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 June 30, 2009
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 333-53111
Atlas Futures Fund, Limited Partnership
(Exact name of registrant as specified in its charter)
Delaware 51-0380494
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
505 Brookfield Drive, Dover, DE 19901
(Address of principal executive offices, including zip code)
(800) 331-1532
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant 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 [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definition of large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [ ]
Accelerated filer [ ]
Non-accelerated filer [ X ]
Smaller Reporting Company [ ]
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Act). Yes [ ] No [X]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) f the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes [ ] No [ ] Not applicable.
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. Not Applicable.
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Part 1 - FINANCIAL INFORMATION
Item 1. Financial Statements.
The reviewed financial statements for the Registrant for the six months ended
June 30, 2009 are attached hereto at page F-1 and made a part hereof.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
General Information
During the past quarter and in the future, Registrant, did and will, pursuant
to the terms of the Limited Partnership Agreement, engage in the business of
speculative and high risk trading of commodity futures and options markets
through the services of one or more commodity trading advisors it selects.
Description of Fund Business
The Fund grants the commodity trading advisors a power of attorney that is
terminable at the will of either party to trade the equity assigned by the
Fund. Clarke Capital Management, Inc. was granted a power of attorney by the
Fund and served as a trading advisor for the Fund since the Fund's inception.
From February 1, 2005 through the end of September, 2007, the Fund also
engaged NuWave Investment Corp as a trading advisor. Clarke traded
approximately 80% of the Fund's equity made available for trading and NuWave
traded the other 20%. During the last week of September, 2007, the General
Partner advised NuWave that, effective October 1, 2007, it would terminate the
Advisory Agreement and Power of Attorney and requested that NuWave liquidate
all positions it had open on behalf of the Fund as of the last business day of
September, 2007, or as soon as practical thereafter. The management and
incentive fees paid to NuWave are, accordingly, no longer paid. Clarke
Capital Management, Inc. remains the sole trading advisor to the Fund. The
commodity trading advisors selected to trade for the Fund have discretion to
select the trades and do not disclose the methods they use to make those
determinations in their disclosure documents or to the Fund or general
partner. There is no promise or expectation of a fixed return to the
partners. The partners must look solely to trading profits for a return their
investment as the interest income is expected to be less than the fixed
expenses to operate the Fund.
Assets
The general partner has sole authority to determine the percentage of our
assets that will be held on deposit with the futures commission merchant, used
for other investments, and held in bank accounts to pay current obligations.
As of the date of this Report, the partnership maintains approximately 80% of
its assets in a Treasury Direct Account maintained with the United States
Department of the Treasury, and it also retains the right to invest in cash
management funds that invest in U.S. Treasuries and have high liquidity.
Funds maintained with the Department of Treasury and any cash management funds
are in the name of the partnership and not commingled with those of any other
entity. The general partner maintains approximately 20% of our net assets
with the futures commission merchant ("FCM") for margin for trading by the
trading advisor. Less than 1% of the previous month's net assets are retained
in our bank accounts to pay expenses and redemptions. The Fund assets at the
FCM consist of cash used as margin to secure futures (formerly called
commodity) trades entered on its behalf by the commodity trading advisors it
selects. The Fund deposits its cash with one or more FCM's (brokers) that
hold and allocate the cash to use as margin to secure the trades made. The
futures held in the Fund accounts are valued at the market price on the close
of business each day by the FCM that holds the Fund equity made available for
trading.
The Capital accounts of the Partners are immediately responsible for all
profit and losses incurred by trading and payment and accrual of the expenses
of offering partnership interests for sale and the operation of the
partnership. During the periods of this Report, the fixed costs of operation
of the Fund include continuing offering costs, fixed brokerage commissions of
11%, and accounting, legal and other operating fees that must be paid before
the limited partners may earn a profit on their investment.
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The Fund has not in the past and does not intend in the future to borrow from
third parties. Its trades are entered pursuant to a margin agreement with the
futures commission merchant which obligates the fund to the actual loss, if
any, without reference or limit by the amount of cash posted to secure the
trade. The limited partners are not personally liable for the debts of the
Fund, including any trading losses. By its post effective amendment to its
registration statement on Form S-1 that became effective May 1, 2009, the Fund
updated its prospectus to include up-to-date performance and financials. The
Registrant will continue to offer Units for sale to the public via its
prospectus until the balance, as of the date of this Report, of $827,472 in
face amount of Units are sold. As of the date of this Report, of the
$15,000,000 in Units registered, $14,172,528 has been sold and, upon
redemption by the holder, will not be resold. Absent the registration of
additional Units, the Fund will be capitalized at $15,000,000 subject to
redemption of Units by the holders as they request, which are expected to be
honored by the General Partner.
An Investment in the Fund Depends upon Redemption of Fund Units
The Fund Units are not traded and they have no market value. Liquidity of an
investment in the Fund depends upon the credit worthiness of the exchanges,
brokers, and third parties of off exchange traded futures that hold Fund
equity or have a lien against Fund assets for payment of debts incurred.
Those parties must honor their obligations to the Fund for the Fund to be able
to obtain the return of its cash from the futures commission merchant that
holds the Fund account.
The commodity trading advisors select the markets and the off exchange
instruments to be traded. The General Partner selects the futures commission
merchants to hold the Fund assets. Both the commodity trading advisors and
the general partner believe all parties who hold Fund assets or are otherwise
obligated to pay value to the Fund are credit worthy. Margin is an amount to
secure the entry of a trade and is not a limit of the profit or loss to be
gained from the trade. The general partner currently allocates nearly 100% of
the Fund equity to be used as margin to enter trades. Although it is
customary for the commodity trading advisors to use 40% or less of the equity
available as margin, there is no limit imposed by the Fund upon the amount of
equity the advisors may commit to margin. It is possible for the Fund to
suffer losses in excess of the margin it posts to secure the trades made.
To have the purchase price or appreciation, if any, of the Units paid to them,
partners must use the redemption feature of the Partnership. Distributions,
although possible in the sole discretion of the general partner, are not
expected to be made. There is no current market for the Units sold, none is
expected to develop and the limited partnership agreement limits the ability
of a partner to transfer the Units.
Results of Operations
The Fund is subject to ongoing offering and operating expenses; however,
profits or losses are primarily generated by the commodity trading advisor by
methods that are proprietary to it. These results are not to be construed as
an expectation of similar profits in the future.
The Limited Partnership Agreement grants solely to the General Partner the
right to select the trading advisor or advisors and to otherwise manage the
operation of the Fund. The CTAs selected are responsible for the selection of
trades. As evidenced by the increase in per unit value disclosed below, the
Fund's CTAs have been successful overall. See the Registration Statement,
incorporated by reference herein, for an explanation of the operation of the
Fund.
