10-K/A 1 a10ka070307.txt Amendment No. 1 to FORM 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the year ended 12-31-2006 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.) 505 Brookfield Drive, Dover, DE 19901 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (800) 331-1532 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered None None Securities registered pursuant to Section 12(g) of the Act: Limited Partnership Units (Title of class) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X] Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X] 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (S 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [X] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [ ] No [X] State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter.: None. There is no market for the Units of partnership interests and none is expected to develop. The Registrant is a commodity pool. The Units are registered to permit the initial sale of Units at month end net asset value. EXPLANATORY NOTE The registrant is filing this Amendment No. 1 on Form 10-K/A (the "Amendment") to its annual report on Form 10-K for the fiscal year ended December 31, 2006, originally filed April 2, 2007 (the "Annual Report"), for the purpose of making the following changes: (1) revision of financials included herein beginning on page F-1 pursuant to Item 8 herein to (a) provide three years of financial information for the statements of operations, changes in net assets, and cash flows, and (b) provide opinions by independent accountants for all periods covered by the financial statements; and, (2) revise Item 9A to identify the changes in controls and procedures that the General Partner has made. In addition, the registrant is also including as exhibits to this Amendment the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. Except as described above, this Amendment does not modify or update the Fund's previously reported financial statements and other disclosures in, or exhibits to, the original filing. Item 8. Financial Statements and Supplementary Data. The Fund financial statements meeting the requirements of Regulation S-X are provided in this Amendment beginning on page F-1. The supplementary financial information specified by Item 302 of Regulation S-K was included in Item 6. Selected Financial Data of the registrant's Annual Report. Item 9A. Controls and Procedures. In the Fund's previously-filed Annual Report on Form 10-K for the year ended December 31, 2006 (the "Annual Report"), the General Partner of the Fund, under the actions of its sole principal, Michael Pacult, 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 Fund as of December 31, 2006 and found them adequate. In May, 2007, management was informed by the SEC that its financials did not conform to SEC requirements because (1) the financials contained only two, and not three, years of financial information for the statements of operations, changes in net assets, and cash flows, and (2) the audit opinion did not cover all financial periods stated. Because of these omissions, management has re-evaluated its prior conclusion regarding the effectiveness of the design and operation of its disclosure controls and procedures as of December 31, 2006 with respect to the Fund. Based upon Mr. Pacult's re-evaluation, conducted under Exchange Act Rule 13a-15 or 15d-15(e), he concluded that the omissions were caused by a personnel problem, were the result of obvious human error and lack of attention to detail, and that the Fund's disclosure controls and procedures were accordingly not effective as of December 31, 2006. To remediate the situation, Mr. Pacult has severely reprimanded those persons who prepared and reviewed the financial statements included in the Annual Report. Mr. Pacult accepts total responsibility for the financial statements of the Fund and filings made with the SEC, including the Annual Report and this Amendment. There have been no changes in the General Partner's internal control over financial reporting applicable to the Fund identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the fourth quarter of fiscal year 2006 and through the date of this Amendment that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting applicable to the Fund. Item 15. Exhibits, Financial Statement Schedules (a) The following documents are filed as part of this Amendment: 1. All Financial Statements The Financial Statements begin on page F-1 of this Amendment. 2. Financial Statement Schedules required to be filed by Item 8 of this form, and by paragraph (b) below. Not applicable, not required, or included in the Financial Statements. 3. List of those Exhibits required by Item 601 of Regulation S-K (sec. 229.601 of this chapter) and by paragraph (b) below. 2 Incorporated by reference from the Fund's Registration Statement on Form S-1, and all amendments at file No. 333-61217 previously filed with the Securities and Exchange Commission. 