-----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, Cumzp188SZXKsuGVwDwTp6xRCdNsSY+WME7v6zwDfX+eZ9RE5CbI9afjQ6IEJ0sn bEgvcglsf/xnbBSo3lhp/Q== 0000865549-08-000008.txt : 20081119 0000865549-08-000008.hdr.sgml : 20081119 20081119155404 ACCESSION NUMBER: 0000865549-08-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20080930 FILED AS OF DATE: 20081119 DATE AS OF CHANGE: 20081119 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: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-53111 FILM NUMBER: 081201008 BUSINESS ADDRESS: STREET 1: 505 BROOKFIELD DRIVE CITY: DOVER STATE: DE ZIP: 19901 BUSINESS PHONE: 800-331-1532 MAIL ADDRESS: STREET 1: 505 BROOKFIELD DRIVE CITY: DOVER STATE: DE ZIP: 19901 10-Q 1 atlas10q0908.txt FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2008 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 333-53111 Atlas Futures Fund, Limited Partnership (Exact name of registrant as specified in its charter) Delaware 51-0380494 (State or other jurisdiction of incorporation (I.R.S. Employer or organization) Identification No.) 505 Brookfield Drive, Dover, DE 19901 (Address of principal executive offices, including zip code) (800) 331-1532 (Registrant's telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ X ] Smaller Reporting Company [ ] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [ ] No [X] 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) f the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ] Not applicable. 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. Not Applicable. Part 1 - FINANCIAL INFORMATION Item 1. Financial Statements. The reviewed financial statements for the Registrant for the nine months ended September 30, 2008 are attached hereto at page F-1 and made a part hereof. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. General Information 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 and high risk trading of commodity futures and options markets through the services of one or more commodity trading advisors it selects. Description of Fund Business The Fund grants the commodity trading advisors a power of attorney that is terminable at the will of either party to trade the equity assigned by the Fund. Clarke Capital Management, Inc. was granted a power of attorney by the Fund and served as a trading advisor for the Fund since the Fund's inception. From February 1, 2005 through the end of September, 2007, the Fund also engaged NuWave Investment Corp as a trading advisor. Clarke traded approximately 80% of the Fund's equity made available for trading and NuWave traded the other 20%. During the last week of September, 2007, the General Partner advised NuWave that, effective October 1, 2007, it would terminate the Advisory Agreement and Power of Attorney and requested that NuWave liquidate all positions it had open on behalf of the Fund as of the last business day of September, 2007, or as soon as practical thereafter. The management and incentive fees paid to NuWave are, accordingly, no longer paid. Clarke Capital Management, Inc. remains the sole trading advisor to the Fund. The commodity trading advisors selected to trade for the Fund have discretion to select the trades and do not disclose the methods they use to make those determinations in their disclosure documents or to the Fund or general partner. There is no promise or expectation of a fixed return to the partners. The partners must look solely to trading profits for a return their investment as the interest income is expected to be less than the fixed expenses to operate the Fund. Assets The general partner has sole authority to determine the percentage of our assets that will be held on deposit with the futures commission merchant, used for other investments, and held in bank accounts to pay current obligations. The partnership will maintain approximately 64% of its assets in a Treasury Direct Account maintained with the United States Department of the Treasury, and it also retains the right to invest in cash management funds that invest in U.S. Treasuries and have high liquidity. Funds maintained with the Department of Treasury and any cash management funds are in the name of the partnership and not commingled with those of any other entity. The general partner will maintain approximately 33% of our net assets with the futures commission merchant ("FCM") for margin for trading by the trading advisor. Approximately 3% of the previous month's net assets are retained in our bank accounts to pay expenses and redemptions. The Fund assets at the FCM consist of cash used as margin to secure futures (formerly called commodity) trades entered on its behalf by the commodity trading advisors it selects. The Fund deposits its cash with one or more FCM's (brokers) that hold and allocate the cash to use as margin to secure the trades made. The futures held in the Fund accounts are valued at the market price on the close of business each day by the FCM that holds the Fund equity made available for trading. The Capital accounts of the Partners are immediately responsible for all profit and losses incurred by trading and payment and accrual of the expenses of offering partnership interests for sale and the operation of the partnership. During the second quarter 2008, the fixed costs of operation of the Fund include continuing offering costs, fixed brokerage commissions of 11%, and accounting, legal and other operating fees that must be paid before the limited partners may earn a profit on their investment. 