SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2001
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 ____333-85755______
Bromwell Financial Fund, Limited Partnership
--------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Delaware 51-0387638
- ------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
6916 N. 300 West, Fremont, IN 46737
- ------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (219) 833-1505
- ------------------------------------------------------------------------
Former Name, Address and Fiscal Year, if Changed, Since Last Report
No such changes occurred
Indicate by check [X] 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 [ ]
Part 1 - FINANCIAL INFORMATION
Item 1. Financial Statements.
The unaudited financial statements for the Registrant for the second quarter
ended June 30, 2001, six months ended June 30, 2001, and audited results for
the calendar year 2000 are attached hereto and made a part hereof.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
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 trading of commodity futures and options markets through the
services of its commodity trading advisors, Ansbacher Management, Inc. and
Mangin Capital Management, Inc. As of July 17, the allocation of equity
among the two traders was equally divided.
The Units are sold through the broker dealer selected by the General Partner,
Futures Investment Company, at the Net Asset Value per Unit as of the close
of business on the last day of the month in which subscriptions are received
by the General Partner.
The Registrant will continue to offer Units for sale to the public via its
fully amended and restated prospectus dated September 11, 2000 until the
total amount of registered securities, $7,000,000, is sold or the offering
terminates.
To obtain a return of invested capital or appreciation, if any, purchasers of
Units must look solely to the redemption feature of the Partnership or to the
General Partner, in its sole judgment, to elect to make distributions. There
is no current market for the Units sold and none is expected to develop nor
is the General Partner expected to make distributions.
Part II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) None
(b) No reports on Form 8-K
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, 2001, to be signed on its behalf by the undersigned,
thereunto duly authorized.
Registrant: Bromwell Financial Fund, Limited
Partnership
By Belmont Capital Management,
Incorporated
Its General Partner
By: /s/ Shira Del Pacult
Ms. Shira Del Pacult
Sole Director, Sole Shareholder,
President, and Treasurer of the
General Partner
Date: August 14, 2001
BROMWELL FINANCIAL FUND,
LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
FOR THE THREE MONTHS AND SIX MONTHS ENDED
JUNE 30, 2001 (UNAUDITED)
AND THE YEAR ENDED DECEMBER 31, 2000
(With Auditors' Report Thereon)
GENERAL PARTNER:
Belmont Capital Management, Inc.
% Corporate Systems, Inc.
101 North Fairfield Drive
Dover, Kent County, Delaware 19901
To The Partners
Bromwell Financial Fund, Limited Partnership
Dover, Kent County, Delaware
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying balance sheet of BROMWELL FINANCIAL
PARTNERSHIP, LIMITED PARTNERSHIP as of December 31, 2000, and the related
statements of operations, partners' equity and cash flows for the year ended.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatements. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of BROMWELL FINANCIAL FUND,
LIMITED PARTNERSHIP as of December 31, 2000, and the results of its
operations and its cash flows for the year ended, in conformity with
generally accepted accounting principles.
Accountants: Frank L. Sassetti & Co.
Certified Public Accountants
Date: February 16, 2001 By: /s/ Frank L. Sassetti & Co.
Frank L. Sassetti & Co.
Certified Public Accountants
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
BALANCE SHEETS
JUNE 30, 2001 AND DECEMBER 31, 2000
ASSETS
2001
(Unaudited) 2000
Cash $ 40,685 $ 16,080
Accrued interest receivable 3,526 1,550
Prepaid commissions 3,677
Equity in Commodity Futures Trading Accounts -
Cash 1,670,109 1,650,576
Net unrealized gains on open commodity
futures contracts (Note 7) 4,791 53,034
Open options, short positions, at market value
(cost ($36,000) and ($76,800)) (15,800) (36,800)
Due from limited partners - 50,000
$1,703,311 $1,738,117
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES
Accrued trading commissions payable $ 2,047 $ 4,606
Accrued management fees payable 8,105 6,177
Accrued incentive fees payable - 5,791
Accrued accounting fees payable 1,882 1,500
Accrued auditing fees payable - 1,835
Partner redemptions payable 38,314 -
Total Liabilities 50,348 19,909
PARTNERS' CAPITAL
Limited partners -
( 1,851.19 and 1,766.04 units) 1,652,963 1,718,208
General partner - (0 and 0 units)
Total Partners' Capital 1,652,963 1,718,208
$1,703,311 $1,738,117
The accompanying notes are an integral part
of the financial statements.