31.1 Certification of CEO and CFO pursuant to Section 302 32.2 Certification of CEO and CFO pursuant to Section 906 (b) Exhibits required by Item 601 of Regulation S-K (sec. 229.601 of this chapter). See response to 15(a)(3), above. (c) Financial statements required by Regulation S-X (17 CFR 210) which are excluded from the annual report to shareholders by Rule 14a-3(b) including (1) separate financial statements of subsidiaries not consolidated and fifty percent or less owned persons; (2) separate financial statements of affiliates whose securities are pledged as collateral; and (3) schedules. 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 Amendment No. 1 to Form 10-K for the period ended December 31, 2006, to be signed on its behalf by the undersigned, thereunto duly authorized. Registrant: Atlas Futures Fund, Limited Partnership By Ashley Capital Management, Inc. Its General Partner Date: July 3, 2007 By: /s/ Michael Pacult Mr. Michael P. Pacult Sole Director, Sole Shareholder President and Treasurer 3 Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Index to the Financial Statements Page Report of Independent Registered Public Accounting Firm F-2 Report of Independent Registered Public Accounting Firm F-3 Statements of Assets and Liabilities F-4 Schedule of Investments - Cash and Securities - December 31, 2006 F-5 Schedules of Investments - Futures Contracts - December 31, 2006 F-6 - F-7 Schedule of Investments - Cash and Securities - December 31, 2005 F-8 Schedules of Investments - Futures Contracts - December 31, 2005 F-9 Statements of Operations F-10 Statements of Changes in Net Assets F-11 Statements of Cash Flows F-12 Notes to Financial Statements F-13 - F18 Affirmation of Commodity Pool Operator F-19 F-1 Jordan, Patke & Associates, Ltd. Certified Public Accountants Report of Independent Registered Public Accounting Firm To the Partners of Atlas Futures Fund, Limited Partnership Dover, Delaware We have audited the accompanying statements of assets and liabilities of Atlas Futures Fund, Limited Partnership, including the schedules of investments, as of December 31, 2006, and the related statements of operations, changes in net assets and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Atlas Futures Fund, Limited Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Atlas Futures Fund, Limited Partnership internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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, 2006, and the results of its operations, its changes in net assets and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. /s/ Jordan, Patke & Associates, Ltd. Jordan, Patke & Associates, Ltd. Lincolnshire, Illinois March 27, 2007 300 Village Green Drive, Suite 210 * Lincolnshire, Illinois 60069 Phone: (847) 913-5400 * Fax: (847) 913-5435 F-2 Frank L. Sassetti & Co. Certified Public Accountants To The Partners Atlas Futures Fund, Limited Partnership Dover, Kent County, Delaware REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of ATLAS FUTURES FUND, LIMITED PARTNERSHIP as of December 31, 2005, and the related statements of operations, changes in net assets and cash flows for each of the two years in the period ended December 31, 2005. 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 audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also 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 audits provide 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, 2005, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2005, in conformity with accounting principles generally accepted in the United States. /s/ Frank L. Sassetti & Co. February 24, 2006 Oak Park, Illinois 6611 W. North Avenue * Oak Park, Illinois 60302 * Phone (708) 386-1433 * Fax (708) 386-0139 F-3 Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Statements of Assets and Liabilities December 31, 2006 2005 Assets Investments Equity in commodity futures trading accounts: Cash and cash equivalents $15,435,188 $16,856,751 Net unrealized gain on open futures contracts 1,933,681 250,902 Total brokerage cash equivalents and investments 17,368,869 17,107,653 Cash 56,030 88,004 Total assets 17,424,899 17,195,657 Liabilities Partner redemptions payable 166,223 117,164 Accrued commissions payable to related parties 8,013 15,555 Management fees payable 15,541 13,110 Incentive fees payable 219,487 170,919 Other accrued liabilities 849 37,128 Total Liabilities 410,113 353,876 Net assets $17,014,786 $16,841,781 Analysis of Net Assets Limited partners $17,014,786 $16,841,781 General partner - - Net assets (equivalent to $3,489.87 and $3,357.08 per unit) $17,014,786 $16,841,781 Partnership units outstanding Limited partners units outstanding 4,875.48 5,016.79 General partner units outstanding - - Total partnership units outstanding 4,875.48 5,016.79