The initial start-up costs attendant to the sale of Units by use of a
prospectus which has been filed with the Securities and Exchange Commission
are substantial. The results of the partial year 1999, the years 2000 through
2008, and the six months ended June 30, 2009 reflect the absorption of these
costs by the Fund.
The Fund's realized and unrealized trading gains (losses) before commissions
were $(877,902) [$(215.48) per Unit] and $10,120,747 [$2,290.53 per Unit] for
the six months ended June 30, 2009 and June 30, 2008, respectively. The
Fund's results after payment and accrual of expenses for the six months ended
June 30, 2009 and June 30, 2008 were profits (losses) of $(2,123,865)
[$(519.71) per Unit] and $6,497,450 [$1,469.49 per Unit], respectively. The
net asset value ("NAV") per Unit as of June 30, 2009, was $4,885.05, a
decrease of (13.5)% from the June 30, 2008 NAV per Unit of $5.644.61. The
decrease includes the intervening quarters of 2008 and 2009.
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The above described performance was primarily due to the trading of Clarke
Capital Management, currently the sole commodity trading advisor that trades
for the Fund via its proprietary method, with the balance of the income from
interest earned on deposits. If a large movement occurs in a sector that a
trading advisor trades, such as agriculture, financials, metals or softs, it
does not necessarily mean that the trading advisor will engage in trades that
capture such moves. Accordingly, market movements and conditions are not
necessarily correlated with Fund performance. Past performance is not
necessarily indicative of future results.
Registrant's average net assets during the six months ended June 30, 2009 were
approximately $20,880,918 a decrease of (1.5)% over average net assets during
the six months ended June 30, 2008 of $21,189,971. The decrease includes
decreases made during the intervening quarters of 2008 and 2009. The
decreases in average net assets during the comparative six month periods were
primarily due to the effects of investment returns generated by the commodity
trading advisor. Net additions (withdrawals) for the six months ended June
30, 2009 and June 30, 2008 were $(1,913,493) and $(406,475), respectively.
Interest income is earned on the Fund's assets, either through investment in
short term cash instruments or through its deposits with the clearing broker.
Interest income to the Fund varies monthly according to interest rates,
trading performance, subscriptions and redemptions. Interest income for the
six months ended June 30, 2009 was $13,777, a 91.15% decrease over the
interest income for the six months ended June 30, 2008 of $155,712. The
decrease in interest income for the comparative six month periods was
primarily due to significantly reduced short term interest rates.
Brokerage commissions of 11% are calculated on the Fund's total trading equity
as of the beginning of each month and therefore, vary according to monthly
trading performance, subscriptions and redemptions. Commissions for the six
months ended June 30, 2009 were $1,173,540, a 0.2% decrease over the
commissions for the six months ended June 30, 2008 of $1,176,008. The
decrease in commissions for the comparative six month periods was primarily
due to decreased average net asset levels.
Pursuant to the Trading Advisory Agreement, the Fund paid a management fee to
a trading advisor that no longer trades for the Fund, which was calculated on
the net asset value of the equity allocated to it to trade as of the end of
each month, and therefore, was affected by monthly trading performance,
subscriptions and redemptions. The trading advisor was removed as of October
1, 2007; accordingly, there were no management fees paid for the six months
ended June 30, 2009 and for the six months ended June 30, 2008.
Pursuant to the Trading Advisory Agreement, the Fund pays a quarterly
incentive fee to each trading advisor that has traded for the Fund. See Note
5 to the financial statements herein for the current incentive fees. Trading
advisor incentive fees during the six months ended June 30, 2009 and June 30,
2008 were $0.0 and $2,505,271, respectively. The amounts are directly related
to the trading performance of the trading advisors. Because CTA's earn their
incentive fees independent of each other, during periods when there are
multiple advisors, it is possible for one advisor to earn an incentive fee
even if the other CTA or the Fund overall has negative performance.
Operating expenses include accounting, audit, tax, and legal fees, as well as
regulatory costs and printing and postage costs related to reports sent to
limited partners. Operating expenses during the six months ended June 30, 2009
and June 30, 2008 were $86,200 and $97,730, respectively. The decrease over
the comparative six month periods was primarily due to reduced state
registration fees from the prior period.
Inflation has had no material impact on the operations or on the financial
condition of the Fund from inception through June 30, 2009.
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.
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Item 4T. Controls and Procedures
Disclosure Controls and Procedures
The Registrant has adopted procedures in connection with the operation of its
business including, but not limited to, the review of account statements sent
to the General Partner before the open of business each day that disclose the
positions held overnight in the Fund accounts, the margin to hold those
positions, and the amount of profit or loss on each position, and the net
balance of equity available in each account. The Fund brokerage account
statements and financial books and records accounts are prepared by an
independent CPA Firm and then are reviewed each quarter and audited each year
by a different independent CPA firm.
The General Partner of the Fund, under the actions of its sole principal,
Michael Pacult, has evaluated the effectiveness of the design and operation of
its disclosure controls and procedures (as defined in the Securities Exchange
Act of 1934 Rules 13a-15(e) or 15d-15(e)) with respect to the Fund as of the
end of the period covered by this Report. Based on their evaluation, Mr.
Pacult has concluded that these disclosure controls and procedures are
effective.
Changes in Internal Control over Financial Reporting
There were no changes in the General Partner's internal control over financial
reporting during the quarter ended June 30, 2009 that have materially
affected, or are reasonably likely to materially affect, internal control over
financial reporting applicable to the Fund.
Part II - OTHER INFORMATION
Item 1. Legal Proceedings
There have been no legal proceedings against the Fund, its General Partner,
the CTA, the IB or any of their Affiliates, directors or officers. The FCM,
MF Global Inc. ("MFG"), (MFG was formerly known as Man Financial Inc. ("MFI")
until the change of name to MFG was effected on July 19, 2007), has disclosed
following described reportable events. Neither the Fund nor the General
Partner is a party to any of these events and they are included in reliance
upon a report supplied by MFG without verification by the General Partner.
MFG has represented to the General Partner that that none of the events it has
reported below will not now, or at any time in the future, interfere with its
performance as the FCM for the Fund's account.
MF Global Inc. ("MFG") is registered under the Commodity Exchange Act, as
amended, as a futures commission merchant and a commodity pool operator, and
is a member of the National Futures Association in such capacities. In
addition, MFG is registered with the Financial Industry Regulatory Authority
as a broker-dealer. MFG was formerly known as Man Financial Inc. ("MFI")
until the change of name to MFG was effected on July 19, 2007. MFG is a
member of all major U.S. futures exchanges and most major U.S. securities
exchanges. MFG's main office is located at 717 Fifth Avenue, 9th Floor, New
York, New York 10022-8101. MFG's telephone number at such location is (212)
589-6200.
