Attached files
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, 2011
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 333-119655
TriView Global Fund, LLC
(Exact name of registrant as specified in its charter)
Delaware 20-1689686
(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 has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec 232.405
of this chapter) during the preceding 12 months (or for such shorter period
that the registrant was required to submit and post such files).
Yes [ ] No [ ] Not Applicable
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, 2011 are attached hereto and made a part hereof.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
General Information
The Registrant (the "Fund") was granted an initial effective date by the
Securities and Exchange Commission ("SEC") on November 3, 2005. The Fund's
Registration Statement filed May 7, 2010 for $20,000,000 in face amount of
units of membership interests (the "Units") went effective with the SEC on
August 10, 2010. The Fund's purpose, pursuant to the terms of the LLC
Operating Agreement, is to engage in the business of speculative and high risk
trading of commodity futures and options markets through the services of the
commodity trading advisors its management has selected. See Subsequent Events
at the end of this Item.
Description of Fund Business
The Fund grants one or more commodity trading advisors ("CTAs") a power of
attorney that is terminable at the will of either party to trade the equity
assigned to each CTA by Fund management. The Managing Member has reserved the
right to add and delete CTAs and reallocate equity assigned as it shall
determine, in its sole discretion, without prior notice to the members
(investors). A CTA has discretion to select and enter trades, and does not
disclose the methods it uses to make those determinations in its disclosure
documents, or to the Fund or to Fund management. There is no promise or
expectation of a fixed or any other return to the investors. The investors
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.
The CTA selected to trade on behalf of the Fund is GT Capital CTA, which is
paid a 1% management fee on Fund assets allocated to it to trade, along with a
20% incentive fee on New Net Profit, as that term is defined in the Fund's
prospectus. See Subsequent Events at the end of this Item for a description of
the fees to the corporate managing member and the affiliated introducing
broker, and for a description of the reimbursement of organizational and
offering expenses. There will be a twelve month lock-in commencing from the
date an investment is admitted to the Fund.
On July 7, 2011, the Fund had sold approximately $1,374,000 in Units and
commenced business. At such time, the Fund began to reimburse the managing
member and its affiliates for offering and organizational of $291,153, though
payment will not exceed 15% of gross subscription proceeds at any time. Such
expenses will be amortized by the Fund over 60 months on a straight line
basis, or paid off sooner at the managing member's discretion.
Through August 31, 2011, the Fund paid the corporate managing member a 2.5%
annual management fee calculated on the prior month-end net assets, and pay
brokerage commissions to the affiliated introducing broker of $15 per round
turn. Beginning September 1, 2011, the aforementioned fees were no longer be
paid. Instead, the Fund pays fixed annual brokerage commissions of 10%,
calculated on the prior month-end net assets, with 2.5% to the corporate
managing member and 7.5% to the introducing broker, paid monthly. In its July
6, 2011 prospectus, the managing member had estimated the round turn brokerage
of $15 would approximate 7.5% annually of Fund net assets. Accordingly, the
managing member does not believe the total fees charged to the Fund will
change. See Subsequent Events at the end of this Item.
Assets
Upon acceptance of subscriptions and admission to the Fund, the Managing
Member deposits the subscription proceeds to the Fund's accounts, including
the account at the futures commission merchant to hold as security for the
trades selected by the commodity trading advisor. The Managing Member will use
its best efforts to put Fund equity not used for margin in accounts not
2
maintained by or accessible by the futures commission merchant (FCM). This
includes U.S. Treasuries held at the U.S. Treasury, investments in cash
management funds that invest in only U.S. Treasuries, and foreign treasuries
held with the respective issuing department of treasury, all held in the name
of the Fund. The Fund assets at the FCM will consist of cash used as margin to
secure futures (formerly called commodities) trades entered on its behalf by
the commodity trading advisors it selects. The futures held in the Fund
accounts at the FCM are valued at the market price on the close of business
each day by the FCM. The Capital accounts of the Members are immediately
responsible for all profit and losses incurred by trading and payment and
accrual of the expenses of offering membership interests for sale and the
operation of the Fund. The fixed costs of operation must be paid before the
members may earn a profit on their investment. See Subsequent Events at the
end of the section.
The Fund does not intend to borrow from third parties. Its trades are entered
pursuant to a margin agreement with the FCM, 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 members are not personally liable for the debts of
the Fund, including any trading losses. As of the date of this Report, there
have been no offers or sales to non-affiliates of Units. Once a Unit has been
sold and redeemed, it will not be resold. Capital available will be dependent
upon the marketing and sales effort put in place by Fund management to sell
the registered membership interests. See Subsequent Events at the end of this
section.
