SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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, 2003
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
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 51-0387638
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
6916 N. 300 West, Fremont, IN 46737
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (219) 833-1505
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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 [ ]
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) of the Securities
and Exchange Act of 1934 subsequent to the distribution of securities under
a plan confirmed by a court. Yes [X] No [ ]
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.
Part 1 - FINANCIAL INFORMATION
Item 1. Financial Statements.
The reviewed financial statements for the Registrant for the second quarter
ended June 30, 2003 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.
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 suspended sales to new investors on October 31,2002, but has
the right to resume its offer of Units for sale to the public provided its
registration statement filed with the Securities and Exchange Commission, the
Commodity Futures Trading Commission and the various states is kept current
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) None
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, 2003, 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, 2003
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BROMWELL FINANCIAL FUND,
LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
FOR THE THREE MONTHS
AND SIX MONTHS ENDED
JUNE 30, 2003 AND 2002
(A Review)
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
We have reviewed the balance sheet, including
the schedule of investments, of BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
as of June 30, 2003 and the related statements of operations for the three
and six months ended June 30, 2003 and 2002, and the statements of partners'
equity and cash flows for the six months ended June 30, 2003 and 2002. These
financial statements are the responsibility of the Partnership's management.
We conducted our review in accordance with
standards established by the American Institute of Certified Public
Accountants. A review of interim financial information consists principally
of applying analytical procedures to financial data and making inquiries of
persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with
auditing standards generally accepted in the 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 reviews we are not aware of any
material modifications that should be made to the financial statements
referred to above for them to be in conformity with accounting principles
generally accepted in the United States.
We have previously audited, in accordance with
auditing standards generally accepted in the United States, the balance
sheet, including the schedule of investments, of BROMWELL FINANCIAL FUND,
LIMITED PARTNERSHIP as of December 31, 2002 and the related statements of
operations, partners' equity and cash flows for the year then ended (not
presented herein); and in our report dated February 13, 2003, we expressed an
unqualified opinion on those financial statements. In our opinion, the
information set forth in the accompanying balance sheet as of December 31,
2002 is fairly stated, in all material respects, in relation to the balance
sheet from which it has been derived.
/s/ Frank L. Sassetti & Co.
July 18, 2003
Oak Park, Illinois
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
BALANCE SHEETS
JUNE 30, 2003 AND DECEMBER 31, 2002
ASSETS
June 30
2003 December 31
(A Review) 2002
Cash $ 1,242 $ 19,491
Accrued interest receivable 15,572 1,884
Equity in Commodity Futures Trading Accounts -
Cash 1,609,196 1,578,725
Net unrealized gains (losses) on open
commodity futures contracts (Note 7) (31,613) 71,746
Open options, long positions, at market
value (cost $3,575 and $0) 1,625
$1,596,022 $1,671,846
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES
Open options, short positions, at market value
(cost $11,375 and $0) $ 6,825 $
Partner redemptions payable 229,296 4,613
Accrued trading commissions payable 2,438 987
Accrued management fees payable 8,690 6,007
Accrued incentive fees payable 6,225 2,751
Accrued auditing fees payable 4,750 7,500
Total Liabilities 258,224 21,858
PARTNERS' CAPITAL
Limited partners - (1,379.02 and 1,815.19 units) 1,337,798 1,649,988
General partner - (0 units)
Total Partners' Capital 1,337,798 1,649,988
$1,596,022 $1,671,846
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, 2003 AND 2002
(A Review)
Three Months Six Months Three Months Six Months
Ended Ended Ended Ended
June 30, 2003 June 30, 2002
REVENUES
Realized gain on trading
futures $ 98,246 $ 290,507 $ 65,457 $ 62,707
Change in unrealized gain
(loss) on open commodity
futures contracts 1,680 (103,358) 81,876 63,062
Realized gain from
trading options 32,687 79,475 181,621 353,448
Change in unrealized gain
(loss) on open options (7,437) 6,175 (65,888) (26,775)
Interest income 699 1,564 1,292 2,781
Redemption penalty 304 102 4,554
Total Revenues 125,875 274,667 264,460 459,777
EXPENSES
Registration costs 6,295
Commissions 44,228 91,000 42,672 87,583
Management fees 15,973 33,026 17,318 34,711
Incentive fees 3,474 3,474 52,197 71,398
Professional accounting and
legal fees 18,313 30,531 14,846 27,347
Other operating and
administrative expenses 139 286 219 575
Total Expenses 82,127 158,317 127,252 227,909
NET INCOME $ 43,748 $116,350 $137,208 $231,868
NET INCOME
Limited partnership unit $ 26.69 $ 67.54 $ 79.47 $ 131.97