F-4 The accompanying notes are an integral part of the financial statements Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Schedule of Investments - Cash and Securities December 31, 2006 Fair Value ________________________________ Description Maturity Date Cost Face Value Local Currency U.S. Dollars Percent Cash and cash equivalents in trading accounts: Cash denominated in U. S. Dollars: United States Markets 696,781 $696,781 4.51% Total cash denominated in U. S. Dollars 696,781 4.51% Cash equivalents denominated in U.S. Dollars: United States Treasury Bill March 2007 $10,373,181 $10,500,000 10,395,342 10,395,342 67.35% United States Treasury Bill March 2007 987,967 1,000,000 990,051 990,051 6.41% United States Treasury Bill January 2007 790,010 800,000 797,417 797,417 5.17% United States Treasury Bill February 2007 1,777,843 1,800,000 1,790,777 1,790,777 11.60% United States Treasury Bill February 2007 987,738 1,000,000 993,841 993,841 6.44% Total cash equivalents denominated in U.S. Dollars $14,916,738 $15,100,000 14,967,428 96.97% Total cash and cash equivalents denominated in U.S. Dollars 15,664,209 101.48% Cash denominated in foreign currency: Euro Markets - Euro 165,260 218,102 1.41% British Pound Markets - GBP (178,240) (349,136) -2.26% Australian Dollar Markets - AUD (197,553) (155,958) -1.01% Hong Kong Dollar Markets - HKD 124,370 15,989 0.10% Japanese Yen Markets - JPY 4,997,745 41,982 0.27% Total cash denominated in foreign currency (229,021) -1.48% Total investments $15,435,188 100.00%
F-5 The accompanying notes are an integral part of the financial statements Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Schedule of Investments - Futures Contracts December 31, 2006 Fair Value _____________________________ Description Expiration Date Contracts Local Currency USD Net unrealized gain (loss) on open futures contracts United States commodity futures positions held long: CBOT Soybeans March 2007 55 29,562 $29,562 CBT Bean Meal March 2007 110 24,570 24,570 CSC Coffee C March 2007 55 46,744 46,744 CBOT Corn March 2007 5 4,038 4,038 CBOT Wheat March 2007 13 (2,025) (2,025) CBT T Note 10Y March 2007 10 (7,813) (7,813) CBOT Gold February 2007 1 (1,320) (1,320) CSC Coffee C March 2007 8 (4,688) (4,688) 05 LME Alum US March 2007 1 125 125 08 LME Alum US March 2007 1 (556) (556) IMM AU Dollar March 2007 7 2,425 2,425 IMM B-Pounds March 2007 12 3,075 3,075 IM Canadian $ March 2007 2 (2,410) (2,410) IMM Euro FX March 2007 11 (750) (750) IMM Euro DLR September 2007 53 (15,900) (15,900) EMINI S&P 500 March 2007 2 150 150 Total United States Commodity Futures Positions 75,227 Japanese commodity futures positions held long: SMX Nikkei March 2007 17 6,865,000 57,667 Total Japanese commodity futures positions held long 57,667 Euro commodity futures positions held long: Eurex E-Bund March 2007 11 (13,540) (17,869) Total European commodity futures positions held long (17,869) British commodity futures positions held long: NEW FTSE 100 March 2007 2 810 1,587 Total British commodity futures positions held long 1,587 Total commodity futures positions held long 116,612 United States commodity futures positions held short: CMX HG Copper March 2007 110 483,088 483,088 NY Natural Gas March 2007 55 647,350 647,350 IMM J YEN March 2007 55 29,563 29,563 CBOT Soybeans March 2007 11 (11,825) (11,825) CBOT Silver March 2007 1 (380) (380) NY LT Crude February 2007 10 24,370 24,370 NY Heating Oil February 2007 8 6,023 6,023 NY Natural Gas February 2007 4 15,930 15,930 NYM RBOB Gas February 2007 5 (9,891) (9,891) 21 LME CO February 2007 1 13,739 13,739 05 LME Copper US March 2007 1 16,357 16,357 14 LME Copper US March 2007 1 12,825 12,825 NYC Cotton March 2007 14 (5,355) (5,355) IMM J YEN March 2007 23 47,831 47,831 Total United States commodity futures positions held short 1,269,625 Australian commodity futures positions held short: SYD T Bill 90D June 2007 165 2,627 2,074 SFE 3Y T-Bond March 2007 55 8,929 7,049 SFE 10Y T-Bond March 2007 11 5,820 4,594 Total Australian commodity futures positions held short 13,717
F-6 The accompanying notes are an integral part of the financial statements Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Schedule of Investments - Futures Contracts, Continued December 31, 2006 Fair Value _____________________________ Description Expiration Date Contracts Local Currency USD Net unrealized gain (loss) on open futures contracts, con't. British commodity futures positions held short: LIF Long GILT March 2007 220 192,500 $377,069 LIF 3M STG IR June 2007 55 3,438 6,733 LIF Long GILT March 2007 11 18,120 35,493 LIF 3M STG IR September 2007 20 (1,250) (2,449) Total British commodity futures positions held short 416,846 Euro commodity futures positions held short: LIF 3m EURIBOR March 2007 110 3,438 4,537 Eurex EUROBOBL March 2007 55 33,000 43,552 EURX E-Bund March 2007 55 35,200 46,455 EURO E-Schatz March 2007 55 15,125 19,961 LIF 3M EURIBOR September 2007 16 1,800 2,376 Total Euro commodity futures positions held short 116,881 Total commodity futures positions held short 1,817,069 Net commodity futures positions $1,933,681
