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	Commission File Number
ended June 30, 2018	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 232, 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 o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated filer o
Non-accelerated filer   o	Small Reporting Company Filer  x
	Emerging growth company o

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes o No x

 Table of Contents

Part I:	Financial Information
Item 1.	Financial Statements		3
	Statements of Financial Condition  June 30, 2018 (Unaudited) and December 31, 2017 (Audited)		3
	Condensed Schedule of Investments June 30, 2018 (Unaudited)		4
	Condensed Schedule of Investments  December 31, 2017 (Audited)		5
	Statements of Operations For the Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)		6-7
	Statements of Changes in Partners’ Capital (Net Asset Value) For the Six Months Ended June 30, 2018 and 2017 (Unaudited)		8-9
	Statements of Cash Flows  For the Six Months Ended June 30, 2018 and 2017 (Unaudited)		10
	Notes to Financial Statements June 30, 2018		11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		17
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		18
Item 4.	Controls and Procedures		18
Part II:	Other Information		19
Item 1.	Legal Proceedings		19
Item 1A.	Risk Factors		19
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		19
Item 3.	Defaults upon Senior Securities		19
Item 4.	Submission of Matters to a Vote of Security Holders		19
Item 5.	Other Information		19
Item 6.	Exhibits		19

PART I. FINANCIAL INFORMATION

Item 1 Financial Statements

Following are Financial Statements for the six months ended June 30, 2018

EVEREST FUND, L.P.

(An Iowa Limited Partnership)

STATEMENTS OF FINANCIAL CONDITION

June 30, 2018 (UNAUDITED) AND DECEMBER 31, 2017 (AUDITED)

		UNAUDITED				AUDITED
		June 30, 2018				DECEMBER 31, 2017
ASSETS
Equity in broker trading accounts:
Cash in broker trading accounts		$	2,927,245			$	3,265,688
Net unrealized trading gains gain on open contracts			76,023				237,641
			3,003,263				3,503,329
Cash			6,347				9,632
Other			3,716				2,633
TOTAL ASSETS		$	3,013,331			$	3,515,594
LIABILITIES AND PARTNERS’ CAPITAL
LIABILITIES:
Management fee payable - Advisor		$	4,961			$	5,760
Management fee payable – General Partner			13,850				15,107
Redemptions payable			0				0
Accrued expenses			22,985				44,335
TOTAL LIABILITIES			41,796				65,201
PARTNERS’ CAPITAL (Net Assets)			2,971,535				3,450,393
Limited partners, A Shares (1,920.06  and 2,137.27 units outstanding)
TOTAL PARTNERS’ CAPITAL			2,971,535				3,450,393
TOTAL LIABILITIES AND PARTNERS’ CAPITAL		$	3,013,331			$	3,515,594

 

The accompanying notes are an integral part of this financial statement.

EVEREST FUND, L.P.

(AN IOWA LIMITED PARTNERSHIP)

CONDENSED SCHEDULE OF INVESTMENTS

June 30, 2018

UNAUDITED

		EXPIRATION		NUMBER OF				MARKET				% OF PARTNERS’
		DATES		CONTRACTS				VALUE (OTE)				CAPITAL
LONG POSITIONS:
FUTURES POSITION
Interest rates		Sep 18 – Jun 19			95			$	6,015				0.20	%
Metals		Sep 18			8				(56,516	)			-1.90	%
Energy		Aug 18 – Sep 18			12				29,416				0.99	%
Foods		Sep 18			2				120				0.00	%
Grains		Dec 18			1				(88	)			0.00	%
Financials		Sep 18			19				677				0.02	%
									(20,376	)			-0.69	%
Total long positions
SHORT POSITIONS:
FUTURES POSITIONS
Metals		Aug 18 – Oct 18			15				40,767				1.37	%
Agriculture		Nov 18			6				(575	)			-.02	%
Foods		Sep 18 – Oct 18			12				5,971				0.20	%
Grains		Aug 18			21				4,788				0.16	%
Currencies		Sep 18			47				43,337				1.46	%
Financials		Sep 18			2				2,110				0.07	%
Total short positions									96,398				3.24	%
TOTAL Net unrealized gain on futures contracts–United States								$	76,023				2.56	%

The accompanying notes are an integral part of these financial statements.

