-----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, G2m2aA7nZFxcfB1tbCmuz7tcLhX21dU0Q34VeAlnUkKlOcbLJd0Iw7t2HAK/GImP YmSBTFcFrDEl396jRN0eXg== 0000865549-03-000004.txt : 20030815 0000865549-03-000004.hdr.sgml : 20030815 20030814213912 ACCESSION NUMBER: 0000865549-03-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20030603 FILED AS OF DATE: 20030815 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ATLAS FUTURES FUND LIMITED PARTNERSHIP CENTRAL INDEX KEY: 0000865549 STANDARD INDUSTRIAL CLASSIFICATION: [6221] IRS NUMBER: 510380494 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-53111 FILM NUMBER: 03849381 BUSINESS ADDRESS: STREET 1: 5916 N 300 WEST CITY: FREMONT STATE: IN ZIP: 46737 BUSINESS PHONE: 2198331306 MAIL ADDRESS: STREET 1: 5916 N 300 WEST CITY: FREMONT STATE: IN ZIP: 46737 10-Q 1 a10q6-03.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 June 30, 2003 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 (260) 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 [ ] APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities and Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [X] No [ ] APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Part 1 - FINANCIAL INFORMATION Item 1. Financial Statements. The reviewed financial statements for the Registrant for the second quarter ended June 30, 2003 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 and Supplement thereto dated February 25, 2003 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 None Item 6. Exhibits and Reports on Form 8-K (a) None (b) None 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 June 30, 2003, 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: August 15, 2003 ******************************************************************************* ATLAS FUTURES FUND, LIMITED PARTNERSHIP (A Delaware Limited Partnership) FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2003 AND 2002 (A Review) 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 We have reviewed the balance sheet, including the schedule of investments, of ATLAS FUTURES FUND, LIMITED PARTNERSHIP as of June 30, 2003 and the related statements of operations for the three and six months ended June 30, 2003 and 2002, and the statements of partners' equity and cash flows for the six months ended June 30, 2003 and 2002. These financial statements are the responsibility of the Partnership's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquires of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our reviews we are not aware of any material modifications that should be made to the financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States. We have previously audited, in accordance with auditing standards generally accepted in the United States, the balance sheet, including the schedule of investments, of ATLAS FUTURES FUND, LIMITED PARTNERSHIP as of December 31, 2002 and the related statements of operations, partner's equity and cash flows for the year then ended (not presented herein); and in our report dated February 11, 2003, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying balance sheet as of December 31, 2002 is fairly stated, in all material respects, in relation to the balance sheet from which it has been derived. /s/ Frank L. Sassetti & Co. August 4, 2003 Oak Park, Illinois ATLAS FUTURES FUND, LIMITED PARTNERSHIP (A Delaware Limited Partnership) BALANCE SHEETS JUNE 30, 2003 AND DECEMBER 31, 2002 ASSETS June 30 2003 December 31 (A Review) 2002 Cash (Note 7) $ 44,562 $ 111,876 United States Treasury Obligations (Note 6) 4,987,285 3,190,667 Accrued interest receivable 8,312 6,860 Prepaid trading commissions 18,977 252 Due from limited partners 538,446 Equity in Commodity Futures Trading Accounts - Cash (Note 6) 2,532,273 1,785,556 Net unrealized gains(losses) on open commodity futures contracts (Note 8) (29,373) 1,183,957 $8,100,482 $6,279,168 LIABILITIES AND PARTNERS' EQUITY LIABILITIES Accrued incentive fees payable $ 225,906 $ Accrued accounting and auditing fees payable 2,200 6,500 Sales commissions payable 12,976 Partner redemptions payable 72,578 Total Liabilities 241,082 79,078 PARTNERS' CAPITAL Limited partners - (4,486.25 and 4,727.47 units) 7,859,400 6,200,090 General partner - (0 units) (Note 2) Total Partners' Capital 7,859,400 6,200,090 $8,100,482 $6,279,168 The accompanying notes are an integral part of the financial statements. ATLAS FUTURES FUND, LIMITED PARTNERSHIP (A Delaware Limited Partnership) STATEMENTS OF OPERATIONS FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2003 AND 2002 (A Review) Three Months Six Months Three Months Six Months Ended Ended Ended Ended June 30, 2003 June 30, 2002 REVENUES Realized gain (loss) from trading in futures $1,059,454 $4,074,674 $ 41,999 $ (505,628) Realized gain on exchange rate fluctuation 44,587 66,921 47,901 39,566 Changes in unrealized gains (losses) on open commodity futures contracts (32,232)(1,213,330) 333,975 607,650 Interest income 18,731 36,736 19,609 40,776 Redemption penalty 13,654 14,389 1,747 3,256 Total Revenues 1,104,194 2,979,390 445,231 185,620 EXPENSES Commissions 168,215 320,968 92,802 200,146 Incentive fees 230,581 597,100 Management fees 35,068 68,510 25,616 54,199 Professional accounting and legal fees 17,680 49,607 11,929 30,490 Other operating and administrative expenses 737 1,367 88 338 Total Expenses 452,281 1,037,552 130,435 285,173 NET INCOME (LOSS) $ 651,913 $1,941,838 $ 314,796 $ (99,553) NET INCOME (LOSS) - Limited partnership unit $157.49 $ 442.36 $ 63.79 $ (19.85) General partnership unit $ $ $ $ The accompanying notes are an integral part of the financial statements. ATLAS FUTURES FUND, LIMITED PARTNERSHIP (A Delaware Limited Partnership) STATEMENTS OF PARTNERS' EQUITY FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002 (A Review) 2003 2002 Amount Units Amount Units Beginning balance- December 31 $6,200,090 4,727.47 $6,102,458 5,186.28 Partner additions 953,716 552.96 134,179 119.33 Partner withdrawals (1,236,244) (794.18) (696,652) (671.40) Syndication costs paid Net Income (Loss) 1,941,838 (99,553) Ending Balance - June 30 $7,859,400 4,486.25 $5,440,432 4,634.21 2003 2002 Value per unit $1,751.89 $1,173.97 Total partnership units 4,486.25 4,634.21 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 SIX MONTHS ENDED JUNE 30, 2003 AND 2002 (A Review) 2003 2002 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $1,941,838 $ (99,553) Adjustments to reconcile net income (loss) to net cash provided by operating activities Changes in operating assets and liabilities Equity in Commodity Futures Trading Accounts 466,613 516,866 Accrued interest receivable (1,452) 1,438 U.S. Treasury Obligations (1,796,618) (940) Prepaid expense (18,725) Accrued commissions payable 12,976 (992) Management and incentive fees payable 225,906 (10,074) Accounting and auditing fees payable (4,300) (5,542) Net Cash Provided By Operating Activities 826,238 401,203 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from sale of units, net of sales commissions 415,270 229,449 Cash partner redemptions (1,308,822) (661,071) Net Cash Used In Financing Activities (893,552) (431,622) NET DECREASE IN CASH (67,314) (30,419) CASH Beginning of period 111,876 32,224 End of period $ 44,562 $ 1,805 The accompanying notes are an integral part of the financial statements. ATLAS FUTURES FUND, LIMITED PARTNERSHIP (A Delaware Limited Partnership) SCHEDULE OF INVESTMENTS June 30, 2003 (A Review) Contracts Value Percent United States Commodity Futures Positions, Held Long 26 Sept '03 2 -Year Treasury Notes $(11,297) (0.15)% 26 Aug '03 Soybean Meal (16,900) (0.23) 26 Sept '03 British Pound 1,513 0.02 Total United States Commodity Futures Positions (26,684) (0.36) British Commodity Futures Positions, Held Long 51 Dec '03 Short Sterling (8,946) (0.12) Total Commodity Futures Positions Held Long (35,630) (0.48) United States Commodity Futures Positions, Sold Short 25 Oct '03 New York Sugar 7,560 0.11 Japanese Commodity Futures Positions, Sold Short 26 May '04 Coffee (1,303) (0.02) Total Commodity Futures Positions Sold Short 6,257 0.09 Net Commodity Futures Positions $(29,373) (0.39)% The accompanying notes are an integral part of the financial statements. ATLAS FUTURES FUND, LIMITED PARTNERSHIP (A Delaware Limited Partnership) SCHEDULE OF INVESTMENTS June 30, 2003 (A Review) Value Percent $5,000,000 United States Treasury Bills $4,987,285 66.58% Cash in Trading Accounts United States Markets 1,540,250 20.56 Canadian Markets (39,962) (0.53) Euro Dollar Markets 1,220,042 16.29 British Pound Markets (37,718) (0.50) Japanese Yen Markets (19,276) (0.26) Australian Dollar Markets (131,063) (1.75) Total Cash in Trading Accounts 2,532,273 33.81 Total Investments $7,490,185 100.00% The accompanying notes are an integral part of the financial statements. ATLAS FUTURES FUND, LIMITED PARTNERSHIP (A Delaware Limited Partnership) SCHEDULE OF INVESTMENTS DECEMBER 31, 2002 Contracts Value Percent United States Commodity Futures Positions, Held Long 42 March '03 US Treasury Bond $ 17,719 0.29% 42 March '03 10-Year Treasury Notes 32,813 0.53 41 March '03 5-Year Treasury Notes 54,484 0.88 83 March '03 2-Year Treasury Notes 79,281 1.29 21 March '03 New York Sugar 1,176 0.02 21 February '03 New York Unleaded Gas (36,427) (0.59) 21 February '03 New York #2 Heating Oil (45,335) (0.74) 21 March '03 New York Cotton (4,350) (0.07) 21 March '03 New York Silver 5,360 0.09 41 February '03 New York Gold 75,420 1.22 41 March '03 British Pound 48,800 0.79 102 March '03 Swiss Franc 366,275 5.95 81 March '03 Euro Foreign Exchange 359,588 5.84 106 March '03 Eurodollar 16,788 0.27 21 January '03 Gas Oil (17,325) (0.28) 21 February '03 Brent Crude 22,680 0.37 Total United States Commodity Futures Positions 976,947 15.86 Australian Commodity Futures Positions, Held Long 21 March '03 90 Day Australian