As Filed with the Securities and Exhcnage Commission on July 6, 1998
Registration No. 33-96292
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
POST EFFECTIVE AMENDMENT NUMBER THREE TO FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
FREMONT FUND, LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
INDIANA
[State of organization]
6289 35-1949364
(Primary SIC Number) (I.R.S. EIN)
5916 N. 300 West
Fremont, Indiana 46737
Telephone: (219) 833-1306
(address and telephone number of registrant's principal executive offices)
Ms. Shira Del Pacult
5916 N. 300 West
Fremont, Indiana 46737
Telephone: (219) 833-1306; Facsimile (219) 833-1505
(Name, address and telephone number of agent for service of process)
Copies to:
William Sumner Scott, Esquire
The Scott Law Firm
5121 Sarazen Drive
Hollywood, Florida 33021
(954) 964-1546; Facsimile (954) 964-1548
The sale of these securities commenced August 12, 1996. No sales have been
made since April, 1997.
If any of the securities being offered on the Form are to be offered on a
continuous basis pursuant to Rule 415 under the Securities Act of 1933, check
the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Title of Each Class Amount being Maximum Offering Maximum Aggregate Amount of
of Securities Being Registered:(1) Price Per Unit: (2) Offering Price: Registration Fee:
Registered:
<S> <C> <C> <C> <C>
Limited Partnership 5,000 $1,000 $5,000,000 $1,724
Interests ("Units")
</TABLE>
(1) This amount is based upon the number of Units to be initially offered.
The exact number of Units issued will vary because of the issuance of
additional Units for interest earned during the Escrow period.
(2) The actual sales price per Unit will fluctuate each month to reflect
expenses and additions and subtractions for trading results.
The registrant hereby amends this registation statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission acting pursuant to said section 8(a),
may determine.
<PAGE>
Fremont Fund, Limited Partnership
UNITS OF LIMITED PARTNERSHIP INTEREST
SUPPLEMENT TO PROSPECTUS DATED JULY 6, 1998
5,000 Units ($5,000,000)
Sold at Month end Net Asset Value per Unit
Fremont Fund, Limited Partnership (the "Partnership") is an Indiana limited
partnership which is managed by Pacult Asset Management, Inc., a Delaware
corporation, its general partner (the "General Partner"). The Partnership is
organized to be a commodity pool to engage in the speculative trading of
futures, commodity options and forward contracts on currencies, interest
rates, energy and agriculture products, metals, and stock indices. The
Partnership Agreement attached as Exhibit A to the Prospectus grants full
management control to the General Partner including the right to employ
independent trading managers ("Commodity Trading Advisors") to select trades.
A Prospectus and this Supplement to disclose all material information will be
delivered to each subscriber either at or before the time of confirmation of
the investment in the Units. This Supplement contains only information which
has changed since the effective date of the Partnership's Registration
Statement, August 12, 1996.
THIS IS A SUPPLEMENT TO AMEND THE PROSPECTUS DATED AUGUST 12, 1996. BOTH THIS
SUPPLEMENT AND THE PROSPECTUS MUST BE READ IN THEIR ENTIRETY TO FULLY
UNDERSTAND THIS OFFERING. THESE SECURITIES ARE SPECULATIVE AND INVOLVE A HIGH
DEGREE OF RISK. SEE "RISK FACTORS" ON PAGE 9 OF THE PROSPECTUS.
* Futures and forward trading is speculative, volatile and involves a high
degree of risk. The investors could lose all, or substantially all, of their
investment.
* The Partnership has substantial fixed management fees and commission costs
which must be paid without regard to the profits earned by the Partnership.
The General Partner estimates the Partnership must generate a 26% return on
investment during its first twelve months of trading to offset expenses and
approximately 30% to offset both expenses and redemption charges due on Units
redeemed as of the twelfth month after they are issued. See "Charges to the
Partnership".
* The transferability of the Units is restricted and there are limitations on
investors' rights to surrender the Units to the Partnership for their Net
Asset Value (the "Redemption Rights"). See "No Right To Transfer Units And
Limited Ability To Realize Return On Investment", and "Redemptions".
* The General Partner and its principal and affiliates have conflicts of
interest in regard to the management of the Partnership for the benefit of the
investors. See "Conflicts of Interest".
* Investors will be taxed upon the profits, if any, earned upon their
investment in the Partnership without the right to receive a distribution of
any such profits. See "Certain Federal Income Tax Aspects".
* The General Partner and its principal have no experience in the management
of commodity pools. See "Risk Factors" and "The General Partner".
THE COMMODITY FUTURES TRADING COMMISSION HAS NOT PASSED UPON THE MERITS OF
PARTICIPATING IN THIS POOL NOR HAS THE COMMISSION PASSED ON THE ADEQUACY OR
ACCURACY OF THIS DISCLOSURE DOCUMENT.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, OR ANY STATE SECURITIES COMMISSION OR AGENCY, NOR HAVE
ANY OF THEM CONFIRMED OR PASSED UPON THE ACCURACY OR ADEQUACY OF PROSPECTUS
AND THIS AMENDMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Initial Price to Sales Proceeds to
Public(1) Commissions(2) Partnership(3)
<S> <C> <C> <C>
Per Limited Partnership Unit Net Asset Value 6% Net Asset Value
Total Maximum $5,000,000 $300,000 $4,700,000
</TABLE>
See Notes on page i
Futures Investment Company
5916 N. 300 West
Fremont, Indiana 46737
Telephone: (219) 833-1306
<PAGE>
NOTES:
(1) Units are offered for sale, from time to time, in the discretion of the
General Partner, at a price per Unit equal to the value of the Units adjusted
to reflect the results from trading after payment of expenses and fees, (the
"Net Asset Value Per Unit"), as of the effective date of the purchase, which
shall be the close of business on the last day of the month of acceptance of
the Subscription Agreement.
The Units are being offered through Futures Investment Company, 5916 N. 300
West, Fremont, Indiana 46737, (219) 833-1306, (the "Selling Agent" or "FIC"),
a National Association of Securities Dealers, Inc. ("NASD") registered broker-
dealer, on a "best efforts" basis.
(2) See "Plan of Distribution - The Selling Agreement" for information
relating to indemnification arrangements with respect to the Selling Agent and
any Additional Sellers. Selling commissions of six percent (6%) of the
subscription price will be paid to the Selling Agent from the proceeds of
subscriptions without regard to the amount invested. The Selling Agent will
retain or distribute the sales commissions to the registered representatives
of all of the dealers, including the principal and Affiliates of the General
Partner, who sold the Units.
(3) Before deduction of offering expenses, estimated to be a total of $70,000,
payable monthly over the first twenty-four months of operation by the
Partnership at the rate of 2% of Capital and 15% of New Net Profits per year,
until paid in full.
(4) The Partnership sold the Minimum of six hundred (600) Units and commenced
trading in November, 1996. The Partnership continues to offer up to a maximum
of 5,000 Units ($5,000,000) until they are either all sold or the General
Partner elects to terminate this offering. There has been no promise by the
Selling Agent, or any other person, to purchase any Units or any other form of
firm underwriting commitment to assure the sale of the Units. The General
Partner or the Selling Agent may engage additional registered broker dealers
(the "Additional Sellers") to sell Units.
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i
<PAGE>
COMMODITY FUTURES TRADING COMMISSION
RISK DISCLOSURE STATEMENT
YOU SHOULD CAREFULLY CONSIDER WHETHER YOUR FINANCIAL CONDITION PERMITS YOU TO
PARTICIPATE IN A COMMODITY POOL. IN SO DOING, YOU SHOULD BE AWARE THAT
FUTURES AND OPTIONS TRADING CAN QUICKLY LEAD TO LARGE LOSSES AS WELL AS GAINS.
SUCH TRADING LOSSES CAN SHARPLY REDUCE THE NET ASSET VALUE OF THE POOL AND
CONSEQUENTLY THE VALUE OF YOUR INTEREST IN THE POOL. IN ADDITION,
RESTRICTIONS ON REDEMPTIONS MAY AFFECT YOUR ABILITY TO WITHDRAW YOUR
PARTICIPATION IN THE POOL.
FURTHER, COMMODITY POOLS MAY BE SUBJECT TO SUBSTANTIAL CHARGES FOR MANAGEMENT,
AND ADVISORY AND BROKERAGE FEES. IT MAY BE NECESSARY FOR THOSE POOLS THAT ARE
SUBJECT TO THESE CHARGES TO MAKE SUBSTANTIAL TRADING PROFITS TO AVOID
DEPLETION OR EXHAUSTION OF THEIR ASSETS. THE DISCLOSURE DOCUMENT DATED AUGUST
12, 1996, CONTAINS A COMPLETE DESCRIPTION OF EACH EXPENSE TO BE CHARGED THIS
POOL AT PAGE 24 AND A STATEMENT OF THE PERCENTAGE RETURN NECESSARY TO BREAK
EVEN, THAT IS, TO RECOVER THE AMOUNT OF YOUR INITIAL INVESTMENT, AT PAGE 20.
THIS BRIEF STATEMENT CANNOT DISCLOSE ALL THE RISKS AND OTHER FACTORS NECESSARY
TO EVALUATE YOUR PARTICIPATION IN THIS COMMODITY POOL. THEREFORE, BEFORE YOU
DECIDE TO PARTICIPATE IN THIS COMMODITY POOL, YOU SHOULD CAREFULLY STUDY THIS
SUPPLEMENT TO THE DISCLOSURE DOCUMENT AND THE DISCLOSURE DOCUMENT DATED AUGUST
12, 1996, INCLUDING A DESCRIPTION OF THE PRINCIPAL RISK FACTORS OF THIS
INVESTMENT, AT PAGE 9 OF THE DISCLOSURE DOCUMENT DATED AUGUST 12, 1996.
YOU SHOULD ALSO BE AWARE THAT THIS COMMODITY POOL MAY TRADE FOREIGN FUTURES OR
OPTIONS CONTRACTS. TRANSACTIONS ON MARKETS LOCATED OUTSIDE THE UNITED STATES,
INCLUDING MARKETS FORMALLY LINKED TO A UNITED STATES MARKET, MAY BE SUBJECT TO
REGULATIONS WHICH OFFER DIFFERENT OR DIMINISHED PROTECTION TO THE POOL AND ITS
PARTICIPANTS. FURTHER, UNITED STATES REGULATORY AUTHORITIES MAY BE UNABLE TO
COMPEL THE ENFORCEMENT OF THE RULES OF REGULATORY AUTHORITIES OR MARKETS IN
NON-UNITED STATES JURISDICTIONS WHERE TRANSACTIONS FOR THE POOL MAY BE
EFFECTED.