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 Managing Member selects the futures commission
merchants to hold the Fund assets. The commodity trading advisors and the
Managing Member 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 Managing Member allocates a substantial portion 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. As of the date of
this Report, the Fund maintained approximately 94% of its cash assets on
deposit with the FCM, and 6% of its assets in a Fund bank account.
To have the purchase price or appreciation, if any, of the Units paid to them,
members must use the redemption feature of the Fund. Distributions, although
possible in the sole discretion of the Managing Member, are not expected to be
made. There is no current market for the Units sold, none is expected to
develop and the LLC Operating Agreement limits the ability of a member to
transfer the Units.
Results of Operations
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 Operating Agreement grants solely to the Managing Member
the right to select the CTAs and to otherwise manage the operation of the
Fund. See the Registration Statement, incorporated by reference herein, for
an explanation of the operation of the Fund.
On July 7, 2011, the Fund commenced business after admission of 26 limited
partners, with total subscriptions of $1,374,333. For non-financial reporting
purposes (subscription and redemption purposes), its initial net asset value
(NAV) per Unit of $1,000 decreased over the three months ended September 30,
2011 to $947.81, primarily as a result of expenses.
3
Going forward, performance is expected to be primarily derived from the
trading of GT Capital CTA. The trading advisor's objective is to achieve
appreciation of the Fund's assets through speculative trading in futures
contracts and options on futures contracts. There is no representation being
made that the trading programs offered by the trading advisor will be
successful in achieving this goal.
Money managers generally rely on either fundamental or technical analysis, or
a combination thereof, in making trading decisions and attempting to identify
price trends in a commodity interest. "Fundamental analysis" is the
consideration of factors external to the market of a particular instrument.
For example, weather and political events which affect the supply and demand
of that particular instrument, in order to predict future prices of that
instrument. As an example, some of the fundamental factors that affect the
supply of commodities (e.g., agricultural products such as corn and soybeans)
include the acreage planted, weather during the growing season, harvesting and
distribution of the commodity and the previous year's crop carryover. The
demand for such commodities is determined in part by domestic consumption and
exports and is a product of many factors, including general world economic
conditions, exports and the cost of competing products which might be
substituted as alternate sources of food or fiber.
Technical analysis is not based on the anticipated supply and demand of the
"cash" or "physical" (i.e., actual) commodity; instead, technical analysis is
based on the theory that a study of the markets themselves (in particular, of
trends of prices established by the markets for various instruments during
selected historical periods) provides a means of anticipating prices.
Technical analysis of the markets often includes a study of the actual daily,
weekly and monthly price fluctuations, as well as volume variations and
changes in open interest, utilizing charts and/or computers for analysis of
these items and other technical market data. Both general methodologies have
been employed with success by traders and investors in the past, however,
neither trading method can be assured of success in a particular interval of
time.
If a large price movement occurs in a sector that a trading advisor trades,
such as stock indices, 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. As always, past performance is not
necessarily indicative of future results.
Approximate Percentage of Trade Volume by Market Sector
2011
3rd Quarter
Currencies 15%
Energy 15%
Metals 10%
Stock Indices 60%
Pursuant to the Trading Advisory Agreement, the Fund pays a quarterly
incentive fee to GT on new net profits, or those profits achieved on a per
unit basis above the advisor's previous high water mark. See Note 5 to the
financial statements herein for the current incentive fees. For the three
months ended September 30, 2011, GT was not paid an incentive fee because of
trading losses of $(8,360), or (0.61)% of beginning net assets (as of July 7,
2011).
Because the Fund commenced business only in July 2011, quarter to quarter
comparisons would not be meaningful. They will be provided going forward,
however, as applicable. These results are not to be construed as an
expectation of similar profits or losses in the future
As a percentage of beginning net assets (as of July 7, 2011), for the three
months ended September 30, 2011, the Fund paid professional fees and operating
expenses of 1.56%, management fees of 0.62% and commissions of 1.39%. These
amounts might be higher or lower than the fixed percentages upon which they
are based because they are paid monthly on the then-current net asset value.
Interest income during the three months was negligible. In addition to the
$1,374,333 with which it commenced business, the Fund had capital
contributions of another $205,881 during the three months.