2 The Fund has not in the past and does not intend in the future to borrow from third parties. Its trades are entered pursuant to a margin agreement with the futures commission merchant which obligates the fund to the actual loss, if any, without reference or limit by the amount of cash posted to secure the trade. The limited partners are not personally liable for the debts of the Fund, including any trading losses. By its post effective amendment to its registration statement on Form S-1 filed June 24, 2008, the Fund updated its prospectus to include up-to-date performance and financials as well as to include the disclosures sent to partners via Notices since the last update of the prospectus. The Registrant will continue to offer Units for sale to the public via its fully amended and restated prospectus dated August 13, 2008 until the balance, as of September 30, 2008, of $1,262,970 in face amount of Units are sold. As of September 30, 2008, of the $15,000,000 in Units registered, $13,737,030 has been sold and, upon redemption by the holder, will not be resold. Absent the registration of additional Units, the Fund will be capitalized at $15,000,000 subject to redemption of Units by the holders as they request, which are expected to be honored by the General Partner. An Investment in the Fund Depends upon Redemption of Fund Units The Fund Units are not traded and they have no market value. Liquidity of an investment in the Fund depends upon the credit worthiness of the exchanges, brokers, and third parties of off exchange traded futures that hold Fund equity or have a lien against Fund assets for payment of debts incurred. Those parties must honor their obligations to the Fund for the Fund to be able to obtain the return of its cash from the futures commission merchant that holds the Fund account. The commodity trading advisors select the markets and the off exchange instruments to be traded. The General Partner selects the futures commission merchants to hold the Fund assets. Both the commodity trading advisors and the general partner believe all parties who hold Fund assets or are otherwise obligated to pay value to the Fund are credit worthy. Margin is an amount to secure the entry of a trade and is not a limit of the profit or loss to be gained from the trade. The general partner currently allocates approximately 97% of the Fund equity to be used as margin to enter trades. Although it is customary for the commodity trading advisors to use 40% or less of the equity available as margin, there is no limit imposed by the Fund upon the amount of equity the advisors may commit to margin. It is possible for the Fund to suffer losses in excess of the margin it posts to secure the trades made. To have the purchase price or appreciation, if any, of the Units paid to them, partners must use the redemption feature of the Partnership. Distributions, although possible in the sole discretion of the general partner, are not expected to be made. There is no current market for the Units sold, none is expected to develop and the limited partnership agreement limits the ability of a partner to transfer the Units. Results of Operations The Fund is subject to ongoing offering and operating expenses; however, profits or losses are primarily generated by the commodity trading advisor by methods that are proprietary to it. These results are not to be construed as an expectation of similar profits in the future. The Limited Partnership Agreement grants solely to the General Partner the right to select the trading advisor or advisors and to otherwise manage the operation of the Fund. The CTAs selected are responsible for the selection of trades. As evidenced by the increase in per unit value disclosed above, the Fund's CTAs have been successful overall. See the Registration Statement, incorporated by reference herein, for an explanation of the operation of the Fund. The initial start-up costs attendant to the sale of Units by use of a prospectus which has been filed with the Securities and Exchange Commission are substantial. The results of the partial year 1999, the years 2000 through 2007, and the nine months ended September 30, 2008 reflect the absorption of these costs by the Fund. 3 The Fund's realized and unrealized trading gains (losses) before commissions were $8,358,283 [$1888.23 per Unit] and $3,587,668[$786.16 per Unit] for the nine months ended September 30, 2008 and September 30, 2007, respectively. The Fund's results after payment and accrual of expenses for the nine months ended September 30, 2008 and September 30, 2007 were profits (losses) of $4,119,748 [$928.11 per Unit] and $1,479,274 [$325.97 Unit], respectively. The net asset value ("NAV") per Unit as of September 30, 2008, was $5,103.23, an increase of 33.74% from the September 30, 2007 NAV per Unit of $3,815.84. The increase includes the intervening quarters of 2007. The above described performance was primarily due to the trading of Clarke Capital Management, currently the sole commodity trading advisor that trades for the Fund via its proprietary method, with the balance of the income from interest earned on deposits. If a large movement occurs in a sector that a trading advisor trades, such as agriculture, financials, metals or softs, it does not necessarily mean that the trading advisor will engage in trades that capture such moves. Accordingly, market movements and conditions are not necessarily correlated with Fund performance. Past performance is not necessarily indicative of future results. Registrant's average net assets during the nine months ended September 30, 2008 were approximately $21,945,754, an increase of 29.15% over average net assets during the nine months ended September 30, 2007 of $16,992,064. The increase includes increases made during the intervening quarters of 2007. The increases in average net assets during the comparative nine month periods were primarily due to the effects of investment returns generated by the commodity trading advisor. Net additions (withdrawals) for the nine months ended September 30, 2008 and September 30, 2007 were $(380,336) and $(1,374,200), respectively. Interest income is earned on the Fund's assets, either through investment in short term cash instruments or through its deposits with the clearing broker. Interest income to the Fund varies monthly according to interest