SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission file number ____333-61217______
Atlas Futures Fund, Limited Partnership
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 51-0380494
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
5916 N. 300 West, Fremont, IN 46737
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (260) 833-1505
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Former Name, Address and Fiscal Year, if Changed, Since Last Report
No such changes occurred
Indicate by check [X] whether the registrant (1)has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]
Part 1 - FINANCIAL INFORMATION
Item 1. Financial Statements.
The financial statements for the Registrant for the third quarter ended
September 30, 2003 prepared under the supervision of Registrant by James
Hepner, Certified Public Accountant, and reviewed by Registrant's auditor,
Frank L. Sassetti & Co., Certified Public Accountants, are attached hereto
and made a part hereof.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Effective September 10, 2003, Michael P. Pacult was added as an additional
general partner and commodity pool operator to the Registrant.
Effective September 10, 2003, Futures Investment Company will no longer serve
the Registrant as the introducing broker.
Effective November 3, 2003, Citigroup Global Markets, Inc. 388 Greenwich St.,
New York, New York 10013 was appointed to serve as the futures commission
merchant for the Registrant. The Citigroup acts only as the clearing broker
for the Fund and, as such, is paid commissions for executing and clearing
trades. Citigroup has not passed upon the adequacy or accuracy of the
Registrant's prospectus or any post effective amendment. Citigroup will not
act in any supervisory capacity with respect to the general partner nor
participate in the management of the general partner or the Registrant.
Therefore, prospective investors in Registrant should not rely on Citigroup's
agreement to clear trades for the Registrant, or for any other reason related
to Citigroup, in deciding whether or not to purchase interests in the
Registrant.
Effective November 3, 2003, Refco, Inc. will no longer serve the Registrant
as the futures commission merchant.
During the past quarter and in the future, Registrant, did and will, pursuant
to the terms of the Limited Partnership Agreement, engage in the business of
speculative trading of commodity futures and options markets through the
services of its commodity trading advisor, Clarke Capital Management, Inc.
The Units are sold on a best efforts basis through the broker dealer and
selling agent, Futures Investment Company, at the Net Asset Value per Unit as
of the close of business on the last day of the month in which the General
Partner receives subscriptions.
The Registrant intends to continue to offer Units for sale to the public via
its prospectus, as amended and restated from time to time, at the month end
Net Asset Value per Unit until the total amount of registered securities,
$15,000,000, is sold or the offering terminates.
To obtain a return of invested capital or appreciation, if any, purchasers of
Units must look solely to the redemption feature of the Partnership or to the
General Partner, in its sole judgment, to elect to make distributions. There
is no current market for the Units sold and none is expected to develop nor
is the General Partner expected to make distributions.
Part II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
Effective September 10, 2003, Michael P. Pacult became the sole shareholder
and sole Director and President of Ashley Capital Management, Inc, the
Corporate GP and a commodity pool operator of the Registrant. Effective that
same date, Shira Del Pacult transferred her 100% shareholding in the
Corporate GP to her husband, Michael Pacult and she resigned as a Director
and President of the Corporate GP. She remains as an officer in charge of
client relations for the Corporate GP.
On August 21, 2003, the Partners of the Registrant were provided with notice
that Ms. Shira Del Pacult will resign as an individual General Partner of
Registrant effective 120 days from the date of the Notice. After her
resignation, the Corporate GP and Michael P. Pacult, individual GP, will
continue to mange the Registrant.
Item 6. Exhibits and Reports on Form 8-K
(a) The Registrant filed an 8-K on September 22, 2003 that it hereby
incorporates by reference in this Report.
(b) None
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Form 10-Q for the
period ended September 30, 2003, to be signed on its behalf by the
undersigned, thereunto duly authorized.
Registrant: Atlas Futures Fund, Limited Partnership
By Ashley Capital Management, Incorporated
Its Corporate General Partner
By: /s/ Michael P. Pacult
Mr. Michael P. Pacult
Sole Director, Sole Shareholder,
President, and Treasurer of the
Corporate General Partner
Date: November 14, 2003
ATLAS FUTURES FUND,
LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2003 AND 2002
(A Review)
GENERAL PARTNER:
Ashley Capital Management, Inc.
% Corporate Systems, Inc.
