Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Re: ProFutures Long/Short Growth Fund, L.P. Commission File Number 0-25585 Dear Sirs: This filing contains Form 10-Q for the quarter ended September 30, 2002. Very truly yours, PROFUTURES LONG/SHORT GROWTH FUND, L.P. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q X Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarter Ended September 30, 2002 -------------- Commission File Number 0-25585 ------- PROFUTURES LONG/SHORT GROWTH FUND, L.P. --------------------------------------- (Exact name of registrant) Delaware 74-2849862 - ----------------------- ------------------------------------ (State of Organization) (I.R.S. Employer Identification No.) ProFutures, Inc. 11612 Bee Cave Road Suite 100 Austin, Texas 78738 --------------------------------------- (Address of principal executive office) Registrant's telephone number (800) 348-3601 -------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark whether the registrant is an accelerated filer (as Defined in Rule 12b-2 of the Exchange Act). Yes No X PART I - FINANCIAL INFORMATION Item 1. Financial Statements. PROFUTURES LONG/SHORT GROWTH FUND, L.P. STATEMENTS OF FINANCIAL CONDITION September 30, 2002 (Unaudited) and December 31, 2001 (Audited) ------------- September 30, December 31, 2002 2001 ---- ---- ASSETS Equity in broker trading accounts Cash $11,217,128 $12,119,461 Net option premiums (received) (290,500) (291,200) Unrealized gain on open contracts 870,321 373,755 ----------- ----------- Deposits with broker 11,796,949 12,202,016 Cash 12,651 11,652 ----------- ----------- Total assets $11,809,600 $12,213,668 =========== =========== LIABILITIES Accounts payable $ 15,287 $ 17,680 Commissions and other trading fees on open contracts 11,361 9,065 Incentive fees payable 31,201 53,703 Management fees payable 48,464 51,559 Redemptions payable 27,627 142,989 ----------- ----------- Total liabilities 133,940 274,996 ----------- ----------- PARTNERS' CAPITAL (Net Asset Value) General Partner - 61 units outstanding at September 30, 2002 and December 31, 2001 65,472 56,537 Limited Partners - 10,896 and 12,913 units outstanding at September 30, 2002 and December 31, 2001 11,610,188 11,882,135 ----------- ----------- Total partners' capital (Net Asset Value) 11,675,660 11,938,672 ----------- ----------- $11,809,600 $12,213,668 =========== =========== See accompanying notes. PROFUTURES LONG/SHORT GROWTH FUND, L.P. CONDENSED SCHEDULE OF INVESTMENTS September 30, 2002 (Unaudited) ----------- LONG FUTURES CONTRACTS - ---------------------- % of Net Description Value Asset Value ----------- ----- ----------- Agricultural $ 290,868 2.49 % Currency 8,652 0.07 % Energy 41,905 0.36 % Interest rate 504,399 4.32 % Metal 24,675 0.21 % Stock index (106,578) (0.91)% ---------- -------- Total long futures contracts $ 763,921 6.54 % ---------- -------- SHORT FUTURES CONTRACTS - ----------------------- Agricultural $ (69,520) (0.60)% Currency 9,650 0.08 % Metal 28,770 0.25 % ---------- -------- Total short futures contracts $ (31,100) (0.27)% ---------- -------- Total futures contracts $ 732,821 6.27 % ========== ======== WRITTEN OPTIONS ON FUTURES CONTRACTS - ------------------------------------ % of Net Description Value Asset Value ----------- ----- ----------- Stock index options (premiums received - $290,500) $ (153,000) (1.31)% ========== ======== See accompanying notes. PROFUTURES LONG/SHORT GROWTH FUND, L.P. STATEMENTS OF OPERATIONS For the Three Months Ended September 30, 2002 and 2001 (Unaudited) ------------- Three months ended September 30, 2002 2001 ---- ---- INCOME Trading gains (losses) Realized $ 320,099 $ (121,080) Change in unrealized 287,106 837,175 ------------ ------------ Gain from trading 607,205 716,095 Interest income 46,942 103,299 ------------ ------------ Total income 654,147 819,394 ------------ ------------ EXPENSES Brokerage commissions 73,252 56,071 Incentive fees 31,201 167,949 Management fees 86,676 92,803 Operating expenses 28,917 23,159 ------------ ------------ Total expenses 220,046 339,982 ------------ ------------ NET INCOME $ 434,101 $ 479,412 ============ ============ NET INCOME PER GENERAL AND LIMITED PARTNER UNIT (based on weighted average number of units outstanding during the period of 11,069 and 13,521, respectively) $ 39.22 $ 35.46 ============ ============ INCREASE IN NET ASSET VALUE PER GENERAL AND LIMITED PARTNER UNIT $ 39.56 $ 36.58 ============ ============ See accompanying notes. PROFUTURES LONG/SHORT GROWTH FUND, L.P. STATEMENTS OF OPERATIONS For the Nine Months Ended September 30, 2002 and 2001 (Unaudited) ----------- Nine months ended September 30, 2002 2001 ---- ---- INCOME Trading gains Realized $ 1,957,721 $ 1,583,478 Change in unrealized 496,566 285,442 ------------ ------------ Gain from trading 2,454,287 1,868,920 Interest income 148,308 376,935 ------------ ------------ Total income 2,602,595 2,245,855 ------------ ------------ EXPENSES Brokerage commissions 220,406 195,756 Incentive fees 314,585 460,855 Management fees 265,865 283,226 Operating expenses 85,290 95,421 ------------ ------------ Total expenses 886,146 1,035,258 ------------ ------------ NET INCOME $ 1,716,449 $ 1,210,597 ============ ============ NET INCOME PER GENERAL AND LIMITED PARTNER UNIT (based on weighted average number of units outstanding during the period of 11,873 and 14,080, respectively) $ 144.57 $ 85.98 ============ ============ INCREASE IN NET ASSET VALUE PER GENERAL AND LIMITED PARTNER UNIT $ 145.42 $ 87.79 ============ ============ See accompanying notes. PROFUTURES LONG/SHORT GROWTH FUND, L.P. STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (NET ASSET VALUE) For the Nine Months Ended September 30, 2002 and 2001 (Unaudited) ------------- Total Partners' Capital Number of ------------------------------------ Units General Limited Total --------- -------- ------------ ------------ Balances at December 31, 2001 12,974 $ 56,537 $ 11,882,135 $ 11,938,672 Net income for the nine months ended September 30, 2002 8,935 1,707,514 1,716,449 Redemptions (2,017) 0 (1,979,461) (1,979,461) ------ -------- ------------ ------------ Balances at September 30, 2002 10,957 $ 65,472 $ 11,610,188 $ 11,675,660 ====== ======== ============ ============ Balances at December 31, 2000 14,773 $ 52,762 $ 12,633,367 $ 12,686,129 Net income for the nine months ended September 30, 2001 5,394 1,205,203 1,210,597 Redemptions (1,536) 0 (1,367,564) (1,367,564) ------ -------- ------------ ------------ Balances at September 30, 2001 13,237 $ 58,156 $ 12,471,006 $ 12,529,162 ====== ======== ============ ============ Net asset value per unit at December 31, 2000 $ 858.74 =========== September 30, 2001 $ 946.53 =========== December 31, 2001 $ 920.18 =========== September 30, 2002 $ 1,065.60 =========== See accompanying notes. PROFUTURES LONG/SHORT GROWTH FUND, L.P. NOTES TO FINANCIAL STATEMENTS (Unaudited) ----------- Note 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ----------------------------------------------------------- A. General Description of the Partnership ProFutures Long/Short Growth Fund, L.P. (the Partnership) is a Delaware limited partnership which operates as a commodity investment pool. The Partnership engages in the speculative trading of futures and option contracts. B. Regulation As a registrant with the Securities and Exchange Commission, the Partnership is subject to the regulatory requirements under the Securities Act of 1933 and the Securities Exchange Act of 1934. As a commodity investment pool, the Partnership is subject to the regulations of the Commodity Futures Trading Commission, an agency of the U.S. government which regulates most aspects of the commodity futures industry; rules of the National Futures Association, an industry self-regulatory organization; and the requirements of commodity exchanges and Futures Commission Merchants (brokers) through which the Partnership trades. C. Method of Reporting The Partnership's financial statements are presented in accordance with accounting principles generally accepted in the United States of America, which require the use of certain estimates made by the Partnership's management. Transactions are accounted for on the trade date. Gains or losses are realized when contracts are liquidated. Unrealized gains or losses on open contracts (the difference between contract trade price and quoted market price) are reflected in the statement of financial condition as a net gain or loss, as there exists a right of offset of unrealized gains or losses in accordance with 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. For purposes of both financial reporting and calculation of redemption value, Net Asset Value Per Unit is calculated by dividing Net Asset Value by the total number of units outstanding. D. Brokerage Commissions Brokerage commissions include other trading fees and are charged to expense when contracts are opened. E. Income Taxes The Partnership prepares calendar year U.S. and applicable state information tax returns and reports to the partners their allocable shares of the Partnership's income, expenses and trading gains or losses. PROFUTURES LONG/SHORT GROWTH FUND, L.P. NOTES TO FINANCIAL STATEMENTS (CONTINUED) (Unaudited) ----------- Note 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) ----------- F. Organizational Charge The General Partner pays all organizational and offering costs of the Partnership. As reimbursement for such costs, the General Partner (or the Distributor, ProFutures Financial Group, Inc., a broker/dealer affiliate of the General Partner) receives an organizational charge of 1% of the subscription amount of each subscriber to the Partnership. There were no such organizational charges received by