rates, trading performance, subscriptions and redemptions. Interest income for the nine months ended September 30, 2008 was $244,845, a 56.41% decrease over the interest income for the nine months ended September 30, 2007 of $561,691. The decrease in interest income for the comparative nine month periods was primarily due to significantly reduced short term interest rates. Brokerage commissions of 11% are calculated on the Fund's total trading equity as of the beginning of each month and therefore, vary according to monthly trading performance, subscriptions and redemptions. Commissions for the nine months ended September 30, 2008 were $1,834,697, a 32.44% increase over the commissions for the nine months ended September 30, 2007 of $1,385,287. The increase in commissions for the comparative nine month periods was primarily due to increased average net asset levels. Pursuant to the Trading Advisory Agreement, the Fund paid a management fee to a trading advisor that no longer trades for the Fund, which was calculated on the net asset value of the equity allocated to it to trade as of the end of each month, and therefore, was affected by monthly trading performance, subscriptions and redemptions. See Note 5 to the financial statements herein for the historical management fee amounts. The trading advisor was removed as of October 1, 2007; accordingly, there were no management fees paid for the nine months ended September 30, 2008. Management fees for the nine months ended September 30, 2007 were $63.946. Pursuant to the Trading Advisory Agreement, the Fund pays a quarterly incentive fee to each trading advisor that has traded for the Fund. See Note 5 to the financial statements herein for the current and historical incentive fees. Trading advisor incentive fees during the nine months ended September 30, 2008 and September 30, 2007 were $2,505,271 and $1,030,459, respectively. The amounts are directly related to the trading performance of the trading advisors. Because CTA's earn their incentive fees independent of each other, during periods when there are multiple advisors, it is possible for one advisor to earn an incentive fee even if the other CTA or the Fund overall has negative performance. Operating expenses include accounting, audit, tax, and legal fees, as well as regulatory costs and printing and postage costs related to reports sent to limited partners. Operating expenses during the nine months ended September 30, 2008 and September 30, 2007 were $143,411 and $170,393, respectively. The decrease over the comparative nine month periods was primarily due to changes in accountants that were in progress during the prior period. Inflation has had no material impact on the operations or on the financial condition of the Fund from inception through September 30, 2008. 4 Item 3. Quantitative and Qualitative Disclosures about Market Risk The business of the Fund is speculative and involves a high degree of risk of loss. See the Fund's Registration Statement and prospectus contained therein, incorporated herein, for a full description of the risks attendant to Fund business. Item 4T. Controls and Procedures Disclosure Controls and Procedures The Registrant has adopted procedures in connection with the operation of its business including, but not limited to, the review of account statements sent to the General Partner before the open of business each day that disclose the positions held overnight in the Fund accounts, the margin to hold those positions, and the amount of profit or loss on each position, and the net balance of equity available in each account. The Fund brokerage account statements and financial books and records accounts are prepared by an independent CPA Firm and then are reviewed each quarter and audited each year by a different independent CPA firm. The General Partner of the Fund, under the actions of its sole principal, Michael Pacult, has evaluated the effectiveness of the design and operation of its disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) with respect to the Fund as of the end of the period covered by this Report. Based on their evaluation, Mr. Pacult has concluded that these disclosure controls and procedures are effective. Changes in Internal Control over Financial Reporting There were no changes in the General Partner's internal control over financial reporting during the quarter ended September 30, 2008 that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting applicable to the Fund. Part II - OTHER INFORMATION Item 1. Legal Proceedings There have been no legal proceedings against the Fund, its General Partner, the CTA, the IB or any of their Affiliates, directors or officers. The FCM, MF Global Inc. ("MFG"), (MFG was formerly known as Man Financial Inc. ("MFI") until the change of name to MFG was effected on July 19, 2007), has disclosed following described reportable events. Neither the Fund nor the General Partner is a party to any of these events and they are included in reliance upon a report supplied by MFG without verification by the General Partner. MFG has represented to the General Partner that that none of the events it has reported below will not now, or at any time in the future, interfere with its performance as the FCM for the Fund's account. MF Global Inc. ("MFG") is registered under the Commodity Exchange Act, as amended, as a futures commission merchant and a commodity pool operator, and is a member of the National Futures Association in such capacities. In addition, MFG is registered with the Financial Industry Regulatory Authority as a broker-dealer. MFG was formerly known as Man Financial Inc. ("MFI") until the change of name to MFG was effected on July 19, 2007. MFG is a member of all major U.S. futures exchanges and most major U.S. securities exchanges. MFG's main office is located at 717 Fifth Avenue, 9th Floor, New York, New York 10022-8101. MFG's telephone number at such location is (212) 