101 North Fairfield Drive
Dover, Kent County, Delaware 19901
To The Partners
Atlas Futures Fund, Limited Partnership
Dover, Kent County, Delaware
We have reviewed the balance sheet, including
the schedule of investments, of ATLAS FUTURES FUND, LIMITED PARTNERSHIP as of
September 30, 2003 and the related statements of operations for the three and
nine months ended September 30, 2003 and 2002, and the statements of
partners' equity and cash flows for the nine months ended September 30, 2003
and 2002. These financial statements are the responsibility of the
Partnership's management.
We conducted our review in accordance with
standards established by the American Institute of Certified Public
Accountants. A review of interim financial information consists principally
of applying analytical procedures to financial data and making inquires of
persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with
auditing standards generally accepted in the United States, the objective of
which is the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.
Based on our review we are not aware of any
material modifications that should be made to the financial statements
referred to above for them to be in conformity with accounting principles
generally accepted in the United States.
We have previously audited, in accordance with
auditing standards generally accepted in the United States, the balance
sheet, including the schedule of investments, of ATLAS FUTURES FUND, LIMITED
PARTNERSHIP as of December 31, 2002 and the related statements of operations,
partner's equity and cash flows for the year then ended (not presented
herein); and in our report dated February 11, 2003, we expressed an
unqualified opinion on these financial statements. In our opinion, the
information set forth in the accompanying balance sheet as of December 31,
2002 is fairly stated, in all material respects, in relation to the balance
sheet from which it has been derived.
s/ Frank L. Sassetti & Co.
October 21, 2003
Oak Park, Illinois
ATLAS FUTURES FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
BALANCE SHEETS
SEPTEMBER 30, 2003 AND DECEMBER 31, 2002
ASSETS
September 30,
2003 December 31,
(A Review) 2002
Cash and cash equivalents (Note 7) $ 8,212 $ 111,876
United States Treasury Obligations (Note 6) 4,988,422 3,190,667
Accrued interest receivable 6,641 6,860
Due from limited partners 10,001 -
Prepaid trading commissions 3,294 252
Equity in Commodity Futures Trading Accounts -
Cash (Note 6) 2,208,663 1,785,556
Net unrealized gains on open commodity
futures contracts (Note 8) 512,850 1,183,957
$7,738,083 $6,279,168
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES
Accrued accounting and auditing fees payable $ 6,000 $ 6,500
Sales commissions payable 976 -
Partner redemptions payable 167,890 72,578
Total Liabilities 174,866 79,078
PARTNERS' CAPITAL
Limited partners - (4,443.83 and 4,699.63 units) 7,563,217 6,200,090
General partner - (0 units) (Note 2)
Total Partners' Capital 7,563,217 6,200,090
$7,738,083 $6,279,168
The accompanying notes are an integral
part of the financial statements
ATLAS FUTURES FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
Three Nine Three Nine
Months Months Months Months
Ended Ended Ended Ended
September 30, 2003 September 30, 2002
REVENUES
Realized gain (loss) from
trading in futures $ (554,809)$3,519,865 $1,313,395 $ 807,767
Realized gain on exchange rate
fluctuation 10,076 76,997 2,550 42,116
Changes in unrealized gains
(losses) on open commodity
futures contracts 542,223 (671,107) 158,443 766,093
Interest income 14,886 51,622 23,004 63,780
Redemption penalty 148 14,537 667 3,923
Total Revenues 12,524 2,991,914 1,498,059 1,683,679
EXPENSES
Commissions (Note 4) 167,901 488,869 232,589 432,735
Incentive fees (Note 4) 597,100 269,367 269,367
Management fees (Note 4) 38,210 106,720 30,934 85,133
Professional accounting and
legal fees 24,589 74,196 23,416 53,906
Other operating and
administrative expenses 642 2,009 625 963
Total Expenses 231,342 1,268,894 556,931 842,104
NET INCOME (LOSS) $ (218,818)$1,723,020 $ 941,128 $ 841,575
NET INCOME (LOSS) -
Limited partnership unit $ (48.46)$ 388.81 $ 203.09 $ 173.50
General partnership unit $ $ $ $
The accompanying notes are an integral
part of the financial statements
ATLAS FUTURES FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(A Review)
2003 2002
Amount Units Amount Units
Beginning balance-
December 31 $6,200,090 4,727.47 $6,102,458 5,186.28
Partner additions 1,114,348 649.40 393,536 316.95
Partner withdrawals (1,468,381) (933.04) (863,273) (803.60)
Syndication costs paid (5,860) (5,250)
Net income 1,723,020 841,575
Ending Balance -
September 30 $7,563,217 4,443.83 $6,469,046 4,699.63
2003 2002
Value per unit $1,701.96 $1,376.50
Total partnership units 4,443.83 4,699.63