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2001
AND THE YEAR ENDED DECEMBER 31, 2000
Three Months Six Months
Ended Ended
Jun 30, 2000 Jun 30, 2000 2000
(Unaudited) (Unaudited) (audited)
REVENUES
Realized gain (loss) on trading
futures $ 6,870 $ 66,683 $ (25,297)
Unrealized gain (loss) on open
commodity futures contracts (30,535) (48,242) 53,034
Realized gain (loss) from trading
options (151,196) (16,599) 15,594
Unrealized gain (loss) on open options 800 (19,200) 40,000
Interest income 3,890 12,958 6,911
Penalty income 267 267
Total Revenues (169,904) (4,133) 90,242
EXPENSES
Organization costs 2,399
Commissions 43,681 90,519 44,218
Management fees 17,037 34,775 17,234
Incentive fees 5,956 21,651
Professional accounting and legal fees 11,636 20,151 16,794
Other operating and administrative
expenses 168 381 1,350
Total Expenses 72,522 151,782 103,646
NET (LOSS) $(242,426) $(155,915) $ (13,404)
NET (LOSS) -
Limited partnership unit $ (128.24) $ (84.80) $ (14.58)
General partnership unit $- $- $-
The accompanying notes are an integral part
of the financial statements.
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
STATEMENT OF PARTNERS' EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 2001
LIMITED PARTNERS GENERAL PARTNERS TOTAL PARTNERS' EQUITY
Amount Units Amount Units Amount Units
March 31, 2001 $1,921,845 1,877.98 $1,921,845 1,877.98
Additions of
52.1084 units 46,566 52.11 46,566 52.11
Syndication costs
paid (2,755) (2,755)
Withdrawals of
78.9024 units (70,267) (78.90) (70,267) (78.90)
Net loss (242,426) (242,426)
June 30, 2001 $1,652,963 1,851.19 $ $1,652,963 1,851.19
Value per unit $892.92
Total partnership units 1,851.19
The accompanying notes are an integral part
of the financial statements.
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2001
AND THE YEAR ENDED DECEMBER 31, 2000
LIMITED PARTNERS GENERAL PARTNERS TOTAL PARTNERS' EQUITY
Amount Units Amount Units Amount Units
Dec 31, 1999 $ 777 1.00 $ 777 1.00 $ 1,554 2.00
Additions of
1,766.0394 units 1,810,270 1,766.04 1,810,270 1,766.04
Syndication costs
(paid) allocated (78,435) 223 (78,212)
Withdrawals of
2.00 units (1,000) (1.00) (1,000) (1.00) (2,000) (2.00)
Net loss (13,404) (13,404)
Dec 31, 2000 $1,718,208 1,766.04 $ $1,718,208 1,766.04
Additions of
164.0502 units
(Unaudited) 165,880 164.05 165,880 164.05
Syndication costs
paid (Unaudited) (4,943) (4,943)
Withdrawals of
78.9024 units
(Unaudited) (70,267) (78.90) (70,267) (78.90)
Net loss
(Unaudited) (155,915) (155,915)
June 30, 2001
(Unaudited) $1,652,963 1,851.19 $ $1,652,963 1,851.19
2001
(Unaudited) 2000
Value per unit $892.92 $972.92
Total partnership units 1,851.19 1,766.04
The accompanying notes are an integral part
of the financial statements.
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2001
AND THE YEAR ENDED DECEMBER 31, 2000
Three Months Six Months
Ended Ended
Jun 30, 2000 Jun 30, 2000 2000
(Unaudited) (Unaudited) (audited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(242,426) $ (155,915) $ (13,404)
Adjustments to reconcile net loss to
net cash (used in) operating
activities -
Changes in operating assets and
liabilities -
Equity in Commodity Futures
Trading Accounts 191,538 7,710 (1,666,810)
Prepaid commissions 3,677 (3,677)
Accrued interest receivable 4,764 (1,976) (1,550)
Accrued commissions payable (7,375) (2,559) 4,606
Management and incentive fees payable (6,724) (3,863) 11,968
Accounting and auditing fees payable (2,064) (1,453) 3,335
Net Cash Used In
Operating Activities (62,287) (154,379) (1,665,532)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of units, net
of sales commissions 137,600 215,880 1,760,270
Syndication and registration costs (2,755) (4,943) (78,212)
Partner cash redemptions (31,953) (31,953) (2,000)
Net Cash Provided By
Financing Activities 102,892 178,984 1,680,058
NET INCREASE IN CASH 40,605 24,605 14,526
CASH
Beginning of period 80 16,080 1,554
End of period $ 40,685 $ 40,685 $ 16,080
The accompanying notes are an integral part
of the financial statements.
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001 (UNAUDITED) AND DECEMBER 31, 2000
1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Bromwell Financial Fund, Limited Partnership (the Fund) was formed
January 12, 1999 under the laws of the State of Delaware. The Fund is
engaged in the speculative trading of futures contracts in commodities, which
commenced in July, 2000. Belmont Capital Management, Inc. and Shira Pacult
are the general partners and commodity pool operators of Bromwell Financial
Fund, Limited Partnership. The commodity trading advisor (CTAs) are
Ansbacher Investment Management, Inc. and Mangin, which has the authority to
trade so much of the Fund's equity as is allocated to it by the General
Partners.
Income Taxes - In accordance with the generally accepted method of
presenting partnership financial statements, the financial statements do not
include assets and liabilities of the partners, including their obligation
for income taxes on their distributive shares of the net income of the Fund
or their rights to refunds on its net loss.