589-6200. At any given time, MFG is involved in numerous legal actions and administrative proceedings, which in the aggregate, are not, as of the date of this report, expected to have a material effect upon its condition, financial or otherwise, or to the services it will render to the partnership. There have been no administrative, civil or criminal proceedings pending, on appeal or concluded against MFG or its principals within the five years preceding the date of this Memorandum that MFI would deem material for purposes of Part 4 of the Regulations of the Commodity Futures Trading Commission, except as follows: In May, 2006, MFI was sued by the Receiver for Philadelphia Alternate Asset Fund ("PAAF") and associated entities for common law negligence, common law fraud, violations of the Commodity Exchange Act and RICO violations (the "Litigation"). In December, 2007, without admitting any liability of any party to the Litigation to any other party to the Litigation, the Litigation was settled with MFI agreeing to pay $69 million, plus $6 million of legal expenses, to the Receiver, in exchange for releases from all applicable parties and the dismissal of the Litigation with prejudice. In a related action, MFI settled a CFTC administrative proceeding (In the Matter of MF Global, f/k/a Man Financial Inc., and Thomas Gilmartin) brought by the CFTC against MFI and one of its employees for failure to supervise and recordkeeping violations. Without admitting or denying the allegations, MFI agreed to pay a civil monetary penalty of $2 million and accepted a cease and desist order. MFI has informed the Managing Member, the Trading Advisor and the Selling Agent that the settlements referenced above will not materially affect MFG or its ability to perform as a clearing broker. 5 On February 20, 2007, MFI also settled a CFTC administrative proceeding (In the Matter of Steven M. Camp and Man Financial Inc., CFTC Docket No. 07-04) in which MFI was alleged to have failed to supervise one of its former associated persons (AP) who was charged with fraudulently soliciting customers to open accounts at MFI. The CFTC alleged that the former AP misrepresented the profitability of a web-based trading system and of a purported trading system to be traded by a commodity trading advisor. Without admitting or denying the allegation, MFI agreed to pay restitution to customers amounting to $196,900.44 and a civil monetary penalty of $120,000. MFI also agreed to a cease and desist order and to strengthen its supervisory system for overseeing sales solicitations by employees in connection with accounts to be traded under letters of direction in favor of third party system providers. On March 6, 2008, and thereafter, four virtually identical proposed class action securities suits were filed against MF Global Ltd., certain of its officers and directors, and Man Group plc. The complaints allege that the registration statement and prospectus issued in connection with MF Global Ltd.'s initial public offering in July 2007, were materially false and misleading to the extent that representations were made regarding the company's risk management policies, procedures and systems. The allegations are based upon the company's disclosure of $141.5 million in trading losses incurred in a single day by an associated person in his personal trading account, which losses the company was responsible to pay as an exchange clearing member. In connection with the incident involving the trading losses referenced above, the CFTC issued a formal order of investigation naming MFG and the AP. The CFTC, in coordination with the Chicago Mercantile Exchange ("CME"), has been collecting documentation and taking depositions of MFG employees. This investigation is ongoing and it is not yet certain what actions the CFTC and/or the CME might take. MF Global has established an accrual of $10.0 million to cover potential CFTC civil monetary penalties in this matter and the two CFTC matters referred to below. This is MF Global's best estimate at this time and there is no assurance that the $10.0 million accrual will be sufficient for these purposes or that the CFTC will not require remedial measures. No accrual has been made for the CME matter. In May 2007, MFG and two of its employees received what is commonly referred to as a "Wells notice" from the staff of the Division of Enforcement of the CFTC. The notice relates to two trades MFG executed in 2004 for a customer and reported to NYMEX. The notice indicates that the Division of Enforcement is considering recommending to the CFTC that a civil proceeding be commenced against MFG and the two employees, in which the CFTC would assert that MFG and the two employees violated Section 9(a)(4) of the Commodity Exchange Act, which generally prohibits any person from willfully making any false, fictitious, or fraudulent statements or representations, or making or using any false writing or document knowing the same to contain any false, fictitious, or fraudulent statement to a board of trade. The Division of Enforcement staff contends that MFG and the individuals presented or participated in the submission of information to NYMEX that falsely represented the dates on which the trades in question occurred. MFG and the individuals dispute these contentions. It is not yet certain what action the CFTC will take, but see the reference to a $10.0 million accrual above. 