The accompanying notes are an integral
part of the financial statements
ATLAS FUTURES FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(A Review)
2003 2002
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income $1,723,020 $ 841,575
Adjustments to reconcile net income
to net cash provided by
operating activities
Changes in operating assets and
liabilities
Equity in Commodity Futures
Trading Accounts 248,000 (617,900)
Accrued interest receivable 219 282
U.S. Treasury Obligations (1,797,755) (1,789)
Prepaid expense (3,042) (1,890)
Accrued commissions payable 976 (10,597)
Management and incentive
fees payable 259,293
Accounting and auditing
fees payable (500) 58
Net Cash Provided By
Operating Activities 170,918 469,032
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from sale of units, net
of sales commissions 1,104,347 428,740
Syndication and registration costs (5,860) (5,250)
Cash partner redemptions (1,373,069) (863,273)
Net Cash (Used in)
Financing Activities (274,582) (439,783)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (103,664) 29,249
CASH AND CASH EQUIVALENTS
Beginning of period 111,876 32,224
End of period $ 8,212 $ 61,473
The accompanying notes are an integral
part of the financial statements
ATLAS FUTURES FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
SCHEDULE OF INVESTMENTS
September 30, 2003
(A Review)
Contracts Value Percent
United States Commodity Futures Positions, Held Long
26 Dec '03 Soybean Meal $ 43,680 0.57 %
52 Dec '03 Brent Crude 46,644 0.60
26 Dec '03 U.S. Treasury Bond 24,469 0.32
26 Dec '03 10 - Year Treasury Notes 16,250 0.21
26 Nov '03 Soybeans 82,875 1.07
26 Dec '03 Live Cattle 8,320 0.11
52 Dec '03 New York Cotton 50,440 0.65
26 Dec '03 New York Gold 28,860 0.37
26 Dec '03 Euro Foreign Exchange 44,200 0.57
52 Dec '03 Eurodollar 3,575 0.05
52 Dec '03 Japanese Yen 134,225 1.74
Total United States Commodity Futures Positions 483,538 6.26
European Commodity Futures Positions, Held Long
26 Dec '03 Eurex German Federal Bond 18,486 0.24
Total European Commodity Futures Positions 18,486 0.24
British Commodity Futures Positions, Held Long
26 Mar '04 Sterling (1,081) (0.01)
Total British Commodity Futures Positions (1,081) (0.01)
Total Commodity Futures Positions 500,943 6.49
The accompanying notes are an integral part
of the financial statements
ATLAS FUTURES FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
SCHEDULE OF INVESTMENTS
September 30, 2003
(A Review)
Contracts Value Percent
Japanese Commodity Futures Positions, Sold Short
26 Sep '04 Corn 11,907 0.15
Total Commodity Futures Positions Sold Short 11,907 0.15
Net Commodity Futures Positions $512,850 6.64 %
The accompanying notes are an integral part
of the financial statements
ATLAS FUTURES FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
SCHEDULE OF INVESTMENTS
September 30, 2003
(A Review)
Maturity
Value Value Percent
$5,000,000 United States Treasury Bills $4,988,422 64.71 %
Cash in Trading Accounts
United States Markets 1,392,473 18.06
Canadian Markets (39,882) (0.52)
Euro Dollar Markets 1,170,138 15.18
British Pound Markets (144,087) (1.87)
Japanese Yen Markets (35,692) (0.46)
Australian Dollar Markets (134,287) (1.74)
Total Cash in Trading Accounts 2,208,663 28.65
Total Investments $7,709,935 100.00 %
The accompanying notes are an integral part
of the financial statements
ATLAS FUTURES FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2002
Contracts Value Percent
United States Commodity Futures Positions, Held Long
42 March '03 US Treasury Bond $ 17,719 0.29%
42 March '03 10-Year Treasury Notes 32,813 0.53
41 March '03 5-Year Treasury Notes 54,484 0.88
83 March '03 2-Year Treasury Notes 79,281 1.29
21 March '03 New York Sugar 1,176 0.02
21 February '03 New York Unleaded Gas (36,427) (0.59)
21 February '03 New York #2 Heating Oil (45,335) (0.74)
21 March '03 New York Cotton (4,350) (0.07)
21 March '03 New York Silver 5,360 0.09
41 February '03 New York Gold 75,420 1.22
41 March '03 British Pound 48,800 0.79
102 March '03 Swiss Franc 366,275 5.95
81 March '03 Euro Foreign Exchange 359,588 5.84
106 March '03 Eurodollar 16,788 0.27
21 January '03 Gas Oil (17,325) (0.28)
21 February '03 Brent Crude 22,680 0.37
Total United States Commodity Futures Positions 976,947 15.86
Australian Commodity Futures Positions, Held Long
21 March '03 90 Day Australian Bill 857 0.01
42 March '03 3-Year Australian Treasury Bond 7,027 0.12
Total Australian Commodity Futures Positions 7,884 0.13
European Commodity Futures Positions, Held Long
40 March '03 Euribor 12,838 0.21
21 March '03 2-Year German Euro Schatz 4,622 0.08
20 March '03 10-Year German Euro Bund 34,794 0.56
Total European Commodity Futures Positions 52,254 0.85
The accompanying notes are an integral part
of the financial statements.
