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EX-31 - DOC 31 - EVEREST FUND L Pex-31cert302.txt
EX-32 - DOC 32 - EVEREST FUND L Pex-32cert906.txt

                  SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C.  20549

                              FORM 10-Q
        Quarterly report pursuant to Section 12(b) or (g) of the
                   Securities Exchange Act of 1934

              For the quarterly period ended September 30, 2012

                    Commission File Number 0-17555
                        THE EVEREST FUND, L.P.
          (Exact name of registrant as specified in its charter)
        Iowa                                                 42-1318186
        State or other jurisdiction of               (I.R.S. Employer
        incorporation or organization)              Identification No.)

        1100 North 4th Street, Suite 143, Fairfield, Iowa   52556
        (Address of principal executive offices)          (Zip Code)

Registrant's telephone number, including area code:  (641) 472-5500

                            Not Applicable
         (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, or a non-accelerated filer. See definition of
accelerated filer and large accelerated filer  in Rule 12b-2 of the Exchange
Act. (Check one): Large accelerated filer		Accelerated filer
Non-accelerated filer
Small Reporting Company Filer  X

Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Act). Yes No  X


Table of Contents
Part I:	Financial Information

Item 1.	Financial Statements                                   3

Statements of Financial Condition                              3
September 30, 2012 (Unaudited) and December 31, 2011 (Audited)

Condensed Schedule of Investments                              4
September 30, 2012 (Unaudited)

Condensed Schedule of Investments                              5
December 31, 2011 (Audited)

Statements of Operations                                      5-6
For the Three and nine Months Ended September 30, 2012 and 2011 (Unaudited)

Statements of Changes in Partners' Capital (Net Asset Value)  6-7
For the nine Months Ended September 30, 2012 and 2011 (Unaudited)

Statements of Cash Flows
For the nine Months Ended September 30, 2012 and 2011 (Unaudited) 7-8

Notes to Financial Statements September 30, 2012                8

Item 2.    Management's Discussion and Analysis of Financial   18
                         Condition and Results of Operations

Item 3.    Quantitative and Qualitative Disclosures about      20
                                              Market Risk

Item 4.    Controls and Procedures	                       21

Part II:	Other Information                              21

Item 1.	   Legal Proceedings                                   21

Item 1A.	Risk Factors	                               21

Item 2.      Unregistered Sales of Equity Securities and Use   21
                                                 of Proceeds