F-7 The accompanying notes are an integral part of the financial statements Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Schedule of Investments - Cash and Securities December 31, 2005 Fair Value ________________________________ Description Maturity Date Face Value Local Currency U.S. Dollars Percent Cash and cash equivalents in trading accounts: Cash denominated in U. S. Dollars: United States Markets 1,516,844 $1,516,844 9.00% Total cash denominated in U. S. Dollars 1,516,844 9.00% Cash equivalents denominated in U.S. Dollars: United States Treasury Bill March 2006 $10,900,000 10,812,162 10,812,162 64.14% United States Treasury Bill March 2006 1,800,000 1,787,650 1,787,650 10.60% United States Treasury Bill February 2006 1,100,000 1,095,335 1,095,335 6.50% United States Treasury Bill February 2006 600,000 597,064 597,064 3.54% United States Treasury Bill January 2006 580,000 577,934 577,934 3.43% Total cash equivalents denominated in U.S. Dollars $14,980,000 14,870,145 88.21% Total cash and cash equivalents denominated in U.S. Dollars 16,386,989 97.21% Cash denominated in foreign currency: Euro Markets - Euro 500,710 592,040 3.51% British Pound Markets - GBP (52,969) (91,011) -0.54% Australian Dollar Markets - AUD (116,451) (85,440) -0.51% Hong Kong Dollar Markets - HKD 13,364 1,724 0.01% Japanese Yen Markets - JPY 6,170,471 52,449 0.31% Total cash denominated in foreign currency 469,762 2.78% Total investments $16,856,751 100%
F-8 The accompanying notes are an integral part of the financial statements Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Schedule of Investments - Futures Contracts December 31, 2005 Fair Value _____________________________ Description Expiration Date Contracts Local Currency USD Net unrealized gain (loss) on open futures contracts United States commodity futures positions held long: CBOT Soybeans March 2006 68 (32,162) $(32,162) CBT Bean Meal March 2006 62 (29,140) (29,140) CBT T-Bonds March 2006 62 (9,688) (9,688) CME Cattle February 2006 76 18,540 18,540 CMX HG Copper March 2006 62 19,200 19,200 LME Aluminum US January 2006 8 51,081 51,081 LME Aluminum US February 2006 2 1,087 1,087 LME Copper March 2006 1 13,022 13,022 CSC Sugar II January 2006 58 187,656 187,656 KC Wheat March 2006 62 4,288 4,288 IMM Mexican Peso March 2006 62 11,963 11,963 IMM British Pounds March 2006 2 (6,400) (6,400) IMM Canadian Dollar March 2006 5 (2,200) (2,200) CBOT Corn March 2006 19 8,800 8,800 CBOT Wheat March 2006 2 238 238 CMX Gold March 2006 1 2,260 2,260 CMX Silver February 2006 1 200 200 Emini S&P 500 March 2006 8 (4,000) (4,000) NY Light Crude March 2006 4 1,810 1,810 NY Heating Oil February 2006 1 3,352 3,352 NY Unleaded Gas February 2006 1 7,178 7,178 NY Natural Gas February 2006 1 (1,050) (1,050) Total United States Commodity Futures Positions 246,035 246,035 Japanese commodity futures positions held long: SGX MINI JGB March 2006 5 249,059 2,117 SMX Nikkei March 2006 4 976,235 8,298 Total Japanese commodity futures positions held long 1,225,294 10,415 Euro commodity futures positions held long: DAB DAX Index March 2006 3 8027 9488 Eurx E-Bond March 2006 1 60 71 Total European commodity futures positions held long 8,087 9,559 British commodity futures positions held long: NEW FTSE 100 March 2006 5 4,450 7,646 LIF Long Gilt March 2006 5 3,550 6,100 CAP 3M STG September 2006 9 12 21 Total British commodity futures positions held long 8,012 13,767 Hong Kong commodity futures positions held long: HG January 2006 5 73,729 (9,511) Total European commodity futures positions held long 73,729 (9,511) Australian commodity futures positions held long: SFE SPI 200 March 2006 1 3,352 2,459 SFE 10Y T-Bond March 2006 6 12,572 9,224 SFE 3Y T-bond March 2006 62 10,333 7,581 Total Australian commodity futures positions held long 26,257 19,264 Total commodity futures positions held long 289,529 United States commodity futures positions held short: CBT T-Note 2Y March 2006 58 (12,813) (12,813) IMM Euro FX March 2006 65 (28,656) (28,656) IMM Euro Dollar March 2006 65 23,825 23,825 CSC Coffee C March 2006 3 (7,819) (7,819) IMM Japanese Yen March 2006 5 (10,406) (10,406) Total United States commodity futures positions held short (35,869) (35,869) Euro commodity futures positions held short: LIF 3M Euribar September 2006 9 338 399 3M Monep CAC40 EU January 2006 2 (920) (1,088) Euro E-Schatz March 2006 62 (1,750) (2,069) Total Euro commodity futures positions held short (2,332) (2,758) Total commodity futures positions held short (38,627) Net commodity futures positions $250,902
F-9 The accompanying notes are an integral part of the financial statements Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Statements of Operations Year ended December 31, 2006 2005 2004 Investment income Interest income $692,736 $383,902 $116,543 Total investment income 692,736 383,902 116,543 Expenses Commission expense 1,829,489 1,628,082 921,708 Management fees 53,217 42,142 - Continuing service fee - - 131,711 Incentive fees 543,763 1,328,137 1,428,902 Professional accounting and legal fees 111,210 140,296 117,343 Other operating and administrative expenses 8,421 10,624 23,411 Total expenses 2,546,100 3,149,281 2,623,075 Net investment loss (1,853,364) (2,765,379) (2,506,532) Realized and unrealized gain (loss) from investments and foreign currency Net realized gain (loss) from: Investments 1,201,655 5,355,716 7,430,148 Foreign currency transactions (420,557) (29,971) (576) Net realized gains from investments and foreign currency transactions 781,098 5,325,745 7,429,572 Net increase in unrealized appreciation (depreciation) on: Investments 1,137,767 348,895 (792,255) Translation of assets and liabilities in foreign currencies 542,898 - - Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies 1,680,665 348,895 (792,255) Net realized and unrealized income from investments and foreign currency 2,461,763 5,674,640 6,637,317 Net increase in net assets resulting from operations $608,399 $2,909,261 $4,130,785 Net income per unit Limited partnership unit $122.22 $610.72 $977.22 General partnership unit $- $- $-