the General Partner during the nine months ended September 30, 2002 and 2001. G. Foreign Currency Transactions 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 currencies other than the U.S. dollar are translated into U.S. dollars at the rates in effect at the date of the statement of financial condition. Income and expense items denominated in currencies other than the U.S. dollar are translated into U.S. dollars at the rates in effect during the period. Gains and losses resulting from the translation to U.S. dollars are reported in income currently. H. Statements of Cash Flows The Partnership has elected not to provide statements of cash flows as permitted by Statement of Financial Accounting Standards No. 102 - "Statement of Cash Flows - Exemption of Certain Enterprises and Classification of Cash Flows from Certain Securities Acquired for Resale." I. Interim Financial Statements In the opinion of management, the unaudited interim financial statements reflect all adjustments, which were of a normal and recurring nature, necessary for a fair presentation of financial position as of September 30, 2002, and the results of operations for the three and nine months ended September 30, 2002 and 2001. Note 2. GENERAL PARTNER --------------- The General Partner of the Partnership is ProFutures, Inc., which conducts and manages the business of the Partnership. The Limited Partnership Agreement requires the General Partner and/or its principals and affiliates to maintain capital accounts equal to at least 1% of the total capital of the Partnership. At September 30, 2002 and December 31, 2001, the capital accounts of the General Partner and/or its principals and affiliates totaled $570,432 and $498,903, respectively. PROFUTURES LONG/SHORT GROWTH FUND, L.P. NOTES TO FINANCIAL STATEMENTS (CONTINUED) (Unaudited) ----------- Note 2. GENERAL PARTNER (CONTINUED) --------------------------- The Limited Partnership Agreement was amended effective February 16, 1999 and generally requires that the General Partner maintain a net worth of up to $1,000,000. ProFutures, Inc. has callable subscription agreements with ABN AMRO Incorporated (ABN), the Partnership's broker, whereby ABN has subscribed to purchase (up to $7,000,000 subject to the conditions set forth in the subscription agreement as amended effective May 20, 2002) the number of shares of common stock of ProFutures, Inc. necessary to maintain the General Partner net worth requirements. The Partnership pays the General Partner a monthly management fee equal to 1/6 of 1% (2% annually) of month-end Net Assets (as defined in the Limited Partnership Agreement). Total management fees earned by ProFutures, Inc. for the nine months ended September 30, 2002 and 2001 were $176,988 and $188,545, respectively. Such management fees earned for the three months ended September 30, 2002 and 2001 were $57,750 and $61,776, respectively. Management fees payable to ProFutures, Inc. as of September 30, 2002 and December 31, 2001 were $19,538 and $20,170, respectively. Note 3. COMMODITY TRADING ADVISORS -------------------------- The Partnership has trading advisory contracts with several trading advisors to furnish investment management services to the Partnership. Each advisor is paid a monthly management fee of 1/12 of 1% (1% annually) of Allocated Net Asset Value (as defined in each respective advisory agreement). In addition, each advisor receives a quarterly incentive fee of 20% of Trading Profits (as defined). Note 4. DEPOSITS WITH BROKER -------------------- The Partnership deposits funds with ABN to act as broker, subject to Commodity Futures Trading Commission regulations and various exchange and broker requirements. The Partnership earns interest income on its assets deposited with the broker. At September 30, 2002 and December 31, 2001, the initial margin requirement of $2,927,633 and $1,706,987, respectively, is satisfied by the deposit of cash with such broker. Note 5. SUBSCRIPTIONS, DISTRIBUTIONS AND REDEMPTIONS -------------------------------------------- Investments in the Partnership were made by subscription agreement, subject to acceptance by the General Partner. Effective November 2000, the Partnership is closed to new investment; however, the General Partner may reopen the Partnership to new investments in the future. PROFUTURES LONG/SHORT GROWTH FUND, L.P. NOTES TO FINANCIAL STATEMENTS (CONTINUED) (Unaudited) ----------- Note 5. SUBSCRIPTIONS, DISTRIBUTIONS AND REDEMPTIONS (CONTINUED) -------------------------------------------------------- The Partnership is not required to make distributions, but may do so at the sole discretion of the General Partner. A Limited Partner may require the Partnership to redeem any or all of such Limited Partner's units at Net Asset Value as of the close of business on the last day of any month upon advance written notice to the General Partner. The Limited Partnership Agreement contains a complete description of the Partnership's redemption policies and procedures. Note 6. TRADING ACTIVITIES AND RELATED RISKS ------------------------------------ The Partnership engages in the speculative trading of U.S. and foreign futures contracts and options on futures contracts (collectively "derivatives"). 