Registration Costs - Costs incurred for the initial filings with the
Securities and Exchange Commission, Commodity Futures Trading Commission,
National Futures Association (the "NFA") 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 expenses. Recurring
registration costs, if any, will be charged to expense 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.
Use of Accounting Estimates - The preparation of financial statements
in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and reported amounts of revenues and
expenses during the reporting period. Actual results could differ from these
estimates.
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001 (UNAUDITED) AND DECEMBER 31, 2000
1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Statement of Cash Flows - For purposes of the Statement of Cash
Flows, the Fund considers only cash and money market funds to be cash
equivalents. As of the balance sheet dates, the Fund has no cash
equivalents. Net cash used in operating activities includes no cash payments
for interest or income taxes for the three months and six months ended June
30, 2001, and the year ended December 31, 2000.
2. GENERAL PARTNER DUTIES
The responsibilities of the General Partner, in addition to directing
the trading and investment activity of the Fund, including suspending all
trading, includes executing and filing all necessary legal documents,
statements and certificates of the Fund, retaining independent public
accountants to audit the Fund, employing attorneys to represent the Fund,
reviewing the brokerage commission rates to determine reasonableness,
maintaining the tax status of the Fund as a limited partnership, maintaining
a current list of the 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 Partnership.
If the net unit value of the partnership falls to less than 50% of
the greater of the original $1,000 selling price, less commissions and other
charges or such higher value earned through trading, then the 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.
3. THE 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 partnership.
Monthly Allocations - Any increase or decrease in the Partnership'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.
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001 (UNAUDITED) AND DECEMBER 31, 2000
3. THE LIMITED PARTNERSHIP AGREEMENT - CONTINUED
Any distribution from profits or partners' capital will be made
solely at the discretion of the General Partners.
Allocation of Profit and Loss for Federal Income Tax Purposes - 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 of the General Partner and the Commodity
Trading Advisors and each Partner's share of such items are includable in the
Partner's personal income tax return.
Redemption - No partner may redeem or liquidate any units until after
the lapse of six months from the date of the investment. Thereafter, a
Limited Partner may withdraw, subject to certain restrictions, any part or
all of his units from the partnership at the net asset value per unit on the
last day of any month with ten days prior written request to the General
Partner. A redemption fee payable to the Partnership of a percentage of the
value of the redemption request is charged pursuant to the following
schedule:
4% if such request is received ten days prior to the last trading day
of the month in which the redemption is to be effective from the sixth month
to the twelfth month after the date of the investment in the Fund.
3% if such request is received during the next six month period.
2% if such request is received during the next six month period.
1% if such request is received during the next six month period.
0% thereafter.
4. FEES
The Fund is charged the following fees on a monthly basis since the
commencement of trading.
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001 (UNAUDITED) AND DECEMBER 31, 2000
4. FEES - CONTINUED
A management fee of 1% (annual rate) of the Fund's net assets
allocated to each CTA to trade will be paid to each CTA and 3% of the Fund's
net assets allocated to all CTA's will be paid to the Fund's Corporate
General Partners.
An incentive fee of 20% of "new trading profits" will be paid to each
CTA. "New trading profits" includes all income earned by a CTA and expense
allocated to his activity. In the event that trading produces a loss, no
incentive fees will be paid and all losses will be carried over to the
following months until profits from trading exceed the loss. It is possible
for one CTA to be paid an incentive fee during a quarter of a year when the
Fund experienced a loss.
The Fund will pay fixed commissions of 11% (annual rate) of assets
assigned to be traded, payable monthly, to the introducing broker affiliated
with the General Partners. The Affiliated Introducing Broker will pay the
costs to clear the trades to the futures commission merchant and all PIT
Brokerage costs which shall include the NFA and exchange fees.
The General Partner has reserved the right to change the management fee and
the incentive fee at its sole discretion.
5. CONCENTRATIONS OF CREDIT RISK
The Fund maintains its cash balances at a high credit financial
institution. The balances may, at times, exceed federally insured credit
limits.
6. PLEDGED ASSETS
The cash in trading accounts is pledged as collateral for commodities
trading on margin.
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001 (UNAUDITED) AND DECEMBER 31, 2000
7. OFF BALANCE SHEET RISK
As discussed in Note 1, the Fund is engaged in speculative trading of
futures contracts in commodities. The carrying amounts of the Fund's
financial instruments and commodity contracts generally approximate their
fair values at December 31. Open commodity contracts had gross contract
value of $2,116,456 on long positions and $822,780 on short positions at June
30, 2001. Open commodity contract had a gross contract value of $2,328,327
on long positions and $528,315 on short positions at December 31, 2000.
Although the gross contract values of open commodity contracts
represent market risk they do not represent exposure to credit risk, which is
limited to the current cost of replacing those contracts in a gain position.
The unrealized gain on open commodity futures contracts at June 30, 2001 and
December 31, 2000 was $4,791 and $53,034, respectively.