F-10 The accompanying notes are an integral part of the financial statements Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Statements of Changes in Net Assets Year ended December 31, 2006 2005 2004 Increase (decrease) in net assets from operations Net investment (loss) $(1,853,364) $(2,765,379) $(2,506,532) Net realized gains from investments and foreign currency transactions 781,098 5,325,745 7,429,572 Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies 1,680,665 348,895 (792,255) Net increase in net assets resulting from operations 608,399 2,909,261 4,130,785 Capital contributions from limited partners 869,489 2,739,224 1,692,212 Distributions to limited partners (1,304,883) (597,653) (1,721,845) Total increase in net assets 173,005 5,050,832 4,101,152 Net assets at the beginning of the year 16,841,781 11,790,949 7,689,797 Net assets at the end of the year $17,014,786 $16,841,781 $11,790,949
F-11 The accompanying notes are an integral part of the financial statements Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Statements of Cash Flows Year ended December 31, 2006 2005 2004 Cash Flows from Operating Activities Net increase in net assets resulting from operations $608,399 $2,909,261 $4,130,785 Adjustments to reconcile net increase in net assets from operations to net cash provided by (used in) operating activities: Changes in operating assets and liabilities: Unrealized appreciation (depreciation) on investments (1,682,779) (348,897) 792,255 Increase (decrease) in accrued commissions payable (7,542) 141 14,927 Increase (decrease) in accrued management and incentive fees 50,999 (191,814) 362,733 Increase in prepaid incentive fees - - 94,433 Increase (decrease) in other payables and accruals (36,279) 25,228 (19,887) Net cash provided by (used in) operating activities (1,067,202) 2,393,919 5,375,246 Cash Flows from Financing Activities Proceeds from sale of units, net of sales commissions 869,489 2,739,224 1,692,212 Partner redemptions (1,255,824) (509,235) (1,721,845) Net cash provided by (used in) financing activities (386,335) 2,229,989 (29,633) Net increase (decrease) in cash and cash equivalents (1,453,537) 4,623,908 5,345,613 Cash and cash equivalents, beginning of period 16,944,755 12,320,847 6,975,234 Cash and cash equivalents, end of period $15,491,218 $16,944,755 $12,320,847 End of year cash and cash equivalents consist of: Cash and cash equivalents at broker $15,435,188 $16,856,751 $12,302,558 Cash 56,030 88,004 18,289 Total cash and cash equivalents $15,491,218 $16,944,755 $12,320,847
F-12 The accompanying notes are an integral part of the financial statements Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Notes to the Financial Statements For the Years Ended December 31, 2006, 2005 and 2004 1. Nature of the Business 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.("Ashley") and Michael Pacult are the General Partners and the commodity pool operators ("CPO's") of the Fund. The registered commodity trading advisors ("CTA's") are Clarke Capital Management, Inc. ("Clarke"), which has served as CTA since commencement of Fund business, and NuWave Investment Corp. ("NuWave"), which became a CTA effective February, 2005. The CTA's have the authority to trade as much of the Fund's equity as is allocated to them by the General Partner, which is currently estimated to be 99% of total equity. Prior to July, 2004, the principal selling agent was Futures Investment Company ("FIC"), which is controlled by Michael Pacult and his wife. Effective July, 2004 the Fund began to sell issuer direct on a best efforts basis with no sales commissions. The Fund is a registrant with the Securities and Exchange Commission (SEC) pursuant to the Securities and Exchange Act of 1933 (the Act). The Fund is subject to the regulations of the SEC and the reporting requirements of the Act. The Fund is also subject to the regulations of the Commodities Futures Trading Commission (CFTC), an agency of the U.S. government which regulates most aspects of the commodity futures industry, the rules of the National Futures Association and the requirements of various commodity exchanges where the Fund executes transactions. Additionally, the Fund is subject to the requirements of futures commission merchants and interbank market makers through which the Fund trades and regulated by commodity exchanges and by exchange markets that may be traded by the advisor. 2. Significant Accounting Policies Registration Costs - Costs incurred for the initial filings with the Securities and Exchange Commission, National Association of Securities Dealers, Inc. 