4
Subsequent Events
As of the beginning of October, 2011, the Managing Member allocated
approximately 50% of trading assets to another program traded by the Fund's
sole CTA and reserves the right to change the allocation between the programs
at its own discretion. For purposes of calculating the incentive fee, the
performance of both programs will be netted during each quarterly incentive
fee period such that the trading advisor is only paid an incentive fee when
the performance considering both programs is net positive.
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 4. 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 Managing Member 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 Managing Member 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 Managing Member's internal control over financial
reporting during the quarter ended September 30, 2011 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
For the five years preceding the date of this Report, there have been no legal
proceedings against the Fund, its Managing Member, the FCM, the IB, the CTA or
any of their Affiliates, directors or officers other than as described below.
The CTA, GT Capital CTA, has had the following described reportable events,
none of which, in the opinion of the CTA, is material to the performance of
the CTA on behalf of the Fund's account
On August 24, 2009, a lawsuit was filed against Mr. Teitelbaoum, principal of
GT Capital CTA, and two other parties. The complaint alleges that Mr.
Teitelbaoum and the other defendants failed to properly compensate the
plaintiff for marketing services. Mr. Teitelbaoum vehemently denies all
allegations of wrongdoing and plans to vigorously defend the lawsuit.
Since the commencement of business, Vision Financial Services LLC was the only
FCM with which the Fund deposited assets, and it has had the following
described reportable events, none of which, in the opinion of the FCM, is
material to the performance of the FCM on behalf of the Fund's account:
5
Vision Financial Services LLC
On May 18, 2011, simultaneously with the issuance of a complaint by the NFA,
Vision Financial Markets LLC ("Vision") consented to a finding based on a one-
count complaint for failure to supervise guaranteed IBs in violation of NFA
Compliance Rule 2-9(a). The alleged activities occurred prior to 2009.
Without admitting or denying the findings in the Committee's Decision, Vision
consented to pay a fine of $500,000 and to retain an independent consultant to
review its supervisory procedures relating to guaranteed IBs. Vision
undertook to implement revised procedures for supervising GIBs within 6
months. Finally, Vision consented to a restriction on guaranteeing new
introducing brokers until 2013, unless it petitions the NFA to lift the
restriction earlier.
The FCM only acts as clearing brokers for the Fund's futures accounts and as
such it may have been paid commissions for executing and clearing trades. The
FCM has not passed upon the adequacy or accuracy of the Fund's prospectus or
this report and will not act in any supervisory capacity with respect to the
CPO or the CTA, as the case may be, nor participate in the management of the
CPO or of the Fund or of the CTA. Therefore, investors should not rely on the
FCM in deciding whether or not to participate in the Fund.
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. The FCMs has represented to the Managing Member that that none of
the events reported above would interfere with its performance as a clearing
broker for the Fund's account.
Item 1A. Risk Factors
There have been no material changes from risk factors as previously disclosed
in the Fund's 2010 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. (Removed and Reserved)
Not Applicable.
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
101.INS XBRL formatted financial statements.
6
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, 2011, to be signed on its behalf by the
undersigned, thereunto duly authorized.
Registrant:
TriView Global Fund, LLC
By TriView Capital Management, Inc.
Its Managing Member
By: /s/ Michael Pacult
Mr. Michael Pacult
Sole Director, Sole Shareholder,
President, and Treasurer of the Managing Member
Date: November 14, 2011
7
TRIVIEW GLOBAL FUND, LLC
(A Delaware Limited Liability Company)
QUARTERLY REPORT
September 30, 2011
MANAGING MEMBER:
Triview Capital Management, Inc.
% Corporate Systems, Inc.
505 Brookfield Drive
Dover, Kent County, Delaware 19901
INDEX TO FINANCIAL STATEMENTS
Page
Report of Independent Registered Public Accounting Firm F-2
Statements of Assets and Liabilities F-3
Statements of Operations F-4
Statements of Changes in Net Assets F-5
Statements of Cash Flows F-6
Notes to the Financial Statements F-7 - F-12
Affirmation of the Commodity Pool Operator F-13
Patke & Associates, Ltd.
Certified Public Accountants
Report of Independent Registered Public Accounting Firm
To the Members of
TriView Global Fund, LLC
Dover, Delaware
We have reviewed the accompanying statements of assets and liabilities of
TriView Global Fund, Limited Liability Company, as of September 30, 2011, and
the related statements of operations for the three and nine months ended
September 30, 2011 and 2010, and the statements of changes in net assets and
cash flows for the nine months ended September 30, 2011 and 2010. These
financial statements are the responsibility of the Company'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 Company 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 TriView Global Fund, Limited Liability Company as of
December 31, 2010 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 February 24, 2011, 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, 2010 is
fairly stated, in all material respects, in relation to the statement of
assets and liabilities from which it has been derived.