EVEREST FUND, L.P.

(AN IOWA LIMITED PARTNERSHIP)

CONDENSED SCHEDULE OF INVESTMENTS

December 31, 2017
(AUDITED)

 

AUDITED		Expiration Dates		Number of Contracts				Market Value (OTE)				% of Partners’ Capital
LONG POSITIONS:
FUTURES POSITIONS
Interest rates		Mar 18 - Mar 19			118			($	15,230	)			-0.44	%
Metals		Feb 18 - Mar 18			17				56,308				1.63	%
Energy		Feb 18 - Mar 18			22				62,427				1.81	%
Agriculture		Feb 18 - Mar 18			18				21,620				0.63	%
Currencies		Mar 18			25				21,173				0.61	%
Indices		Jan 18 - Mar 18			31				55,891				1.62	%
									202,189				5.86	%
Total long positions									202,189				5.86	%
SHORT POSITIONS
FUTURES POSITIONS
Interest rates		Mar 18  - Mar 19			96				(6,549	)			-0.19	%
Metals		Apr 18			4				(2,320	)			-0.07	%
Energy		Feb 18			5				3,350				0.10	%
Agriculture		Feb 18 -  Mar 18			90				8,308				0.24	%
Currencies		Mar 18- Sep 19			89				20,845				0.60	%
Indices		Mar 18			11				11,818				0.34	%
									35,452				1.02	%
Total short positions									35,452				1.02	%
Total net unrealized  gain on futures contracts – United States								$	237,641				6.88	%

 

The accompanying notes are an integral part of these financial statements.

EVEREST FUND, L.P.

(AN IOWA LIMITED PARTNERSHIP)

STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED June 30, 2018 AND 2017

UNAUDITED

  

		THREE MONTHS ENDED				THREE MONTHS ENDED
		June 30, 2018				June 30, 2017
TRADING INCOME (LOSS)
Net realized trading (loss)		$	-184,368			$	-4,974
Change in net unrealized trading gain (loss)			59,937				-64,812
Brokerage commissions			-4,486				-6,995
NET TRADING (LOSS)			-128,917				-76,782
Interest income, net of cash management fees			11,775				5,659
TOTAL (LOSS)			-117,142				-71,123
EXPENSES:
Management fee - General Partner			42,310				49,564
Management fee - Advisor			15,286				18,603
Professional fees			26,326				26,640
Administrative expenses			1,577				2,519
TOTAL EXPENSES			85,499				97,327
NET (LOSS)		$	-202,641			$	-168,450
NET (LOSS) PER UNIT OF PARTNERSHIP INTEREST		$	-105.54			$	-77.07

The accompanying notes are an integral part of these financial statements.

EVEREST FUND, L.P.

(AN IOWA LIMITED PARTNERSHIP)

STATEMENTS OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2018 AND 2017

UNAUDITED

 

		SIX MONTHS ENDED				SIX MONTHS ENDED
		JUNE 30, 2018				JUNE 30, 2017
TRADING INCOME (LOSS)
Net realized trading gain		$	242,543			$	1,879
Change in net unrealized trading (loss)			(166,305	)			(154,893	)
Brokerage Commissions			(8,634	)			(14,406	)
NET TRADING INCOME (LOSS)			67,604				(167,420	)
Interest income, net of cash management fees			22,281				9,982
TOTAL INCOME (LOSS)			89,885				(157,438	)
EXPENSES:
General partner management fees			89,267				101,638
Advisor Management fees			32,542				38,152
Incentive fees			0				0
Professional fees			52,222				54,466
Administrative expenses			3,399				3,959
TOTAL EXPENSES			177,430				198,216
NET (LOSS)		$	(87,545	)		$	(355,653	)
NET  LOSS  PER UNIT OF PARTNERSHIP INTEREST		$	-45.59			$	-162.73

 

The accompanying notes are an integral part of these financial statements.