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. The Fund remains open to new partners, and incurs costs required to retain the ability to issue new units. Such costs, in addition to the 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. Interest income is recognized when it is earned. 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. Income Taxes - The Fund, a regulated investment company, is not required to provide a provision for income taxes. Each partner is individually liable for the tax on its share of income or loss. The Fund may be subject to state and local taxes in jurisdictions in which it operates. The Fund prepares a calendar year information tax return Net Income Per Unit - Net income per unit is calculated based on the weighted average number of units outstanding during the period. Statement of Cash Flows - For purposes of the Statement of Cash Flows, the Fund considers cash, money market funds and the market value of U.S. Treasury Bills to be cash equivalents. Net cash provided by operating activities include no cash payments for interest or income taxes for the years ended December 31, 2006, 2005 and 2004. F-13 Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Notes to the Financial Statements For the Years Ended December 31, 2006, 2005 and 2004 2. Significant Accounting Policies - Continued Foreign Currency - Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Company does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments. Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. 3. 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. If the daily net unit value of the partnership falls to less than 50% of the highest value earned through trading at the close of any month, then the General Partner will immediately suspend all trading, provide all limited partners with notice of the reduction and give all limited partners the opportunity, for fifteen days after such notice, to redeem partnership interests. No trading will commence until after the lapse of the fifteen day period. 4. 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 Partners. Federal Income Tax Allocations - As of the end of each fiscal year, the Partnership's realized capital gain or loss and ordinary income or loss shall be allocated among the partners, after having given effect to the fees and expenses of the Fund. Subscriptions - Investors must submit subscription agreements and funds at least five business days prior to month end. Subscriptions must be accepted or rejected by the General Partner within five business days. The investor also has five business days to withdraw his subscription. Funds are deposited into an interest bearing subscription account and will be transferred to the Fund's account on the first business day of the month after the subscription is accepted. Interest earned on the subscription funds will accrue to the account of the investor. Redemptions - A limited partner may request any or all of his investment be redeemed at the net asset value as of the end of a month. The written request must be received by the General Partner no less than ten days prior to a month end. Redemptions will generally be paid within twenty days of the effective month end. However, in various circumstances due to liquidity, etc. the General Partner may be unable to comply with the request on a timely basis. Effective January 1, 2004, redemption penalties are no longer charged. F-14 Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Notes to the Financial Statements For the Years Ended December 31, 2006, 2005 and 2004 5. Fees Effective January 1, 2004, the Fund was charged the following fees: A monthly commission of 7% (annual rate) of the Fund's assets on deposit with the futures commission merchant to the Fund's Corporate General Partner. The Corporate General Partner was responsible for payments of brokerage commission and fees to the futures commission merchant. A quarterly incentive fee of 25% of "new net profits" paid to each CTA is unchanged. A monthly continuing service fee of 4% (annual rate) of the investment in the Fund (as defined) will be paid to the selling agent. Effective June 1, 2004, the monthly commission was changed from 7% to 11% and the continuing service fee was eliminated. Effective February 1, 2005, the Fund added a new CTA, NuWave. NuWave's quarterly incentive fee was 20% of "new net profits" and also received a monthly management fee of 2% (annualized) on the first $2,000,000 in allocated equity and 1% on the allocated equity above $2,000,000. NuWave was allocated $2,000,000 in equity on February 1, 2005. Effective February 6, 2006, the Corporate General Partner began paying 4% of the 11% of received brokerage commissions to FIC for serving as introducing broker to the Fund. Effective December 1, 2006, the Fund changed the monthly management fee to NuWave to a percentage based on the rate of trading assigned by NuWave and approved by the General Partner of up to 3% (annualized) on the first $2,000,000 in allocated equity and up to 2% on the allocated equity above $2,000,000. The incentive fee of 20% remains unchanged. The Corporate General Partner reserves the right to change the fee structure at its sole-discretion. 