Item 3. Defaults upon Senior Securities	                       22

Item 4. Submission of Matters to a Vote of Security Holders    22

Item 5. 	Other Information	                       22

Item 6. 	Exhibits	                               22




2 PART I. FINANCIAL INFORMATION Item 1 Financial Statements Following are Financial Statements for the three months ended September 30, 2012 EVEREST FUND, L.P. (An Iowa Limited Partnership) STATEMENTS OF FINANCIAL CONDITION September 30, 2012 (UNAUDITED) AND DECEMBER 31, 2011 (AUDITED) UNAUDITED AUDITED SEPTEMBER 30, 2012 DECEMBER 31, 2011 ----------------- ----------------- ASSETS Cash and cash equivalents $ 9,796,885 $12,127,485 Equity in broker trading accounts: Cash and cash equivalents 2,039,736 2,459,727 Net unrealized trading gains(losses) on open contracts 1,926 591,296 Interest receivable 54 (100) ----------------- ---------------- TOTAL ASSETS $11,838,601 $15,178,408 =============== ================ LIABILITIES AND PARTNERS' CAPITAL LIABILITIES: Redemptions payable $10,000 $ 0 Management fee payable 55,404 24,925 Brokerage commissions and fees payable 20,703 69,868 Incentive fee payable 0 0 O&O Payable 495 0 Accounts payable & accrued expenses 51,544 59,195 ----------- ------------ TOTAL LIABILITIES 138,146 153,989 ----------- ------------ PARTNERS' CAPITAL Limited partners, A Shares (4,546,14937 and 4,576.28727 units outstanding) 11,700,455 15,024,419 ------------- ------------ TOTAL PARTNERS' CAPITAL 11,700,455 15,024,419 ------------- ------------ TOTAL LIABILITIES AND PARTNERS' CAPITAL $11,838,601 $15,178,408 ============= ============ The accompanying notes are an integral part of this statement. 3
EVEREST FUND, L.P. (AN IOWA LIMITED PARTNERSHIP) CONDENSED SCHEDULE OF INVESTMENTS September 30, 2012 UNAUDITED EXPIRATION NUMBER OF MARKET % OF PARTNERS' DATES CONTRACTS VALUE (OTE) CAPITAL ---------------- --------- ------------ -------------- LONG POSITIONS: FUTURES POSITIONS Interest rates Dec 12 - Jun 13 280 $(42,393) -0.36% Metals Dec 12 65 147,906 1.26% Energy Dec 12 - Jan 13 40 28,819 0.25% Agriculture Nov 12 - Dec 12 48 (14) 0.00% Currencies Dec 12 - Sep 13 454 (15,100) -0.13% Indices Dec 12 - Jun 13 44 (48,135) -0.411% Forward Positions Currencies 6,313 0.05% ---------- ---------- Total long positions 77,396 0.66% SHORT POSITIONS: FUTURES POSITIONS Energy Jan 13 4 (18,160) -0.16% Agriculture Dec 12 - Mar 13 120 (51,502) -0.44% Forward Positions Currencies (5,808) -0.05% ---------- ----------- Total short positions (75,470) -0.65% ----------- ----------- TOTAL OPEN CONTRACTS 1,926 0.02% =========== =========== The accompanying notes are an integral part of this statement. THE EVEREST FUND, L.P. (an Iowa Limited Partnership) CONDENSED SCHEDULE OF INVESTMENTS December 31, 2011 AUDITED Unrealized % of(Loss) Expiration Number Partners' On Open Date of Contracts Capital Contracts ________ ____________ _________ ___________ Long U.S. Futures Contracts Interest rates Mar 12 - Sep 12 157 1.31% $196,358 Agriculture Mar 12 10 0.00% (250) ---------- ---------- Total Long Futures Contracts 1.31 % 196,108 ---------- ---------- Short U.S. Futures Contracts Interest rates Mar 12 4 -0.01% ($2,070) Metals Feb 12 - Mar 12 60 2.29% 343,720 Energy Mar 12 - Apr 12 55 0.17% 25,835 Agriculture Mar 12 166 0.30% 45,668 Currencies Mar 12 - Dec 12 126 -0.26% (39,013) Indices Mar 12 9 0.14% 21,047 ---------- ---------- Total Short Futures Contracts 2.63 % $395,188 ---------- ---------- Total Futures Contracts 3.94 % $591,296 ========== ========== The accompanying notes are an integral part of these financial statements.
4 EVEREST FUND, L.P. (AN IOWA LIMITED PARTNERSHIP) STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED September 30, 2012 AND 2011 UNAUDITED THREE MONTHS ENDED THREE MONTHS ENDED September 30, 2012 September 30, 2011 ------------------- ------------------- TRADING INCOME (LOSS) Net realized trading gain(loss) on closed contracts $ (836,784) $ 831,293 Change in net unrealized trading gain (loss) on open contracts 204,347 950,479 Net foreign currency translation loss (324) 11,555 Brokerage Commissions (12,122) (11,236) -------------------- ------------------- NET TRADING INCOME (LOSS) (644,883) 1,782,091 Interest income, net of cash management fees 8,404 7,772 ---------------- ------------------- TOTAL INCOME (636,479) 1,789,863 ---------------- ------------------- EXPENSES: General partner management fees 177,627 245,088 Advisor Management fees 61,853 88,228 Incentive fees 0 0 Professional fees 17,416 7,155 Administrative expenses 6,473 2,775 ---------------- ------------------- TOTAL EXPENSES 263,369 343,247 ---------------- ------------------- NET INCOME (LOSS) $(899,848) $1,446,616 ================ =================== NET INCOME (LOSS) PER UNIT OF PARTNERSHIP INTEREST A SHARES, OUTSTANDING ENTIRE PERIOD $(197.94) $318.42 ================ =================== The accompanying notes are an integral part of these statements.
EVEREST FUND, L.P. (AN IOWA LIMITED PARTNERSHIP) STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011 UNAUDITED NINE MONTHS ENDED NINE MONTHS ENDED September 30, 2012 September 30, 2011 -------------------- ------------------- TRADING INCOME (LOSS) Net realized trading gain(loss) on closed contracts $(1,913,146) $1,388,527 Change in net unrealized trading gain (loss) on open contracts (589,371) (13,871) Net foreign currency translation loss 77,788 5,040 Brokerage Commissions (42,635) (34,547) -------------------- ------------------- NET TRADING INCOME (LOSS) (2,467,363) 1,345,149 Interest income, net of cash management fees 27,129 27,203 ---------------- ------------------- TOTAL INCOME (LOSS) (2,440,234) 1,372,352 ---------------- ------------------- EXPENSES: General partner management fees 541,425 753,184 Advisor Management fees 189,612 264,761 Incentive fees 0 143,073 Professional fees 53,286 30,602 Administrative expenses 9,971 6,265 ---------------- ------------------- TOTAL EXPENSES 794,295 1,197,885 ---------------- ------------------- NET INCOME (LOSS) $(3,234,528) $174,467 ================ =================== NET INCOME (LOSS) PER UNIT OF PARTNERSHIP INTEREST A SHARES, OUTSTANDING ENTIRE PERIOD $(711.49) $38.40 ================ =================== The accompanying notes are an integral part of these statements.
5 EVEREST FUND, L.P. (An Iowa Limited Partnership) STATEMENT OF CHANGES IN PARTNERS' CAPITAL FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 UNAUDITED UNITS LIMITED PTRS A SHARES A SHARES TOTAL ---------- ---------------- ------------ BALANCES, January 1, 2012 4,576.29 15,024,419 15,024,419 Additional Units Sold 120.69 335,776 335,776 Redemptions (150.83) (421,888) (421,888) Less Offering Costs -- (3,324) (3,324) Net profit (Loss) -- (3,234,528) (3,234,528) ----------- --------------- ------------- BALANCES, SEPTEMBER 30,2012 4,546.149 $11,700,455 $11,700,455 =========== =============== ============= Net asset value per unit, January 1, 2012 $3,283.10 Net profit (loss) per unit (709.40) ------------ Net asset value per unit SEPTEMBER 30, 2012 $2,573.707 ============ The accompanying notes are an integral part of these statements.
