates. To obtain a return of invested capital or appreciation, if any, purchasers of Units must look solely to the redemption feature of the Partnership or to the General Partner, in its sole judgment, to elect to make distributions. There is no current market for the Units sold and none is expected to develop nor is the General Partner expected to make distributions. Part II - OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Changes in Securities None Item 3. Defaults Upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other Information Item 6. Exhibits and Reports on Form 8-K (a) None (b) No reports on Form 8-K SIGNATURES Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Form 10-Q for the period ended September 30, 2001, to be signed on its behalf by the undersigned, thereunto duly authorized. Registrant: Atlas Futures Fund, Limited Partnership By Ashley Capital Management, Incorporated Its General Partner By: /s/ Shira Del Pacult Ms. Shira Del Pacult Sole Director, Sole Shareholder, President, and Treasurer of the General Partner Date: November 15, 2001 ATLAS FUTURES FUND, LIMITED PARTNERSHIP (A Delaware Limited Partnership) FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2001 (Unaudited) AND THE YEAR ENDED DECEMBER 31, 2000 (With Auditors' Report Thereon) GENERAL PARTNER: Ashley Capital Management, Inc. % Corporate Systems, Inc. 101 North Fairfield Drive Dover, Kent County, Delaware 19901 To The Partners Atlas Futures Fund, Limited Partnership Dover, Kent County, Delaware INDEPENDENT AUDITORS' REPORT We have audited the accompanying balance sheet of ATLAS FUTURES FUND, LIMITED PARTNERSHIP as of December 31, 2000, and the related statements of operations, partners' equity and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. 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 ATLAS FUTURES FUND, LIMITED PARTNERSHIP as of December 31, 2000, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. Accountants: Frank L. Sassetti & Co. Certified Public Accountants Date: February 15, 2001 By: /s/ Frank L. Sassetti & Co. Frank L. Sassetti & Co. Certified Public Accountants ATLAS FUTURES FUND, LIMITED PARTNERSHIP (A Delaware Limited Partnership) BALANCE SHEET SEPTEMBER 30, 2001 AND DECEMBER 31, 2000 ASSETS 2001 (Unaudited) 2000 Cash (Note 7) $ 15,527 $ 560 United States Treasury Obligations ( Note 6) 3,173,792 3,199,558 Accrued interest receivable 16,439 36,401 Due from limited partners 70,000 142,503 Equity in Commodity Futures Trading Accounts - Cash (Note 6) 1,721,379 1,187,154 Net unrealized gain on open commodity futures contracts (Note 8) 346,883 1,375,352 $5,344,020 $5,941,528 LIABILITIES AND PARTNERS' EQUITY LIABILITIES Accrued trading commissions payable $ 3,717 $ 14,268 Accrued management fees payable 9,308 7,672 Accrued incentive fees payable 318,405 Accrued accounting and auditing fees payable 8,400 4,193 Sales commissions payable 7,500 11,617 Partner redemption payable 21,368 27,591 Total Liabilities 50,293 383,746 PARTNERS' CAPITAL Limited partners - (4,751.42 and 4,434.40 units) 5,293,727 5,557,782 General partner - (0 units) Total Partners' Capital 5,293,727 5,557,782 $5,344,020 $5,941,528 The accompanying notes are an integral part of the financial statements. ATLAS FUTURES FUND, LIMITED PARTNERSHIP (A Delaware Limited Partnership) STATEMENT OF OPERATIONS FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2001 AND THE YEAR ENDED DECEMBER 31, 2000 Three Months Nine Months Ended Ended Sep 30, 2001 Sep 30, 2001 2000 (Unaudited) (Unaudited) (audited) REVENUES Realized gain from trading in futures $ 76,134 $ 714,118 $ 356,986 Realized gain (loss) on exchange rate fluctuation 6,872 (3,882) 1,600 Changes in unrealized gains (losses) on open futures contracts 10,286 (1,028,469) 1,371,772 Interest income 41,070 152,507 162,762 Redemption penalty 1,916 3,640 9,567 Total Revenues 136,278 (162,086) 1,902,687 EXPENSES Commissions 105,834 319,850 171,976 Management fees 27,287 81,530 104,921 Incentive fees 390,501 Professional accounting and legal fees 14,139 47,994 39,496 Other operating and administrative expenses 422 2,504 5,456 Total Expenses 147,682 