6 Additionally, MF Global is currently cooperating in an investigation conducted by a New York County Grand Jury in conjunction with the U.S. Attorney's Office in the Southern District of New York, with which the CFTC and the SEC are also involved. The investigation centers around trading by a market making energy trader at Bank of Montreal (BMO) who allegedly mismarked his book. An MFG broker did business with the BMO trader, and used bid and offer prices for forward OTC trades the BMO trader sent to him as a basis for prices which the MFG broker disseminated to MFG's customers, including BMO, as price indications that reflected a consensus. MFG has been told that neither MFG nor the broker is a target of the Grand Jury investigation. In connection with this investigation, MFG has been served by the CFTC with a Wells notice in anticipation of civil charges against the broker under the anti-fraud provisions of CFTC Regulation 33.10 and MFG with derivative liability for the broker's actions. It is not yet certain what action the CFTC may take against MFG or the broker, but see the reference to a $10.0 million accrual above. The Fund is not aware of any threatened or potential claims or legal proceedings to which the Fund is a party or to which any of its assets are subject. Item 1A. Risk Factors There have been no material changes from risk factors as previously disclosed in the Fund's 2007 Form 10-K. The risks of the Fund are (1) described fully in its prospectus filed with its registration statement on Form S-1, which is incorporated herein by reference (2) described in summary in Part I of this Form 10-Q, which is incorporated herein by reference. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. None Item 3. Defaults Upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other Information (a) None (b) None Item 6. Exhibits 31.1 Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 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, 2008, 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/ Michael Pacult Mr. Michael Pacult Sole Director, Sole Shareholder, President, and Treasurer of the General Partner Date: November 19, 2008 7 ATLAS FUTURES FUND, LIMITED PARTNERSHIP (A Delaware Limited Partnership) NINE MONTHS ENDED SEPTEMBER 30, 2008 GENERAL PARTNER: Ashley Capital Management, Inc. % Corporate Systems, Inc. 505 Brookfield Drive Dover, Kent County, Delaware 19901 Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Index to the Financial Statements Page Report of Independent Registered Public Accounting Firm F-2 Statements of Assets and Liabilities F-3 Schedule of Investments - Cash and Securities - September 30, 2008 F-4 Schedule of Investments - Cash and Securities - December 31, 2007 F-5 Schedule of Investments - Futures Contracts - September 30, 2008 F-6 Statements of Operations F-7 Statements of Changes in Net Assets F-8 Statements of Cash Flows F-9 Notes to Financial Statements F-10 - F-16 Affirmation of the Commodity Pool Operator F-17 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 reviewed the accompanying statements of assets and liabilities, including the schedule of investments, of Atlas Futures Fund, Limited Partnership as of September 30, 2008 and the related statements of operations for the three and nine months ended September 30, 2008 and 2007, and changes in net assets and cash flows for the nine months ended September 30, 2008 and 2007. These financial statements are the responsibility of the Partnership's management. We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Accounting Oversight Board (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 review, we are not aware of any material modifications that should be made to such interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America. We have previously audited, in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States), the statement of assets and liabilities of Atlas Futures Fund, Limited Partnership as of December 31, 2007 and the related statements of operations, changes in net assets and cash flows for the year then ended (not presented herein); and in our report dated March 29, 2008, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying statement of assets and liabilities as of December 31, 2007 is fairly stated, in all material respects, in relation to the statement of assets and liabilities from which it has been derived. /s/ Jordan, Patke & Associates, Ltd. Jordan, Patke & Associates, Ltd. Lincolnshire, Illinois November 18, 2008 300 Village Green Drive, Suite 210 * Lincolnshire, Illinois 60069 Phone: (847) 913-5400 * Fax: (847) 913-5435 F-2 Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Statements of Assets and Liabilities (A Review) September 30, December 31, 2008 2007 Assets Investments Equity in broker trading accounts Cash and cash equivalents at broker $7,339,711 $19,285,953 Net unrealized gain on open futures contracts 9,017 - Total equity in broker trading accounts 7,348,728 19,285,953 U.S. Treasury Bills (cost $14,932,003. and $0) 14,984,294 - Cash 129,179 47,167 Money market fund 1,008 - Interest receivable 5,714 44,109 Total assets 22,468,923 19,377,229 Liabilities Partner redemptions payable 11,023 53,817 Accrued commissions payable to related parties 51,625 7,344 Incentive fees payable - 657,278 Other accrued liabilities 30,152 22,080 Total Liabilities 92,800 740,519 Net assets $22,376,123 $18,636,710 Analysis of net assets Limited partners $22,376,123 $18,636,710 General partners - - Net assets (equivalent to $5,103.23 and $4,175.12 per unit) $22,376,123 $18,636,710 Partnership units outstanding Limited partners units outstanding 4,384.70 4,463.75 General partners units outstanding - - Total partnership units outstanding 4,384.70 4,463.75
The accompanying notes are an integral part of the financial statements F-3 Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Schedule of Investments - Cash and Securities September 30, 2008 (A Review) Fair Value Percent Description Maturity Date Cost Face Value Local Currency U.S. Dollars of Net Assets United States Treasury Bills: United States Treasury Bill October-08 $4,975,986 $5,000,000 4,999,466 $4,999,466 United States Treasury Bill October-08 4,979,652 5,000,000 4,996,383 4,996,383 United States Treasury Bill November-08 4,976,365 5,000,000 4,988,445 4,988,445 Total United States Treasury Bills $14,932,003 $15,000,000 $14,984,294 66.97% Cash and cash equivalents in trading accounts: United States Markets 7,430,924 $7,430,924 Total cash and cash equivalents in trading accounts denominated in U.S. Dollars 7,430,924 33.21% Cash denominated in foreign currency: Euro Markets - Euro (64,725) (91,213) Total cash denominated in foreign currency (91,213) -0.41% Total cash and cash equivalents in trading accounts $7,339,711 32.80% Money market fund (1,007.71 shares at $1 per share) 1,008 $1,008 0.00%