6 EVEREST FUND, L.P. (An Iowa Limited Partnership) STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011 UNAUDITED 7 EVEREST FUND, L.P. NOTES TO FINANCIAL STATEMENTS sEPTEMBER 30, 2012 (1) GENERAL INFORMATION AND SUMMARY The Everest Fund, L.P., formerly Everest Futures Fund, L.P. (an Iowa Limited Partnership), (the "Partnership") is a limited partnership organized in June 1988, under the Iowa Uniform Limited Partnership Act (the "Act") for the purpose of engaging in the speculative trading of commodity futures and options thereon and forward contracts (collectively referred to as "Commodity Interests"). The sole General Partner of the Partnership is Everest Asset Management, Inc. (the "General Partner"). On July 1, 1995, the Partnership recommenced its offering under a Regulation D, Rule 506 private placement. The private placement offering is continuing at a gross subscription price per unit equal to net asset value (NAV) per unit, plus an organization and offering cost reimbursement fee payable to the General Partner, and an ongoing compensation fee equal to 3% of the net asset value of Class A Units sold. The Class A Units (retail shares) continue to be charged an initial 1% Offering and Organization fee as a reduction to capital. On June 12, 2012 The Everest Fund, L.P. has dismissed its Futures Clearing Firm Newede USA, LLC. Newedge USA, LLC served as the Fund's clearing broker from October 13, 2005 through June 2012. On June12, 2012 they were replaced with R.J. O'Brein and Associates, LLC (RJO), 222 South Riverside Plaza, Suite 900, Chicago, Illinois 60606. The decision to change clearing brokers was recommended and approved by the board of directors. Currently, R.J. O'Brien and Associates, LLC ("RJO") serves as the Fund's clearing broker to execute and clear Fund's futures and equities transactions and provide other brokerage-related services. RJO Professional FX is a division of RJO. RJO Professional FX may execute foreign exchange or other over the counter transaction with the Fund as principal. RJO is a subsidiary of R.J. O'Brien Holdings Corporation. RJO is registered with the U.S. Commodity Futures Trading Commission ("CFTC") as a Futures Commission Merchant ("FCM") and is a member of the National Futures Association ("NFA") in several capacities, including as a Forex Dealer Member ("FDM") and is a member of certain principal U.S. contracts markets. RJO is a full clearing member of the CME Group, the IntercontinentalExchange, NYSE Liffe U.C., and the CBOE Futures Exchange ("CFE"). There have been no material administrative, civil or criminal action brought, pending or concluded against RJO in the past five years. There were no disagreements with the former clearing broker on any matter of accounting principles or practices, or procedures or compliance with the applicable rules of the Commission during the most recent fiscal year and any subsequent interim periods. The move is necessitated by the desire for more efficient trading and execution, and better back office support. On October 31, 2012 The Everest Fund, L.P. has dismissed its Commodity Trading Advisor John W. Henry & Company, Inc. after the Chairman of JWH announced that JWH would stop trading client assets as of December 31, 2012. We will be replacing JWH with EMC Capital Management, Inc., 2201 Waukegan Road, Suite West 240, Bannockburn, IL 60015; telephone: 847-267-8700. (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenue Recognition Commodity futures contracts, forward contracts, physical commodities, and related options are recorded on the trade-date basis and realized gains or losses are recognized when contracts are liquidated. All such transactions are recorded on the identified cost basis and marked to market daily. Unrealized gains or losses on open contracts (the difference between contract trade price and market price) are reported in the statement of financial condition as a net unrealized gain or loss, as there exists a right of offset of unrealized gains or losses in accordance with the Financial Accounting Standards Board Interpretation No. 39 - "Offsetting of Amounts Related to Certain Contracts." Any change in net unrealized gain or loss from the preceding period is reported in the statement of operations. Fair value of exchange-traded contracts is based upon exchange settlement prices. Fair value of non-exchange-traded contracts is based on third party quoted dealer values on the Interbank market. Use of 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 the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents Cash equivalents represent short-term highly liquid investments with maturities of 90 days or less at the date of acquisition. The Partnership maintains deposits with high quality financial institutions in amounts that are in excess of federally insured limits; however, the Partnership does not believe it is exposed to any significant credit risk. Redemptions Payable Pursuant to the provisions of FASB ASC 480, Distinguishing Liabilities from Equity, redemptions approved by the General Partner prior to month end with a fixed effective date and fixed amount are recorded as redemptions payable as of month end. Fair Value of Financial Instruments The financial instruments held by the Company are reported in the statements of financial condition at fair value, or at carrying amounts that approximate fair value, due to their highly liquid nature and short-term maturity. Foreign Currency Translation The Partnership's functional currency is the U.S. dollar, however, it transacts business in currencies other than the U.S. dollar. Assets and liabilities denominated in foreign currencies are translated at the prevailing exchange rates as of the date of the statement of financial conditions. Gains and losses on investment activity are translated at the prevailing exchange rate on the date of each respective transaction while period end balances are translated at the period end currency rates. Realized and unrealized foreign exchange gains or losses are included in trading income or loss in the statements of operations. Income Taxes No provision for income taxes has been made in the accompanying financial statements as each partner is responsible for reporting income (loss) based upon the pro rata share of the profits or losses of the Partnership. Recently adopted accounting pronouncements ASU No. 2011-02; A Creditor's Determination of Whether a Restructuring Is a Troubled Debt Restructuring ("TDR"). In April, 