451,878 712,350 NET INCOME (LOSS) $ (11,404) $(613,964) $1,190,337 NET INCOME (LOSS) - Limited partnership unit $ (2.41) $ (131.53) $ 361.85 General partnership unit $ 97.04 The accompanying notes are an integral part of the financial statements. ATLAS FUTURES FUND, LIMITED PARTNERSHIP (A Delaware Limited Partnership) STATEMENT OF PARTNERS' EQUITY FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2001 (Unaudited) LIMITED PARTNERS GENERAL PARTNERS TOTAL PARTNERS' EQUITY Amount Units Amount Units Amount Units Balance - July 1, 2001 $5,304,295 4,740.34 $ $5,304,295 4,740.34 Addition of 65.748 units 76,779 65.75 76,779 65.75 Withdrawal of 54.669 units (64,260) (54.67) (64,260) (54.67) Syndication costs paid (11,683) (11,683) Net loss (11,404) (11,404) Balance - Sep 30, 2001 $5,293,727 4,751.42 $ $5,293,727 4,751.42 Value per unit $ 1,114.13 Total partnership units 4,751.42 The accompanying notes are an integral part of the financial statements. ATLAS FUTURES FUND, LIMITED PARTNERSHIP (A Delaware Limited Partnership) STATEMENT OF PARTNERS' EQUITY FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 (Unaudited) AND THE YEAR ENDED DECEMBER 31, 2000 LIMITED PARTNERS GENERAL PARTNERS TOTAL PARTNERS' EQUITY Amount Units Amount Units Amount Units Balance - Dec 31, 1999 $1,659,249 1,738.59 $ 50,243 52.64 $1,709,492 1,791.23 Addition of 3092.404 units 3,138,897 3,092.41 3,138,897 3,092.41 Syndication costs paid (16,864) (16,864) Withdrawal - of 449.237 units (409,154) (396.60) (54,926) (52.64) (464,080) (449.24) Net income 1,185,654 4,683 1,190,337 Balance - Dec 31, 2000 5,557,782 4,434.40 5,557,782 4,434.40 Addition of 494.492 units (Unaudited) 577,377 494.49 577,377 494.49 Withdrawal of 177.469 units (Unaudited) (202,967) (177.47) (202,967) (177.47) Syndication costs paid (Unaudited) (24,501) (24,501) Net loss (Unaudited) (613,964) (613,964) Balance - Sep 30, 2001 (Unaudited) $5,293,727 4,751.42 $ $5,293,727 4,751.42 2001 (Unaudited) 2000 Value per unit $1,114.13 $1,253.33 Total partnership units 4,751.42 4,434.40 The accompanying notes are an integral part of the financial statements. ATLAS FUTURES FUND, LIMITED PARTNERSHIP (A Delaware Limited Partnership) STATEMENT OF CASH FLOWS FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2001 AND THE YEAR ENDED DECEMBER 31, 2000 Three Months Nine Months Ended Ended Sep 30, 2001 Sep 30, 2001 2000 (Unaudited) (Unaudited) (audited) CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ (11,404) $ (613,964) $1,190,337 Adjustments to reconcile net income (loss) to net cash used in operating activities - Changes in operating assets and liabilities - Equity in Commodity Futures Trading Accounts (280,978) 494,244 (1,768,461) Accrued interest receivable 1,578 19,962 (29,904) U.S. Treasury Obligations 295,951 25,766 (2,508,449) Prepaid expense 87 Accrued commissions payable 2,708 (14,668) 3,864 Management and incentive fees payable 207 (316,769) 312,002 Accounting and auditing fees payable 6,225 4,207 2,716 Net Cash Provided By (Used In) Operating Activities 14,374 (401,222) (2,797,895) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from sale of units, net of sales commissions 76,779 577,377 3,138,897 Syndication and registration costs (11,683) (24,501) (16,864) Proceeds due from limited partners 16,861 72,503 50,162 Cash partner redemptions (119,574) (209,190) (436,489) Net Cash Provided By (Used In) Financing Activities (37,617) 416,189 2,735,706 NET INCREASE (DECREASE) IN CASH (23,243) 14,967 (62,189) CASH Beginning of period 38,770 560 62,749 End of period $ 15,527 $ 15,527 $ 560 The accompanying notes are an integral part of the financial statements. ATLAS FUTURES FUND, LIMITED PARTNERSHIP (A Delaware Limited Partnership) NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2001 (UNAUDITED) AND DECEMBER 31, 2000 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Atlas Futures Fund, Limited Partnership (the Fund) was formed January 12, 1998 under the laws of the State of Delaware. The Fund is engaged in speculative trading of futures contracts in commodities, which commenced in October, 1999. Ashley Capital Management, Inc. is the