The accompanying notes are an integral part of the financial statements F-4 Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Schedule of Investments - Cash and Securities December 31, 2007 Fair Value Percent Description Maturity Date Face Value Local Currency U.S. Dollars of Net Assets Cash and cash equivalents in trading accounts: Cash denominated in U.S. Dollars: United States Markets 19,246,172 $19,246,172 103.27% Total cash denominated in U.S. Dollars 19,246,172 103.27% Total cash and cash equivalents denominated in U.S. Dollars 19,246,172 103.27% Cash denominated in foreign currency: Australian Dollar Markets - AUD 45,394 39,781 0.21% Total cash denominated in foreign currency 39,781 0.21% Total cash and cash equivalents $19,285,953 103.48%
The accompanying notes are an integral part of the financial statements F-5 Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Schedule of Investments - Futures Contracts September 30, 2008 A Review Percent Fair Value of Net Assets Description Expiration Date Contracts Local Currency USD Net unrealized gain (loss) on open futures contracts Euro commodity futures positions held long: EURX EUROBOBL December 2008 202 (41,620) $(58,653) -0.26% United States commodity futures positions held short: IMM CANADIAN December 2008 101 67,670 $67,670 0.30% Net commodity futures positions $9,017 0.04%
The accompanying notes are an integral part of the financial statements F-6 Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Statements of Operations (A Review) Three Months Ended September 30, Nine Months Ended September 30, 2008 2007 2008 2007 Investment income Interest income $89,133 $191,578 $244,845 $561,691 Total investment income 89,133 191,578 244,845 561,691 Expenses Commission expense 658,689 448,031 1,834,697 1,385,287 Management fees - 21,164 - 63,946 Incentive fees - 579,381 2,505,271 1,030,459 Professional accounting and legal fees 39,500 30,424 115,500 156,409 Other operating and administrative expenses 6,181 881 27,911 13,984 Total expenses 704,370 1,079,881 4,483,379 2,650,085 Net investment (loss) (615,237) (888,303) (4,238,534) (2,088,394) Realized and unrealized gain (loss) from investments and foreign currency Net realized gain (loss) from: Investments (1,283,434) 2,265,090 9,649,429 3,989,256 Foreign currency transactions (430,297) (759,005) (1,300,163) 1,226,693 Net realized gain (loss) from investments and foreign currency transactions (1,713,731) 1,506,085 8,349,266 5,215,949 Net increase (decrease) in unrealized appreciation (depreciation) on: Investments 9,920 148,727 67,670 (1,058,292) Translation of assets and liabilities in foreign currencies (58,653) (47,423) (58,653) (589,989) Net increase (decrease) in unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies (48,733) 101,304 9,017 (1,648,281) Net realized and unrealized income (loss) from investments and foreign currency (1,762,464) 1,607,389 8,358,283 3,567,668 Net increase (decrease) in net assets resulting from operations $(2,377,701) $719,086 $4,119,749 $1,479,274 Net income (loss) per unit (for a single unit outstanding during the entire period) Limited partnership unit $(541.38) 166.66 $928.11 $325.97 General partnership unit $- $- $- $-
The accompanying notes are an integral part of the financial statements F-7 Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Statements of Changes in Net Assets (A Review) Nine Months Ended September 30, 2008 2007 Increase (decrease) in net assets from operations Net investment (loss) $(4,238,534) $(2,088,394) Net realized gain from investments and foreign currency transactions 8,349,266 5,215,949 Net increase (decrease) in unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies 9,017 (1,648,281) Net increase in net assets resulting from operations 4,119,749 1,479,274 Capital contributions from limited partners 311,647 179,561 Redemptions by limited partners (691,983) (1,553,761) Total increase in net assets 3,739,413 105,074 Net assets at the beginning of the period 18,636,710 17,014,786 Net assets at the end of the period $22,376,123 $17,119,860
The accompanying notes are an integral part of the financial statements F-8 Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Statements of Cash Flows (A Review) Nine Months Ended September 30, 2008 2007 Cash Flows from Operating Activities Net increase (decrease) in net assets resulting from operations $4,119,749 $1,479,274 Adjustments to reconcile net increase in net assets from operations to net cash provided by operating activities: Changes in operating assets and liabilities: Unrealized appreciation (depreciation) on investments (9,017) 1,648,281 (Increase) decrease in interest receivable 38,395 (48,804) (Increase) in prepaid fees - (18,038) Increase (decrease) in accrued commissions payable 44,281 (7,519) Increase (decrease) in accrued management and incentive fees (657,278) 365,518 Increase in other payables and accruals 8,072 8,351 Net cash provided by operating activities 3,544,202 3,427,063 Cash Flows from Financing Activities Proceeds from sale of units, net of sales commissions 311,647 179,561 Partner redemptions (734,777) (1,460,812) Net cash (used in) financing activities (423,130) (1,281,251) Net increase in cash and cash equivalents 3,121,072 2,145,812 Cash and cash equivalents, beginning of period 19,333,120 15,491,218 Cash and cash equivalents, end of period $22,454,192 $17,637,030 End of period cash and cash equivalents consist of: Cash and cash equivalents at broker $7,339,711 $17,419,036 Treasury Bills 14,984,294 - Cash 129,179 217,994 Money market fund 1,008 - Total cash and cash equivalents $22,454,192 $17,637,030