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ii
<PAGE>
TABLE OF CONTENTS
COMMODITY FUTURES TRADING COMMISSION RISK DISCLOSURE STATEMENT ii
PARTNERSHIP AND GENERAL PARTNER IDENTIFICATION 1
NOTICE TO RESIDENTS OF ALL STATES 1
VARIOUS SPECIFIC STATE NOTICES 3
NOTICE TO CALIFORNIA INVESTORS 3
NOTICE TO IDAHO INVESTORS 3
NOTICE TO MICHIGAN INVESTORS 3
NOTICE TO OREGON INVESTORS 3
NOTICE TO FOREIGN INVESTORS 3
SUMMARY OF THE OFFERING 4
CONFLICTS OF INTEREST 4
CONFLICTS OF INTEREST IN THE PARTNERSHIP STRUCTURE 4
NO PRIOR OPERATION EXPERIENCE OF THE GENERAL PARTNER 4
NO ASSURANCE THAT UNITS WILL BE SOLD 4
SELECTION OF COMMODITY TRADING ADVISORS AND ALLOCATION OF EQUITY 4
PLAN OF DISTRIBUTION 4
CONFLICTS OF INTEREST 5
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 5
MANAGEMENT'S DISCUSSION 5
TRADING MANAGEMENT 5
SELECTION OF COMMODITY TRADING ADVISORS AND ALLOCATION OF EQUITY 5
THE ADVISORY CONTRACTS 5
FREQUENCY OF CTA AND EQUITY REALLOCATIONS 5
THE COMMODITY TRADING ADVISORS 6
MICHAEL J. FRISCHMEYER 6
BUSINESS BACKGROUND 6
DESCRIPTION OF TRADING PROGRAM 6
PERFORMANCE RECORD OF THE CTA 8
Managed Account Program, Iowa Commodities Fee Schedule 9
Managed Account Program, Regular Fee Schedule-Regular Fee
Restricted Accounts Only 10
Managed Account Program, Frischmeyer Fund, L.P. Fee Schedule 11
Financial Futures Managed Account Program 12
Managed Account Program, Regular Fee Schedule 12
EPIC TRADING 14
BUSINESS BACKGROUND 14
DESCRIPTION OF TRADING PROGRAM 14
PERFORMANCE RECORD OF THE CTA 14
EPIC Trading Program 14
BELL FUNDAMENTAL FUTURES L.L.C. 15
BUSINESS BACKGROUND 16
DESCRIPTION OF TRADING PROGRAM 16
PERFORMANCE RECORD OF THE CTA 18
Capsule A - Bell Fundamental Futures, L.L.C. 18
PERFORMANCE OF FREMONT FUND, LIMITED PARTNERSHIP 19
Fremont Fund, LP 19
NOTES TO PERFORMANCE RECORD OF THE FUND 20
LIMITED PRIOR PERFORMANCE AND REGULATORY NOTICE 21
PLAN OF DISTRIBUTION 21
iii
<PAGE>
LEGAL MATTERS 22
LITIGATION AND CLAIMS 22
LEGAL OPINION 22
EXPERTS 22
ADDITIONAL INFORMATION 22
FINANCIAL STATEMENTS
A. FREMONT FUND, LIMITED PARTNERSHIP
Audited Balance Sheets as of December 31, 1996 and December 31, 1997
With Notes to Statement of Financial Condition
B. PACULT ASSET MANAGEMENT, INC.
Audited Balance Sheets and Income Statements as of December 31, 1996 and
December 31, 1997 With Notes to Statement of Financial Condition
APPENDIX I - Commodity Terms And Definitions; State Regulatory Glossary
APPENDIX II - Performance Record Of The Fund
APPENDIX III - Supplemental Performance Information For Epic Trading, CTA
APPENDIX IV - Supplemental Performance Information For Michael J.
Frischmeyer, CTA
EXHIBIT D - Subscription Agreement And Power Of Attorney
EXHIBIT G - Form Of Advisory Agreement for Epic Trading, CTA
EXHIBIT H - Form of Advisory Agreement for Bell Fundamental
Futures, L.L.C., CTA
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iv
<PAGE>
PARTNERSHIP AND GENERAL PARTNER IDENTIFICATION
Fremont Fund, Limited Partnership (the "Partnership") is an Indiana limited
partnership. Its main business office is 5916 N. 300 West, Fremont, Indiana
(219) 833-1306. It is managed by Pacult Asset Management, Inc., a Delaware
corporation, its general partner (the "General Partner"), with its main
business office c/o Corporate Systems, Inc. 101 North Fairfield Drive, Dover,
DE 19901 (302) 697-2139. The Partnership is organized to be a commodity pool
to engage in the speculative trading of futures, commodity options and forward
contracts on currencies, interest rates, energy and agriculture products,
metals, and stock indices. The Partnership Agreement attached as Exhibit A to
the Prospectus dated August 12, 1996, grants full management control to the
General Partner including the right to employ independent trading managers
("Commodity Trading Advisors") to select trades. The objective of the
Partnership is substantial capital appreciation with controlled volatility.
There can be no assurance that the Partnership will achieve its objectives or
avoid substantial losses.
NOTICE TO RESIDENTS OF ALL STATES
UNTIL 90 DAYS AFTER THE TERMINATION OF THIS OFFERING, ALL DEALERS EFFECTING
TRANSACTIONS IN THE UNITS, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION,
ARE REQUIRED TO DELIVER A PROSPECTUS AND ALL POST EFFECTIVE AMENDMENTS TO ALL
PROSPECTIVE PURCHASERS OF THE UNITS. THIS IS IN ADDITION TO THE OBLIGATION OF
DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS OR BEST EFFORTS
SELLERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS. THE
SELLING AND ADDITIONAL SELLERS MUST ALSO DELIVER ANY SUPPLEMENTED OR AMENDED
PROSPECTUS ISSUED BY THE PARTNERSHIP.
NO DEALER, SALESMAN, OFFICER, EMPLOYEE OR AGENT OF THE PARTNERSHIP OR THE
GENERAL PARTNER AND OR ANY OTHER PERSON HAS BEEN AUTHORIZED, IN CONNECTION
WITH THIS OFFERING, TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE PARTNERSHIP, THE GENERAL PARTNER, THE SELLING AGENTS, OR ANY
OTHER PERSON CONNECTED WITH THIS OFFERING. THIS PROSPECTUS SPEAKS AS OF THE
DATE OF ITS ISSUANCE. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE PARTNERSHIP
SINCE THE DATE OF THIS PROSPECTUS. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY UNITS BY ANYONE IN ANY
STATE IN WHICH SUCH OFFER, SOLICITATION, OR PURCHASE IS NOT AUTHORIZED OR IN
WHICH THE PERSON MAKING THE OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO,
OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
THE REGULATIONS OF THE COMMODITY FUTURES TRADING COMMISSION REQUIRE THAT NO
COMMODITY POOL OPERATOR MAY SOLICIT, ACCEPT OR RECEIVE FUNDS, SECURITIES OR
OTHER PROPERTY FROM A PROSPECTIVE PARTICIPANT IN A COMMODITY POOL WITHOUT
FIRST DELIVERING A DISCLOSURE DOCUMENT (THIS "PROSPECTUS") TO SUCH PROSPECTIVE
PARTICIPANT. THE GENERAL PARTNER MUST FURNISH ALL PARTNERS ANNUAL AND MONTHLY
REPORTS COMPLYING WITH COMMODITY FUTURES TRADING COMMISSION ("CFTC") AND
NATIONAL FUTURES ASSOCIATION ("NFA") REQUIREMENTS. THE ANNUAL REPORTS WILL
CONTAIN CERTIFIED AND AUDITED, AND THE MONTHLY REPORTS UNAUDITED, FINANCIAL
INFORMATION IN REGARD TO THE OPERATION OF THE PARTNERSHIP AND ITS GENERAL
PARTNER
THE DIVISION OF INVESTMENT MANAGEMENT OF THE SECURITIES AND EXCHANGE
COMMISSION (THE "SEC") REQUIRES THAT THE FOLLOWING STATEMENT BE SET FORTH
HEREIN: FREMONT FUND, LIMITED PARTNERSHIP, IS NOT A MUTUAL FUND AND IS NOT
SUBJECT TO REGULATION UNDER THE INVESTMENT COMPANY ACT OF 1940. CONSEQUENTLY,
INVESTORS WILL NOT HAVE THE BENEFIT OF THE PROTECTIVE PROVISIONS OF SUCH
LEGISLATION.
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<PAGE>
INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE ISSUER AND THE TERMS OF
THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. INVESTORS SHOULD BE
AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. ACCORDINGLY, THE UNITS MAY BE
SOLD, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF ONLY IN ACCORDANCE WITH
THE TERMS OF THE LIMITED PARTNERSHIP AGREEMENT, INCLUDING THE CONSENT OF THE
GENERAL PARTNER, AND ONLY IF SUCH UNITS ARE SUBSEQUENTLY REGISTERED OR, IN THE
OPINION OF COUNSEL FOR THE COMPANY, SUCH TRANSFER WILL NOT VIOLATE ANY
APPLICABLE FEDERAL OR STATE SECURITIES LAWS. THE SUBSCRIPTION AGREEMENT AND
THE CERTIFICATE FOR UNITS, IF ANY, WILL HAVE A LEGEND TO DISCLOSE THAT THE
UNITS ARE RESTRICTED FROM SALE OR OTHER TRANSFER WITHOUT PRIOR REGISTRATION OR
OTHER LEGAL JUSTIFICATION. NO PUBLIC MARKET EXISTS OR IS EXPECTED TO DEVELOP
FOR THE UNITS AND, CONSEQUENTLY, PROSPECTIVE INVESTORS WHO DESIRE LIQUIDITY
SHOULD NOT PURCHASE THE UNITS. EACH INVESTOR (PURCHASER OF UNITS) MUST MEET
THE FOLLOWING SUITABILITY STANDARDS: (i) AN INVESTOR MUST HAVE (A) HAD AN
ANNUAL GROSS INCOME IN EXCESS OF $45,000 IN THE LAST CALENDAR YEAR AND
REASONABLY EXPECTS TO HAVE GROSS INCOME IN EXCESS OF $45,000 FOR THE CURRENT
YEAR TOGETHER WITH A NET WORTH, EXCLUSIVE OF PRINCIPAL RESIDENCE, HOME
FURNISHINGS, AND AUTOMOBILE OF $45,000; OR (B) THE INVESTOR HAS A NET WORTH
(EXCLUSIVE OF PRINCIPAL RESIDENCE, HOME FURNISHINGS AND AUTOMOBILE) IN EXCESS
OF $150,000; AND (ii) THE INVESTOR IS REPRESENTED BY A PURCHASER
REPRESENTATIVE OR OTHERWISE DEMONSTRATES TO THE GENERAL PARTNER SUFFICIENT
KNOWLEDGE TO ACCEPT THE RISKS OF THIS INVESTMENT. A GENERAL PARTNERSHIP OR
OTHER ENTITY MAKING INVESTMENT MUST MEET THE FINANCIAL SUITABILITY
REQUIREMENTS PRESCRIBED FOR NATURAL PERSONS. A QUALIFIED PENSION, PROFIT-
SHARING OR KEOGH EMPLOYEE PLAN, THE FIDUCIARY FOR SUCH PLAN, OR THE DONOR OF
ANY SUCH PLAN WHO DIRECTLY OR INDIRECTLY SUPPLIES THE FUNDS TO PURCHASE AN
INTEREST (THE "UNITS") IN THE PARTNERSHIP MUST MEET THE MINIMUM FINANCIAL
SUITABILITY STANDARDS. "ACCREDITED INVESTORS", AS THAT TERM IS DEFINED UNDER
REGULATION D OF THE ACT, WHO MEET THE NET INCOME TEST IN (i) ABOVE, ARE DEEMED
TO HAVE SUCH KNOWLEDGE AND EXPERIENCE IN FINANCIAL BUSINESS MATTERS AS TO BE
CAPABLE OF EVALUATING THE MERITS AND RISKS OF THE PROPOSED INVESTMENT AND, AT
THE TIME OF INVESTING, CAN AFFORD A COMPLETE LOSS.