/s/ Patke & Associates, Ltd.
Patke & Associates, Ltd.
Lincolnshire, Illinois
November 9, 2011
F-2
TriView Global Fund, LLC
(A Delaware Limited Liability Company)
Statements of Assets and Liabilities
September 30, December 31,
2011 2010
(A Review)
Assets
Equity in broker trading accounts
Cash at broker $1,211,735 $-
Total equity in broker trading accounts 1,211,735 -
Cash 81,670 405
Prepaid expenses 17,883 4,481
Total assets 1,311,288 4,886
Liabilities
Accrued commissions payables 10,146 -
Accrued management fees 915 -
Other accrued liabilities 1,062 920
Redemptions payable 1,986 -
Due to related parties 65,577 262,272
Total liabilities 79,686 263,192
Net assets $1,231,602 $(258,306)
Analysis of net assets
Non-managing members $1,231,602 $(129,153)
Managing members - (129,153)
Net assets (equivalent to $773.98 and
$(129,153.02) per unit) $1,231,602 $(258,306)
Membership units outstanding
Non-managing member units outstanding 1,591.250 1.000
Managing members units outstanding - 1.000
Total membership units outstanding 1,591.250 2.000
The accompanying notes are an integral part of the financial statements.
F-3
TriView Global Fund, LLC
(A Delaware Limited Liability Company)
Statements of Operations
(A Review)
Three Months Ended September 30, Nine Months Ended September 30,
2011 2010 2011 2010
Investment income
Interest income $5 $- $5 $-
Other income - 20,000 - 20,000
Total investment income 5 20,000 5 20,000
Expenses
Commission expense 19,162 - 19,162 -
Management fees 8,556 - 8,556 -
Professional fees 18,750 5,385 38,105 34,958
Other operating expenses 2,651 8,610 14,142 22,858
Total expenses 49,119 13,995 79,965 57,816
Net investment gain (loss) (49,114) 6,005 (79,960) (37,816)
Realized and unrealized (loss) from
investments and foreign currency
Net realized (loss) from:
Investments (4,658) - (4,658) -
Foreign currency translation (3,702) - (3,702) -
Net realized (loss) from investments
and foreign currency transactions (8,360) - (8,360) -
Net unrealized appreciation
(depreciation) on investments - - - -
Net realized and unrealized (loss)
from investments and foreign currency
transactions (8,360) - (8,360) -
Net increase (decrease) in net assets
resulting from operations $(57,474) $6,005 $(88,320) $(37,816)
Net increase (decrease) per unit (for
a single unit outstanding during the
entire period)
Non-managing member unit $(14.48) $3,002.50 $(15,437.80) $(18,908.00)
Managing member unit - 3,002.50 - (18,908.00)
The accompanying notes are an integral part of the financial statements.
F-4
TriView Global Fund, LLC
(A Delaware Limited Liability Company)
Statements of Changes in Net Assets
(A Review)
Nine Months Ended September 30,
2011 2010
Units Net Assets Units Net Assets
(Decrease) in net assets from operations
Net investment (loss) $(79,960) $(37,816)
Net realized (loss) from investments and
foreign currency transactions (8,360) -
Net (decrease) in net assets resulting from operations (88,320) (37,816)
Capital contributions from members 1,591.250 1,580,214 -
Redemptions by members (2.000) (1,986) - -
Total increase (decrease) in net assets 1,589.250 1,489,908 - (37,816)
Net assets at the beginning of the period 2.000 (258,306) 2.000 (196,436)
Net assets at the end of the period 1,591.250 $1,231,602 2.000 $(234,252)
The accompanying notes are an integral part of the financial statements.