Bill 857 0.01 42 March '03 3-Year Australian Treasury Bond 7,027 0.12 Total Australian Commodity Futures Positions 7,884 0.13 European Commodity Futures Positions, Held Long 40 March '03 Euribor 12,838 0.21 21 March '03 2-Year German Euro Schatz 4,622 0.08 20 March '03 10-Year German Euro Bund 34,794 0.56 Total European Commodity Futures Positions 52,254 0.85 The accompanying notes are an integral part of the financial statements. ATLAS FUTURES FUND, LIMITED PARTNERSHIP (A Delaware Limited Partnership) SCHEDULE OF INVESTMENTS DECEMBER 31, 2002 Contracts Value Percent British Commodity Futures Positions, Held Long 61 June '03 Short Sterling $ 12,933 0.21% 41 March '03 Long Gilt 42,788 0.69 Total British Commodity Futures Positions 55,721 0.90 Japanese Commodity Futures Positions, Held Long 21 April '03 Rubber 2,658 0.04 22 October '03 Gold 20,053 0.33 Total Japanese Commodity Futures Positions 22,711 0.37 Total Commodity Futures Positions Held Long 1,115,517 18.11 United States Commodities Futures Positions, Sold Short 20 March '03 New York Coffee 64,125 1.04 21 March '03 Mexican Peso 4,938 0.08 Total United States Commodity Futures Positions 69,063 1.12 Japanese Commodity Futures Positions, Sold Short 21 March '03 Euro Yen (623) (0.01) Total Commodity Futures Positions Sold Short 68,440 1.11 Net Commodity Futures Positions 1,183,957 19.22 The accompanying notes are an integral part of the financial statements. ATLAS FUTURES FUND, LIMITED PARTNERSHIP (A Delaware Limited Partnership) SCHEDULE OF INVESTMENTS DECEMBER 31, 2002 Maturity Value Value Percent $3,200,000 United States Treasury Bills $3,190,667 51.80% Cash in Trading Accounts United States Markets 1,163,497 18.89 Canadian Markets (34,209) (0.55) Eurodollar Markets 676,612 10.98 British Pound Markets 84,526 1.37 Japanese Yen Markets (35,561) (0.58) Australian Dollar Markets (69,309) (1.13) Total Cash in Trading Accounts 1,785,556 28.98 Total Investments $6,160,180 100.00% The accompanying notes are an integral part of the financial statements. ATLAS FUTURES FUND, LIMITED PARTNERSHIP (A Delaware Limited Partnership) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2003 AND 2002 (A Review) 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 the speculative trading of futures contracts in commodities, which commenced in October, 1999. Ashley Capital Management, Inc. is the general partner and 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 expenses. The Fund remains open to new partners, and incurs costs required to retain the ability to issue new units. Such costs are treated in a similar manner. Costs of recurring annual and quarterly filings with regulatory agencies are expensed 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 amounts 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. ATLAS FUTURES FUND, LIMITED PARTNERSHIP (A Delaware Limited Partnership) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2003 AND 2002 (A Review) 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 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 used in operating activities includes no cash payments for interest or income taxes for the six months ended June 30, 2003 and 2002. 2. GENERAL PARTNER DUTIES The responsibilities of the General Partner, in addition to directing the trading and investment activity of the Fund, including suspending all trading, includes 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 the 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. 3. THE LIMITED PARTNERSHIP AGREEMENT The Limited Partnership Agreement provides, among other things, the following: 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. ATLAS FUTURES FUND, LIMITED PARTNERSHIP (A Delaware Limited Partnership) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2003 AND 2002 (A Review) 3. THE LIMITED PARTNERSHIP AGREEMENT - CONTINUED 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: 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. ATLAS FUTURES FUND, LIMITED PARTNERSHIP (A Delaware Limited Partnership) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2003 AND 2002 (A Review) 4. FEES - CONTINUED 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. 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. ATLAS FUTURES FUND, LIMITED PARTNERSHIP (A Delaware Limited Partnership) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2003 AND 2002 (A Review) 7. CONCENTRATIONS 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. Open commodity contracts had gross contract value of $18,968,772 on long positions and $293,239 on short positions at June 30, 2003. Open commodity contracts had gross contract value of $59,123,308 on long positions and $937,241 on short positions at June 30, 2002. 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(loss) on open commodity futures contracts at June 30, 2003 and 2002 was $(29,373) and $729,746, respectively. -----END PRIVACY-ENHANCED MESSAGE-----