2011, the FASB issued ASU No. 2011-02, intended to provide additional guidance to assist creditors in determining whether a restructuring of a receivable meets the criteria to be considered a troubled debt restructuring. The amendments in this ASU are effective for the first interim or annual period beginning on or after June 15, 2011, and are to be applied retrospectively to the beginning of the annual period of adoption. As a result of applying these amendments, an entity may identify receivables that are newly considered impaired. Early adoption is permitted. The adoption of ASU No. 2011-02 will not have a material affect on the Partnership's financial statements. ASU No. 2011-04; Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Reporting Financial Standards (IFRS).The amendments in this ASU generally represent clarifications of Topic 820, but also include some instances where a particular principle or requirement for measuring fair value or disclosing information about fair value measurements has changed. This ASU results in common principles and requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and IFRS. The amendments in this ASU are to be applied prospectively. For public entities, the amendments are effective during interim and annual periods beginning after December 15, 2011. Early application by public entities is not permitted. (3) FAIR VALUE OF FINANCIAL INSTRUMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Financial Accounting Standards Board has defined a hierarchy for fair value measurements. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below: Level 1. Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2. Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly; and fair value is determined through the use of models or other valuation methodologies. A significant adjustment to a Level 2 input could result in the Level 2 measurement becoming a Level 3 measurement. Level 3. Inputs are unobservable for the asset or liability and include situations where there is little, if any, market activity for the asset or liability. The inputs into the determination of fair value are based upon the best information in the circumstances and may require significant management judgment or estimation. The table below demonstrates the Partnership's fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of September 30, 2012 and September 30, 2011: Level 1 Level 2 Level 3 Assets at September 30,2012: Open positions in futures and option contracts $1,926 ---------- ---------- --------- Total assets at fair value $1,926 $0 $0 ========== ========== ========= Level 1 Level 2 Level 3 Assets at September 30, 2011: Open positions in futures and option contracts $1,021,970 ---------- ---------- --------- Total assets at fair value $1,021,970 $0 $0 =========== ========== ========= (4) LIMITED PARTNERSHIP AGREEMENT The Limited Partners and General Partner share in the profits and losses of the Partnership in proportion to the number of units or unit equivalents held by each. However, no Limited Partner is liable for obligations of the Partnership in excess of their capital contribution and profits, if any, and such other amounts as they may be liable for pursuant to the Act. Distributions of profits are made solely at the discretion of the General Partner. Responsibility for managing the Partnership is vested solely in the General Partner. The General Partner has delegated complete trading authority to an unrelated party (see Note 5). Although the Agreement does not permit redemptions for the first six months following a Limited Partner's admission to the Partnership, the Agreement does permit the Partnership to declare additional regular redemption dates. The Partnership will be dissolved on December 31, 2020, or upon the occurrence of certain events, as specified in the Limited Partnership agreement. (5) AGREEMENTS AND RELATED PARTY TRANSACTIONS Effective November 2003, the General Partner charges the Partnership a monthly management fee equal to 0.50% (6% annually) of the Partnership's Class A beginning-of-month net asset value. From the monthly management fee the General Partner deducts the round turn trading costs and related exchange fees (between $5.80 to $10.70 per round turn trade on domestic exchanges, and higher for foreign exchanges) and pays the selling agents and certain other parties, if any, up to 50% of the fee retained by the General Partner. The General Partner may replace or add trading advisors at any time. The clearing agreements with the clearing brokers provide that the clearing brokers charge the Partnership brokerage commissions at the rate of between $5.80 to $10.70 per round-turn trade, plus applicable exchange, give up fees and National Futures Association fees for futures contracts and options on futures contracts executed on domestic exchanges and over the counter markets. For trades on certain foreign exchanges, the rates may be higher. The Partnership also reimburses the clearing brokers for all delivery, insurance, storage or other charges incidental to trading and paid to third parties. The Partnership earns interest on 95% of the Partnership's average monthly cash balance on deposit with its clearing brokers at a rate equal to the average 91-day Treasury Bill rate during that month. The Partnership has also entered into an investment advisory agreement with Horizon Cash Management L.L.C. ("HCM''). At September 30, 2012 and 2011 Approximately 99.824% and 99.819 %, respectively of the partnership's capital were funds deposited with a commercial bank and invested under the direction of HCM. HCM receives a monthly cash management fee equal to 1/12 of .25% (.25% annually) of the average daily assets under management if the accrued monthly interest income earned on the Partnership's assets managed by HCM exceeds the 91-day U.S. Treasury bill rate. (6) DERIVATIVE INSTRUMENTS In the normal course of business, the Partnership engages in trading derivatives by purchasing and selling futures contracts and options on future contracts for its own account. All such trading is effectuated as speculative as opposed to hedging. Effective January 1, 2009, the Partnership adopted the provisions of Accounting Standards Codification 815, Derivatives & Hedging, which requires enhanced disclosures about the objectives and strategies for using derivatives and quantitative disclosures about the fair value amounts, and gains and losses on derivatives. See below for such disclosures. Fair Value of Derivative Instruments 2012 2011 Speculative Instruments Location- Statement of Financial Fair Value Fair Value Condition ______________________ ________________________________ __________ __________ Futures Contracts Net unrealized gain (loss) on open contracts $1,926 $1,021,970 2012 2011 Speculative Instruments