F-5
TriView Global Fund, LLC
(A Delaware Limited Liability Company)
Statements of Cash Flows
(A Review)
Nine Months Ended September 30,
2011 2010
Cash Flows from Operating Activities
Net (decrease) in net assets resulting from operations $(88,320) $(37,816)
Adjustments to reconcile net (decrease) in net assets from
operations to net cash (used in) operating activities:
(Increase) in prepaid expenses (13,402) (4,702)
Increase in accrued commissions payable 10,146 -
Increase in accrued management fees 915 -
Increase (decrease) in other accrued liabilities 142 (3,817)
Net cash (used in) operating activities (90,519) (46,335)
Cash Flows from Financing Activities
Increase (decrease) in due to related parties (196,695) 46,500
Proceeds from sale of units 1,580,214 -
Net cash provided by financing activities 1,383,519 46,500
Net increase in cash 1,293,000 165
Cash, beginning of period 405 363
Cash, end of period $1,293,405 $528
End of period cash consists of:
Cash at broker $1,211,735 $-
Cash 81,670 528
Total cash $1,293,405 $528
The accompanying notes are an integral part of the financial statements.
F-6
TriView Global Fund, LLC
(A Delaware Limited Liability Company)
Notes to the Financial Statements
September 30, 2011
(A Review)
1. Nature of the Business
TriView Global Fund, LLC (the "Fund") was formed on October 1, 2004 under the
laws of the State of Delaware. The Fund is engaged in high risk, speculative
and hedge trading of futures and forward contracts, options on futures and
forward contracts, and other instruments selected by registered commodity
trading advisors ("CTA's"). On July 7, 2011, the Fund commenced business
after admission of 26 members, with total subscriptions of $1,374,333 at a
price of $1,000 per Unit. Through September 30, 2011 additional capital
contributions from members of $205,881 were received. The maximum offering is
$20,000,000. TriView Capital Management, Inc. (the "Corporate Managing
Member") and Michael Pacult (the "Individual Managing Member" and collectively
the "Managing Member") are the managing members and commodity pool operators
("CPO's") of the Fund. The CTA is GT Capital CTA ("GT Capital"), which has
the authority to trade as much of the Fund's equity as is allocated to it by
the Managing Member. The selling agent and introducing broker is Futures
Investment Company ("FIC"), which is owned and operated by Michael Pacult and
his wife.
Regulation - The Fund is a registrant with the Securities and Exchange
Commission ("SEC") pursuant to the Securities Act of 1933. The Fund is
subject to the regulations of the SEC and the reporting requirements of the
Securities and Exchange Act of 1934, and of the rules and regulations of the
Financial Industry Regulation Authority ("FINRA"). The Fund is also be
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 ("FCM's") and interbank market makers through which the
Fund trades.
2. Significant Accounting Policies
Offering Expenses and Organizational Costs - For financial reporting purposes
in conformity with accounting principles generally accepted in the United
States of America ("GAAP"), on the Fund's initial effective date, November 3,
2005, the Fund deducted from members' capital the total initial offering costs
of $43,468, as of that date, and began expensing all subsequent offering
costs. Organizational and operating costs are expensed as incurred for GAAP
purposes. For all other purposes, including determining the Net Asset Value
per Unit for subscription and redemption purposes, the Fund capitalized all
offering, organizational and operating costs until commencement of business,
July 7, 2011, which totaled $291,153. These costs are expensed and amortized
on a straight line basis for 60 months or sooner at the discretion of the
Managing Member.
As of September 30, 2011 and December 31, 2010, the Net Asset Value and Net
Asset Value per Unit for financial reporting purposes and for all other
purposes are as follows:
Balance Per Unit Calculation
September 30, December 31, September 30, December 31,
2011 2010 2011 2010
Net Asset Value for financial reporting purposes $1,231,602 $(258,306) $773.98 $(129,153.02)
Adjustment for initial offering costs 43,468 43,468 27.32 21,734.00
Adjustment for other offering, organizational and
operating expenses 233,127 216,838 146.51 108,419.02
Net Asset Value for all other purposes $1,508,197 $2,000 $947.81 $1,000.00
Number of Units 1,591.25 2.00
Registration Costs - Costs incurred for the initial filings with SEC, FINRA
and the states where the offering is expected to be made are included in the
offering expenses and, accordingly, are accounted for as described above under
"Offering Expenses and Organizational Costs".
Revenue Recognition - Forward contracts, futures and other investments are
recorded on the trade date and will be reflected in the statement of
operations at the difference between the original contract amount and the fair
value on the last business day of the reporting period.
Fair value of forward contracts, futures and other investments is based upon
exchange or other applicable closing quotations related to the specific
positions.
Interest income will be recognized when it is earned.
Other Income - Other income consists of $20,000 of offering and organizational
costs which were previously incurred, but were subsequently absorbed in
accordance with the S-1, which was approved by the SEC on August 10, 2010.