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. Purchase and sale of futures and options on futures contracts requires margin deposits with the broker. 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. A customer's cash and other property (for example, U.S. Treasury bills) deposited with a broker are considered commingled with all other customer funds subject to the broker's segregation requirements. In the event of a broker'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 total cash and other property deposited. Open contracts generally mature within three months, however, the Partnership intends to close all contracts prior to maturity. At September 30, 2002, the latest maturity date for open contracts is December 2003, and at December 31, 2001, the latest maturity date for open contracts is March 2003. 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 notional contract value of futures 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. Written options expose the Partnership to potentially unlimited liability, and purchased options expose the Partnership to a risk of loss limited to the premiums paid. The Partnership has assets on deposit with a financial institution in connection with its cash management activities. In the event of a financial institution's insolvency, recovery of Partnership assets on deposit may be limited to account insurance or other protection afforded such deposits. PROFUTURES LONG/SHORT GROWTH FUND, L.P. NOTES TO FINANCIAL STATEMENTS (CONTINUED) (Unaudited) ----------- Note 6. TRADING ACTIVITIES AND RELATED RISKS (CONTINUED) ------------------------------------------------ The General Partner has established procedures to actively monitor market risk and minimize credit risk, although there can be no assurance that it will, in fact, succeed in doing so. The General Partner's basic market risk control procedures consist of continuously monitoring the trading activity of the various trading advisors, with the actual market risk controls being applied by the advisors themselves. The General Partner seeks to minimize credit risk primarily by depositing and maintaining the Partnership's assets at financial institutions and brokers which the General Partner believes to be creditworthy. The Limited Partners bear the risk of loss only to the extent of the market value of their respective investments and, in certain specific circumstances, distributions and redemptions received. PROFUTURES LONG/SHORT GROWTH FUND, L.P. NOTES TO FINANCIAL STATEMENTS (CONTINUED) (Unaudited) ----------- Note 7. FINANCIAL HIGHLIGHTS -------------------- The following information presents per unit operating performance data and other supplemental financial data for the three months and nine months ended September 30, 2002 and 2001. This information has been derived from information presented in the financial statements. Three months ended September 30, 2002 2001 (Unaudited) (Unaudited) ----------- ----------- Per Unit Performance (for a unit outstanding throughout the entire period) ----------------------------------------------------- Net asset value per unit at beginning of period $1,026.04 $ 909.95 --------- --------- Income (loss) from operations: Net investment (loss) (1), (3) (9.02) (13.36) Net realized and change in unrealized gain from trading (2), (3) 48.58 49.94 --------- --------- Total income from operations 39.56 36.58 --------- --------- Net asset value per unit at end of period $1,065.60 $ 946.53 ========= ========= Total Return (4) 3.86 % 4.02 % ======= ======= Supplemental Data Ratios to average net asset value: (5) Expenses prior to incentive fees (1) 4.03 % 3.78 % Incentive fees 1.09 % 5.48 % ------- ------- Total expenses (1) 5.12 % 9.26 % ======= ======= Net investment (loss) (1) (3.49)% (5.89)% ======= ======= Nine months ended September 30, 2002 2001 (Unaudited) (Unaudited) ----------- ----------- Per Unit Performance (for a unit outstanding throughout the entire period) ----------------------------------------------------- Net asset value per unit at beginning of period $ 920.18 $ 858.74 --------- --------- Income (loss) from operations: Net investment (loss) (1), (3) (43.58) (32.85) Net realized and change in unrealized gain from trading (2), (3) 189.00 120.64 --------- --------- Total income from operations 145.42 87.79 --------- --------- Net asset value per unit at end of period $1,065.60 $ 946.53 ========= ========= Total Return (4) 15.80 % 10.22 % ======= ======= Supplemental Data Ratios to average