At any given time, MFG is involved in numerous legal actions and
administrative proceedings, which in the aggregate, are not, as of the date of
this report, expected to have a material effect upon its condition, financial
or otherwise, or to the services it will render to the partnership. There
have been no administrative, civil or criminal proceedings pending, on appeal
or concluded against MFG or its principals within the five years preceding the
date of this Memorandum that MFI would deem material for purposes of Part 4 of
the Regulations of the Commodity Futures Trading Commission, except as
follows:
In May, 2006, MFI was sued by the Receiver for Philadelphia Alternate Asset
Fund ("PAAF") and associated entities for common law negligence, common law
fraud, violations of the Commodity Exchange Act and RICO violations (the
"Litigation"). In December, 2007, without admitting any liability of any
party to the Litigation to any other party to the Litigation, the Litigation
was settled with MFI agreeing to pay $69 million, plus $6 million of legal
expenses, to the Receiver, in exchange for releases from all applicable
parties and the dismissal of the Litigation with prejudice. In a related
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action, MFI settled a CFTC administrative proceeding (In the Matter of MF
Global, f/k/a Man Financial Inc., and Thomas Gilmartin) brought by the CFTC
against MFI and one of its employees for failure to supervise and
recordkeeping violations. Without admitting or denying the allegations, MFI
agreed to pay a civil monetary penalty of $2 million and accepted a cease and
desist order. MFI has informed the General Partner, the Trading Advisor and
the Placement Agent that the settlements referenced above will not materially
affect MFG or its ability to perform as a clearing broker.
On February 20, 2007, MFI also settled a CFTC administrative proceeding (In
the Matter of Steven M. Camp and Man Financial Inc., CFTC Docket No. 07-04) in
which MFI was alleged to have failed to supervise one of its former associated
persons ("AP") who was charged with fraudulently soliciting customers to open
accounts at MFI. The CFTC alleged that the former AP misrepresented the
profitability of a web-based trading system and of a purported trading system
to be traded by a commodity trading advisor. Without admitting or denying the
allegation, MFI agreed to pay restitution to customers amounting to
$196,900.44 and a civil monetary penalty of $120,000. MFI also agreed to a
cease and desist order and to strengthen its supervisory system for overseeing
sales solicitations by employees in connection with accounts to be traded
under letters of direction in favor of third party system providers.
On March 6, 2008, and thereafter, 5 virtually identical proposed class action
securities suits were filed against MFG's parent, MF Global Ltd. ("MF
Global"), certain of its officers and directors, and Man Group plc. These
suits have now been consolidated into a single action. The complaints seek to
hold defendants liable under Sec. Sec. 11, 12, and 15 of the Securities Act
of 1933 by alleging that the registration statement and prospectus issued in
connection with MF Global's initial public offering in July 2007, were
materially false and misleading to the extent that representations were made
regarding MF Global's risk management policies, procedures and systems. The
allegations are based upon MF Global's disclosure of $141.5 million in trading
losses incurred in a single day by an AP in his personal trading account,
which losses MFG was responsible to pay as an exchange clearing member.
In connection with the incident involving the trading losses referenced above,
the CFTC issued a formal order of investigation naming MFG and the AP. The
CFTC, in coordination with the Chicago Mercantile Exchange ("CME"), has been
collecting documentation and taking depositions of MFG employees. This
investigation is ongoing and it is not yet certain what actions the CFTC
and/or the CME might take. MF Global has established an accrual of $10.0
million to cover potential CFTC civil monetary penalties in this matter and
the two CFTC matters referred to below. This is MFG's best estimate at this
time and there is no assurance that the $10.0 million accrual will be
sufficient for these purposes or that the CFTC will not require remedial
measures. No accrual has been made for the CME matter.
In May 2007, MFG and two of its employees received what is commonly referred
to as a "Wells notice" from the staff of the Division of Enforcement of the
CFTC. The notice relates to two trades MFG executed in 2004 for a customer and
reported to NYMEX. The notice indicates that the Division of Enforcement is
considering recommending to the CFTC that a civil proceeding be commenced
against MFG and the two employees, in which the CFTC would assert that MFG and
the two employees violated Section 9(a)(4) of the Commodity Exchange Act,
which generally prohibits any person from willfully making any false,
fictitious, or fraudulent statements or representations, or making or using
any false writing or document knowing the same to contain any false,
fictitious, or fraudulent statement to a board of trade. The Division of
Enforcement staff contends that MFG and the individuals presented or
participated in the submission of information to NYMEX that falsely
represented the dates on which the trades in question occurred. MFG and the
individuals dispute these contentions. It is not yet certain what action the
CFTC will take, but see the reference to a $10.0 million accrual above.
Additionally, MFG is currently cooperating in an investigation conducted by a
New York County Grand Jury in conjunction with the U.S. Attorneys Office in
the Southern District of New York, with which the CFTC and the SEC are also
involved. The investigation centers around trading by a market making energy
trader at Bank of Montreal (BMO) who allegedly mismarked his book. An MFG
broker did business with the BMO trader, and used bid and offer prices for
forward OTC trades the BMO trader sent to him as a basis for prices which the
MFG broker disseminated to MFG's customers, including BMO, as price
indications that reflected a consensus. MFG has been told that neither MFG nor
the broker are targets of the Grand Jury investigation. In connection with
this investigation, MFG has been served by the CFTC with a Wells notice in
anticipation of civil charges against the broker under the anti-fraud
provisions of CFTC Regulation 33.10 and MFG with derivative liability for the
broker's actions. It is not yet certain what action the CFTC may take against
MFG or the broker, but see the reference to a $10.0 million accrual above.
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On December 12, 2008, MFG settled three CME Group disciplinary actions
involving allegations that on a number of occasions in 2006 and 2007, MFG
employees engaged in impermissible pre-execution communications in connection
with trades executed on the e-cbot electronic trading platform, withheld
customer orders that were executable in the market for the purpose of
soliciting, and brokering contra-orders and crossed orders on the e-cbot
trading platform without allowing for the minimum required exposure period
between the entry of the orders. MFG was also charged with failing to properly
supervise its employees in connection with these trades. Without admitting or
denying any wrongdoing, MFG consented to an order of a CME Business Conduct
Committee Panel which found that MFG violated legacy CBOT Rule 504.00 and
Regulations 480.10 and 9B.13 and 9B.13(c) and ordered MFG to pay a $400,000
fine, cease and desist from similar conduct and, in consultation with CME
Market Regulation staff, enhance its training practices and supervisory
procedures regarding electronic trading practices.