EVEREST FUND, L.P.

(An Iowa Limited Partnership)

STATEMENT OF CHANGES IN PARTNERS’ CAPITAL

FOR THE SIX MONTHS ENDED JUNE 30, 2018

UNAUDITED

		UNITS				LIMITED PTRS
		A SHARES				A SHARES				TOTAL
BALANCES, January 1, 2018		$	2,137.27			$	3,450,393			$	3,450,393
Additional Units Sold			0				0				0
Redemptions			(217.21	)			(391,313	)			(391,313	)
Less Offering Costs			—				0				0
Net (loss)			—				(87,545	)			(87,545	)
BALANCES, JUNE 30, 2018		$	1,920.06			$	2,971,535			$	2,971,535
Net asset value per unit January 1, 2018		$	1,614.39
Net (loss) per unit			(66.76	)
Net asset value per unit JUNE 30, 2018		$	1,547.63

The accompanying notes are an integral part of these financial statements.

EVEREST FUND, L.P.

(An Iowa Limited Partnership)

STATEMENT OF CHANGES IN PARTNERS’ CAPITAL

FOR THE SIX MONTHS ENDED JUNE 30, 2017

UNAUDITED

		UNITS				LIMITED PTRS
		A SHARES				A SHARES				TOTAL
BALANCES, January 1, 2017		$	2,211.96			$	3,957,148			$	3,957,148
Additional Units Sold			0				0				0
Redemptions			(26.38	)			(43,784	)			(43,784	)
Less Offering Costs			—				0				0
Net (loss)			—				(355,653	)			(355,653	)
BALANCES, June 30, 2017		$	2,185.58			$	3,557,711			$	3,557,711
Net asset value per unit January 1, 2017		$	1,788.98
Net (loss) per unit			(161.17	)
Net asset value per unit June 30, 2017		$	1,627.81

 

The accompanying notes are an integral part of these financial statements.

EVEREST FUND, L.P.

(An Iowa Limited Partnership)

STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2018 AND 2017

UNAUDITED

 

		SIX MONTHS ENDED				SIX MONTHS ENDED
		June 30, 2018				June 30, 2017
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Net income (loss)		$	(87,545	)		$	(355,653	)
Net changes to reconcile net income (loss) to net cash provided (used) by operating activities:
Unrealized gain on open contracts			161,619				165,436
Interest receivable			(1,083	)			(870	)
Management fee payable - General partner			(1,257	)			(2,228	)
Management fee payable - Advisor			(799	)			(714	)
Accrued expenses			(21,350	)			2,312
Net cash provided by (used in) operating activities			49,585				(191,717	)
Cash flows for financing activities:
Cash Redemptions paid			(391,313	)			(71,742	)
Net cash (used in) financing activities			(391,313	)			(71,742	)
Net decrease in cash and cash equivalents			(341,728	)			(263,459	)
Cash and cash equivalents
Beginning of period			3,275,320				3,967,943
End of Period		$	2,933,592			$	3,704,484
End of period cash and cash equivalents consist of:
Cash at Banks		$	6,347			$	15,860
Cash in broker trading accounts			2,927,245				3,688,624
CASH AND CASH EQUIVALENTS, at end of period		$	2,933,592			$	3,704,484

 

The accompanying notes are an integral part of these financial statements.

The Everest Fund, L.P.

(an Iowa Limited Partnership)

Notes to the Financial Statements

June 30, 2018

 

(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”).

Currently, R.J. O’Brien and Associates, LLC (“RJO”), 222 South Riverside Plaza, Suite 900, Chicago, Illinois 60606, 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 Intercontinental Exchange, NYSE Liffe U.C., and the CBOE Futures Exchange (“CFE”).