Foreign Currency - The accounting records of the Fund are denominated in U.S.
dollars. Assets and liabilities denominated in currencies other than U.S.
dollars are translated into U.S. dollars at the exchange rates in effect on
the valuation date. Commodity futures contracts transactions are translated
into U.S. dollars at the exchange rates on the dates of such transactions. On
the accompanying financial statements, effects of changes in exchange rates
from all transactions denominated in currencies other than U.S. dollars are
disclosed separately.
Use of Accounting Estimates - The preparation of financial statements in
conformity with GAAP 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.
Income Taxes - The Fund is not required to provide a provision for income
taxes. Income tax attributes that arise from its operations are passed
directly to the individual members. The Fund may be subject to state and
local taxes in jurisdictions in which it operates.
Management has continued to evaluate the application of Financial Accounting
Standards Board ("FASB") Accounting Standards Codification ("ASC") 740,
"Income Taxes" to the Fund and has determined that ASC 740 does not have a
material impact on the Fund's financial statements. The Fund files federal and
state tax returns. The 2007 through 2010 tax years generally remain subject to
examination for the U.S. federal and most state tax authorities.
F-7
TriView Global Fund, LLC
(A Delaware Limited Liability Company)
Notes to the Financial Statements
September 30, 2011
(A Review)
2. Significant Accounting Policies - Continued
Statement of Cash Flows - Net cash used in operating activities includes no
cash payments for interest or income taxes for the nine months ended September
30, 2011 and 2010.
Reclassifications - Certain prior year amounts were reclassified to conform to
current year presentation.
Fair Value Measurement and Disclosures - ASC 820 establishes a fair value
hierarchy which prioritizes the inputs to valuation techniques used to measure
fair value into three broad levels. The fair value hierarchy gives the
highest priority to unadjusted quoted prices in active markets for identical
assets or liabilities (Level 1 measurements) and the lowest priority to
unobservable inputs (Level 3 measurements).
Level 1 inputs are unadjusted quoted prices in active markets for identical
assets or liabilities that the Fund has the ability to access at the
measurement date.
Level 2 inputs are inputs other than quoted prices included in Level 1 that
are observable for the asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for an asset or liability, including
the Fund's own assumptions used in determining the fair value of investments.
Unobservable inputs shall be used to measure fair value to the extent that
observable inputs are not available, thereby allowing for situations in which
there is little, if any, market activity for the asset or liability at the
measurement date. As of and for the nine months ended September 30, 2011 and
the year ended December 31, 2010, the Fund did not have any Level 3 assets or
liabilities.
As of September 30, 2011, the Fund had no level 1 or level 2 inputs.
3. Managing Member Duties
The responsibilities of the Managing Member, in addition to directing the
trading and investment activity of the Fund, including suspending all trading,
includes executing and filing all necessary legal documents, statements and
certificates of the Fund, retaining independent public accountants to audit
the Fund, employing attorneys to represent the Fund, reviewing the brokerage
commission rates to determine reasonableness, maintaining the tax status of
the Fund, maintaining a current list of the names, addresses and numbers of
units owned by each Member and taking such other actions as deemed necessary
to manage the business of the Fund.
If the net unit value of the Fund falls to less than 50% of the greater of the
original $1,000 selling price, less commissions and other charges or such
higher value earned through trading, then the Managing Member will immediately
suspend all trading, provide all members with notice of the reduction in net
unit value and give all members the opportunity, for fifteen days after such
notice, to redeem Units. No trading shall commence until after the lapse of
such fifteen day period.
4. The Limited Liability Company ("LLC") Agreement
The LLC Operating Agreement provides, among other things, that-
Capital Account - A capital account shall be established for each member. The
initial balance of each member's capital account shall be the amount of the
initial contributions to the Fund.
Monthly Allocations - Any increase or decrease in the Fund's net asset value
as of the end of a month shall be credited or charged to the capital account
of each Member in the ratio that the balance of each account bears to the
total balance of all accounts.
Any distribution from profits or members' capital will be made solely at the
discretion of the Managing Member.
Federal Income Tax Allocations - As of the end of each fiscal year, the Fund's
realized capital gain or loss and ordinary income or loss shall be allocated
among the Members, after having given effect to the fees and expenses of the
Fund.
Subscriptions - Investors must submit subscription agreements and funds at
least five business days prior to month end. Subscriptions must be accepted
or rejected by the Managing Member 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 after the minimum to commence business has been raised and,
thereafter, on the first business day of the month after the subscription is
accepted. Interest earned on the subscription funds will accrue to the
account of the investor.