General Partner and the commodity pool operator (CPO) of Atlas Futures Fund, Limited Partnership. The commodity trading advisor (CTA) is Clarke Capital Management, who has the authority to trade so much of the Fund's equity as is allocated to it by the General Partner. Income Taxes - In accordance with the generally accepted method of presenting partnership financial statements, the financial statements do not include assets and liabilities of the partners, including their obligation for income taxes on their distributive shares of the net income of the Fund or their rights to refunds on its net loss. Registration Costs - Costs incurred for the initial filings with the Securities and Exchange Commission, Commodity Futures Trading Commission, National Futures Association (the "NFA") and the states where the offering was made were accumulated, deferred and charged against the gross proceeds of offering at the initial closing as part of the offering expense. Recurring registration costs, if any, will be charged to expense as incurred. Revenue Recognition - Commodity futures contracts are recorded on the trade date and are reflected in the balance sheet at the difference between the original contract amount and the market value on the last business day of the reporting period. Market value of commodity futures contracts is based upon exchange or other applicable market best available closing quotations. Use of Accounting Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Statement of Cash Flows - For purposes of the Statement of Cash Flows, the Fund considers only cash and money market funds to be cash equivalents. Net cash provided by operating activities include no cash payments for interest or income taxes for the three and nine months ended September 30, 2001 and the year ended December 31, 2000. ATLAS FUTURES FUND, LIMITED PARTNERSHIP (A Delaware Limited Partnership) NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2001 (UNAUDITED) AND DECEMBER 31, 2000 2. GENERAL PARTNER DUTIES The responsibilities of the General Partner, in addition to directing the trading and investment activity of the Fund, include executing and filing all necessary legal documents, statements and certificates of the Fund, retaining independent public accountants to audit the Fund, employing attorneys to represent the Fund, reviewing the brokerage commission rates to determine reasonableness, maintaining the tax status of the Fund as a limited partnership, maintaining a current list of names, addresses and numbers of units owned by each Limited Partner and taking such other actions as deemed necessary or desirable to manage the business of the Partnership. In addition, the general partners held a financial interest in the partnership until June 30, 2000, at which time the investment was redeemed. 3. THE LIMITED PARTNERSHIP AGREEMENT The Limited Partnership Agreement provides, among other things, that - Capital Account - A capital account shall be established for each partner. The initial balance of each partner's capital account shall be the amount of the initial contributions to the partnership. Monthly Allocations - Any increase or decrease in the Partnership's net asset value as of the end of a month shall be credited or charged to the capital account of each Partner in the ratio that the balance of each account bears to the total balance of all accounts. Any distribution from profits or partners' capital will be made solely at the discretion of the General Partner. Allocation of Profit and Loss for Federal Income Tax Purposes - As of the end of each fiscal year, the Partnership's capital gain or loss and ordinary income or loss shall be allocated among the Partners, after having given effect to the fees of the General Partner and the Commodity Trading Advisors and each Partner's share of such items are includable in the Partner's personal income tax return. Redemption - No partner may redeem or liquidate any Units until after the lapse of six months from the date of the investment. Thereafter, a Limited Partner may withdraw, subject to certain restrictions, any part or all of his units from the