The Fund is not aware of any threatened or potential claims or legal
proceedings to which the Fund is a party or to which any of its assets are
subject.
Item 1A. Risk Factors
There have been no material changes from risk factors as previously disclosed
in the Fund's 2008 Form 10-K. The risks of the Fund are (1) described fully
in its prospectus filed with its registration statement on Form S-1, which is
incorporated herein by reference (2) described in summary in Part I of this
Form 10-Q, which is incorporated herein by reference.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
(a) None
(b) None
Item 6. Exhibits
31.1 Certification of Principal Executive Officer and Principal Financial
Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
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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 June 30, 2009, to be signed on its behalf by the undersigned, thereunto
duly authorized.
Registrant: Atlas Futures Fund, Limited Partnership
By Ashley Capital Management, Incorporated
Its General Partner
By: /s/ Michael Pacult
Mr. Michael Pacult
Sole Director, Sole Shareholder,
President, and Treasurer of the General Partner
Date: August 18, 2009
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ATLAS FUTURES FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
QUARTERLY REPORT
June 30, 2009
GENERAL PARTNER:
Ashley Capital Management, Inc.
% Corporate Systems, Inc.
505 Brookfield Drive
Dover, Kent County, Delaware 19901
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Index to the Financial Statements
Page
Report of Independent Registered Public Accounting Firm F-2
Statements of Assets and Liabilities F-3
Schedule of Investments - Cash and Securities - June 30, 2009 F-4
Schedule of Investments - Futures Contracts - June 30, 2009 F-5
Schedule of Investments - Cash and Securities - December 31, 2008 F-6
Statements of Operations F-7
Statements of Changes in Net Assets F-8
Statements of Cash Flows F-9
Notes to the Financial Statements F-10-F-17
Affirmation of the Commodity Pool Operator F-18
F-1
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Jordan, Patke & Associates, Ltd.
Certified Public Accountants
Report of Independent Registered Public Accounting Firm
To the Partners of
Atlas Futures Fund, Limited Partnership
Dover, Delaware
We have reviewed the accompanying statements of assets and liabilities of
Atlas Futures Fund, Limited Partnership, as of June 30, 2009 and the related
statements of operations for the three and six months ended June 30, 2009 and
2008, and the statements of changes in net assets and cash flows for the six
months ended June 30, 2009 and 2008. These financial statements are the
responsibility of the Partnership's management.
We conducted our review in accordance with the standards of the Public Company
Accounting Oversight Board (United States). A review of interim financial
information consists principally of applying analytical procedures and making
inquiries of persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with the
standards of the Public 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 Accounting Oversight Board (United States), the statement of assets and
liabilities of Atlas Futures Fund, Limited Partnership as of December 31, 2008
and the related statements of operations, changes in net assets and cash flows
for the year then ended (not presented herein); and in our report dated March
13, 2009, 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, 2008 is fairly stated, in all
material respects, in relation to the statement of assets and liabilities from
which it has been derived.
/s/ Jordan, Patke & Associates, Ltd.
Jordan, Patke & Associates, Ltd.
Lincolnshire, Illinois
August 7, 2009
300 Village Green Drive, Suite 210
* Lincolnshire, Illinois 60069 *(847)913-5400
F-2
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Atlas Futures Fund, Limited Partnership
(A Delaware Limited Partnership)
Statements of Assets and Liabilities
<table>
<s> <c> <c>
June 30, December 31,
2009 2008
(A Review)
Assets
Investments
Equity in broker trading accounts
Cash and cash equivalents at broker $3,915,419 $7,826,204
Net unrealized gain on open futures contracts 60,289 -
Total equity in broker trading accounts 3,975,708 7,826,204
U.S. Treasury Bills (cost $14,992,922 and $14,977,729) 14,998,294 14,997,985
Cash 237,121 99,988
Money market fund 1,009 1,009
Interest receivable - 203
Total assets 19,212,132 22,925,389
Liabilities
Partner redemptions payable 443,953 1,027
Accrued commissions and fees payable to related parties 90,243 151,937
Incentive fees payable - 57,490
Other accrued liabilities 24,259 23,900
Total liabilities 558,455 234,354
Net assets $18,653,677 $22,691,035
Analysis of net assets
Limited partners $18,653,677 $22,691,035
General partners - -
Net assets (equivalent to $4,885.05 and $5,404.76 per unit) $18,653,677 $22,691,035
Partnership units outstanding
Limited partners units outstanding 3,818.52 4,198.35
General partners units outstanding - -
Total partnership units outstanding 3,818.52 4,198.35
</table>
The accompanying notes are an integral part of the financial statements
F-3
<page>
Atlas Futures Fund, Limited Partnership
(A Delaware Limited Partnership)
Schedule of Investments - Cash and Securities
June 30, 2009
(A Review)
<table>
<s> <c> <c> <c> <c> <c> <c>
Fair Value Percent
Description Maturity Date Cost Face Value Local Currency U.S. Dollars of Net Assets
United States Treasury Bills:
United States Treasury Bill July 2, 2009 $4,997,535 $5,000,000 4,999,973 $4,999,973
United States Treasury Bill July 16, 2009 4,997,725 5,000,000 4,999,621 4,999,621
United States Treasury Bill August 20, 2009 4,997,662 5,000,000 4,998,700 4,998,700
Total United States Treasury Bills $14,992,922 $15,000,000 $14,998,294 80.40%
Cash in trading accounts:
United States Markets 3,899,864 $3,899,864
Total cash in trading accounts denominated in U.S. Dollars 3,899,864 20.91%
Cash denominated in foreign currency:
Australian Dollar Markets - AUD 19,288 15,555
15,555 0.08%
Total cash denominated in foreign currency
Total cash in trading accounts $3,915,419 20.99%
Money market fund (1,009.48 shares at $1 per share) 1,009 $1,009 0.01%
</table>
The accompanying notes are an integral part of the financial statements
F-4
<page>
Atlas Futures Fund, Limited Partnership
(A Delaware Limited Partnership)
Schedule of Investments - Futures Contracts
June 30, 2009
(A Review)
<table>
<s> <c> <c> <c> <c> <c>
Fair Value Percent
Description Expiration Date Contracts Local Currency USD of Net Assets
Net unrealized gain (loss) on open futures contracts
United States commodity futures positions held long:
Sep 09 IMM B- Pounds (USD) September 2009 65 86,125 $86,125 0.46%
Total United States commodity futures positions held long 86,125 0.46%
Euro commodity futures positions held long:
Sep 09 LIF 3M Euribor (EUR) September 2009 130 813 1,140 0.01%