net asset value: (5) Expenses prior to incentive fees (1) 4.04 % 4.06 % Incentive fees 3.61 % 4.95 % ------- ------- Total expenses (1) 7.65 % 9.01 % ======= ======= Net investment (loss) (1) (5.95)% (4.96)% ======= ======= Total returns are calculated based on the change in value of a unit during the period. An individual partner's total returns and ratios may vary from the above total returns and ratios based on the timing of additions and redemptions. -------------------- (1) Excludes brokerage commissions and other trading fees. (2) Includes brokerage commissions and other trading fees. (3) The net investment (loss) per unit is calculated by dividing the net investment (loss) by the average number of units outstanding during the period. The net realized and change in unrealized gain from trading is a balancing amount necessary to reconcile the change in net asset value per unit with the other per unit information. (4) Not annualized. (5) Annualized. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. A. LIQUIDITY: Substantially all of the Partnership's assets are highly liquid, such as cash and open futures and option contracts. It is possible that extreme market conditions or daily price fluctuation limits at exchanges could adversely affect the liquidity of open futures contracts. There are no restrictions on the liquidity of these assets except for amounts on deposit with the broker needed to meet margin requirements on open futures contracts. B. CAPITAL RESOURCES: Since the Partnership's business is the purchase and sale of various commodity interests, it will make few, if any, capital expenditures. The Partnership raises additional capital only through the sale of Units and trading profits (if any) and does not engage in borrowing. The Partnership sells no securities other than the Units. Effective November 2000, the Partnership is closed to new investment; however, the General Partner may reopen the Partnership to new investments in the future. C. RESULTS OF OPERATIONS: The Partnership's net income (loss) for the nine months ended September 30, 2002 and 2001 consisted of the following: 2002 2001 ---- ---- Three months ended March 31 $ 326,772 $ 958,206 Three months ended June 30 955,576 (227,021) Three months ended September 30 434,101 479,412 ---------- ---------- Nine months ended September 30 $1,716,449 $1,210,597 ========== ========== At September 30, 2002, partners' capital totaled $11,675,660, a net decrease of $263,012 from December 31, 2001, due to redemptions of limited partner units exceeding net income for the nine months ended September 30, 2002. At September 30, 2001, partners' capital totaled $12,529,162, a net decrease of $156,967 from December 31, 2000, due to redemptions of $1,367,564 exceeding net income for the nine months ended September 30, 2001. Third Quarter 2002 ------------------ The futures markets continued to be volatile in the third quarter of 2002. The equity markets suffered losses during the quarter, which impacted the commodities markets. The looming threat of war with Iraq also had a big impact on the markets, especially oil and gas futures. The Partnership started the quarter with a loss in July of (2.58)%. There were losses in stock indexes along with losses in metals, foreign currencies and certain of the agricultural commodities. These losses were partially offset by gains in interest rates, and some of the agricultural commodities. In August, the Partnership gained 6.11%. There were gains in stock indexes. There were also gains in grains and other agricultural commodities, as well as interest rates. There were losses in foreign currencies and base metals. In September, the Partnership posted another gain of 0.47%. There were gains in interest rates, energy and base metals. These gains were mostly offset by losses in stock indexes, certain of the agricultural commodities, and foreign currencies. The Partnership had a total return of 3.86% for the quarter and 15.80% for the nine months ended September 30, 2002. For the third quarter 2002, the majority of the Partnership's trading gains were in interest rate futures and the largest loss was in stock index futures. Second Quarter 2002 ------------------- The futures markets continued to be volatile in the second quarter of 2002, though there was a surge at the end of the quarter. The extreme volatility of the equity markets, mainly on the downside, had a major impact on the commodities markets. Many of the US and overseas stock indexes and foreign currencies were very active. Some of this was the result of the corporate scandals that continue to rock the markets. The Partnership had a good second quarter, starting in April with a gain of .56%. There was a gain in S & P 500 options, with gains in lean hogs and corn futures. These were partially offset by losses in the S & P 500 Index, copper futures and coffee