 

(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 accounting principles generally accepted in the United States (U.S. 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 the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and 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 Partnership 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.

The Partnership files U.S. federal and state tax returns.

Subsequent Events

Management of the Partnership has evaluated subsequent events through the dated the financial statements were filed. There were no subsequent events to disclose or record.

(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.

All financial instruments listed in the condensed schedule of investments as of June 30, 2018 and December 31, 2017 are considered Level 1, measured at fair value on a recurring basis on quoted prices for identical assets in active markets.

(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

EMC Capital Management, Inc. (EMC), 2201 Waukegan Road, Suite West 240, Bannockburn, IL 60015; telephone: 847-267-8700, serves as the Partnership’s Commodity Trading Advisor (CTA).

EMC receives a monthly management fee equal to 0.167% (2% annually) of the Partnership’s month-end net asset value, (as defined),and a quarterly incentive fee of 20% of the Partnership’s new net trading profits. The incentive fee is retained by EMC even though trading losses may occur in subsequent quarters; however, no further incentive fees are payable until any such trading losses (other than losses attributable to redeemed units and losses attributable to assets reallocated to another advisor) are recouped by the Partnership.

Effective November 2003, the General Partner charges the Partnership a monthly management fee equal to 0.50% 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.

A substantial portion of the Partnership’s assets are held in a cash account a Everest’s futures broker R.J. O’Brien, the FCM. As is standard in the industry Everest receives 90% of the 3 month T-bill rate on its cash that is unused for trading. The Partnership’s assets at RJO cash account are subject to potential loss resulting from interest rate fluctuations and default.

(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. The Partnership has 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.

 

The following table identifies the fair value amounts of derivative contracts by type of risk as of June 30, 2018:

Risk Type		Asset Derivatives				Liability Derivatives				Net				Number of Contracts
Agricultural		$	12,671			$	(2,455	)		$	10,216				42
Currencies			48,990				(5,653	)			43,337				47
Energy			29,416				—				29,416				12
Indices			14,511				(11,724	)			2,787				21
Interest rates			7,068				(1,053	)			6,015				95
Metals			41,208				(56,956	)			(15,748	)			23
		$	153,864			$	(77,841	)		$	76,023				240

The following table identifies the fair value amounts of derivative contracts by type of risk as of December 31, 2017:

Risk Type		Asset Derivatives				Liability Derivatives				Net				Number of Contracts
Agricultural		$	21,620			$	8,308			$	29,928				108
Currencies			21,173				20,845				42,018				114
Energy			62,427				3,350				65,777				27
Indices			55,891				11,818				67,709				42
Interest rates			(15,231	)			(6,549	)			(21,780	)			214
Metals			56,309				(2,320	)			53,989				21
		$	202,189			$	35,452			$	237,641				526

 

Total average of futures contracts bought and sold

Six months ended June 30, 2018
Total		$	233,909
6 month average		$	38,985

 

Total average of futures contracts bought and sold

 

Six months ended June 30, 2017
Total		$	-12,527
6 month average		$	-2,088

For the six months ended June 30, 2018, the monthly average of futures contracts bought and sold was approximately $38,985.

(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 six months ended June 30, 2018 and June 30, 2017.

		June 30, 2018				June 30, 2017
		Class A				Class A
Per unit operating performance:
Net asset per unit at beginning of period		$	1,614.39			$	1,788.98
Net gain (loss)  from investment operations:
Net realized and unrealized gain (loss) on investments			12.46				(76.02	)
Net investment gain (loss)			(79.22	)			(85.15	)
Total net gain (loss) from investment operations			(66.76	)			(161.17	)
Net asset value per unit at the end of period		$	1,547.63			$	1,627.81
Total return before distributions*			-4.14	%			-9.01	%
Ratio to average net assets:
Net investment Income (loss)**			-9.63	%			-9.85	%
Expenses**			11.01	%			10.37	%

*Not annualized

**Annualized

Interim Financial Statements

The statements of financial condition, including the consolidated schedule of investments, as of June 30, 2018, the statements of operations for the three months ended June 30, 2018 and 2017, the statements of cash flows and changes in partners’ capital (net asset value) for the three months ended June 30, 2018 and 2017 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. GAAP 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 June 30, 2018, results of operations for the three months ended June 30, 2018 and 2017, cash flows and changes in partners’ capital (net asset value) for the three months ended June 30, 2018 and 2017. The results of operations for the full three months ended June 30, 2018 and 2017 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 June 30, 2018 compared to each months ended June 30, 2017.