Redemptions - A member may request any or all of his investment be redeemed at
the net asset value as of the end of a month. Unless this requirement is
waived, the written request must be received by the managing member no less
than ten business 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 Managing Member may be unable to
comply with the request on a timely basis. There will be no redemption fee;
however there will be a twelve month lock-in commencing from the date of
admission of an investment.
5. Fees
The Fund was initially charged the following fees after the commencement of
trading.
A monthly management fee of 2.5% (annual rate) paid to the Corporate Managing
Member, calculated on the Fund's prior month-end net assets. Brokerage
commissions to the Fund's affiliated introducing broker, FIC, of $15 per round
turn.
As of September 1, 2011, the Fund no longer paid FIC round turn brokerage
commissions and no longer paid the Corporate Managing Member a management fee.
Instead, the Fund is charged 10% (annual rate) fixed brokerage commissions,
paid monthly, calculated on the prior month-end net assets, with 7.5% paid to
FIC and 2.5% to the Corporate Managing Member.
A monthly management fee of 1% (annual rate) paid to GT Capital calculated on
the prior month-end equity allocated to it to trade.
A quarterly incentive fee of 20% of new net profits paid to GT Capital. In
October 2011, the Managing Member allocated approximately 50% of Fund trading
equity to a separate program offered by GT Capital maintained in a separate
account at the FCM, held in the name of the Fund. For purposes of calculating
the quarterly incentive fee, the net performance of both programs is combined.
The Managing Member has reserved the right to implement a management fee and
change the incentive fee at its sole discretion. The total incentive fees may
be increased to 27% if the management fee is zero. The Fund may also increase
the total management fees paid to the CTA's and Corporate Managing Member to
6% of total net assets if the total incentive fees are decreased to 15%.
F-8
TriView Global Fund, LLC
(A Delaware Limited Liability Company)
Notes to the Financial Statements
September 30, 2011
(A Review)
6. Related Party Transactions
The sole shareholder of the Corporate Managing Member made an initial member
capital contribution in the Fund of $1,000. He is also the sole shareholder
of TriView Capital Management, Inc., which along with the shareholder and
other affiliates, has temporarily funded the syndication costs incurred by the
Fund to date. A variable interest entity relationship existed between the
Corporate Managing Member and the Fund until July 7, 2011 when the Fund
commenced business. The Corporate Managing Member redeemed its interest July
31, 2011.
In the normal course of business, the Fund has provided general
indemnifications to the Managing Member, its CTA's 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.
Due to related parties at September 30, 2011 and December 31, 2010 consisted
of amounts due to the Corporate Managing Member, TriView Capital Management,
Inc., FIC, and Michael Pacult, President of FIC, the Corporate Managing Member
and TriView Capital Management, Inc. The balances result from offering,
organizational and operating costs paid by the related parties on behalf of
the Fund and cash advances. These amounts bear no interest or due dates and
are unsecured. The following balances were outstanding as of September 30,
2011 and December 31, 2010:
September 30, December 31,
2011 2010
FIC $65,576 $194,108
Ashley Capital Management, Inc. - 26,475
Corporate Managing Member 1 1,958
Michael Pacult - 39,731
Balance due to related parties $65,577 $262,272
The Fund pays commissions to the Corporate Managing Member and Futures
Investment Company, the introducing broker. These related parties are 100%
and 50%, respectively, owned by Michael Pacult. Related party commissions and
management fees were as follows:
Commissions included in expenses:
For The Nine Months Ended September 30,
2011 2010
Corporate Managing Member $2,750 $-
Futures Investment Company 13,344 -
Total related party expenses $16,094 $-
Management fees included in expenses:
For The Nine Months Ended September 30,
2011 2010
Corporate Managing Member $5,706 $-
Total related party expenses $5,706 $-
Commissions included in accrued expenses:
September 30, December 31,
2011 2010
Corporate Managing Member $2,750 $-
Futures Investment Company 7,396 -
Total accrued commissions payable to
related parties $10,146 $-
Redemptions payable due to related parties:
September 30, December 31,
2011 2010
Corporate Managing Member $993 $-
Michael Pacult 993 -
Total redemptions payable due to
related parties $1,986 $-
In the normal course of business, the Fund has provided general
indemnifications to the Managing Member, 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. Concentrations
The Fund will maintain all of its initial subscription deposits with a
commercial financial institution. In the event of the financial institution's
insolvency, recovery of Fund deposits may be limited to account insurance or
other protection afforded deposits by the institution.