The accompanying notes are an integral part of the financial statements F-9 Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Notes to the Financial Statements Nine Months Ended September 30, 2008 and 2007 (A Review) 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. As of September 30, 2007, the sole registered commodity trading advisor ("CTA") of the fund was Clarke Capital Management, Inc. ("Clarke"), which has served as CTA since commencement of Fund business. From February 1, 2005 until October 1, 2007, NuWave Investment Corp. ("NuWave") also served as CTA. The CTAs 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. 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 Act of 1933 (the Act). The Fund is subject to the regulations of the SEC and the reporting requirements of the Securities and Exchange Act of 1934. 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 Statement of Cash Flows - For purposes of the Statement of Cash Flows, the Fund considers cash at broker, cash and money market funds to be cash equivalents. Net cash provided by operating activities includes no cash payments for interest or income taxes for the periods ended September 30, 2008 and 2007. F-10 Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Notes to the Financial Statements Nine Months Ended September 30, 2008 and 2007 (A Review) 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. Recently Issued Accounting Pronouncements In July 2006, the Financial Accounting Standards Board (FASB) issued interpretation No. 48 (FIN 48) entitled "Accounting for Uncertainty in Income Taxes - an interpretation of FASB 109". FIN 48 prescribes the minimum recognition threshold a tax position must meet in connection with accounting for uncertainties in income tax positions taken or expected to be taken by an entity before being measured and recognized in the financial statements. Adoption of FIN 48 was required for fiscal years beginning after December 15, 2006. The implementation of FIN 48 did not have a material impact on the Fund's financial statements. In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (FAS 157). FAS 157 defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America, and expands disclosures about fair value measurements. While FAS 157 does not require any new fair value measurements, for some entities, the application of FAS 157 may change current practice. FAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The implementation of FAS 157 did not have a material impact on the Fund's financial statements. 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. F-11 Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Notes to the Financial Statements Nine Months Ended September 30, 2008 and 2007 (A Review) 4. Limited Partnership Agreement - Continued 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 - After holding the investment for a minimum of twelve months, 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. 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 Clarke is unchanged. A monthly continuing service fee of 4% (annual rate) of the investment in the Fund (as defined) was 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 October 1, 2007, NuWave ceased to be a CTA of the Fund. 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% remained unchanged during the period over which NuWave served as CTA. Effective October 1, 2007, NuWave Investment Corp. was removed as a commodity trading advisor to the Fund and it ceased earning management and incentive fees. 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% and 50%, respectively, owned by Michael Pacult, the Fund's individual CPO and president of the corporate CPO. Related party commissions and fees were as follows: F-12 Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Notes to the Financial Statements Nine Months Ended September 30, 2008 and 2007 (A Review) 6. Related Party Transactions - Continued Commissions and fees included in expense: Nine Months Ended September30, 2008 2007 Ashley Capital Management, Inc. $665,901 $501,177 Futures Investment Company 1,041,045 768,010 Total related party expenses $1,706,946 $1,269,187 Commissions and fees included in accrued expenses: September 30, December 31, 2008 2007 Ashley Capital Management, Inc. $18,928 $494 Futures Investment Company 32,697 - Total accrued expenses to related parties $51,625 $494 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 September 30, 2008 and 2007, partnership units were valued at $5,103.41 and $3.815.84. respectively. Transactions in partnership units were as follows: Units Amount 2008 2007 2008 2007 Limited Partner Units Subscriptions 59.40 49.59 $311,647 $179,561 Redemptions (138.45) (438.54) (691,983) (1,553,761) Total (79.05) (388.95) (380,336) (1,374,200) General Partner Units Subscriptions - - - - Redemptions - - - - Total - - - - Total Units Subscriptions 59.40 49.59 311,647 179,561 Redemptions (138.45) (438.54) (691,983) (1,553,761) Total (79.05) (388.95) $(380,336) $(1,374,200)