THE ACT AND THE SECURITIES LAWS OF CERTAIN STATES GRANT PURCHASERS OF
SECURITIES SOLD, EITHER IN VIOLATION OF THE REGISTRATION OR QUALIFICATION
PROVISIONS OF SUCH LAWS OR WITHIN CERTAIN TIME LIMITATIONS, THE RIGHT TO
RESCIND THEIR PURCHASE OF SUCH SECURITIES AND TO RECEIVE BACK THEIR
CONSIDERATION PAID, PLUS INTEREST. THE GENERAL PARTNER EITHER INTENDS TO
REGISTER THE UNITS FOR SALE OR BELIEVES THAT THE OFFERING DESCRIBED IN THIS
PROSPECTUS IS NOT REQUIRED TO BE REGISTERED OR QUALIFIED. MANY OF THESE LAWS
WHICH GRANT THE RIGHT OF RESCISSION ALSO PROVIDE THAT SUITS FOR SUCH
VIOLATIONS MUST BE BROUGHT WITHIN A SPECIFIED TIME, USUALLY ONE YEAR FROM
DISCOVERY OF FACTS CONSTITUTING SUCH VIOLATION. SHOULD ANY INVESTOR INSTITUTE
AN ACTION ON THE THEORY THAT THE OFFERING CONDUCTED AS DESCRIBED HEREIN WAS
REQUIRED TO BE REGISTERED OR QUALIFIED, THE PARTNERSHIP WILL CONTEND THAT THE
CONTENTS OF THIS PROSPECTUS PROVIDED NOTICE OF SUFFICIENT FACTS TO COMMENCE
THE TIME FROM WHICH AN ACTION FOR RESCISSION SHOULD HAVE BEEN BROUGHT. ALSO,
SHOULD ANY INVESTOR CONTEND THE OFFER WAS NOT QUALIFIED FOR PRESENTATION OR
THE INVESTOR NOT SUITABLE TO MAKE SUCH INVESTMENT, THE GENERAL PARTNER WILL
PLEAD RELIANCE UPON THE INFORMATION SUPPLIED BY THE INVESTOR IN THE
SUBSCRIPTION DOCUMENTS. INVESTORS ARE TO COMPLETE ALL DOCUMENTS BEFORE
SIGNING. NEITHER THE INFORMATION CONTAINED HEREIN, NOR ANY PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT COMMUNICATION SHOULD BE CONSTRUED BY THE
PROSPECTIVE INVESTOR AS LEGAL OR TAX ADVICE FOR THAT INVESTOR. EACH
PROSPECTIVE INVESTOR SHOULD CONSULT HIS OWN LEGAL AND TAX ADVISORS TO
ASCERTAIN THE MERITS AND RISKS DESCRIBED HEREIN PRIOR TO SUBSCRIBING TO
PURCHASE UNITS IN THE PARTNERSHIP PURSUANT TO THIS OFFERING.
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VARIOUS SPECIFIC STATE NOTICES
NOTICE TO CALIFORNIA INVESTORS
CALIFORNIA RESIDENTS ARE REQUIRED TO HAVE A LIQUID NET WORTH OF $100,000 AND
ANNUAL INCOME OF $50,000 TO BE ABLE TO PURCHASE PARTNERSHIP INTERESTS IN THIS
COMMODITY POOL. THE TRANSFER OF THE LIMITED PARTNERSHIP INTERESTS OFFERED AND
SOLD PURSUANT TO THIS OFFERING CAN NOT BE RESOLD OR TRANSFERRED WITHOUT
PERMISSION OF THE GENERAL PARTNER AND FULFILLMENT OF OTHER TERMS AND
CONDITIONS CONTAINED IN THE PARTNERSHIP AGREEMENT. ACCORDINGLY, (a) THE
LIMITED PARTNERSHIP, AS ISSUER OF A SECURITY UPON WHICH A RESTRICTION ON
TRANSFER HAS BEEN IMPOSED MUST CAUSE A COPY OF RULE 260.141.11 TO BE DELIVERED
TO EACH ISSUEE OR TRANSFEREE OF SUCH SECURITY AT THE TIME THE CERTIFICATE
EVIDENCING THE SECURITY IS DELIVERED TO THE ISSUEE OR TRANSFEREE; AND, (b) IT
IS UNLAWFUL FOR THE HOLDER OF ANY SUCH SECURITY TO CONSUMMATE A SALE OR
TRANSFER OF SUCH SECURITY, OR ANY INTEREST THEREIN, WITHOUT THE PRIOR WRITTEN
CONSENT OF THE COMMISSIONER (UNTIL THIS CONDITION IS REMOVED PURSUANT TO
SECTION 260.141.12 OF THESE RULES), EXCEPT AS PROVIDED IN THE CODE. THE
CERTIFICATES, WHETHER UPON INITIAL ISSUANCE OR UPON ANY TRANSFER, SHALL BEAR
ON THEIR FACE, IN CAPITAL LETTERS OF 10-POINT SIZE, AS FOLLOWS: "IT IS
UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY INTEREST
THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR WRITTEN
CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT
AS PERMITTED IN THE COMMISSIONER'S RULES".
NOTICE TO IDAHO INVESTORS
INVESTORS WHO ARE RESIDENTS OF IDAHO ARE REQUIRED TO HAVE A NET WORTH OF
$100,000 OR NET WORTH OF $50,000 AND ANNUAL INCOME OF $50,000 TO BE ELIGIBLE
TO INVEST IN THIS OFFERING OF PARTNERSHIP INTERESTS IN THIS COMMODITY POOL.
NOTICE TO MICHIGAN INVESTORS
INVESTORS WHO ARE RESIDENTS OF MICHIGAN ARE REQUIRED TO HAVE A NET WORTH OF
$225,000 OR NET WORTH OF $60,000 AND TAXABLE ANNUAL INCOME OF $60,000 TO BE
ELIGIBLE TO INVEST IN THIS OFFERING OF PARTNERSHIP INTERESTS IN A COMMODITY
POOL. NET WORTH IN ALL CASES MUST BE CALCULATED EXCLUSIVE OF HOME, HOME
FURNISHINGS AND AUTOMOBILES. IN ADDITION, NO MORE THAN TEN PERCENT (10%) OF
THE INVESTOR'S NET WORTH MAY BE INVESTED IN THIS LIMITED PARTNERSHIP.
NOTICE TO OREGON INVESTORS
INVESTORS WHO ARE RESIDENTS OF OREGON ARE REQUIRED TO HAVE A NET WORTH OF
$225,000 OR NET WORTH OF $60,000 AND ANNUAL INCOME OF $60,000 TO BE ELIGIBLE
TO INVEST IN THIS OFFERING OF PARTNERSHIP INTERESTS IN THIS COMMODITY POOL.
NOTICE TO FOREIGN INVESTORS
THE SECURITIES HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION AND SEVERAL SELECTED STATES. HOWEVER, THE SECURITIES MAY
NOT BE OFFERED, SOLD, RENOUNCED OR TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE
UNITED STATES OF AMERICA, ITS TERRITORIES, POSSESSIONS, AND ALL AREAS SUBJECT
TO ITS JURISDICTION ("UNITED STATES" OR IN CANADA (COLLECTIVELY, "NORTH
AMERICA"), OR TO OR FOR THE BENEFIT OF ANY PERSON WHO IS A NATIONAL CITIZEN OR
A RESIDENT OR NORMALLY A RESIDENT THEREOF, THE ESTATES OF SUCH A PERSON OR ANY
CORPORATION OR OTHER ENTITY CREATED OR ORGANIZED UNDER ANY LAW OF THE UNITED
STATES OR CANADA OR ANY POLITICAL SUBDIVISION THEREOF (COLLECTIVELY REFERRED
TO AS "NORTH AMERICAN PERSONS") UNLESS (i) THE SECURITIES ARE DULY REGISTERED
UNDER THE APPLICABLE STATE ACT, OR (ii) AN EXEMPTION FROM REGISTRATION UNDER
THE APPLICABLE STATE ACT AND THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL TO
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<PAGE>
SUCH EFFECT REASONABLY SATISFACTORY TO IT, OR (iii) SUCH SECURITIES ARE SOLD
ON FOREIGN EXCHANGE IN ACCORDANCE WITH PROCEDURES APPROVED BY SUCH FOREIGN
STOCK EXCHANGE.
SUMMARY OF THE OFFERING
The following summary is qualified, in its entirety, by the more detailed
information appearing elsewhere in the Prospectus, this Supplement, in the
Exhibits, and other documents identified herein. Reference to subsections in
the Prospectus as amended by this Supplement to the Prospectus are in
quotation marks. Terms with the initial letter capitalized are defined in the
Glossary in Appendix I of the Prospectus and this Supplement.
CONFLICTS OF INTEREST
Significant potential and actual conflicts of interest may arise as a result
of the fact the Selling Agent is controlled by the principal of the General
Partner and, therefore, no independent due diligence of the offering is made
by the Selling Agent for the benefit of the prospective purchasers. See
"Conflicts of Interest" and "Risk Factors".
CONFLICTS OF INTEREST IN THE PARTNERSHIP STRUCTURE
Certain actual and potential conflicts of interest do exist in the structure
and operation of the Partnership which must be considered by investors before
they purchase Units in the Partnership. See "Risk Factors", "Conflicts of
Interest", and "The Limited Partnership Agreement" attached as Exhibit A to
the Prospectus. In addition, the Selling Agent is Affiliated with the
principal of the General Partner and, therefore, no independent due diligence
of the offering will be conducted for the protection of the investors. The
General Partner has taken steps to insure that the Partnership equity is held
in segregated accounts at the banks and futures commission merchant selected
and has otherwise assured the Selling Agent that all money on deposit is in
the name of and for the beneficial use of the Partnership.
LIMITED PRIOR OPERATION EXPERIENCE OF THE GENERAL PARTNER
The General Partner of this Partnership, Pacult Asset Management, Inc., a
Delaware corporation, c/o Corporate Systems, Inc. 101 N. Fairfield Drive,
Dover, DE 19901 was incorporated on October 13, 1994, which has operated this
commodity pool since November, 1996.
NO ASSURANCE THAT UNITS WILL BE SOLD
Futures Investment Company and other broker dealers selected, if any, have no
obligation to purchase Units or otherwise support the price of the Units. The
sales commitment obligates the broker dealers to use their best efforts only.
See "Subscription Procedure and Plan of Distribution".
SELECTION OF COMMODITY TRADING ADVISORS AND ALLOCATION OF EQUITY
The General Partner is solely responsible for the selection of the CTAs and
the allocation of equity to the CTAs it selects. The General Partner has
entered in advisory contracts with independent commodity trading advisors to
direct all trading with the commodity broker, The Chicago Corporation, (the
"Futures Commission Merchant" or "FCM").