Location- Statement of Operations Fair Value Fair Value _______________________ _________________________________ ____________ _________ Futures Contracts Net realized trading gains(losses) ($1,913,146) $1,388,527 Futures Contracts Change in unrealized gains(losses) ($589,371) $(13,871) Asset Derivatives Balance Sheet Location Fair Value #of contracts _____________________ ____________ _____________ Agricultural Net unrealized trading gains on open contracts (14) 48 Currencies Net unrealized trading gains on open contracts (15,100) 454 Energy Net unrealized trading gains on open contracts 28,819 40 Metals Net unrealized trading gains on open contracts 147,906 65 Interest rates Net unrealized trading gains on open contracts (42,393) 280 Indices Net unrealized trading gains on open contracts (48,135) 44 Currency Forwards Net unrealized trading gains on open contracts 6,313 ============ =========== 77,396 931 Liability Derivatives Balance Sheet Location Fair Value #of contracts Net _____________ ______________ _______ Agricultural Net unrealized trading gains on open contracts (51,502) 120 (51,516) Currencies Net unrealized trading gains on open contracts 0 0 (15,100) Energy Net unrealized trading gains on open contracts (18,160) 4 10,659 Metals Net unrealized trading gains on open contracts 0 0 147,906 Interest rates Net unrealized trading gains on open contracts 0 0 (42,393) Indices Net unrealized trading gains on open contracts 0 0 (48,135) Currency Forwards Net unrealized trading gains on open contracts (5,808) 505 ============ ========== ========= (75,470) 124 1,926 Trading Revenue for the Nine Months Ended September 30, 2012 Line Item in Income Statement Realized (1,877,993) Change in unrealized (589,371) =========== (2,467,363) Includes net foreign currency translation gain(loss) Trading Revenue for the Nine Months Ended September 30, 2011 Line Item in Income Statement Realized 1,359,020 Change in unrealized (13,871) =========== 1,345,149 Includes net foreign currency translation gain (loss) Total average of futures contracts bought and sold Nine months ended September 30, 2012 Total (1,877,993) ============ 9 month average (208,666) Total average of futures contracts bought and sold Nine months ended September 30, 2011 Total 1,359,020 =============== 9 month average 151,002 For the nine months ended September 30, 2012, the monthly average of futures contracts bought and sold was approximately (208,666). (7) FINANCIAL INSTRUMENTS, OFF-BALANCE SHEET RISKS AND CONTINGENCIES The Partnership engages in the speculative trading of U.S. and foreign futures contracts, options on U.S. and foreign futures contracts, and forward contracts ("collectively derivatives''). These derivatives include both financial and non-financial contracts held as part of a diversified trading strategy. The Partnership is exposed to both market risk, the risk arising from changes in the market value of the contracts; and credit risk, the risk of failure by another party to perform according to the terms of a contract. The purchase and sale of futures and options on futures contracts requires margin deposits with a Futures Commission Merchant ("FCM"). Additional deposits may be necessary for any loss on contract value. The Commodity Exchange Act requires an FCM to segregate all customer transactions and assets from the FCM's proprietary activities. A customer's cash and other property such as U.S. Treasury Bills, deposited with an FCM are considered commingled with all other customer funds subject to the FCM's segregation requirements. In the event of an FCM's insolvency, recovery may be limited to a pro rata share of segregated funds available. It is possible that the recovered amount could be less than the total of cash and other property deposited. For derivatives, risks arise from changes in the market value of the contracts. Theoretically, the Partnership is exposed to a market risk equal to the value of futures and forward contracts purchased and unlimited liability on such contracts sold short. As both a buyer and seller of options, the Partnership pays or receives a premium at the outset and then bears the risk of unfavorable changes in the price of the contract underlying the option. In the case of forward contracts, over-the-counter options contracts or swap contracts, which are traded on the interbank or other institutional market rather than on exchanges, the counterparty is generally a single bank or other financial institution, rather than a clearinghouse backed by a group of financial institutions; thus, there likely will be greater counterparty credit risk. The Partnership trades only with those counterparties that it believes to be creditworthy. All positions of the Partnership are valued each day on a mark-to-market basis. There can be no assurance that any clearing member, clearinghouse or other counterparty will be able to meet its obligations to the Partnership. (8) FINANCIAL HIGHLIGHTS The following financial highlights show the Partnership's financial performance for the nine months ended September 30, 2012 and September 30, 2011. September 30, 2012 September 30, 2011 -------------------- -------------------- Class A Class A -------------------- -------------------- Total return before distributions* (21.61)% 1.20% =============== =============== Ratio to average net assets: Net investment Income (loss)** (7.96)% (8.92)% =============== =============== Management fees 5.62% 5.74% Incentive fees 0.00% 1.09% Other expenses 2.62% 2.30% --------------- --------------- Total expenses** 8.24% 9.13% =============== =============== *Not annualized **Annualized Interim Financial Statements The statements of financial condition, including the consolidated schedule of investments, as of September 30, 2012, the statements of operations for the three and nine months ended September 30, 2012 and 2011, the statements of cash flows and changes in partners' capital (net asset value) for the nine months ended September 30, 2012 and 2011 and the accompanying notes to the financial statements are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles may be omitted pursuant to such rules and regulations. In the opinion of management, such financial statements and accompanying disclosures reflect all adjustments, which were of a normal and recurring nature, necessary for a fair presentation of financial position as of September 30, 2012, results of operations for the nine months ended September 30, 2012 and 2011, cash flows and changes in partners' capital (net asset value) for the nine months ended September 30, 2012 and 2011. The results of operations for the full nine months ended September 30, 2012 and 2011 are not necessarily indicative of the results to be expected for the full year or any other period. These financial statements should be read in conjunction with the audited financial statements and the notes thereto included in our form 10-k as filed with the Securities and Exchange Commission. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation Each months ended September 30, 2011 compared to each months ended September 30, 2010 Class A Units were negative 13.32% in January 2012 resulting in a Net Asset Value per unit of $2,845.95 as of January 31, 2012. Class A Units were positive 1.40% in January 2011 resulting in a Net Asset Value per unit of $3,841.11 as of January 31, 2011. The New Year started on a decidedly negative note for the Fund as performance declined in January. All six sectors of the portfolio posted negative returns with the largest losses coming from the metals sector. There was no dominant or clear theme running through the markets in January that easily explains the Fund's returns. The interest rate sector was the best performing sector in the Fund for the month. The foreign exchange markets were more difficult to trade in January as the Fund suffered from significant reversals across the sector during the month. The stock market was slightly unprofitable as gains from positions in U.S. equity index futures were insufficient to offset losses from positions in the Nikkei and European index futures. The largest losses came from the metals sector and from positions in gold and silver. Gold and silver ended 2011 in clear down trends with closing prices near multi-month lows. The energy sector was unprofitable as gains from positions in natural gas could not offset losses from petroleum products. Agricultural commodities were also unprofitable for the month with all markets in the sector detracting from performance. The month was filled with radical trend reversals in many markets that have previously provided excellent returns and portfolio protection for our investors. Fund's portfolios have been structured to provide investors with a broad exposure to historically uncorrelated markets and market sectors that have an opportunity to enhance the risk and return profiles of their overall investment portfolios. Class A Units were negative 0.66% in February 2012 resulting in a Net Asset Value per unit of $2,827.04 as of February 29, 2012. Class A Units were positive 3.09% in February 2011 resulting in a Net Asset Value per unit of $3,959.69 as of February 28, 2011. After a tumultuous start to the year, the Fund's performance stabilized in February. This period of relative quiet reflected a less volatile market environment for many of the sectors traded in the Fund. Global equity prices rose while registering lower levels of volatility. The energy sector was one area where there continues to be a high level of uncertainty. The Fund was able to profit as energy prices rose. Gains from positions in energy, indices and currencies helped reduce the losses in the other sectors resulting in a minimal loss for the Fund. The currency sector was profitable for February as positions in the Japanese yen paced gains. Gains from positions in the yen more than offset small net losses from trading in European currencies. The rally in global stock prices propelled performance in the equity sector in the latest period. Positions in the Japanese Nikkei 225 were the most profitable in the sector. Positions in the metal sector were unprofitable in February as the listless trading conditions that prevailed for most of the month were upset in a one day shock on the last trading day of the month. Gold trended higher on low volatility for most of February, while it generally followed the path of stocks. The energy sector was profitable in February as crude oil prices moved higher and traded over $100 per barrel for most of the month. Positions in all energy markets were profitable in February. The agricultural sector was unprofitable as gains from positions in the cotton market were unable to offset losses in other parts of the sector. There was an absence of trends across the balance of the sector with generally lower levels of volatility. After a difficult start to the year, a period of calm has come across many of the market sectors in the Fund amid lower levels of volatility. Class A Units were negative 3.57% in March 2012 resulting in a Net Asset Value per unit of $2,726.12 as of March 31, 2012. Class A Units were negative 1.14% in March 2011 resulting in a Net Asset Value per unit of $3,914.46 as of March 31, 2011. The Fund declined in March as the markets closed out the first Quarter in a decidedly quiet tone. The interest rate sector was the worst-performing sector in the Fund in March as the long run move in bond prices may have ended. The currency sector was essentially flat as gains from positions in the Japanese yen nearly offset losses from trading in European currencies as exchange rate flows generally tracked the changes in market risk sentiment. Trading in equities was predictably profitable given the underlying state of the markets as positions in the Nikkei 225 led the way. Trading in metals was unprofitable in March as meaningful losses in silver more than offset small gains from trading in gold. While the rally in crude oil prices lost some momentum in March, the energy sector was nevertheless still profitable as sector leadership rotated to the natural gas market. In the petroleum complex, small gains in crude oil and London gas oil offset small losses from positions in heating oil. The agricultural sector was slightly unprofitable in March as gains from positions in soybeans and coffee were unable to offset losses in other parts of the sector. Unfortunately, soybeans were the only strong trend in the sector as most other markets lacked direction. Class A Units were negative 1.80% in April 2012 resulting in a Net Asset Value per unit of $2,677.00 as of April 30, 2012. Class A Units were positive 7.53% in April 2011 resulting in a Net Asset Value per unit of $4,209.22 as of April 30, 2011. In a relatively quiet month the Fund declined in April as the rally in equity prices appeared to lose some momentum. In general, commodity prices fell in April as the uptrend in crude oil prices appears to be threatened. Amidst this relatively benign market backdrop, the Fund's trading advisor added a few new markets to the portfolio with the objective of increasing the diversification of the Fund. The South African rand and the Russian ruble were added to the currency sector, while London copper and aluminum were added to the metals sector. The interest rate sector was the best-performing sector in the Fund during April as positions in European and Japanese bond futures lead the way and offset small losses from positions in U.S., interest rates. The currency sector was unprofitable in April. Trading in European and emerging currencies was largely