F-9
TriView Global Fund, LLC
(A Delaware Limited Liability Company)
Notes to the Financial Statements
September 30, 2011
(A Review)
8. Trading Activities and Related Risks
The Fund is engaged in speculative trading of U.S. and foreign futures
contracts. 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 in trading accounts are pledged as collateral for
futures 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 establishes minimum
margin requirements for each traded contract. The FCM may increase the margin
requirements above these minimums for any or all contracts. The Fund
maintains cash to satisfy these margin requirements. Cash at September 30,
2011 and December 31, 2010 was $1,293,405 and $405, respectively. Based upon
the types and amounts of contracts traded and the amount of liquid assets of
the Fund, the Managing Member believes there is minimal risk of not being able
to meet its margin requirement.
Trading in futures contracts involves entering into contractual commitments to
purchase or sell a particular futures contracts 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 i
limited to the gross or face amount of the face amount of the contracts held
on long positions, of which there were none at September 30, 2011 and December
31, 2010. 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.
There we no open futures contracts at September 30, 2011 or December 31, 2010.
The following tables disclose the fair values of derivative and hedging
activities in the Statements of Assets and Liabilities and the Statements of
Operations.
Derivative Instruments
Statement of Operations
Line Item in the For the three For the nine
Statement of Operations months ended months ended
September 30, 2011 September 30, 2011
Derivatives not designated as hedge Futures Net realized (loss) from $(12,300) $(12,300)
instruments under ASC 815 contracts investments and foreign currency
transactions
Derivatives not designated as hedge Options on Net realized (loss) from $3,940 $3,940
instruments under ASC 815 futures contracts investments and foreign currency
transactions
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. 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 assets and
liabilities 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 assets and liabilities 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.
10. 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 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.
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.
F-10
TriView Global Fund, LLC
(A Delaware Limited Liability Company)
Notes to the Financial Statements
September 30, 2011
(A Review)
12. Financial Highlights
Three Months Ended September 30, Nine Months Ended September 30,
2011 2010 2011 2010
Performance per unit (1)
Net unit value, beginning of the period $(144,576.34) $(120,128.50) $(129,153.02) $(98,218.00)
Other income $- 10,000.00 10,000.00
Expenses - (6,997.50) (15,423.32) (28,908.00)
Net increase (decrease) prior to commencement
of operations (July 7, 2011) - 3,002.50 (15,423.32) (18,908.00)
Reallocation of initial offering costs (see footnote 2) 145,576.34 145,576.34
Net unit value, initial subscription 1,000.00 1,000.00
Absorption of initial offering costs (see footnote 2) (211.54) (211.54)
Net unit value, commencement of operations
(July 7, 2011) 788.46 788.46
Net realized and unrealized gain (loss) from
investments and foreign currency 19.35 19.35
Expenses (33.83) (33.83)
Net increase (decrease) after commencement
of operations (14.48) (14.48)
Net unit value at the end of the period $773.98 $(117,126.00) $773.98 $(117,126.00)
Net assets at the end of the period ($000) $1,232 $(234) $1,232 $(234)
Total return (2) (22.60)% (3) 0.00 % (22.60)% (3) 0.00%
Number of units outstanding at the end of the period 1,591.250 2.000 1,591.250 2.000
Supplemental Data
Ratio to average net assets (4)
Net investment (loss) (18.17)% (3) (15.16)% (18.17)% (3) (25.92)%
Expenses (18.17)% (3) (23.59)% (18.17)% (3) (35.00)%
Total return was calculated based on the change in value of a unit during the
period. Net realized and unrealized gain (loss) from investments and foreign
currency is a balancing amount necessary to reconcile the change in net unit
value. An individual member's total returns and ratios may vary from the
above total returns and ratios based on the timing of additions and
redemptions.
(1) Investment income and expenses and net realized and unrealized gains and
losses on future transactions are calculated based on a single unit
outstanding during the period.
(2) Not annualized
(3) Total return and ratios were calculated for the trading period of July 7,
2011 through September 30, 2011.
(4) Annualized
F-11
TriView Global Fund, LLC
Affirmation of the Commodity Pool Operator
For the Nine Months Ended September 30, 2011 and 2010
*****************************************************************************
To the best of the knowledge and belief of the undersigned, the information
contained in this report is accurate and complete.
/s/ Michael Pacult
Michael Pacult
President, TriView Capital Management, Inc.
Managing Member
TriView Global Fund, LLC
F-12