Sep 09 Euro E- Schatz (EUR) September 2009 65 (1,950) (2,737) (0.02%)
Total European commodity futures positions held long (1,597) (0.01%)
British commodity futures positions held long:
Mar10 LIF 3M STG IR (GBP) March 2010 65 (4,063) (6,689) (0.04%)
Total British commodity futures positions held long (6,689) (0.04%)
United States commodity futures positions held short:
Dec09 CBT Bean Oil (USD) December 2009 65 (17,550) (17,550) (0.09%)
Total United States commodity futures positions held short (17,550) (0.09%)
Net commodity futures positions $60,289 0.32%
</table>
The accompanying notes are an integral part of the financial statements
F-5
<page>
Atlas Futures Fund, Limited Partnership
(A Delaware Limited Partnership)
Schedule of Investments - Cash and Securities
December 31, 2008
<table>
<s> <c> <c> <c> <c> <c> <c>
Fair Value Percent
Description Maturity Date Cost Face Value Local Currency U.S. Dollars of Net Assets
United States Treasury Bills:
United States Treasury Bill January 2, 2009 $4,985,944 $5,000,000 5,000,000 $5,000,000
United States Treasury Bill January 15, 2009 4,993,681 5,000,000 4,999,017 4,999,017
United States Treasury Bill February 19, 2009 4,998,104 5,000,000 4,998,968 4,998,968
Total United States Treasury Bills $14,977,729 $15,000,000 $14,997,985 66.10%
Cash and cash equivalents in trading accounts:
United States Markets 7,826,204 $7,826,204
Total cash and cash equivalents in trading
accounts denominated in U.S. Dollars 7,826,204 34.49%
Total cash and cash equivalents in
trading accounts $7,826,204 34.49%
Money market fund (1,009.26 shares at $1 per share) 1,009 $1,009 0.00%
</table>
The accompanying notes are an integral part of the financial statements
F-6
<page>
Atlas Futures Fund, Limited Partnership
(A Delaware Limited Partnership)
Statements of Operations
(A Review)
<table>
<s> <c> <c> <c> <c>
Three Months Ended June 30, Six Months Ended June 30,
2009 2008 2009 2008
Investment income
Interest income $7,921 $67,689 $13,777 $155,712
Total investment income 7,921 67,689 13,777 155,712
Expenses
Commission expense 560,126 641,259 1,173,540 1,176,008
Incentive fees - 1,673,853 - 2,505,271
Professional accounting and legal fees 38,700 42,000 76,200 76,000
Other operating and administrative expenses 8,036 1,484 10,000 21,730
Total expenses 606,862 2,358,596 1,259,740 3,779,009
Net investment (loss) (598,941) (2,290,907) (1,245,963) (3,623,297)
Realized and unrealized gain (loss) from investments and foreign currency
Net realized gain (loss) from:
Investments 99,271 7,643,508 (676,416) 10,932,863
Foreign currency transactions (38,042) - (261,775) (869,866)
Net realized gain (loss) from investments and
foreign currency transactions 61,229 7,643,508 (938,191) 10,062,997
Net unrealized appreciation (depreciation) on:
Investments 68,575 (905,056) 68,575 57,750
Foreign currency transactions (8,286) - (8,286) -
Net unrealized appreciation (depreciation) on
investments and foreign currency transactions 60,289 (905,056) 60,289 57,750
Net realized and unrealized income (loss) from investments
and foreign currency transactions 121,518 6,738,452 (877,902) 10,120,747
Net increase (decrease) in net assets resulting from operations $(477,423) $4,447,545 $(2,123,865) $6,497,450
Net income (loss) per unit (for a single unit outstanding during the entire
period)
Limited partnership unit $(126.62) $1,012.64 $(519.74) $1,469.49
General partnership unit $- $- $- $-
</table>
The accompanying notes are an integral part of the financial statements
F-7
<page>
Atlas Futures Fund, Limited Partnership
(A Delaware Limited Partnership)
Statements of Changes in Net Assets
(A Review)
<table>
<s> <c> <c>
Six Months Ended June 30,
2009 2008
Increase (decrease) in net assets from operations
Net investment (loss) $(1,245,963) $(3,623,297)
Net realized gain (loss) from investments and foreign currency transactions (938,191) 10,062,997
Net unrealized appreciation on investments and foreign currency
transactions 60,289 57,750
Net increase (decrease) in net assets resulting from operations (2,123,865) 6,497,450
Capital contributions from limited partners 339,344 140,882
Redemptions by limited partners (2,252,837) (547,357)
Total increase (decrease) in net assets (4,037,358) 6,090,975
Net assets at the beginning of the period 22,691,035 18,636,710
Net assets at the end of the period $18,653,677 $24,727,685
</table>
The accompanying notes are an integral part of the financial statements
F-8
<page>
Atlas Futures Fund, Limited Partnership
(A Delaware Limited Partnership)
Statements of Cash Flows
(A Review)
<table>
<s> <c> <c>
Six Months Ended June 30,
2009 2008
Cash Flows from Operating Activities
Net increase (decrease) in net assets resulting from operations $(2,123,865) $6,497,450
Adjustments to reconcile net increase (decrease) in net assets from
operations to net cash provided by (used in) operating activities:
Changes in operating assets and liabilities:
Unrealized (appreciation) on investments (60,289) (57,750)
Decrease in interest receivable 203 29,632
Increase (decrease) in accrued commissions payable (61,694) 32,329
Increase (decrease) in accrued incentive fees (57,490) 1,016,575
Increase (decrease) in other payables and accruals 359 (128)
Net cash provided by (used in) operating activities (2,302,776) 7,518,108
Cash Flows from Financing Activities
Proceeds from sale of units, net of sales commissions 339,344 140,882
Partner redemptions (1,809,911) (563,186)
Net cash (used in) financing activities (1,470,567) (422,304)
Net increase (decrease) in cash and cash equivalents (3,773,343) 7,095,804
Cash and cash equivalents, beginning of period 22,925,186 19,333,120
Cash and cash equivalents, end of period $19,151,843 $26,428,924
End of period cash and cash equivalents consist of:
Cash and cash equivalents at broker $3,915,419 $16,323,689
Treasury Bills 14,998,294 9,986,095
Cash 237,121 118,136
Money market fund 1,009 1,004
Total cash and cash equivalents $19,151,843 $26,428,924
</table>
The accompanying notes are an integral part of the financial statements
F-9
<page>
Atlas Futures Fund, Limited Partnership
(A Delaware Limited Partnership)
Notes to the Financial Statements
June 30, 2009
(A Review)
1. Nature of the Business
Atlas Futures Fund, Limited Partnership (the "Fund") was formed January 12,
1998 under the laws of the State of Delaware. The Fund is engaged in the
speculative trading of futures contracts in commodities, which commenced in
October, 1999. Ashley Capital Management, Inc. ("Ashley") and Michael Pacult
are the General Partners and the commodity pool operators ("CPO's") of the
Fund. The registered commodity trading advisor ("CTA") of the fund is Clarke
Capital Management, Inc. ("Clarke"). The CTA has the authority to trade as
much of the Fund's equity as is allocated to them by the General Partner,
which is currently estimated to be 99% of total equity. Effective July, 2004
the Fund began to sell issuer direct on a best efforts basis with no sales
commissions.