mixed and not sufficient enough to offset losses from trading in the Japanese yen. In their inaugural month of trading in the Fund's portfolio, emerging currencies were flat, with the Russian ruble contributing small gains and the South African rand contributing small losses. The equity sector experienced small losses during the month. The energy sector was the worst-performing sector in the Fund during April, as positions in crude oil, crude oil products and natural gas were all unprofitable. The high levels of supply combined with weaker economic data weighed on the oil patch in April. The small month-on-month rally in natural gas led to small losses for the Fund, which ended a streak of nine consecutive months of profitable trading in this commodity. The metals market was profitable as gains from precious metals, especially silver, more than offset small losses from trading in industrial metals. The newly added London copper and London aluminum traded largely flat with just small losses for the month. The agricultural sector was also profitable in April due to strong gains from trading in the soybean market. Class A Units were positive 15.78% in May 2012 resulting in a Net Asset Value per unit of $3,099.31 as of May 31, 2012. Class A Units were negative 13.27% in May 2011 resulting in a Net Asset Value per unit of $3,650.59 as of May 31, 2011. Performance in May was exceptional as the Fund gained almost 16 percent for the month. Profits came from almost every sector traded: metals; interest rates; currencies; energies; and agriculturals. In our opinion, this is a very good time to have the diversification of Everest and the traditional equity and bond markets. The interest rate sector was the best-performing sector in the Fund as government bond prices surged to historic levels, pushing yields on government bonds to historic levels. Performance from the currency sector was also strong as investor flight from the euro gathered momentum. The Russian ruble and the South African rand were both profitable in their first full month of trading after being added to the Fund in April. The euro and ruble were the sector's best-performing markets. Despite the fact that most global equity markets were down significantly during May, the Fund's exposure to that sector generated only modest profits, as not all markets entered the month in clear down trends. The metals sector, revamped in April, contributed positively to performance in May as all positions in the sector were profitable. The copper and aluminum markets - also newly added to the Fund - were both profitable in their first full month of trading. Trading in the energy sector was profitable as positions in crude oil products were more than sufficient to offset losses from trading in natural gas. All positions in crude oil and crude oil products were significantly positive in May. The Fund also benefited from strong gains in the agricultural sector, especially in cotton and sugar. Class A Units were negative 10.54% in June 2012 resulting in a Net Asset Value per unit of $2,772.63 as of June 30, 2012. Class A Units were negative 3.73% in June 2011 resulting in a Net Asset Value per unit of $3,514.44 as of June 30, 2011. The Fund's performance in June was disappointing with the reversal of a large portion of the profits generated in May. The interest rate sector was unprofitable in June but, on a relative basis, performance was more encouraging as long-term trends remained largely intact and there was only a modest retracement of the strong moves of May. The currency sector was hard hit as all positions were unprofitable on the month. Trends in the equity sector were similarly upset. The S&P 500, which was down 6.26 percent in May, rebounded in June to gain almost four percent, continuing the non-correlation of the stock markets and our Everest Fund. Trading in metals was unprofitable as gains from positions in aluminum were insufficient to offset losses from trading in gold and copper. In certain respects, trading in the energy sector was similar to the metals sector. Crude oil and crude oil products were in powerful downtrends for much of the month and were making significant positive contributions to the Fund's performance until very late in the month. The agricultural sector was unprofitable in June as trading in sugar and corn weighed heavily in the group's performance. Both markets entered the month in long protracted down trends. Sugar prices gained more than six percent in June, ending trends for certain models used in the Fund. Class A Units were positive 5.31% in July 31, 2012 resulting in a Net Asset Value per unit of $2,919.89 as of July 31, 2012. Class A Units were positive 9.46% in July 31, 2011 resulting in a Net Asset Value per unit of $3,847.03 as of July 31, 2011. The Fund's performance was strong in July. The agricultural sector made the difference between a modestly positive month and the strong performance delivered in July. Corn and soybean prices surged during the month as drought conditions across much of the grain belt significantly damaged the U.S. crop. The trend in these markets was powerful and made a significant contribution to the month's positive performance. Trading in the interest rate sector was profitable as yields touched historic lows. All positions in the sector were profitable for the month. Trading in the currency sector was more mixed; but nonetheless, still modestly profitable in July led by positions in the euro and Swiss franc. The South African rand and Russian ruble were directionless leading to small losses for the month. Trading in the equity sector was unprofitable as positions continue to be upset by abrupt changes in investor sentiment. Trading in Japanese equities was also challenging in July. The energy sector was also unprofitable in July as the downtrend in oil prices reversed during July. Trading in the metals sector was relatively subdued as small losses from trading in gold and copper offset small gains from trading in aluminum. Industrial metal prices have also lacked direction for some time as the markets have struggled to reconcile increased monetary stimulus with reduced expectation for global demand. Positions across the complex have been relatively light, reflecting the lack of clear direction in the market, which has resulted in a reduced impact on Fund performance attributable to the sector. Trading in the agricultural sector was far from subdued. Corn prices rallied 27 percent for the month and were up more than 60 percent since mid-June, as drought conditions in the U.S. Midwest persist. Soybean prices rallied 15 percent during the month. The lack of rainfall represents the worst drought since 1956, while crop conditions are the poorest since 1988. The two markets generated significant positive performance