General partnership unit $ $ $ $
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, 2003 AND 2002
(A Review)
2003 2002
Amount Units Amount Units
December 31, $1,649,988 1,815.19 $1,835,639 1,931.43
Partner additions 81,902 74.74
Partner withdrawals (421,640) (436.17) (227,680) (239.09)
Syndication costs paid (6,900)
Net income 116,350 231,868
June 30, $1,337,798 1,379.02 $1,921,729 1,767.08
2003 2002
Value per unit $ 970.11 $1,087.52
Total partnership units 1,379.02 1,767.08
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 SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(A Review)
2003 2002
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $116,350 $231,868
Adjustments to reconcile net income to
net cash provided by operating activities -
Changes in operating assets and liabilities -
Equity in Commodity Futures Trading Accounts 78,088 (98,026)
Accrued interest receivable (13,688) 672
Accrued commissions 1,451 (20,778)
Management and incentive fees payable 6,157 47,984
Accounting and auditing fees payable (2,750) (2,750)
Net Cash Provided By Operating Activities 185,608 158,970
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of units, net of sales
commissions 60,274
Syndication and registration costs (6,900)
Partner cash redemptions (196,957) (227,680)
Net Cash Used In Financing Activities (203,857) (167,406)
NET INCREASE (DECREASE) IN CASH (18,249) (8,436)
CASH
Beginning of period 19,491 39,135
End of period $ 1,242 $ 30,699
The accompanying notes are an integral
part of the financial statements
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
SCHEDULE OF INVESTMENTS
June 30, 2003
(A Review)
Contracts (All securities are from U.S. markets) Value Percent
Commodity Futures Positions, Held Long
4 Sept '03 Treasury Notes $ (3,813) (0.24)%
4 Sept '03 Hi - Grade Copper (850) (0.05)
4 Sept '03 British Pounds 450 0.03
6 Sept '03 Swiss Franc (19,650) (1.25)
10 Sept '03 Japanese Yen (11,000) (0.70)
9 Dec '03 Eurodollars 338 0.02
3 Sept '03 European Currency Unit (9.038) (0.57)
4 Dec '03 Cotton 2,460 0.16
8 Aug '03 New York Crude Oil 3,520 0.22
Total Commodity Futures Positions,
Held Long (37,583) (2.38)
Commodity Futures Positions Sold Short
3 Sept '03 US Dollar Index (3,930) (0.25)
4 Sept '03 New S&P 9,900 0.63
Total Commodity Futures Sold Short 5,970 0.38
Net Commodity Futures Positions (31,613) (2.00)
Option Positions, Held Long
26 Calls July '03 S&P Index @ 1125 325 0.02
26 Puts July '03 S&P Index @ 825 1,300 0.08
Total Option Positions, Held
Long (cost $3,575) 1,625 0.10
Cash in Trading Accounts 1,609,196 101.90
Total Investments $1,579,208 100.00%
The accompanying notes are an integral
part of the financial statements
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
SCHEDULE OF INVESTMENTS
June 30, 2003
(A Review)
Securities Sold Short
Options Value Percent
26 Calls July '03 S&P Index @ 1065 $ (1,950) (28.57)%
26 Puts July '03 S&P Index @ 880 (4,875) (71.43)
Total Options Sold Short
(proceeds $11,375) $ (6,825) (100.00)%
The accompanying notes are an integral
part of the financial statements
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2002
Contracts (All securities are from U.S. markets) Value Percent
Commodity Futures Positions, Held Long
1 Mar '03 British Pounds $ 2,138 0.13%
3 Mar '03 Treasury Notes 5,765 0.35
9 Mar '03 Euro Dollars 11,463 0.69
2 Mar '03 European Currency Unit 10,525 0.64
6 Mar '03 Swiss Francs 29,700 1.80
3 Mar '03 US Dollar Index 10,170 0.62
3 Mar '03 Cotton 1,305 0.08
5 Feb '03 New York Crude Oil 17,400 1.05
2 Apr '03 Platinum 1,240 0.08
Total Commodity Futures Positions,
Held Long 89,706 5.44
Commodity Futures Positions Sold Short
4 Mar '03 Hi-Grade Copper (4,150) (0.25)
4 Mar '03 Canadian Dollars (2,320) (0.14)
3 Feb '03 Natural Gas (11,490) (0.70)
Total Commodity Futures Sold Short (17,960) (1.09)
Net Commodity Futures Positions 71,746 4.35
Cash in Trading Accounts 1,578,725 95.65
Total Investments $1,650,471 100.00%
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, 2003 AND 2002
(A Review)
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 advisors (CTAs) are
Ansbacher Investment Management, Inc. and Mangin, which have 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. The Fund
remains open to new partners and incurs costs required to retain the ability
to issue new units. Such costs are treated in a similar manner. 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.
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, 2003 AND 2002
(A Review)
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 six months ended June 30, 2003 and 2002.
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, the
following:
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.
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003 AND 2002
(A Review)
3. THE LIMITED PARTNERSHIP AGREEMENT - CONTINUED
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.
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.
BROMWELL FINANCIAL FUND, LIMITED PARTNERSHIP
(A Delaware Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003 AND 2002
(A Review)
4. FEES
The Fund is charged the following fees on a monthly basis since the
commencement of trading.
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 quality
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, 2003 AND 2002
(A Review)
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. Open commodity contracts had gross contract value of
approximately $5,575,000 and $12,322,000 on long positions and $1,371,000 and
$278,000 on short positions at June 30, 2003 and 2002, respectively.
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.