The Fund is a registrant with the Securities and Exchange Commission ("SEC")
pursuant to the Securities Act of 1933 ("the Act"). The Fund is subject to the
regulations of the SEC and the reporting requirements of the Securities and
Exchange Act of 1934. The Fund is also subject to the regulations of the
Commodities Futures Trading Commission ("CFTC"), an agency of the U.S.
government which regulates most aspects of the commodity futures industry, the
rules of the National Futures Association and the requirements of various
commodity exchanges where the Fund executes transactions. Additionally, the
Fund is subject to the requirements of futures commission merchants and
interbank market makers through which the Fund trades and regulated by
commodity exchanges and by exchange markets that may be traded by the advisor.
2. Significant Accounting Policies
Registration Costs - Costs incurred for the initial filings with the
Securities and Exchange Commission, National Association of Securities
Dealers, Inc. and the states where the offering was made were accumulated,
deferred and charged against the gross proceeds of offering at the initial
closing as part of the offering expense. The Fund remains open to new
partners, and incurs costs required to retain the ability to issue new units.
Such costs, in addition to the costs of recurring annual and quarterly filings
with regulatory agencies are expensed as incurred.
Revenue Recognition - Commodity futures contracts are recorded on the trade
date and are reflected in the balance sheet at the difference between the
original contract amount and the market value on the last business day of the
reporting period.
Market value of commodity futures contracts is based upon exchange or other
applicable market best available closing quotations.
Interest income is recognized when it is earned.
Use of Accounting Estimates - The preparation of financial statements in
conformity with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions that affect
the reported amount of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from these estimates.
Income Taxes - The Fund prepares calendar year U.S. Federal and applicable
state information tax returns and reports to the partners their allocable
shares of the Fund's income, expenses and trading gains or losses. No
provision for income taxes has been made in the accompanying financial
statements as each partner is individually responsible for reporting income or
loss based on such partner's respective share of the Fund's income and
expenses as reported for income tax purposes.
Management has continued to evaluate the application of Financial Accounting
Standards Board (FASB) Interpretation No. 48, "Accounting for Uncertainty in
Income Taxes - an interpretation of FASB Statement No. 109 (FIN 48)," to the
Fund, and has determined that FIN 48 does not have a material impact on the
Fund's financial statements. The Fund files federal and state tax returns.
The 2005 through 2008 tax years generally remain subject to examination by the
U.S. federal and most state tax authorities.
Statement of Cash Flows - For purposes of the Statement of Cash Flows, the
Fund considers cash at broker, cash, money market funds and U.S. Treasury
Bills to be cash equivalents. Net cash provided by operating activities
includes no cash payments for interest or income taxes for the periods ended
June 30, 2009 and 2008.
F-10
<page>
Atlas Futures Fund, Limited Partnership
(A Delaware Limited Partnership)
Notes to the Financial Statements
June 30, 2009
(A Review)
2. Significant Accounting Policies - Continued
Foreign Currency - Investment securities and other assets and liabilities
denominated in foreign currencies are translated into U.S. dollar amounts at
the date of valuation. Purchases and sales of investment securities and
income and expense items denominated in foreign currencies are translated into
U.S. dollar amounts on the respective dates of such transactions.
The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
Reported net realized foreign exchange gains or losses arise from sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received
or paid. Net unrealized foreign exchange gains and losses arise from changes
in the fair values of assets and liabilities, other than investments in
securities at fiscal period end, resulting from changes in exchange rates.
Fair Value Measurement - The Fund adopted the provisions of Statement of
Financial Accounting Statement No. 157 - "Fair Value Measurement", or SFAS
157, as of January 1, 2008. SFAS 157 provides guidance for determining fair
value and requires increased disclosure regarding the inputs to valuation
techniques used to measure fair value. SFAS 157 clarifies the definition of
fair value 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
SFAS No. 157 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 period and year ended June 30, 2009 and
December 31, 2008, the Fund did not have any Level 3 assets or liabilities.
The following table sets forth by level within the fair value hierarchy the
Fund's investments accounted for at fair value on a recurring basis as of June
30, 2009 and December 31, 2008.
Fair Value at June 30, 2009
Description Level 1 Level 2 Level 3 Total
Money Market Accounts $1,009 $- $- $1,009
US Treasury Bills - 14,998,294 - 14,998,294
Exchange traded - futures contracts 60,289 - - 60,289
Total $61,298 $14,998,294 $- $15,059,592
Fair Value at December 31, 2008
Description Level 1 Level 2 Level 3 Total
Money Market Accounts $1,009 $- $- $1,009
US Treasury Bills - 14,997,985 - 14,997,985
Total $1,009 $14,997,985 $- $14,998,994
F-11
<page>
Atlas Futures Fund, Limited Partnership
(A Delaware Limited Partnership)
Notes to the Financial Statements
June 30, 2009
(A Review)
3. General Partner Duties
The responsibilities of the General Partner, in addition to directing the
trading and investment activity of the Fund, include executing and filing all
necessary legal documents, statements and certificates of the Fund, retaining
independent public accountants to audit the Fund, employing attorneys to
represent the Fund, reviewing the brokerage commission rates to determine
reasonableness, maintaining the tax status of the Fund as a limited
partnership, maintaining a current list of names, addresses and numbers of
units owned by each Limited Partner and taking such other actions as deemed
necessary or desirable to manage the business of the Fund.
If the daily net unit value of the fund falls to less than 50% of the
highest value earned through trading at the close of any month, then the
General Partner will immediately suspend all trading, provide all limited
partners with notice of the reduction and give all limited partners the
opportunity, for fifteen days after such notice, to redeem partnership
interests. No trading will commence until after the lapse of the fifteen day
period.
4. Limited Partnership Agreement
The Limited Partnership Agreement provides, among other things, that:
Capital Account - A capital account shall be established for each partner.
The initial balance of each partner's capital account shall be the amount of
the initial contributions to the 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 partner in the ratio that the balance of each account bears to the
total balance of all accounts.
Any distribution from profits or partners' capital will be made solely at
the discretion of the General Partners.