The General Partner has selected two additional CTAs to trade for the fund,
EPIC Trading ("EPIC") and Bell Fundamental Futures, L.L.C. ("BFF"), and will
rely, pursuant to the Advisory Agreements and Powers of Attorney attached as
Exhibits F, G and H, upon Michael J. Frischmeyer ("Frischmeyer"), EPIC and
Bell, to trade the equity of the Partnership and to implement the trading
methods and strategies. Upon the effective date of this Supplement, the
General Partner intends to assign 50% of total trading equity to Frischmeyer,
30% to BFF and 20% to EPIC.
PLAN OF DISTRIBUTION
The Units are being offered and sold through Futures Investment Company,
("FIC") and other broker dealers it, or the General Partner may select, on a
best efforts basis. The selling commission will be six percent (6%) of the
gross subscription for all Units sold. See "Subscription Procedure" and "Plan
of Distribution". FIC is registered as a broker dealer with the SEC and is a
member of the National Association of Securities Dealers, Inc. (the "NASD").
4
<PAGE>
CONFLICTS OF INTEREST
Significant actual and potential conflicts of interest exist in the structure
and operation of the Partnership. The General Partner has used its best
efforts to identify and describe all potential conflicts of interest which may
be present under this heading in this Amendment and in the Prospectus and the
Exhibits attached thereto. Prospective investors should consider that the
General Partner intends to assert that Partners have, by subscribing to the
Partnership, consented to the existence of such potential conflicts of
interest as are described in the Prospectus, this Supplement, and the Exhibits,
in the event of any claim or other proceeding against the General Partner, any
principal of the General Partner, the Commodity Trading Advisors, any Principal
of the Trading Advisors, the Partnership's FCM, or any principal of the FCM,
the Partnership's IB and Selling Agent or any principal or any Affiliate of
any of them alleging that such conflicts violated any duty owed by any of them
to said subscriber. Specifically, the Selling Agent is Affiliated with the
principal of the General Partner and, therefore, no independent due diligence
of the Partnership or the General Partner will be made by a National
Association of Securities Dealers, Inc. member.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
MANAGEMENT'S DISCUSSION
The Partnership commenced operations in November, 1996. The Net Asset Value
of a Unit purchased for $1,000 prior to commencement of operations was worth
$731 as of April 30, 1998. Management cannot predict whether the
Partnership's Net Asset Value per Unit will increase or decrease.
TRADING MANAGEMENT
SELECTION OF COMMODITY TRADING ADVISORS AND ALLOCATION OF EQUITY
The General Partner selects Commodity Trading Advisors for the Partnership by
utilizing the best judgment of its principal and her sixteen year personal
experience in the review of disclosure documents of CTAs. The Partnership
will rely, pursuant to the Advisory Agreements and Powers of Attorney attached
as Exhibits F, G and H, upon Michael J. Frischmeyer, EPIC Trading and Bell
Fundamental Futures, L.L.C., the CTAs selected by the General Partner to trade
the equity of the Partnership and to implement the trading methods and
strategies. Upon the effective date of this Supplement, the General Partner
intends to assign substantially all of the Partnership Capital to the CTAs to
trade, with 50% being allocated to Frischmeyer, 30% to BFF and 20% to EPIC.
Previous to this Supplement, 100% of the equity was assigned to Frischmeyer.
The General Partner periodically reviews the performance of the Partnership to
determine if the CTAs selected to trade for the Partnership should be changed
or if other CTAs should be added. Due to the allocation of trading assets
over multiple CTAs, it is possible for one of the CTAs to produce New Net
Profit in the account assigned to him and be paid an incentive fee while the
other CTA or CTAs produce losses which cause the Partnership to suffer a net
loss for the Quarter or the year. From time to time, the General Partner may
use computer generated correlation analysis or other types of automated review
procedures to evaluate CTAs.
THE ADVISORY CONTRACTS
For the purpose of directing and effecting trades, the Partnership has entered
into advisory contracts and granted Powers of Attorney to the CTAs to trade.
The CTAs have sole discretion, in the accounts so assigned, to determine the
commodity futures trades made by the Partnership. The Partnership is bound by
the directions of the CTAs given to the FCM under the Powers of Attorney. The
Powers of Attorney are subject to termination by either the General Partner or
the respective CTAs upon written notice to the other and to the FCM. If the
Powers of Attorney are terminated, the General Partner will undertake to
manage the trading or will seek and retain a new CTA or CTAs. See Exhibits F,
G and H.
FREQUENCY OF CTA AND EQUITY REALLOCATIONS
The General Partner believes that a CTA should be retained on a medium to
long-term basis and should be given the opportunity to implement fully his
trading strategy or program. While it is not anticipated that frequent
changes will be made to the number of CTAs advising the Partnership or that
frequent reallocations of assets among existing CTAs will be made, the General
Partner will retain the flexibility to replace CTAs or to reallocate the
Partnership's assets among
5
<PAGE>
CTAs based upon its sole judgment and experience. From time to time, the
General Partner may engage in reallocations of assets or add or replace CTAs
on a frequent basis. Due to the allocation of trading assets over multiple
CTAs, it is possible for one of the CTAs to produce New Net Profit in the
account assigned to him and be paid an incentive fee while the other CTA or
CTAs produce losses which cause the Partnership to suffer a net loss for the
Quarter or the year.
THE COMMODITY TRADING ADVISORS
MICHAEL J. FRISCHMEYER
Michael J. Frischmeyer is one of the Commodity Trading Advisors (collectively
above called the "CTAs" and in this section called the "CTA"). The CTA
conducts the business of the trading program described in this Disclosure
Document as a sole proprietorship, and his Main Business Office and main
business telephone are: 1422 Central Avenue, P.O. Box 898, Fort Dodge, Iowa
50501; (515) 955-3800; and, Facsimile: (515) 955-1444. The books and records
of the CTA will be kept and made available for inspection at the Main Business
Office.
BUSINESS BACKGROUND
The business background of the CTA for at least five (5) years is as follows:
The CTA, Mr. Frischmeyer, was born in 1953. He graduated from Iowa State
University, Ames, Iowa, in 1976 with a Bachelor of Science degree in
agricultural business. From March of 1976 to November of 1979, Mr.
Frischmeyer was an account executive in the commodity brokerage business of
Stark Brokerage, Inc., Fort Dodge, Iowa. In November of 1979, he joined the
newly organized North Iowa Commodities, now known as Iowa Commodities, Ltd.
He is currently Vice President and owner of approximately 21% of the total
outstanding stock of Iowa Commodities, Ltd. and is registered with the CFTC
and the NFA as an associated person of Iowa Commodities, Ltd. (since 1984).
Iowa Commodities, Ltd. serves as an introducing broker for various traders,
and is registered as an introducing broker with the CFTC (though the NFA) and
a member of the Chicago Board of Trade.
Mr. Frischmeyer is registered with the CFTC and the NFA as a commodity trading
advisor (since October 12, 1984), and, as a commodity pool operator (since
April, 1987). He directs the trading for discretionary accounts for
individuals and entities and devotes substantially all of his time to the
futures and options trading business. Mr. Frischmeyer serves as both the
commodity pool operator and commodity trading advisor for two commodity pools
and also advises other commodity pool operators and other traders and managers
with respect to trading strategies including his role as the sole CTA for
Fremont Fund, Limited Partnership, a publicly offered commodity pool in which
Ms. Pacult, the principal of the General Partner for this pool also serves as
the principal of the general partner. See "Performance Record of Fremont
Fund, Limited Partnership".
Mr. Frischmeyer was affiliated with R.G. Dickinson and Company, based in Des
Moines, Iowa, as registered representative from January, 1986 through
December, 1991. R.G. Dickinson is a securities broker-dealer. Mr.
Frischmeyer became a registered representative with Broker-Dealer Financial
Services, Inc., based in Des Moines, Iowa on January 1, 1992. Mr. Frischmeyer
terminated his association with Broker-Dealer Financial Services Corporation
on December 31, 1994, and became a registered representative of Investment
Guidance, Inc., effective January 1, 1995. Investment Guidance, Inc. is
registered as a fully-disclosed broker-dealer with the Securities and Exchange
Commission and member of the National Association of Securities Dealers, Inc.
It serves as the underwriter for certain limited partnership commodity pool
offerings, in addition to offering general brokerage services to the public.
Additionally, please see "Performance of the CTA," below, for a detailed
performance history of Mr. Frischmeyer.
DESCRIPTION OF TRADING PROGRAM
The types of futures contracts and options which the CTA may trade for the
Partnership include, without limitation, all domestic and foreign currency
futures contracts and all domestic and foreign commodities, currencies and
provisions, and options therefore, as are usually dealt in on exchanges or in
the interbank foreign currency forward markets.
The CTA's trading has been active in the soybean complex (beans, oil and
meal), corn, wheat, cattle (live and feeder), live hog and pork belly
contracts and interest rate futures (long-term treasury bonds, Eurodollars and
others). The CTA's trading has also been active in foreign currencies and in
stock index futures and options and in precious metals (primarily gold and
silver) futures, as well as in futures and options on foreign futures and
options exchanges.
6
<PAGE>
The futures and options traded by the CTA, including the trades to be made for
the Partnership, will be traded on regulated exchanges located in the United
States and in non-United States jurisdictions, including England, France,
Spain, Germany, Canada, Australia, Japan and Singapore. No business will in
any event be conducted which is forbidden by or will be contrary to any
applicable law (whether laws of the United States or a foreign jurisdiction)
or any lawful rules and regulations as are established by the regulated
exchanges (whether United States exchanges or foreign exchanges) upon which
futures or options are traded for the Partnership. Prospective clients should
be aware, however, that trading on foreign exchanges will not be subject to
the regulations of the Commodity Futures Trading Commission (the "CFTC") and
may involve greater risks than trading on exchanges located in the United
States. In addition, the CTA will be effecting certain trades through the
"GLOBEX" system, Project A and other systems, which are electronic order-entry
and matching systems for futures and options. See "Risk Factors".
The CTA contemplates trading the contracts identified on the following Futures
Exchanges for the Partnership, although other exchanges may be used and other
types of contracts or interests may be traded:
FOREIGN FUTURES EXCHANGES: Deutsche Terminborse - DAX Index; London
International Financial Futures Exchange (LIFFE) - 3-Month Sterling, 3-Month
EuroDeutscheMark, 3-Month EuroLira, 3-Month EuroSwissFranc, German Bond,
British Gilt, Italian Government Bond (BTP), FT-SE 100 Index; Marche A Terme
Internationale de France (MATIF) - 3-Month PIBOR, French Notional Bond, CAC 40
Index; Mercado de Futuros Y Opciones (MEFF) - 3-Month MIBOR, Spanish Notional
Bond; Montreal Stock Exchange - 3-Month Canadian Bankers Acceptance, Canadian
Government Bond; Sydney Futures Exchange - 3-Month Australian Bills, 10 Year
Australian Bonds; Tokyo International Financial Futures Exchange (TIFFE) -
EuroYen; Tokyo Stock Exchange - Japanese 10 Year Bond; Singapore International
Financial Futures Exchange (SIMEX) - EuroDollars, Nikkei, Japanese 10 Year
Bond.