Partnership at the Net Asset Value per Unit on the last day of any month with ten days prior written request to the General Partner. A redemption fee payable to the Partnership of a percentage of the value of the redemption request is charged during the first 24 months of investment pursuant to the following schedule: ATLAS FUTURES FUND, LIMITED PARTNERSHIP (A Delaware Limited Partnership) NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2001 (UNAUDITED) AND DECEMBER 31, 2000 3. THE LIMITED PARTNERSHIP AGREEMENT - CONTINUED 4% if such request is received ten days prior to the last trading day of the sixth month after the date of the partner's investment in the Fund 3% if such request is received during the seventh to twelfth month after the investment. 2% if such request is received during the thirteenth to eighteenth month. 1% if such request is received during the nineteenth to twenty-fourth month. 0% thereafter. 4. FEES The Fund is charged the following fees on a monthly basis since the commencement of trading. A management fee of 3% (annual rate) of the Fund's net assets allocated to each CTA to trade will be paid to each CTA and 1% of equity to the Fund's General Partner. Effective November 1, 2000, the management fee allocated to each CTA was decreased to 0% (annual rate) and the management fee allocated to the Fund's General Partner was increased to 2% (annual rate) of the Fund's net assets. An incentive fee of 20% of "new trading profits" will be paid to each CTA. "New trading profits" includes all income earned by each CTA and expense allocated to his activity. In the event that trading produces a loss, no incentive fees will be paid and all losses will be carried over to the following months until profits from trading exceed the loss. It is possible for one CTA to be paid an incentive fee during a quarter of a year when the Fund experienced a loss. Effective November 1, 2000, the incentive fee increased to 25% of "new trading profits." The Fund will pay fixed commissions of 9% (annual rate) of assets assigned to be traded, payable monthly, to the Introducing Broker affiliated with the General Partner. The Affiliated Introducing Broker will pay the costs to clear the trades to the futures commission merchant and all PIT Brokerage costs which shall include the NFA and exchange fees. ATLAS FUTURES FUND, LIMITED PARTNERSHIP (A Delaware Limited Partnership) NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2001 (UNAUDITED) AND DECEMBER 31, 2000 5. REALIZED GAIN ON EXCHANGE RATE FLUCTUATIONS Certain trades executed by the Fund are denominated in foreign currencies. Gains and losses on these transactions are recorded as futures trading gains or losses at the U. S. dollar equivalent on the date the trade is settled. Exchange rate fluctuation gain or loss is reflected when residual amounts of foreign currencies are reconverted to U. S. dollars. 6. PLEDGED ASSETS The U. S. Treasury obligations and cash in trading accounts are pledged as collateral for commodities trading on margin. 7. CONCENTRATIONS OF CREDIT RISK The Fund maintains its cash balances at a high credit quality financial institution. The balances may, at times, exceed federally insured credit limits. 8. OFF BALANCE SHEET RISK As discussed in Note 1, the Fund is engaged in speculative trading of futures contracts in commodities. The carrying amounts of the Fund's financial instruments and commodity contracts generally approximate their fair values at the respective balance sheet dates. Open commodity contracts had gross contract value of $42,199,233 on long positions and $3,479,840 on short positions at September 30, 2001. Open commodity contracts had gross contract value of $81,103,765 on long positions and $7,068,373 on short positions at December 31, 2000. Although the gross contract values of open commodity contracts represent market risk, they do not represent exposure to credit risk, which is limited to the current cost of replacing those contracts in a gain position. The unrealized gain on open commodity futures contracts at September 30, 2001 and December 31 was $346,883 and $1,375,352, respectively.