6. Related Party Transactions The Fund has an agreement to pay commissions and fees to two related parties, Ashley Capital Management, the Fund's General Partner and Futures Investment Company, the introducing broker. These related parties are 100% owned by Michael Pacult, the Fund's CPO. Related party commissions and fees were as follows: Commissions and fees included in expense: Year ended December 31, 2006 2005 2004 Ashley Capital Management, Inc. $747,549 $1,471,651 $792,870 Futures Investment Company 934,678 - 131,711 Total related party expenses $1,682,227 $1,471,651 $924,581 Commissions and fees included in accrued expenses: December 31, 2006 2005 Ashley Capital Management, Inc. $4,482 $15,555 Futures Investment Company 3,531 - Total accrued expenses to related parties $8,013 $15,555 F-15 Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Notes to the Financial Statements For the Years Ended December 31, 2006, 2005 and 2004 6. Related Party Transactions, Continued Financial Accounting Standards Board Interpretation No. 45, Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, identifies certain disclosures to be made by a guarantor in its financial statements about its obligations under certain guarantees that it has issued. In the normal course of business, the Fund has provided general indemnifications to the General Partner, its CTA and others when they act, in good faith, in the best interests of the Fund. The Fund is unable to develop an estimate for future payments resulting from hypothetical claims, but expects the risk of having to make any payments under these indemnifications to be remote. 7. Partnership Unit Transactions As of December 31, 2006, 2005 and 2004 partnership units were valued at $3,489.87, $3,357.08 and $2,731.41 respectively. Transactions in partnership units were as follows: Units Amount 2006 2005 2004 2006 2005 2004 Limited Partner Units Subscriptions 257.31 900.87 723.76 $869,489 $2,739,224 $1,692,212 Redemptions (398.62) (200.88) (800.01) (1,304,883) (597,653) (1,721,845) Total (141.31) 699.99 (76.25) (435,394) 2,141,571 (29,633) General Partner Units Subscriptions - - - - - - Redemptions - - - - - - Total - - - - - - Total Units Subscriptions 257.31 900.87 723.76 869,489 2,739,224 1,692,212 Redemptions (398.62) (200.88) (800.01) (1,304,883) (597,653) (1,721,845) Total (141.31) 699.99 (76.25) $(435,394) $2,141,571 $(29,633)
8. Trading Activities and Related Risks The Fund is engaged in speculative trading of U.S. and foreign futures contracts in commodities. The Fund is exposed to both market risk, the risk arising from changes in market value of the contracts, and credit risk, the risk of failure by another party to perform according to the terms of a contract. A certain portion of cash and Treasury Bills in trading accounts are pledged as collateral for commodities trading on margin. 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. Each U.S. commodity exchange, with the approval of the CFTC and the futures commission merchant, establish minimum margin requirements for each traded contract. The futures commission merchant may increase the margin requirements above these minimums for any or all contracts. In general, the amount of required margin should never fall below 10% of the Net Asset Value. The cash deposited in trading accounts at December 31, 2006 and 2005 was $467,760 and $1,986,606, respectively, which equals approximately 2.7% and 11.8% of Net Asset Value, respectively. The Fund also purchases United States Treasury Bills as a form of margin. At December 31, 2006 and 2005, $14,967,428 and $14,870,145, respectively, was invested in U.S. Treasury Bills, which approximates 88.0% and 88.3% of Net Asset Value, respectively. F-16 Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Notes to the Financial Statements For the Years Ended December 31, 2006, 2005 and 2004 8. Trading Activities and Related Risks, Continued Trading in futures contracts involves entering into contractual commitments to purchase or sell a particular commodity at a specified date and price. The gross or face amount of the contract, which is typically many times that of the Fund's net assets being traded, significantly exceeds the Fund's future cash requirements since the Fund intends to close out its open positions prior to settlement. As a result, the Fund is generally subject only to the risk of loss arising from the change in the value of the contracts. The market risk is limited to the gross or face amount of the contracts held of approximately $68,503,263 and $44,907,000 on long positions at December 31, 2006 and 2005, respectively. However, when the Fund enters into a contractual commitment to sell commodities, it must make delivery of the underlying commodity at the contract price and then repurchase the contract at prevailing market prices or settle in cash. Since the repurchase price to which a commodity can rise is unlimited, entering into commitments to sell commodities exposes the Fund to unlimited potential risk. Market risk is influenced by a wide variety of factors including