UNITED STATES FUTURES EXCHANGES: Chicago Board of Trade (CBOT) - Corn,
Soybeans, Soybean Meal, Soybean Oil, Wheat, Treasury (10 year) Notes, Treasury
Bonds, Municipal Bond Index; Chicago Mercantile Exchange (CME) - Live Cattle,
Feeder Cattle, Live Hogs, Pork Bellies; International Monetary Market (IMM) a
division of the CME - Australian Dollar, Canadian Dollar, Deutsche Mark,
French Franc, Japanese Yen, Swiss Franc, Eurodollars, British Pound, Mexican
Peso; Index and Options Market (IOM) a division of the CME - S & P 500 Index,
S & P Midcap 400 Index; New York Futures Exchange (NYFE) - NYSE Composite;
Financial Instruments Exchange (FINEX) - U.S. Dollar Index, British Sterling-
Deutsche Mark, Deutsche Mark-Yen, Deutsche Mark-French Franc, Deutsche Mark-
Italian Lira; Commodity Exchange, Inc. (COMEX) - Gold, Silver; Kansas City
Board of Trade (KCBT) - Hard Red Winter Wheat, Value Line Index.
The following description of the CTA's trading systems, methods and strategies
is not intended to be exhaustive. In addition, the trading methods, systems
and principles utilized by the CTA are proprietary and confidential and the
following descriptions are general in nature. Further, in preparing the
following discussion, the CTA may have chosen to refer to or emphasize only
specific aspects of his trading systems, methods and strategies. Prospective
clients should also be aware that there are numerous trading systems, methods
and strategies utilized in the various futures and options contexts and that
the following discussion only addresses those systems, methods and strategies
utilized by the CTA. Prospective clients will be unable to compare the CTA's
systems, methods and strategies with any other trading systems, methods and
strategies that are or may be utilized by other traders or commodity trading
advisors or trading managers.
The CTA will rely on his subjective judgment and discretion in the trading of
Partnership accounts. The intent of such subjective judgment and discretion
is to enhance returns and/or lower risks; however, there can be no assurances
that such actions will be successful. One example of such subjective judgment
or discretion may be determining the appropriate level of aggressiveness
during periods of unusual uncertainty.
In certain trades, the CTA will be utilizing a practice known as "Exchange for
Physicals" ("EFP"). EFP is a practice whereby positions in certain futures
contracts may be initiated or liquidated by first executing the transaction in
the appropriate cash market and then arbitraging the position into the futures
market (simultaneously buying the cash position and selling the futures
position, or vice versa). Although it is not anticipated to occur, if the
CTA's ability to engage in such transactions were to be restricted by the CFTC
or other applicable authority, the current trading techniques employed by the
CTA may be impaired to the detriment of clients of the CTA.
7
<PAGE>
PERFORMANCE RECORD OF THE CTA
The performance capsules set forth below are presented on a composite basis.
While there may be differences in the specific trades made in each account,
the trading program and strategies employed for accounts traded in Mr.
Frischmeyer's Managed Account Program, Iowa Commodities Fee Schedule and in
his Managed Account Program, Regular Fee Schedule are the same, and Mr.
Frischmeyer does not believe there are substantial differences between the
trading systems, money management policies or fee structures, or any other
significant differences among the accounts comprising the respective
composites which would make the use of a composite inappropriate. As much as
possible, Mr. Frischmeyer attempts to trade all managed accounts
proportionately the same. For example, if one account is twice the size of
another, it will trade twice the number of contracts so that the two accounts
would generate a similar rate of return.
When reviewing the CTA's performance record, prospective clients should also
be aware, however, that composite performance results tend to create an
"averaging effect" on the performance of the accounts. Further, prospective
clients should recognize that different accounts can have and have had varying
investment results, even though they have been traded according to the same
general trading approach. The reasons for this include numerous material
differences between accounts, including the following:
1. The timing of the deposit of equity and the total period during which each
account was traded.
2. The relative sizes of the accounts, which influences the number of
interests and the number of contracts in each interest traded by accounts, as
well as the diversification of the account and the design and execution of the
CTA's methods. For instance, in the example given above, the larger account
might not be exactly twice the size of the smaller account. The CTA may, from
time to time, determine that certain trades may entail greater than ordinary
risks, which may cause him to also determine that all accounts should trade a
smaller than usual number of contracts. As a result, in some circumstances
larger accounts may trade a reduced number of contracts in such trades and the
small accounts may not participate in such trades.
3. The trading approach used-although all accounts may be traded in
accordance with the same general trading approach, such approach can and does
change periodically as a result of research and development by the CTA.
4. Split fills. When entering an order to buy or sell futures or options,
the CTA will block his managed accounts (group them together) so that multiple
accounts can be filled on one order. If fills occur at more than one price, a
small difference in performance can result. In such instances (except where
the Average Price System is applicable, described in the Sections entitled
"Description of Trading Program" and "Conflicts of Interest"), the fills are
arbitrarily allocated so that the highest prices (whether buys or sells) are
successively allocated to the numerically highest account numbers.
5. Incomplete fills. Occasionally, a blocked order can be partially, but not
completely filled at the price specified on the order. In such an instance,
the CTA attempts to allocate one contract to each account, regardless of
account size, and then allocate the remaining fills in proportion to account
capitalization, but some discrepancies may be unavoidable. See "Conflicts of
Interest" above.
6. The size and time of payment of brokerage commissions and fees paid by the
accounts.
7. The size and time and payment of administrative costs paid by the
accounts.
8. The size and time and payment of interest income earned by the accounts.
9. The market condition in which accounts are traded, which in part
determines the quality of trade executions.
10. The allocation of orders to open or close positions.
Thus, the results of individual accounts, as a result of differences in the
above factors, may experience better or worse than the composite performance
results shown.
8
<PAGE>
Managed Account Program, Regular Fee Schedule
The following capsule shows the past performance of Mr. Frischmeyer's Managed
Account Program, Regular Fee Schedule since the inception of the Managed
Account Program, Regular Fee Schedule and year-to-date (through April 30,
1998). PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
<TABLE>
Managed Account Program, Regular Fee Schedule
Percentage Rate of Return
(Computed on a compounded monthly basis)*
<CAPTION>
Month 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
January (0.02) (2.36) (2.56) 1.45 N/A
February (0.51) (1.79) (1.22) (5.86) N/A
March (0.79) (1.79) (5.11) (2.88) 0.19
April (3.94) (3.17) 14.71 (7.88) (3.40)
May (0.94) (8.46) (6.24) 0.58
June (0.91) (10.26) (3.09) (6.47)
July (3.28) 2.21 2.55 11.36
August (1.15) (7.38) 9.58 5.38
September (3.76) (7.53) 19.83 (0.55)
October (0.11) 2.35 4.18 1.65
November (1.51) (0.47) (3.01) (1.62)
December (0.66) (3.40) 12.87 (1.53)
Year (5.20) (19.50) (25.86) 19.24 4.64
<FN>
Name of Commodity Trading Advisor: Michael J. Frischmeyer
Name of Trading Program: Managed Account Program, Regular Fee Schedule
("Regular Program")
Date Commodity Trading Advisor Began Trading Client Accounts: March 1, 1976
Date When Client Funds Began Being Traded Pursuant To The Regular Program:
March 1, 1994
Number of Accounts Directed Pursuant To The Regular Program: 206
Total Assets Under Management of Mr. Frischmeyer: $21,366,515
Total Assets Traded Pursuant To The Regular Program: $8,045,677
Largest Monthly Draw-Down: 6-96/10.26% of client funds
Worst Peak-to-Valley Draw-Down***: 12-95 to 4-98/70.29% of net asset value
* Rate of Return is computed by dividing net performance by beginning net
asset value for the period. For those months when additions or
withdrawals exceed ten percent of beginning net assets, the Time-
Weighting of Additions and Withdrawals method is used to compute rates
of return.
** "Draw-down" is defined by applicable CFTC regulations to mean losses
experienced by an account over the specified period.
*** Worst Peak-to-Valley Draw-Down means the greatest cumulative percentage
decline in month-end net asset value due to losses sustained by a pool,
account or trading program during any period in which the initial month-
end net asset value is not equaled or exceeded by a subsequent month-end
net asset value.
</TABLE>
As indicated above, the performance capsule is a composite consisting of 206
accounts, comprised of 134 at $40,000, 53 at $80,000, 7 at $120,000, 11 at
$160,000, and 1 at $200,000. As also indicated above, Mr. Frischmeyer's
Managed Account Program, Regular Fee Schedule began in March of 1994. One
hundred twenty-three (123) such accounts were opened in 1994, one hundred
thirty-two (132) such accounts were opened in 1995, two hundred thirty (230)
were opened
9
<PAGE>
in 1996, fifty-six (56) were opened in 1997, and nine (9) were opened in 1998
(as of April 30, 1998). Three (3) of such accounts were closed in 1994, all
of which were profitable. Forty-three (43) such accounts were closed in 1995,
of which 29 were profitable, and 14 of which were unprofitable. Fifty-two
(52) such accounts were closed in 1996, of which 22 were profitable, 30 of
which were unprofitable, and 20 of which were closed for purposes of
transferring to the accounts to another futures commission merchant. The CTA
continued as the commodity trading advisor for all such 20 accounts. One
hundred eighty (180) such accounts were closed in 1997, 17 of which were
profitable, and 163 of which were unprofitable. Seventy-six (76) such
accounts were closed in 1998 (as of April 30, 1998), 1 of which was profitable
and 75 of which were unprofitable.
The composite performance records of the CTA's Managed Account Program,
Regular Fee Schedule do not include certain limited accounts (5 as of April
30, 1998) which are traded in the Managed Account Program, Regular Fee
Schedule, but which have not and will not, with the client's agreement, make
any trades in any contracts, options or other interests in any grains, oil
seeds or livestock which are otherwise made by the other accounts traded in
the CTA's Managed Account Program, Regular Fee Schedule. Those accounts are
collectively referred to in this Prospectus as the "Regular Fee Schedule-
Regular Fee Restricted Accounts Only". Although the Regular Fee Restricted
Accounts are charged the same fees by the CTA as the other accounts traded in
the CTA's Managed Account Program, Regular Fee Schedule, the CTA believes
including the Regular Fee Schedule-Regular Fee Restricted Accounts Only
Accounts in his composite performance records for his Managed Account Program,
Regular Fee Schedule is inappropriate because the Regular Fee Schedule-Regular
Fee Restricted Accounts Only Schedule Accounts do not trade in any contracts,
options or other interest in any grains, oil seeds or livestock. As indicated
above, the Regular Fee Schedule-Regular Fee Restricted Accounts Only Accounts
were therefore also excluded from the composite performance records for the
CTA's Managed Account Program, Regular Fee Schedule.