Federal Income Tax Allocations - As of the end of each fiscal year, the
Partnership's realized capital gain or loss and ordinary income or loss shall
be allocated among the partners, after having given effect to the fees and
expenses of the Fund.
Subscriptions - Investors must submit subscription agreements and funds at
least five business days prior to month end. Subscriptions must be accepted or
rejected by the General Partner within five business days. The investor also
has five business days to withdraw his subscription. Funds are deposited into
an interest bearing subscription account and will be transferred to the Fund's
account on the first business day of the month after the subscription is
accepted. Interest earned on the subscription funds will accrue to the account
of the investor.
Redemptions - After holding the investment for a minimum of twelve months, a
limited partner may request any or all of his investment be redeemed at the
net asset value as of the end of a month. The written request must be received
by the General Partner no less than ten days prior to a month end. Redemptions
will generally be paid within twenty days of the effective month end. However,
in various circumstances due to liquidity, etc. the General Partner may be
unable to comply with the request on a timely basis.
5. Fees
The Fund was charged the following fees:
The partnership pays the corporate general partner a 11% fixed annual
brokerage commission, of which it retains 4% and pays 7% to the introducing
broker.
A quarterly incentive fee of 25% of "new net profits" is paid to Clarke.
The Corporate General Partner reserves the right to change the fee structure
at its sole-discretion.
F-12
<page>
Atlas Futures Fund, Limited Partnership
(A Delaware Limited Partnership)
Notes to the Financial Statements
June 30, 2009
(A Review)
6. Related Party Transactions
The Fund has an agreement to pay commissions and fees to two related
parties, Ashley Capital Management, the Fund's General Partner and Futures
Investment Company, the introducing broker. These related parties are 100%
and 50%, respectively, owned by Michael Pacult, the Fund's individual CPO and
president of the corporate CPO. Related party commissions were as follows:
Commissions included in expense:
Six Months Ended June 30,
2009 2008
Ashley Capital Management, Inc. $428,304 $426,783
Futures Investment Company 681,788 649,562
Total related party expenses $1,110,092 $1,076,345
Commissions included in accrued expenses:
June 30, December 31,
2009 2008
Ashley Capital Management, Inc. $56,958 $79,523
Futures Investment Company 33,285 72,414
Total accrued expenses to related parties $90,243 $151,937
Financial Accounting Standards Board Interpretation No. 45, Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others, identifies certain disclosures to be
made by a guarantor in its financial statements about its obligations under
certain guarantees that it has issued. In the normal course of business, the
Fund has provided general indemnifications to the General Partner, its CTA and
others when they act, in good faith, in the best interests of the Fund. The
Fund is unable to develop an estimate for future payments resulting from
hypothetical claims, but expects the risk of having to make any payments under
these indemnifications to be remote.
F-13
<page>
Atlas Futures Fund, Limited Partnership
(A Delaware Limited Partnership)
Notes to the Financial Statements
June 30, 2009
(A Review)
7. Partnership Unit Transactions
As of June 30, 2009 and 2008 partnership units were valued at $4,885.05 and
$5,644.61, respectively.
Transactions in partnership units were as follows:
Units Amount
2009 2008 2009 2008
Limited Partner Units
Subscriptions 63.85 28.11 $339,344 $140,882
Redemptions (443.68) (111.10) (2,252,837) (547,357)
Total (379.83) (82.99) (1,913,493) (406,475)
General Partner Units
Subscriptions - - - -
Redemptions - - - -
Total - - - -
Total Units
Subscriptions 63.85 28.11 339,344 140,882
Redemptions (443.68) (111.10) (2,252,837) (547,357)
Total (379.83) (82.99) $(1,913,493) $(406,475)
F-14
<page>
Atlas Futures Fund, Limited Partnership
(A Delaware Limited Partnership)
Notes to the Financial Statements
June 30, 2009
(A Review)
8. Trading Activities and Related Risks
The Fund is engaged in speculative trading of U.S. and foreign futures
contracts in commodities. The Fund is exposed to both market risk, the risk
arising from changes in market value of the contracts, and credit risk, the
risk of failure by another party to perform according to the terms of a
contract.
A certain portion of cash in trading accounts are pledged as collateral for
commodities trading on margin. Additional deposits may be necessary for any
loss on contract value. The Commodity Exchange Act requires a broker to
segregate all customer transactions and assets from such broker's proprietary
activities.
Each U.S. commodity exchange, with the approval of the CFTC and the futures
commission merchant, establish minimum margin requirements for each traded
contract. The futures commission merchant may increase the margin
requirements above these minimums for any or all contracts. In general, the
amount of required margin should never fall below 10% of the Net Asset Value.
The cash deposited in trading accounts at June 30, 2009 and December 31, 2008
was $3,915,419 and $7,826,204, respectively, which equals approximately 20.99%
and 34.49% of Net Asset Value, respectively. Cash and cash equivalents
exceeded Net Asset Value because of accrued expenses and partner redemptions
at June 30, 2009 and December 31, 2008. Cash payments for these expenses were
made prior to the end of the subsequent quarter. Prior to April, 2007, the
fund purchased United States Treasury Bills as a form of margin and the Fund
earned interest on this margin. As of April 2007, the Fund benefits from an
arrangement with the FCM whereby the FCM pays the Fund the daily Treasury Bill
or Libor rate minus 10 basis points on the net liquidity of the Fund.
Beginning in the second quarter of 2008, the Fund resumed investing in United
States Treasury Bills.
Trading in futures contracts involves entering into contractual commitments
to purchase or sell a particular commodity at a specified date and price. The
gross or face amount of the contract, which is typically many times that of
the Fund's net assets being traded, significantly exceeds the Fund's future
cash requirements since the Fund intends to close out its open positions prior
to settlement. As a result, the Fund is generally subject only to the risk of
loss arising from the change in the value of the contracts. The market risk is
limited to the gross or face amount of the contracts held of approximately
$84,954,075 and $0 on long positions at June 30, 2009 and December 31, 2008,
respectively. However, when the Fund enters into a contractual commitment to
sell commodities, it must make delivery of the underlying commodity at the
contract price and then repurchase the contract at prevailing market prices or
settle in cash. Since the repurchase price to which a commodity can rise is
unlimited, entering into commitments to sell commodities exposes the Fund to
unlimited potential risk.
Market risk is influenced by a wide variety of factors including government
programs and policies, political and economic events, the level and volatility
of interest rates, foreign currency exchange rates, the diversification
effects among the derivative instruments the Fund holds and the liquidity and
inherent volatility of the markets in which the Fund trades.
The net unrealized gains on open commodity futures contracts at June 30,
2009 and December 31, 2008 were $60,289 and $ 0 respectively.