Class A Units were positive 12.35% in January 2018 resulting in a Net Asset Value per unit of $1,813.79 as of January 31, 2018.

Class A Units were negative 1.64% in January 2017 resulting in a Net Asset Value per unit of $1,759.68 as of January 31, 2017.

The Fund had an outsized gain of +12.35% to begin the New Year. Stock indices, currencies, interest rates, energies and softs led the way. There was a small loss in grains with most other sectors flat.

Class A Units were negative 6.73% in February 2018 resulting in a Net Asset Value per unit of $1,691.76 as of February 28, 2018.

 

Class A Units were positive 3.98% in February 2017 resulting in a Net Asset Value per unit of $1,829.77 as of February 28, 2017.

The Fund had a loss of -6.73% for the month of February. The Fund gave back more than 1/2 the gains from a very robust January. Losses came across the board but mainly in global stock indices and currencies which reversed directions from January. Smaller losses were posted in energies, interest rates and metals.

Class A Units were negative 2.28% in March 2018 resulting in a Net Asset Value per unit of $1,653.17 as of March 31, 2018.

Class A Units were negative 6.85% in March 2017 resulting in a Net Asset Value per unit of $1,704.35 as of March 31, 2017.

Losses came from interest rates, grains, metals and stock indices. Smaller gains came from softs, currencies, energies and meats.

Class A Units were negative 0.64% in April 2018 resulting in a Net Asset Value per unit of $1,642.54 as of April 30, 2018.

Class A Units were negative 0.31% in April 2017 resulting in a Net Asset Value per unit of $1,699.15 as of April 30, 2017.

The Fund was down 0.64% in April as gains in energies, softs and stock indices were not enough to overcome losses in interest rates, currencies, metals, meats and grains.

With the exception of energies, markets remain directionless overall, and reactive to news out of Washington on trade and arms negotiations.

Class A Units were negative 3.89% in May 2018 resulting in a Net Asset Value per unit of $1,578.65 as of May 31, 2018.

Class A Units were positive 1.10% in May 2017 resulting in a Net Asset Value per unit of $1,717.81 as of May 31, 2017.

Then Fund had a loss of 3.89% in May coming from positions in stock indices, interest rates, grains and currencies. Smaller gains came in energies and softs.

Among other things, on again off again then on again threats of tariffs and then actual tariffs played havoc on the above markets, especially at the end of the month.

Class A Units were negative 1.97% in June 2018 resulting in a Net Asset Value per unit of $1,547.63 as of June 30, 2018.

Class A Units were negative 5.24% in June 2017 resulting in a Net Asset Value per unit of $1,627.81 as of June 30, 2017.

Then Fund had a loss of -1.97% in June. A large gain in currencies was not enough to offset larger overall losses from almost every other sector in June. Declines came from softs, interest rates, energies, metals and stock indices.

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, 2017.

 

Item 4. Controls and Procedures

 

As of June 30, 2018 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, 2017.

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

 

RECENT SALES OF UNREGISTERED SECURITIES A UNITS

		Six months				Six months
		ended June 30, 2018				ended June 30, 2017
Units Sold			0				0
Value of Units Sold		$	0			$	0

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

The partnership has been asked by the SEC to re-audit 2015 financial statements for the Fund.

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: August 14, 2018	By:	Everest Asset Management, Inc.,
		its General Partner
	By:	/s/ Peter Lamoureux
		Peter Lamoureux
		President