Managed Account Program, Regular Fee Schedule-Regular Fee Restricted Accounts
Only
The following capsule shows the past performance of Regular Fee Schedule-
Regular Fee Restricted Accounts Only since the inception of trading of the
first Regular Fee Schedule-Regular Fee Restricted Accounts Only Account (in
November, 1995) and year-to-date (through April 30, 1998). PAST PERFORMANCE
IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
<TABLE>
Managed Account Program, Regular Fee Schedule -
Regular Fee Restricted Accounts Only
Percentage Rate of Return
(Computed on a compounded monthly basis)*
<CAPTION>
Year-to-date Nov - Dec
1998 1997 1996 1995
<S> <C> <C> <C>
2.91 (10.06) (18.40) (2.12)
<FN>
Name of Pool: Managed Account Program, Regular Fee Schedule-Regular Fee
Restricted Accounts Only
Date Commodity Trading Advisor Began Trading Client Accounts: March 1, 1976
Date When Client Funds Began Traded Pursuant To The Restricted Program:
November 27, 1995
Number of Accounts Directed Pursuant To The Restricted Program: 5
Total Assets Under Management of Mr. Frischmeyer: $21,366,515
Total Assets Traded Pursuant To The Regular Program: $183,093
Largest Monthly Draw-Down**: 7-96/7.84% of client funds
Worst Peak-to-Valley Draw-Down***: 7-96 to 12-97/25.99% of net asset value
* Rate of return is computed by dividing the net performance by the sum of
the beginning net asset value and net additions, capital withdrawals and
redemptions.
** "Draw-down" is defined by applicable CFTC regulations to mean losses
experienced by an account over the specified period.
*** Worst Peak-to-Valley Draw-Down means the greatest cumulative percentage
decline in month-end net asset value due to losses sustained by a pool,
account or trading program during any period in which the initial month-
end net asset value is not equaled or exceeded by a subsequent month-end
net asset value.
</TABLE>
10
<PAGE>
The above performance capsule is a composite of five (5) Regular Fee Schedule-
Regular Fee Restricted Accounts Only Accounts. One (1) such Account was
opened in 1995, twelve (12) such Accounts were opened in 1996, and no such
Accounts were opened in either 1997 or 1998 (as of April 30, 1998). Three (3)
such Accounts were closed in 1996, all of which were unprofitable as of the
date they were closed. Four (4) such Accounts were closed in 1997, all of
which were unprofitable as of the date they were closed. One (1) such Account
was closed in 1998 (as of April 30, 1998), which was unprofitable as of the
date it was closed.
The CTA has reserved the right, in his discretion, to negotiate and accept a
different fee schedule for any particular account or accounts to be traded
under his trading program, i.e., the CTA's Managed Account Program, Regular
Fee Schedule. One account traded under the CTA's Managed Account Program,
Regular Fee Schedule for which the CTA has agreed to a different fee schedule
is Frischmeyer Fund, L.P., which is an Iowa limited partnership operating as a
commodity pool. As of April 30, 1998, Frischmeyer Fund, L.P. had net assets
of approximately $1,431,291. Given the size of Frischmeyer Fund, L.P., the
CTA has agreed to receive a one percent (1%) annual management fee from
Frischmeyer Fund, L.P. based upon the total equity of Frischmeyer Fund, L.P.'s
account, rather than the four percent (4%) annual management fee based upon
the incremental trading level of the account as is generally charged to
accounts traded in the CTA's Managed Account Program, Regular Fee Schedule.
(The fees charged Frischmeyer Fund, L.P. by the CTA are otherwise the same as
those normally charged by the CTA to accounts traded in the CTA's Managed
Account Program, Regular Fee Schedule.). The CTA has determined that the
difference in the management fees charged to Frischmeyer Fund, L.P. makes the
inclusion of Frischmeyer Fund, L.P. in the composite performance records of
the CTA's Managed Account Program, Regular Fee Schedule inappropriate. The
following paragraph therefore sets forth a separate performance capsule for
Frischmeyer Fund, L.P.
Managed Account Program, Frischmeyer Fund, L.P. Fee Schedule
Frischmeyer Fund, L.P. is a single advisor pool that does not have a guarantee
feature. The following capsule shows the past performance of Frischmeyer
Fund, L.P. since the inception of trading by Frischmeyer Fund, L.P. and year-
to-date (through April 30, 1998). The CTA has no authority to, and no
offering of any interests in Frischmeyer Fund, L.P. is made by this
Prospectus. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
<TABLE>
Managed Account Program, Frischmeyer Fund, L.P. Fee Schedule
Percentage Rate of Return
(Computed on a compounded monthly basis)*
<CAPTION>
Year-to-date Feb - Dec
1998 1997 1996 1995
<S> <C> <C> <C>
(0.24) (14.25) 12.69 (6.62)
<FN>
Name of Pool: Frischmeyer Fund, L.P.
Type of Pool: Publicly offered, but currently closed to new investors
Date of Inception of Trading: March 15, 1995
Aggregate Gross Capital Subscriptions to the Pool: $2,658,017
Pool's Net Asset Value: $1,272,857
Largest Monthly Draw-Down**: 12-95/19.44% of net asset value
Worst Peak-to-Valley Draw-Down***: 4-96 to 7-98/31.06 of net asset value
* Rate of return is computed by dividing the net performance by the sum of
the beginning net asset value and net additions, capital withdrawals and
redemptions.
** "Draw-down" is defined by applicable CFTC regulations to mean losses
experienced by an account over the specified period.
*** Worst Peak-to-Valley Draw-Down means the greatest cumulative percentage
decline in month-end net asset value due to losses sustained by a pool,
account or trading program during any period in which the initial month-
end net asset value is not equaled or exceeded by a subsequent month-end
net asset value.
</TABLE>
11
<PAGE>
Financial Futures Managed Account Program
The following capsule shows the past performance of Financial futures Managed
Account Program since the inception of trading of the first Financial futures
Managed Account Program (in June, 1997) and year-to-date (through April 30,
1998). PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
<TABLE>
Financial Futures Managed Account Program
Percentage Rate of Return
(Computed on a compounded monthly basis)*
<CAPTION>
Year-to-Date June - Dec
1998 1997
<S> <C>
2.09**** (9.36)****
<FN>
Name of Pool: Financial Futures Managed Account Program
Date Commodity Trading Advisor Began Trading Client Accounts: March 1, 1976
Date When Client Funds Began Traded Pursuant To The Financial Futures program:
June, 1997
Number of Accounts Directed Pursuant To The Restricted Program: 1
Total Assets Under Management of Mr. Frischmeyer: $21,366,515
Total Assets Traded Pursuant To The Regular Program: $58,334
Largest Monthly Draw-Down**: 8-97/3.45% of client funds
Worst Peak-to-Valley Draw-Down***: 6-97 to 12-97/5.02% of net asset value
* Rate of return is computed by dividing the net performance by the sum of
the beginning net asset value and net additions, capital withdrawals and
redemptions.
** "Draw-down" is defined by applicable CFTC regulations to mean losses
experienced by an account over the specified period.
*** Worst Peak-to-Valley Draw-Down means the greatest cumulative percentage
decline in month-end net asset value due to losses sustained by a pool,
account or trading program during any period in which the initial month-
end net asset value is not equaled or exceeded by a subsequent month-end
net asset value.
**** The rates of return for 1995 and 1996 were affected by a
misappropriation in 1995 of certain assets of Frischmeyer Fund, L.P. by
its prior general partner and by the recovery of those assets by
Frischmeyer Fund, L.P. in 1996. Mr. Frischmeyer was not involved in any
way with the referenced events.
</TABLE>
The above performance capsule is a composite of one (1) Financial Futures
Managed Account Program Account. Four (4) such Accounts were opened in 1997,
and no such Accounts were opened in 1998 (as of April 30, 1998). Three (3)
such Account was closed in 1997, all of which were unprofitable as of the date
they were closed. No such Accounts were closed in 1998 (as of April 30,
1998).
Managed Account Program, Iowa Commodities Fee Schedule
The following capsule shows the past performance of Mr. Frischmeyer's Managed
Account Program, Iowa Commodities Fee Schedule for the most recent five
calendar years and year-to-date (through April 30, 1998), as well as since
inception through 1992. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF
FUTURE RESULTS.
12
<PAGE>
<TABLE>
Managed Account Program, Iowa Commodities Fee Schedule
Percentage Rate of Return
For the Most Recent Five Calendar Years and Year-to-Date
(Computed on a compounded monthly basis)*
<CAPTION>
Year-to-Date
1998 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
(6.95) (17.89) (20.14) 42.34 9.71 166.90
</TABLE>
<TABLE>
Managed Account Program, Iowa Commodities Fee Schedule
Percentage Rate of Return
Since Inception Through December, 1992
(Computed on a compounded monthly basis)*
<CAPTION>
1992 1991 1990 1989 1988 1987 1986 1985 1984 1983 1982 1981
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21.19 (4.96) (6.73) 54.84 86.89 100.09 (35.78) (4.62) 229.34 100.69 0.86 (25.34)
<FN>
Name of Commodity Trading Advisor: Michael J. Frischmeyer
Name of Trading Program: Managed Account Program, Iowa Commodities Fee
Schedule ("ICL Program")
Date Commodity Trading Advisor Began Trading Client Accounts: March 1, 1976
Date When Client Funds Began Being Traded Pursuant To The ICL Program:
January 1, 1981
Number of Accounts Directed Pursuant To The ICL Program: 61
Total Assets Under Management of Mr. Frischmeyer: $21,366,515
Total Assets Traded Pursuant To The ICL Program: $11,648,120
Largest Monthly Draw-Down**: 8-93/35.47% of client funds
Worst Peak-to-Valley Draw-Down***: 4-96 to 4-98/74.70% of net asset value
* Rate of Return is computed by dividing the net trading results by
beginning net asset value for the period.
** "Draw-down" is defined by applicable CFTC regulations to mean losses
experienced by an account over the specified period.
*** Worst Peak-to-Valley Draw-Down means the greatest cumulative percentage
decline in month-end net asset value due to losses sustained by a pool,
account or trading program during any period in which the initial month-
end net asset value is not equaled or exceeded by a subsequent month-end
net asset value.
</TABLE>
No accounts in Mr. Frischmeyer's Managed Account Program, Iowa Commodities Fee
Schedule were opened in 1998 (as of April 30, 1998). Four (4) such accounts
were opened in 1997. Eight (8) such accounts were opened in 1996, six (6)
such accounts were opened in 1995, and twenty-one (21) such accounts were
opened in 1994. Eight (8) such accounts were opened in 1993, and one (1) such
account was opened in 1992, being a commodity pool which was created as a
vehicle for existing managed accounts of less than $30,000 to permit
participation in trades that would be unsuitable for a small account. In the
course of consolidating those accounts, twenty-four (24) managed accounts were
closed. The historical performance of each of those accounts was comparable
to that shown in the composite performance record. The lifetime performance
of such accounts is dependent upon when each account was opened.