F-13 Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Notes to the Financial Statements Nine Months Ended September 30, 2008 and 2007 (A Review) 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 September 30, 2008 and December 31, 2007 was $7,339,711 and $19,285,953, respectively, which equals approximately 32.8% and 103.5% of Net Asset Value, respectively. Cash exceeded Net Asset Value because of accrued expenses and partner redemptions at December 31, 2007. Cash payments for these expenses were made prior to the end of the subsequent fiscal quarter. Prior to April, 2007, the fund purchased United States Treasury Bills as a form of margin and the Fund earned interest on this margin. As of April 2007, the Fund benefits from an arrangement with the FCM whereby the FCM pays the Fund the daily Treasury Bill or Libor rate minus 10 basis points on the net liquidity of the Fund. Beginning in the second quarter of 2008, the Fund resumed investing in United States Treasury Bills. 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 $40,753,688. and $0 on long positions at September 30, 2008 and December 31, 2007, 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. F-14 Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Notes to the Financial Statements Nine Months Ended September 30, 2008 and 2007 (A Review) 8. Trading Activities and Related Risks - Continued The net unrealized gains on open commodity futures contracts at September 30, 2008 and December 31, 2007 were $9,017. and $0, respectively. Open contracts generally mature within three months of September 30, 2008 The latest maturity for open futures contracts is in December 2008. 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. 9. Financial Instruments with Off-Balance Sheet Credit and Market Risk All financial instruments are subject to market risk, the risk that future changes in market conditions may make an instrument less valuable or more onerous. As the instruments are recognized at fair market value, those changes directly affect reported income. Included in the definition of financial instruments are securities, restricted securities and derivative financial instruments. Theoretically, the investments owned by the Fund directly are exposed to a market risk (loss) equal to the notional value of the financial instruments purchased and substantial liability on certain financial instruments purchased short. Generally, financial instruments can be closed. However, if the market is not liquid, it could prevent the timely close-out of any unfavorable positions or require the Fund to hold those positions to maturity, regardless of the changes in their value or the trading advisor's investment strategies. Credit risk represents the accounting loss that would be recognized at the reporting date if counterparties failed to perform as contracted. Concentrations of credit risk (whether on or off balance sheet) that arise from financial instruments exist for groups of counterparties when they have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions. 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. F-15 Atlas Futures Fund, Limited Partnership (A Delaware Limited Partnership) Notes to the Financial Statements Nine Months Ended September 30, 2008 and 2007 (A Review) 11. Indemnifications In the normal course of business, the Fund enters into contracts and agreements that contain a variety of representations and warranties and which provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. The Fund expects the risk of any future obligation under these indemnifications to be remote. 12. Financial Highlights Three Months Ended September 30, Nine Months Ended September 30, 2008 2007 2008 2007 Performance per unit (1) Net unit value, beginning of the period $5,644.61 $3,649.18 $4,175.12 $3,489.87 Net realized and unrealized gain (loss) on commodity transactions (402.29) 372.54 1,888.23 786.16 Investment and other income 20.36 44.40 55.58 123.77 Expenses (159.45) (250.28) (1,015.70) (583.97) Net increase (decrease) for the period (541.38) 166.66 928.11 325.97 Net unit value at the end of the period $5,103.23 $3,815.84 $5,103.23 $3,815.84 Net assets at the end of the period ($000) $22,376 $17,120 $22,376 $17,120 Total return (2) -9.59% 4.57% 22.23% 9.34% Number of units outstanding at the end of the period 4,384.70 4,486.53 4,384.70 4,486.53 Ratio to average net assets Investment and other income (3) 1.49% 4.66% 1.49% 4.41% Expenses (3) -11.76% -26.29% -27.24% -20.79%
Total return is calculated based on the change in value of a unit during the period. An individual partner's total return and ratios may vary from the above total returns and ratios based on the timing of additions and redemptions. (1) For the quarter ended September 30, 2008 and 2007, investments and other income and expenses and net realized and unrealized gains and losses on commodity transactions are calculated based on a single unit outstanding during the period. (2) Not annualized (3) Annualized F-16 Atlas Futures Fund, Limited Partnership Affirmation of the Commodity Pool Operator Nine Months Ended September 30, 2008 and 2007 ******************************************************************************** To the best of the knowledge and belief of the undersigned, the information contained in this report is accurate and complete. /s/ Michael Pacult November 19, 2008 Michael Pacult Date President, Ashley Capital Management, Inc. General Partner Atlas Futures Fund, Limited Partnership F-17 EX-31 2 atlas10q0908ex31.txt Exhibit 31.01 CERTIFICATION I, Michael Pacult, do hereby certify that: 1. I have reviewed this quarterly report on Form 10-Q of Atlas Futures Fund, Limited Partnership; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonable likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. By: /s/ Michael Pacult Michael Pacult President of Ashley Capital Management, Inc. General Partner of the Registrant Date: November 19, 2008 EX-32 3 atlas10q0908ex32.txt EXHIBIT 32.01 CERTIFICATION BY CHIEF EXECUTIVE OFFICER & CHIEF FINANCIAL OFFICER I, Michael Pacult, the Chief Executive Officer and Chief Financial Officer of Ashley Capital Management, Inc. as general partner of Atlas Futures Fund, L.P., certify that (i) the Form 10-Q for the period ended September 30, 2008 of Atlas Futures Fund, L.P. fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Form 10-Q for the period ended September 30, 2008 fairly presents, in all material respects, the financial condition and results of operations of Atlas Futures Fund, L.P. ATLAS FUTURES FUND, LIMITED PARTNERSHIP By: Ashley Capital Management, Inc., General Partner By: /s/ Michael Pacult Michael Pacult Chief Executive Officer & Chief Financial Officer Date: November 19, 2008 -----END PRIVACY-ENHANCED MESSAGE-----