ATLAS FUTURES FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2002
Contracts Value Percent
British Commodity Futures Positions, Held Long
61 June '03 Short Sterling $ 12,933 0.21%
41 March '03 Long Gilt 42,788 0.69
Total British Commodity Futures Positions 55,721 0.90
Japanese Commodity Futures Positions, Held Long
21 April '03 Rubber 2,658 0.04
22 October '03 Gold 20,053 0.33
Total Japanese Commodity Futures Positions 22,711 0.37
Total Commodity Futures Positions Held Long 1,115,517 18.11
United States Commodities Futures Positions, Sold Short
20 March '03 New York Coffee 64,125 1.04
21 March '03 Mexican Peso 4,938 0.08
Total United States Commodity Futures Positions 69,063 1.12
Japanese Commodity Futures Positions, Sold Short
21 March '03 Euro Yen (623) (0.01)
Total Commodity Futures Positions Sold Short 68,440 1.11
Net Commodity Futures Positions 1,183,957 19.22
The accompanying notes are an integral part
of the financial statements.
ATLAS FUTURES FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2002
Maturity
Value Value Percent
$3,200,000 United States Treasury Bills $3,190,667 51.80%
Cash in Trading Accounts
United States Markets 1,163,497 18.89
Canadian Markets (34,209) (0.55)
Eurodollar Markets 676,612 10.98
British Pound Markets 84,526 1.37
Japanese Yen Markets (35,561) (0.58)
Australian Dollar Markets (69,309) (1.13)
Total Cash in Trading Accounts 1,785,556 28.98
Total Investments $6,160,180 100.00%
The accompanying notes are an integral part
of the financial statements.
ATLAS FUTURES FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2003 AND 2002
(A Review)
1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Atlas Futures Fund, Limited Partnership (the Fund) was formed January
12, 1998 under the laws of the State of Delaware. The Fund is engaged in the
speculative trading of futures contracts in commodities, which commenced in
October, 1999. Ashley Capital Management, Inc. is the corporate general
partner and one of the commodity pool operators (CPO) of Atlas Futures Fund,
Limited Partnership. The commodity trading advisor (CTA) is Clarke Capital
Management, who has the authority to trade so much of the Fund's equity as is
allocated to it by the general partner.
Income Taxes - In accordance with the generally accepted method of
presenting partnership financial statements, the financial statements do not
include assets and liabilities of the partners, including their obligation
for income taxes on their distributive shares of the net income of the Fund
or their rights to refunds on its net loss.
Registration Costs - Costs incurred for the initial filings with the
Securities and Exchange Commission, Commodity Futures Trading Commission,
National Futures Association (the "NFA") and the states where the offering
was made were accumulated, deferred and charged against the gross proceeds of
offering at the initial closing as part of the offering expenses. The Fund
remains open to new partners, and incurs costs required to retain the ability
to issue new units. Such costs are treated in a similar manner. Costs of
recurring annual and quarterly filings with regulatory agencies are expensed
as incurred.
Revenue Recognition - Commodity futures contracts are recorded on the
trade date and are reflected in the balance sheet at the difference between
the original contract amount and the market value on the last business day of
the reporting period.
Market value of commodity futures contracts is based upon exchange or
other applicable market best available closing quotations.
Use of Accounting Estimates - The preparation of financial statements
in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and reported amounts of revenues and
expenses during the reporting period. Actual results could differ from these
estimates.
ATLAS FUTURES FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2003 AND 2002
(A Review)
1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Statement of Cash Flows - For purposes of the Statement of Cash Flows,
the Fund considers only cash and money market funds to be cash equivalents.