One account in Mr. Frischmeyer's Managed Account Program, Iowa Commodities Fee
Schedule was closed in 1992, one other was closed in 1993, three were closed
in 1994, five such accounts were closed in 1995, no such accounts were closed
in 1996, four such accounts were closed in 1997, and 2 such accounts were
closed in 1998 (as of April 30, 1998). The account closed in 1992 had been
traded for ten quarters from April, 1990 through September, 1992 and was
unprofitable (as were all of Mr. Frischmeyer's managed accounts during that
period). The account closed in 1993 was transferred to Mr. Frischmeyer in
1989, had been profitable, and was closed due to the dissolution of the
partnership which owned the account. Of the three closed in 1994, one was
opened in 1989 and was profitable, one was opened in 1990 and was profitable
(closed for estate planning), and one was opened in 1976 and was closed due to
a death. Of the five closed in 1995, one was opened in 1981 and was
profitable, one was opened in 1984 and was profitable, and three were opened
in
13
<PAGE>
1994 and were unprofitable. Two of the accounts which were closed in 1995
were closed pursuant to reorganizations by the client, and resulted in two new
accounts being opened in 1995.
EPIC TRADING
EPIC Trading is a registered Commodity Trading Advisor ("collectively above
called the "CTAs" and in this section called the "CTA"") organized as a sole
proprietorship with Bradley P. Jordan, Commodity Trading Advisor as principal.
The business office of EPIC Trading is One Whitehall St., Suite 1500, New
York, New York 10004 and the telephone number is (212) 859-0200.
BUSINESS BACKGROUND
The business background of the CTA for at least five (5) years is as follows:
Mr. Jordan first obtained his CFTC license as an Associated Person in 1975
while employed with the Taylor-Grant Division of Rosenthal & Co. In 1976, he
began ten years with Merrill Lynch Futures, Inc. ("Merrill") as a Commodity
Account Executive, Futures Analyst serving institutional clients in grains and
soft commodities as well as speculative accounts primarily in the metals
markets. Mr. Jordan left Merrill in 1986 as the Senior Floor Broker on the New
York Futures Exchange to trade his own account in the NYFE pits. In January
1995, the THESIS Fund, L.P. started trading as an exempt Commodity Pool with
Mr. Jordan as Trading Advisor and 50% Managing Partner. In January, 1997, he
resumed trading for his proprietary account in stock index futures until early
this year. Currently, Mr. Jordan is an associated person of Super Fund
Financial Group, Inc., an NFA member, Commodity Pool Operator and Introducing
Broker guaranteed by Vision Limited Partnership.
Mr. Jordan lives in Glen Rock, New Jersey with his wife and two sons. He
currently serves as Councilman for the Borough of Glen Rock and in that
capacity is the Chairman of the Division of Revenue and Finance overseeing a
municipal budget of $11,000,000. Mr. Jordan graduated from Cornell University
in 1975.
There have been no material administrative, civil or criminal actions
concluded within the preceding five years against EPIC Trading or Bradley P.
Jordan and no such actions are pending or on appeal.
DESCRIPTION OF TRADING PROGRAM
At the backbone of EPIC Trading is a technically based system utilized to
trade the stock index futures and options markets. A proprietary moving
average program is combined with internal divergence analysis to create
trading strategies. Divergence analysis is used to study the price structure
of underlying equity markets in order to create a long-term trading framework.
A leading indicator moving average projection is then applied to generate
short and intermediate term trades. Various filters have been developed to
maximized results. Standard technical analysis techniques, such as trend line
and pattern formation, are also used to a lesser extent in the trading
program.
The CTA intends to trade primarily Stock Index Futures and Options, however
the CTA may trade any variety of commodity interests that fall in the
categories of Grains, Meats, Metals, Currencies, Financials, Stock Indexes,
Energies, and other items of Food and Fiber. "Commodity Interests" means
contracts on and for physical commodities, currencies, money market
instruments, and items which are now, or may hereinafter be, the subject of
futures contract trading, options' contracts, or physical commodities.
PERFORMANCE RECORD OF THE CTA
Trading in Epic Trading Program commenced on January, 1995 and ceased in
December, 1996, then resumed in April, 1998. During 1997, Mr. Jordan traded
for his own accounts. See Appendix III for the performance summary of his
trading activity.
EPIC Trading Program
The following capsule shows the past performance of EPIC Trading Program since
the inception of trading (in January, 1995) and year-to-date (through April
30, 1998). PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
14
<PAGE>
<TABLE>
EPIC Trading Program
Percentage Rate of Return
(Computed on a compounded monthly basis)*
<CAPTION>
MONTH 1998 1997 1996 1995
<S> <C> <C> <C> <C>
January N/A N/A 3.88 5.67
February N/A N/A 5.66 6.10
March N/A N/A (0.04) (1.18)
April 4.64 N/A (2.62) (2.90)
May N/A 6.57 4.80
June N/A 2.35 0.95
July N/A 0.99 1.17
August N/A 3.70 (0.71)
September N/A 2.49 (3.67)
October N/A (0.20) 1.73
November N/A 2.97 0.06
December N/A 2.30 (1.73)
Year 4.64 N/A 15.10 26.03
<FN>
Name of the Commodity Trading Advisor: EPIC Trading
Name of the Trading Program: EPIC Trading Program
Date Commodity Trading Advisor Began Trading Client Accounts: January 1, 1995
Date When Client Funds Began Being Traded Pursuant to Trading Program:
January 1, 1995
Number Of Accounts In Trading Program: 4
Total Assets Under Management: $46,283
Largest Monthly Draw-Down**: 3.67%, September, 1995.
Worst Peak-to-Valley Draw-Down***: 8-95 to 9-95 / 4.38% of net assets
Number of Accounts Closed With Net Profit: 1
Number of Accounts Closed With Net Loss: 0
* Rate of return is computed by dividing the net performance by the sum of
the beginning net asset value and net additions, capital withdrawals and
redemptions.
** "Draw-down" is defined by applicable CFTC regulations to mean losses
experienced by an account over the specified period.
*** Worst Peak-to-Valley Draw-Down means the greatest cumulative percentage
decline in month-end net asset value due to losses sustained by a pool,
account or trading program during any period in which the initial month-
end net asset value is not equaled or exceeded by a subsequent month-end
net asset value.
</TABLE>
BELL FUNDAMENTAL FUTURES, L.L.C.
Bell Fundamental Futures, L.L.C. ("BFF") is a registered Commodity Trading
Advisor ("collectively above called the "CTAs" and in this section called the
"CTA"") organized in 1997 as a Tennessee Limited Liability corporation, with
its business office located at 889 Ridge Lake Boulevard, Suite 233, Memphis,
Tennessee 38120. Its telephone number is (901) 766-4692 and its facsimile
number is (901)766-4698.
BFF became registered with the Commodity Futures Trading Commission (the
"CFTC") as a commodity trading advisor ("CTA") on September 30, 1997 and is a
member in good standing with the National Futures Association ("NFA"), a self-
regulatory organization.
15
<PAGE>
David M. Bell is the President of BFF. He and his wife, Diane L. Bell are the
sole shareholders of BFF. Ms. Bell is not otherwise involved in BFF. Mr.
Bell is currently the only Trader for the CTA.
BUSINESS BACKGROUND
The business background of the CTA for at least five (5) years is as follows:
BFF is a corporation, created to engage in the business of managing
speculative commodity accounts. David M. Bell has been registered as
principal of BFF with the CFTC since September 30, 1997, the initial
registration.
Mr. Bell was born in Lincoln, Nebraska, and grew up on the family's
diversified farm at Bellwood, Nebraska.
Mr. Bell graduated from David City High School, David City, Nebraska, in 1961.
He received a B.S. of Agricultural Economics from the University of Nebraska
in 1965; a MS of Agricultural Economics from the University of Nebraska in
1966; and a Ph.D. from Michigan State University in 1972, with a major in
Agricultural Economics and minors in Marketing and Statistics. Mr. Bell's
doctoral dissertation was selected as one of the three outstanding
dissertations in 1972 by the American Agricultural Economics Association.
Mr. Bell taught economics at Northwest Missouri State College in Maryville,
Missouri during the 1966/67 academic year. From 1970-75, Mr. Bell was
employed by the Economic Research Service of the US Department of Agriculture,
first in East Lansing, Michigan and later in Washington, D.C., where he served
as leader of the Manufactured Inputs Research Area.
In June, 1975, Mr. Bell joined Connell Econometrics/Connell Rice and Sugar
Co., a commodity research and consulting company in Westfield, New Jersey.
Mr. Bell directed commodities research and consulting operations and developed
econometric models for forecasting prices and key fundamental factors in the
grain and soybean complex markets. From January, 1982 through December, 1994,
he was employed by Sparks Companies, Inc., one of the leading commodity
research and consulting companies. He developed trading strategies for
customers, directed research operations, and conducted training schools on
futures and options markets, fundamental analysis, and development of trading
strategies. Since January, 1995, Mr. Bell has been the sole trader for Eagle
Fund, L.P., a commodity speculation enterprise.
Past Performance for Mr. Bell may be found beginning on below under
"Performance Record of the CTA".
Diane L. Bell, the only other principal, is not otherwise involved in either
the management or trading of BFF.
DESCRIPTION OF TRADING PROGRAM
Fundamental and Technical Analysis
There are generally two methods of analysis used to forecast price behavior in
commodity markets - fundamental and technical.
Fundamental analysis looks at factors that affect the supply and demand of the
underlying commodity thereby affecting its equilibrium price. Such factors as
weather patterns, government policies, livestock profitability, prices of
competitive commodities, farmer's profit margins, and foreign monetary
exchange rates are a few of the factors involved. For example, if a foreign
country sells feed wheat at prices below the US export price for corn, export
demand for US corn will be reduced, potentially leading to lower corn prices.
Since both producers and consumers may take positions in the futures market as
a substitute for the transaction in the cash market, fundamental analysis must
also take those actions into consideration.
Technical analysis is based upon the theory that the market price reflects all
known supply and demand factors and appropriately discounts the unknown
factors, and that by studying the price patterns, future price changes can be
anticipated. Such variables as closing prices, highs and lows, the
relationship of closings to openings, volume and open interest, rate of change
in prices, and even the rate of change of the rate of change may be variables
studied. These variables may be studied on a daily, weekly or even monthly
basis, and be in the form of computer generated models,
16
<PAGE>
graphic chart patterns, or discretionary, where the trader considers a number
of variables and makes a judgment of what they mean.
Mr. Bell's Trading Style
Mr. Bell trades primarily, but not exclusively, futures on agricultural
markets, as well as options on these markets. (See Description of Commodity
Interests Traded)
As discussed above, CTAs generally rely on either fundamental or technical
analysis or a combination thereof to identify effective trading strategies.
Mr. Bell believes that fundamental factors determine the eventual movement of
the market and places primary emphasis on these factors. However, he also
monitors technical factors as they may serve to confirm the fundamentals,
serve as an early warning that fundamentals are changing, or help indicate the
potential extent of the price move. Mr. Bell's trading strategy attempts to
detect disequilibriums in prices which will lead to trend movements for the
commodity interests monitored, and normally seeks to establish positions and
maintain such positions while the particular market moves in favor of the
position and to exit the particular market and/or establish reverse positions
when the favorable trend either reverses or does not materialize. In markets
that are in equilibrium, Mr. Bell may trade a range around that price, making
more frequent trades of shorter duration.