Open contracts generally mature within three months of June 30, 2009. The
latest maturity for open futures contracts is in March 2010. However the Fund
intends to close all contracts prior to maturity.
F-15
<page>
Atlas Futures Fund, Limited Partnership
(A Delaware Limited Partnership)
Notes to the Financial Statements
June 30, 2009
(A Review)
8. Trading Activities and Related Risks - Continued
In March 2008, the FASB issued Statement of Financial Accounting Standards
No. 161 (SFAS 161), "Disclosures about Derivative Instruments and Hedging
Activities - an amendment of FASB Statement No. 133." SFAS 161 provides for
disclosures about derivative instruments and hedging activities. SFAS 161 is
intended to improve financial reporting about derivative instruments and
hedging activities by requiring enhanced disclosures to enable investors to
better understand how those instruments and activities are accounted for; how
and why they are used; and their effects on a Fund's financial position,
financial performance, and cash flows. SFAS 161 is effective for financial
statements issued for fiscal years beginning after November 15, 2008, and
interim periods within those fiscal years.
The Fund adopted the provisions of SFAS 161 effective January 1, 2009.
The following tables disclose the fair values of derivative and hedging
activities in the Statement of Assets and Liabilities and the Statement of
Operations.
Derivative instruments
Statement of Assets and Liabilities
<table>
<s> <c> <c> <c> <c> <c>
Asset Liability
Derivatives at Derivatives at
June 30, 2009 June 30, 2009
Statement of Assets and Liabilities Location Fair Value Fair Value Net
Derivatives not designated as hedge Commodity contracts Net unrealized gain (loss) on open futures $87,265 $(26,976) $60,289
instruments under Statement 133 contracts
</table>
Derivative instruments
Statement of Operations
<table>
<s> <c> <c> <c> <c>
Three Months Ended Six Months Ended
Line Item in the Statement of Operations June 30, 2009 June 30, 2009
Derivatives not designated as hedge Commodity contracts Net realized gain (loss) from investments and $61,229 $(938,191)
instruments under Statement 133 foreign currency transactions
Net unrealized appreciation from investments $60,289 $60,289
and foreign currency
</table>
Credit risk is the possibility that a loss may occur due to the failure of a
counter party to perform according to the terms of a contract.
The Fund has a substantial portion of its assets on deposit with financial
institutions. In the event of a financial institution's insolvency, recovery
of Fund deposits may be limited to account insurance or other protection
afforded deposits.
The Fund has established procedures to actively monitor market risk and
minimize credit risk although there can be no assurance that it will succeed.
The basic market risk control procedures consist of continuously monitoring
open positions, diversification of the portfolio and maintenance of a
desirable margin-to-equity ratio. The Fund seeks to minimize credit risk
primarily by depositing and maintaining its assets at financial institutions
and brokers which it believes to be creditworthy.
9. Financial Instruments with Off-Balance Sheet Credit and Market Risk
All financial instruments are subject to market risk, the risk that future
changes in market conditions may make an instrument less valuable or more
onerous. As the instruments are recognized at fair market value, those
changes directly affect reported income.
Included in the definition of financial instruments are securities,
restricted securities and derivative financial instruments. Theoretically,
the investments owned by the Fund directly are exposed to a market risk (loss)
equal to the notional value of the financial instruments purchased and
substantial liability on certain financial instruments purchased short.
Generally, financial instruments can be closed. However, if the market is not
liquid, it could prevent the timely close-out of any unfavorable positions or
require the Fund to hold those positions to maturity, regardless of the
changes in their value or the trading advisor's investment strategies.
Credit risk represents the accounting loss that would be recognized at the
reporting date if counterparties failed to perform as contracted.
Concentrations of credit risk (whether on or off balance sheet) that arise
from financial instruments exist for groups of counterparties when they have
similar economic characteristics that would cause their ability to meet
contractual obligations to be similarly affected by changes in economic or
other conditions.
10. Derivative Financial Instruments and Fair Value of Financial Instruments
A derivative financial instrument is a financial agreement whose value is
linked to, or derived from, the performance of an underlying asset. The
underlying asset can be currencies, commodities, interest rates, stocks, or
any combination. Changes in the underlying asset indirectly affect the value
of the derivative. As the instruments are recognized at fair value, those
changes directly affect reported income.
All investment holdings are recorded in the statement of 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.
F-16
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Atlas Futures Fund, Limited Partnership
(A Delaware Limited Partnership)
Notes to the Financial Statements
June 30, 2009
(A Review)
11. Indemnifications
In the normal course of business, the Fund enters into contracts and
agreements that contain a variety of representations and warranties and which
provide general indemnifications. The Fund's maximum exposure under these
arrangements is unknown, as this would involve future claims that may be made
against the Fund that have not yet occurred. The Fund expects the risk of any
future obligation under these indemnifications to be remote.
12. Financial Highlights
<table>
<s> <c> <c> <c> <c>
Three Months Ended June 30, Six Months Ended June 30,
2009 2008 2009 2008
Performance per unit (1)
Net unit value, beginning of the period $5,011.67 $4,631.97 $5,404.76 $4,175.12
Net realized and unrealized gain (loss) on
commodity transactions 23.99 1,536.07 (215.48) 2,290.53
Investment and other income 1.97 15.44 3.37 35.23
Expenses (152.58) (538.87) (307.60) (856.27)
Net increase (decrease) for the period (126.62) 1,012.64 (519.71) 1,469.49
Net unit value at the end of the period $4,885.05 $5,644.61 $4,885.05 $5,644.61
Net assets at the end of the period ($000) $18,654 $24,728 $18,654 $24,728
Total return (2) (2.53%) 21.86% (9.62%) 35.20%
Number of units outstanding at the end of the period 3,818.52 4,380.76 3,818.52 4,380.76
Supplemental Data:
Ratio to average net assets
Investment and other income (3) 0.16% 1.20% 0.13% 1.46%
Expenses (3) (12.20%) (41.16%) (12.07%) (35.66%)
</table>
Total return is calculated based on the change in value of a unit during the
period. An individual partner's total return and ratios may vary from the
above total returns and ratios based on the timing of additions and
redemptions.
(1) Investments and other income and expenses and net realized and
unrealized gains and losses on commodity transactions are calculated based
on a single unit outstanding during the period.
(2) Not annualized
(3) Annualized
F-17
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Atlas Futures Fund, Limited Partnership
Affirmation of the Commodity Pool Operator
For the Six Months Ending June 30, 2009 and 2008
*****************************************************************************
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, Ashley Capital Management, Inc.
General Partner
Atlas Futures Fund, Limited Partnership
F-18
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