for the Fund and more than offset small losses incurred from trading in other parts of the sector. Class A Units were negative 6.08% in August 31, 2012 resulting in a Net Asset Value per unit of $2,742.39 as of August 31, 2012. Class A Units were positive 4.93% in August 31, 2011 resulting in a Net Asset Value per unit of $4,036.56 as of August 31, 2011. Performance declined in August as trends in interest rates and currencies reversed course near mid-month. Price reversals in interest rates were the key factor affecting performance in August. The Fund entered the month with positions that were profiting from the long-term decline in government bond yields. The extent of this increase in interest rates was sufficient to cause a change in the make-up and signals of the positions held within the interest rate sector of the portfolio. Trading in currencies was unprofitable as small gains from positions in the British pound were insufficient to offset the losses from trading in other currencies. Trading in the equity sector was slightly negative as gains from positions in U.S. and European equities were offset by losses from trading in the Japanese Nikkei 225. Trading in energies was unprofitable as gains from positions in oil and oil products were offset by losses from trading in natural gas. Trading in the metals sector was especially quiet in August as the price action in all the markets remained largely range-bound. Small gains from trading in gold did not quite offset small losses from trading in aluminum and copper. Trading in agricultural commodities was positive as the summer-long rally in soybean prices continued. Soybean prices gained more than seven percent for the month, while setting another all-time high during August. Grain prices remain underpinned by supply losses caused by the U.S. drought. The Fund was also able to profit from certain downtrends in agricultural prices. Raw sugar prices declined 12.5 percent in August as optimal weather conditions in Brazil, the world's largest exporter of sugar, weighed on prices. Class A Units were negative 6.15% in September 30, 2012 resulting in a Net Asset Value per unit of $2,573.71 as of September 30, 2012. Class A Units were positive 5.03% in September 30, 2011 resulting in a Net Asset Value per unit of $3,833.38 as of September 30, 2011. Performance declined in September as most financial markets continue to be held in check or under the firm control of politicians and economic policy makers. What has been extremely positive for the valuation of stocks and bonds has been more challenging for the trend-dependent strategies used by Fund. Trading in the interest rate sector was little changed as recent action steps by global monetary authorities have sapped the market of much of its volatility. It has been a difficult environment for trend-followers. The sector was unprofitable for the month as small gains from positions in Libor and Eurodollar contracts were insufficient to offset small losses from positions in bond futures. The currency sector was quiet as small position sizes across the sector meant that there were only small changes to profit/loss on the individual market level. Small profits from positions in the British pound and the Russian ruble slightly offset losses from other positions in the sector. The energy sector was unprofitable in September. Crude oil prices, which entered the month in an uptrend due in part to the increases in monetary stimulus and also the heightened geopolitical risk linked to turmoil in Syria, reversed course sharply during the month. Natural gas, which has been in an extended long-term down trend, rallied in September leading to losses. Trading in the metals sector was profitable as strong gains in the gold market more than offset losses from trading in industrial metals. Copper and aluminum also moved higher during September but the Fund was not positioned early in the month to take advantage of the rally in industrial metals. The agricultural sector suffered meaningful losses during the month, partly as a result of the sharp turnaround in grain prices. The market traded at a record price early in the month, following reports that the U.S. crop will drop to a nine-year low after the hottest and driest summer in the Midwest since 1936. The Fund also suffered from a reversal in the prices of coffee. Item 3. Quantitative and Qualitative Disclosures About Market Risk There has been no material change with respect to market risk since the "Quantitative and Qualitative Disclosures About Market Risk" was made in the Form 10K of the Partnership dated December 31, 2011. Item 4. Controls and Procedures As of September 30, 2012 an evaluation was performed by the company under the supervision and with the participation of management, including the President of the Company, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on that evaluation, the Company's management, including the President, concluded that the Company's disclosure controls and procedures are effective in timely alerting them to material information relating to the Company that is required to be included in the Company's period filings with the Securities and Exchange Commission. There have been no significant changes in the company's internal controls or in other factors that could significantly affect those internal controls subsequent to the date the company carried out its evaluation. Part II. OTHER INFORMATION Item 1. Legal Proceedings Neither the Partnership, nor the General Partner, is party to any pending material legal proceeding. Item 1A. Risk Factors There has been no material change with respect to risk factors since the "Risk Factors" were disclosed in the Form 10K of the Partnership dated December 31, 2011. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds RECENT SALES OF UNREGISTERED SECURITIES A UNITS NIne months Nine months ended September 30, 2012 ended September 30,2011 Units Sold 120.69 181.46 Value of Units Sold $335,776 $713,010 1% of the proceeds from the above sales were used to pay the Partnership's Organization and Offering charge. The remaining 99% was invested in the Partnership. See Part I, Statement of Changes in Partner's Capital Item 3. Defaults Upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K a) Exhibits Exhibit Number Description of Document Page Number 31 Certification by Chief Executive Officer and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 E- 1-2 32 Certification by Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 E - 3 b) Reports on Form 8-K none SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned and thereunto duly authorized. EVEREST FUND, L.P. Date: November 14, 2012 By: Everest Asset Management, Inc., its General Partner By:__/s/ Peter Lamoureux__________________________ Peter Lamoureux President 3