Net cash provided by operating activities includes no cash payments for
interest or income taxes for the nine months ended September 30, 2003 and
2002.
2. GENERAL PARTNER DUTIES
The responsibilities of the General Partner, in addition to directing
the trading and investment activity of the Fund, including suspending all
trading, 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 the names, addresses and numbers of units owned by each
Limited Partner and taking such other actions as deemed necessary or
desirable to manage the business of the Partnership.
3. THE LIMITED PARTNERSHIP AGREEMENT
The Limited Partnership Agreement provides, among other things, 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.
Allocation of Profit and Loss for Federal Income Tax Purposes - As of
the end of each fiscal year, the Partnership's capital gain or loss and
ordinary income or loss shall be allocated among the Partners, after having
given effect to the fees of the General Partner and the Commodity Trading
Advisors and each Partner's share of such items are includable in the
Partner's personal income tax return.
ATLAS FUTURES FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2003 AND 2002
(A Review)
3. THE LIMITED PARTNERSHIP AGREEMENT - CONTINUED
Redemption - No partner may redeem or liquidate any units until after
the lapse of six months from the date of the investment. Thereafter, a
Limited Partner may withdraw, subject to certain restrictions, any part or
all of his units from the partnership at the Net Asset Value per Unit on the
last day of any month with ten days prior written request to the General
Partner. A redemption fee payable to the Partnership of a percentage of the
value of the redemption request is charged during the first 24 months of
investment pursuant to the following schedule:
4% if such request is received ten days prior to the last trading day
of the sixth month after the date of the partner's investment in the Fund.
3% if such request is received during the seventh to twelfth month
after the investment.
2% if such request is received during the thirteenth to eighteenth
month.
1% if such request is received during the nineteenth to twenty-fourth
month.
0% thereafter.
4. FEES
The Fund is charged the following fees on a monthly basis since the
commencement of trading.
A management fee of 3% (annual rate) of the Fund's net assets allocated
to each CTA to trade will be paid to each CTA and 1% of equity to the Fund's
General Partner. Effective November 1, 2000, the management fee allocated to
each CTA was decreased to 0% (annual rate) and the management fee allocated
to the Fund's General Partner was increased to 2% (annual rate) of the Fund's
net assets.
ATLAS FUTURES FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2003 AND 2002
(A Review)
4. FEES - CONTINUED
An incentive fee of 25% of "new trading profits" will be paid to the
CTA. "New trading profits" includes all income earned by the CTA and expense
allocated to his activity. "New trading profits" are computed and paid
quarterly. In the event that trading produces a loss, no incentive fees will
be paid and all losses will be carried over to the following months until
profits from trading exceed the loss.
The Fund will pay fixed commissions of 9% (annual rate) of assets
assigned to be traded, payable monthly, to the Introducing Broker affiliated
with the General Partner. The Affiliated Introducing Broker will pay the
costs to clear the trades to the futures commission merchant and all PIT
Brokerage costs which shall include the NFA and exchange fees.
5. REALIZED GAIN ON EXCHANGE RATE FLUCTUATIONS
Certain trades executed by the Fund are denominated in foreign
currencies. Gains and losses on these transactions are recorded as futures
trading gains or losses at the U. S. dollar equivalent on the date the trade
is settled. Exchange rate fluctuation gain or loss is reflected when
residual amounts of foreign currencies are reconverted to U. S. dollars.
6. PLEDGED ASSETS
The U. S. Treasury Obligations and Cash in trading accounts are pledged
as collateral for commodities trading on margin.
7. CONCENTRATIONS
The Fund maintains its cash balances at a high credit quality financial
institution. The balances may, at times, exceed federally insured credit
limits.
ATLAS FUTURES FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2003 AND 2002
(A Review)
8. OFF BALANCE SHEET RISK
As discussed in Note 1, the Fund is engaged in speculative trading of
futures contracts in commodities. The carrying amounts of the Fund's
financial instruments and commodity contracts generally approximate their
fair values. Open commodity contracts had gross contract value of $40,230,800
on long positions and $335,277 on short positions at September 30, 2003.
Open commodity contracts had gross contract value of $93,764,073 on long
positions and $396,060 on short positions at September 30, 2002.
Although the gross contract values of open commodity contracts
represent market risk, they do not represent exposure to credit risk, which
is limited to the current cost of replacing those contracts in a gain
position. The unrealized gain on open commodity futures contracts at
September 30, 2003 and 2002 was $512,850 and $888,189, respectively.