futures. In May, the Partnership continued its positive quarter with a gain of 5.66%. There were gains in foreign currencies, stock indexes and precious metals. There were losses in the energy complex and some agricultural commodities. In June, the Partnership posted another gain of 2.16%. There were gains in British Pounds, the S & P 500 Index, Euro futures and EuroDollar futures. These were partially offset by losses in options on the S & P 500, lean hogs and sugar futures. The Partnership had a total return of 8.54% for the quarter and 11.50% for the six months ended June 30, 2002. For the second quarter 2002, the majority of the Partnership's trading gains were in foreign currencies and the largest loss was in the energy markets. First Quarter 2002 ------------------ The futures markets remained choppy in the first quarter of 2002. While the economy was showing some signs of improvement, there were also some negative signs that caused uncertainty. The troubles in the Middle East lead to large increases in oil and gas prices. Gold prices also moved higher early in the quarter, but gave back some of their gains at the end of the quarter. In January 2002, the Partnership gained a modest 0.99%. There were large gains in stock index, along with some smaller gains in energy and foreign currencies. These were mostly offset by losses in interest rates, agricultural commodities and precious metals. In February 2002, there was another gain of 4.34%. This resulted from gains in stock index, once again. There were also gains in interest rates and agricultural commodities. There were some losses incurred in energy and foreign currencies. In March 2002, the Partnership incurred a loss of 2.51%. Again there were profits in the stock indexes. These however were offset by losses in foreign currencies, interest rates and agricultural commodities. Coffee and Eurodollar futures incurred the largest losses. For the first quarter 2002, the majority of the Partnership's gains came from profits in options on S&P 500 Index futures. The largest loss for the quarter was from coffee. Third Quarter 2001 ------------------ The quarter ended September 30, 2001 started out with a loss of 2.87% in July. This loss was offset by a gain in August, primarily in stock index futures and options. There were also some smaller gains in interest rates, energy and certain agricultural markets. The Fed's continuing loose monetary policy kept both short-term and long-term interest rates somewhat volatile. The equity markets also remained somewhat volatile. September 2001 was a very volatile month for the Fund due to the events of September 11th. Although the US markets were closed for the remainder of the week, most overseas markets remained open, and significant gains were made during this period. The Fund had significant profits in short-term interest rate futures (Eurodollar). There were also some significant gains in agriculture, mostly orange juice and coffee. Some of these gains were offset by some losses in corn and soybean oil. The Fund was able to end the quarter with a profit of 4.02% and 10.22% for the nine months ended September 30, 2001. Second Quarter 2001 ------------------- April 2001 brought a large loss for the Fund, almost all of which came from stock indexes. On April 18th, the U.S. Federal Reserve announced a surprise cut in interest rates. This caused the stock market, which had been trending lower, to move up dramatically in a mid-day surge. One of the Trading Advisors had sold call options based on a bearish forecast. The sudden reversal led to these positions being stopped out at a major loss within a few moments of the Federal Reserve announcement. April ended with a net loss for the Fund of 10.73%. May and June 2001 were much more favorable, bringing gains of 3.69% and 6.32% respectively. Much of the gain came from stock indexes and foreign currencies as well as agricultural commodities. The second quarter of 2001 ended with a loss of 1.58% and the first six months of 2001 were a gain of 5.96%. First Quarter 2001 ------------------ The Partnership's Trading Advisors were able to profit during the first quarter of 2001, even though many markets were relatively trendless, by using very short-term trading strategies in the stock index futures and writing options on the S&P 500. The decision in late 2000 to expand the Partnership's focus beyond stock indexes by allocating part of the assets to a more diversified program proved helpful, with additional gains coming in markets such as foreign currencies, agricultural commodities, short-term interest rates and metals. The first quarter ended with a gain of 7.66%. Market and Credit Risk ---------------------- The General Partner has established procedures to actively monitor market risk and minimize credit risk, although there can be no assurance that it will, in fact, succeed in doing so. The General Partner's basic market risk control procedures consist of continuously monitoring the trading activity of the various advisors with the actual market risk controls being applied by the advisors themselves. The General Partner seeks to minimize credit risk primarily by depositing and maintaining the Partnership's assets at financial institutions and brokers which the General Partner believes to be creditworthy. Due to the speculative nature of trading derivatives, the Partnership's income or loss from operations may vary widely from period to period. Management cannot predict whether the Partnership's future Net Asset Value per Unit will increase or experience a decline. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. D. POSSIBLE CHANGES: The General Partner reserves the right to terminate certain and/or engage additional trading advisors or change any of the Partnership's clearing arrangements. Item 4. Controls and Procedures. ProFutures, Inc. as general partner of ProFutures Long/Short Growth Fund, L.P., with the participation of the general partner's President and Chief Financial Officer, has evaluated the effectiveness of the design and operation of its disclosure controls and procedures with respect to the Partnership within 90 days of the filing date of this quarterly report, and, based on their evaluation, have concluded that these disclosure controls and procedures are effective. There were no significant changes in the general partner's internal controls with respect to the Partnership or in other factors applicable to the Partnership that could significantly affect these controls subsequent to the date of their evaluation. PART II - OTHER INFORMATION Item 1. Legal Proceedings. None. Item 2. Changes in Securities. None. Item 3. Defaults Upon Senior Securities. Not Applicable. Item 4. Submission of Matters to a Vote of Security Holders. None. Item 5. Other Information. None. Item 6. Exhibits and Reports on Form 8-K. There were no reports filed on Form 8-K. Exhibits filed herewith: 99.1 Form of Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code. 99.2 Form of Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code. CERTIFICATIONS - -------------- I, Gary D. Halbert, certify that: 1. I have reviewed this quarterly report on Form 10-Q of ProFutures Long/Short Growth Fund, L.P.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 13, 2002 ---------------------------------- /s/ Gary D. Halbert - ----------------------------------------- Gary D. Halbert, President ProFutures, Inc., General Partner I, Debi B. Halbert, certify that: 1. I have reviewed this quarterly report on Form 10-Q of ProFutures Long/Short Growth Fund, L.P.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 13, 2002 ---------------------------------- /s/ Debi B. Halbert - ----------------------------------------- Debi B. Halbert, Chief Financial Officer ProFutures, Inc., General Partner SIGNATURE Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Partnership has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PROFUTURES LONG/SHORT GROWTH FUND, L.P. (Registrant) By /s/ Gary D. Halbert ------------------------------------- Gary D. Halbert, President ProFutures, Inc., General Partner EXHIBIT 99.1 CERTIFICATION PURSUANT TO SECTION 1350 OF CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE ------------------------------------------------ I, Gary D. Halbert, the President of ProFutures, Inc. as general partner of ProFutures Long/Short Growth Fund, L.P., certify that (i) the Form 10-Q for the quarter ended September 30, 2002 of ProFutures Long/Short Growth Fund, L.P. fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Form 10-Q for the quarter ended September 30, 2002 fairly presents, in all material respects, the financial condition and results of operations of ProFutures Long/Short Growth Fund, L.P. PROFUTURES LONG/SHORT GROWTH FUND, L.P. By: ProFutures, Inc., general partner By: /s/ Gary D. Halbert ---------------------------------- Gary D. Halbert President November 13, 2002 EXHIBIT 99.2 CERTIFICATION PURSUANT TO SECTION 1350 OF CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE ------------------------------------------------ I, Debi B. Halbert, the Chief Financial Officer of ProFutures, Inc. as general partner of ProFutures Long/Short Growth Fund, L.P., certify that (i) the Form 10-Q for the quarter ended September 30, 2002 of ProFutures Long/Short Growth Fund, L.P. fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Form 10-Q for the quarter ended September 30, 2002 fairly presents, in all material respects, the financial condition and results of operations of ProFutures Long/Short Growth Fund, L.P. PROFUTURES LONG/SHORT GROWTH FUND, L.P. By: ProFutures, Inc., general partner By: /s/ Debi B. Halbert ---------------------------------- Debi B. Halbert Chief Financial Officer November 13, 2002