government programs and policies, political and economic events, the level and volatility of interest rates, foreign currency exchange rates, the diversification effects among the derivative instruments the Fund holds and the liquidity and inherent volatility of the markets in which the Fund trades. The net unrealized gains on open commodity futures contracts at December 31, 2006 and 2005 were $1,933,681 and $250,902, respectively. Open contracts generally mature within three months of December 31, 2006. The latest maturity for open futures contracts is in September, 2007. However, the Fund intends to close all contracts prior to maturity. Credit risk is the possibility that a loss may occur due to the failure of a counter party to perform according to the terms of a contract. The Fund has a substantial portion of its assets on deposit with financial institutions. In the event of a financial institution's insolvency, recovery of Fund deposits may be limited to account insurance or other protection afforded deposits. The Fund has established procedures to actively monitor market risk and minimize credit risk although there can be no assurance that it will succeed. The basic market risk control procedures consist of continuously monitoring open positions, diversification of the portfolio and maintenance of a desirable margin-to-equity ratio. The Fund seeks to minimize credit risk primarily by depositing and maintaining its assets at financial institutions and brokers which it believes to be creditworthy. F-17 Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Notes to the Financial Statements For the Years Ended December 31, 2006, 2005 and 2004 9. Prior Year Reclassification At December 31, 2006, U.S. Government Treasury Bills were shown at market value on the Statement of Assets and Liabilities and were included as cash equivalents on the Statement of Cash Flows. Interest receivable of $34,073 at December 31, 2005 was reclassified as U.S. Treasury Bills and shown as cash equivalents in the Statement of Assets and Liabilities and Statement of Cash Flows respectively for 2005. 10. Derivative Financial Instruments and Fair Value of Financial Instruments A derivative financial instrument is a financial agreement whose value is linked to, or derived from, the performance of an underlying asset. The underlying asset can be currencies, commodities, interest rates, stocks, or any combination. Changes in the underlying asset indirectly affect the value of the derivative. As the instruments are recognized at fair value, those changes directly affect reported income. All investment holdings are recorded in the statement of financial condition at their net asset value (fair value) at the reporting date. Financial instruments (including derivatives) used for trading purposes are recorded in the statement of financial condition at fair value at the reporting date. Realized and unrealized changes in fair values are recognized in net investment gain (loss) in the period in which the changes occur. Interest income arising from trading instruments is included in the statement of operations as part of interest income. Notional amounts are equivalent to the aggregate face value of the derivative financial instruments. Notional amounts do not represent the amounts exchanged by the parties to derivatives and do not measure the Fund's exposure to credit or market risks. The amounts exchanged are based on the notional amounts and other terms of the derivatives. 11. Financial Highlights Year to Date 2006 2005 2004 2003 2002 Performance per unit (3) Net unit value, beginning of the year $3,357.08 $2,731.41 $1,750.45 $1,311.50 $1,181.89 Net realized and unrealized gains and losses on commodity transactions 505.12 1,206.19 1,573.93 735.70 298.13 Investment and other income 139.17 80.59 27.57 18.43 18.32 Expenses (1) (511.50) (661.11) (620.54) (315.18) (186.84) Net increase for the year 132.79 625.67 980.96 438.95 129.61 Net unit value at the end of the year $3,489.87 $3,357.08 $2,731.41 $1,750.45 $1,311.50 Net assets at the end of the year ($000) $17,015 $16,842 $11,791 $7,690 $6,200 Total return 3.94% 22.91% 56.04% 33.47% 10.97% Ratio to average net assets Investment and other income 4.22% 2.57% 1.23% 1.10% 1.48% Expenses (2) -4.36% -10.19% -17.91% -10.33% -7.62%
(1) Includes brokerage commissions (2) Excludes brokerage commissions (3) Investment and other income and expenses are calculated using the average number of units outstanding during the year. Net realized and unrealized gains and losses on commodity transactions is a balancing amount necessary to reconcile the change in net unit value. F-18 Atlas Futures Fund, Limited Partnership Affirmation of the Commodity Pool Operator For the Years Ended December 31, 2006, 2005 and 2004 ****************************************************************************** To the best of the knowledge and belief of the undersigned, the information contained in this report is accurate and complete. /s/ Michael Pacult July 3, 2007 Michael Pacult Date President, Ashley Capital Management, Inc. General Partner Atlas Futures Fund, Limited Partnership F-19