BFF may employ trading analysts and technical analysts to assist with market
research. No client will acquire any rights or proprietary interest in, or
have access to, any of the information, data or trading methods utilized by
BFF.
BFF intends to maintain its current reliance on a combination of fundamental
and technical analyses as the basis for all trading decisions, although BFF
reserves the right to make adjustments to its risk management and other
trading policies, without approval by the client. Clients will, however, be
advised of any material changes in such trading policies.
Proprietary Trading Policy and Associated Order Allocation
Mr. Bell does trade for his own account(s) and may trade his proprietary
accounts in a manner more or less aggressively than client accounts or trade
positions different from, or not included in, a client account. Such
proprietary trading may differ from trading decisions made by Mr. Bell on
behalf of BFF's clients. Mr. Bell generally follows the same basic trading
methods and strategies developed, modified and refined as described above.
Mr. Bell may elect not to trade his proprietary account(s) in parallel with
customer accounts. However, Mr. Bell will normally not take a position that
is opposite those taken for clients.
In trading for proprietary account(s) and in contrast to trading for
customers, Mr. Bell may trade a larger number of commodity interests, utilize
a higher degree of leverage, and test new markets. In addition, Mr. Bell may
conduct experimental trading methods and strategies. Mr. Bell also may trade
contracts for proprietary account(s), but not for customer accounts of BFF, or
may trade contracts for customer accounts of BFF and not his own proprietary
accounts. Accordingly, Mr. Bell at times may take positions in his
proprietary account(s) that are different to those taken by BFF on behalf of
customer accounts and Mr. Bell's proprietary account(s) may produce trading
results that are different from those experienced by the CTA's clients.
Any such proprietary trading will not knowingly be made so as to benefit from
contemplated purchase or sales by customer accounts - i.e., engaging in so-
called "front running." The intent of such policies is to ensure that all
client orders have the opportunity to be filled at the best possible price
(although the prices at which individual client orders are filled will vary
depending upon changing market conditions and the quality of the carrying
brokerage firm's execution services).
BFF may place all client orders for a particular FCM as part of a bulk order
that will include all client accounts handled by that FCM in which the same
commodity is being traded pursuant to BFF's trading program(s). BFF will
employ an objective price allocation system which is intended to promote
fairness among all client accounts maintained at each FCM
Clients will not be permitted to inspect the records of Mr. Bell's proprietary
trading nor any written policies related to such trading.
17
<PAGE>
Description of Commodity Interests Traded
BFF intends to trade futures and options on futures contracts primarily, but
not exclusively, on agricultural raw materials and products, particularly:
grains, oilseeds, oilseed products, livestock, fiber and food products.
However, BFF may trade all commodity futures contracts, including, but not
limited to, agricultural products, financials, metals, foreign currencies and
options on such futures contracts without limitations or restrictions.
Options on futures contracts may be used by BFF on both a covered basis (i.e.,
to write or sell an option against a futures contract in the client's account)
and/or on an uncovered basis (i.e., to buy or sell an option directly). Both
Put and Call options may be used. In general, the use of options by BFF
increases an account's margin requirements and may increase volatility as
well.
Money And Risk Management
BFF and its principals believe that the discipline of money management is an
important element of the overall trading program.
BFF determines the size of any particular position based on the potential risk
of the trade relative to the potential gain along with the probabilities of
each, and the volatility of the market. This evaluation is purely
discretionary and does not ensure in any way whatsoever that risk of loss will
be effectively managed or limited or that the preservation of capital will be
achieved.
PERFORMANCE RECORD OF THE CTA
Capsule A - Bell Fundamental Futures, L.L.C.
The following capsule shows the past performance of the BFF Trading Program
since the inception of trading (in February, 1998) and year-to-date (through
April 30, 1998). PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE
RESULTS.
<TABLE>
Capsule A - Bell Fundamental Futures, L.L.C.
Percentage Rate of Return
(Computed on a compounded monthly basis)*
<CAPTION>
MONTH 1998
<S> <C>
January N/A
February 0.5
March 2.4
April 0.4
May
June
July
August
September
October
November
December
Year 3.3
<FN>
18
<PAGE>
Name of the Commodity Trading Advisor: Bell Fundamental Futures, L.L.C.
Name of the Trading Program: Capsule A - Bell Fundamental Futures, L.L.C.
Date Commodity Trading Advisor Began Trading Client Accounts: January 1983
Date When Client Funds Began Being Traded Pursuant to Trading Program:
February 1998
Number Of Accounts In Trading Program: 2
Total Assets Under Management: $224,818
Largest Monthly Draw-Down**: 1.8% / April, 1998
Worst Peak-to-Valley Draw-Down***: 1.8% / April, 1998
Number of Accounts Closed With Net Profit: 0
Number of Accounts Closed With Net Loss: 0
* Rate of return is computed by dividing the net performance by the sum of
the beginning net asset value and net additions, capital withdrawals and
redemptions.
** "Draw-down" is defined by applicable CFTC regulations to mean losses
experienced by an account over the specified period.
*** Worst Peak-to-Valley Draw-Down means the greatest cumulative percentage
decline in month-end net asset value due to losses sustained by a pool,
account or trading program during any period in which the initial month-
end net asset value is not equaled or exceeded by a subsequent month-end
net asset value.
</TABLE>
Capsule A - Bell Fundamental Futures, L.L.C. represents the performance
history of accounts managed by BFF. No proprietary trading accounts are
included. All of the accounts were traded in a manner consistent with the
program and policies currently offered. See Appendix V for the performance
summary of Mr. Bell's supplemental proprietary and pro forma trading activity.
Accounts in this composite pay monthly management fees of .167 of 1% (2% per
annum) of an account's month ending Net Asset Value and an incentive fee of
20% of New High Trading Profits. The accounts pay brokerage commission at
rates of $26 per round-turn trade plus exchange and NFA fees. As of April 30,
1998 this capsule had 2 accounts varying in size from $98,232 to $126,585
totaling $224,817. Total funds under management, including notionally funded
and proprietary accounts was $2.7 million.
PERFORMANCE OF FREMONT FUND, LIMITED PARTNERSHIP
The Fremont Fund Limited Partnership is traded by three CTAs, Michael J.
Frischmeyer, EPIC Trading and Bell Fundamental Futures, L.L.C.. Upon the
effective date of this Supplement, 50% of the equity of the Fund will be
allocated to Frischmeyer, 30% to Bell and 20% to EPIC. Previous to this
Supplement, 100% of the equity was allocated to Frischmeyer. The Fund pays
various expenses in relation its operation including a management fee to the
CTAs and the General Partner of 4% and 2% annually respectively charged 1/12th
monthly, and quarterly incentive fees of 15% of all new profits. In addition,
the fund pays 1% per month for trading commissions as opposed to a round turn
commission charge.
In addition to the following performance capsule, a detailed performance table
of the Fund is available in Appendix II.
Fremont Fund, LP
The following capsule shows the past performance of Fremont Fund, LP for the
period from inception of trading in November, 1996, through April, 1998. PAST
PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
19
<PAGE>
<TABLE>
Fremont Fund, Limited Partnership
Percentage Rate of Return
(Computed on a compounded monthly basis)*
<CAPTION>
Month 1998 1997 1996
<S> <C> <C> <C>
January (1.48) (1.79) N/A
February (0.92) 0.71 N/A
March 0.74 (0.91) N/A
April (3.46) (2.13) N/A
May (0.66) N/A
June (0.39) N/A
July (0.65) N/A
August (2.57) N/A
September (0.53) N/A
October (0.76) N/A
November (1.09) (8.83)
December (2.13) 2.34
Year (5.06) (12.21) (6.69)
<FN>
Name of Pool: Fremont Fund, LP
How Offered: Publicly offered pursuant to Form S-1 Registration statement
Name of CTAs: Michael J. Frischmeyer, EPIC Trading, Bell Fundamental Futures,
L.L.C.
Principal Protected: No
Date of Inception of trading: November, 1996
Aggregate gross capital subscriptions to the pool: $1,227,702
Net Asset Value of the pool (as of October 31, 1997): $744,936 on total Units
outstanding: 1,018.964
NAV Per Unit (as of October 31, 1997): $731
Largest Monthly Draw-Down**: 12-96/8.83% of client funds
Worst Peak-to-Valley Draw-Down***: 11-96 to 4-98/22.23% of net asset value
* Rate of return is computed by dividing the net performance by the sum of
the beginning net asset value and net additions, capital withdrawals and
redemptions.
** "Draw-down" is defined by applicable CFTC regulations to mean losses
experienced by a pool or account over the specified period
*** Worst Peak-to-Valley Draw-Down means the greatest cumulative percentage
decline in month-end net asset value due to losses sustained by a pool,
account or trading program during any period in which the initial month-
end net asset value is not equaled or exceeded by a subsequent month-end
net asset value.
</TABLE>
NOTES TO PERFORMANCE RECORD OF THE FUND
The performance capsule set forth above represents real time trading results
for the Fremont Fund, Limited Partnership. While there may be differences in
the specific trades made by the CTAs in each account they has under
management, the trading program for all of their accounts are the same. As
much as possible, the CTAs attempt to trade all managed accounts
proportionately the same. For example, if one account is twice the size of
another, it will trade twice the number of contracts so that the two accounts
would generate a similar rate of return.
When reviewing the Fund's performance record, prospective clients should
recognize that different accounts can have and have had varying investment
results, even though they have been traded according to the same general
trading approach. The reasons for this include numerous material differences
between accounts, including the following:
1. The timing of the deposit of equity and the total period during which each
account was traded.
20
<PAGE>
2. The relative sizes of the accounts, which influences the number of
interests and the number of contracts in each interest traded by accounts,
as well as the diversification of the account and the design and execution
of the CTA's methods. For instance, in the example given above, the larger
account might not be exactly twice the size of the smaller account. The
CTA may, from time to time, determine that certain trades may entail
greater than ordinary risks, which may cause him to also determine that all
accounts should trade a smaller than usual number of contracts. As a
result, in some circumstances larger accounts may trade a reduced number of
contracts in such trades and the small accounts may not participate in such
trades.
3. The trading approach used-although all accounts may be traded in accordance
with the same general trading approach, such approach can and does change
periodically as a result of research and development by the CTA.
4. Split fills. When entering an order to buy or sell futures or options, the
CTA will block his managed accounts (group them together) so that multiple
accounts can be filled on one order. If fills occur at more than one
price, a small difference in performance can result. In such instances
(except where the Average Price System is applicable, described in the
Sections entitled "Description of Trading Program" and "Conflicts of
Interest"), the fills are arbitrarily allocated so that the highest prices
(whether buys or sells) are successively allocated to the numerically
highest account numbers.
5. Incomplete fills. Occasionally, a blocked order can be partially, but not
completely filled at the price specified on the order. In such an
instance, the CTA attempts to allocate one contract to each account,
regardless of account size, and then allocate the remaining fills in
proportion to account capitalization, but some discrepancies may be
unavoidable. See "Conflicts of Interest" above.
6. The size and time of payment of brokerage commissions and fees paid by the
accounts.
7. The size and time and payment of administrative costs paid by the accounts.
8. The size and time and payment of interest income earned by the accounts.
9. The market condition in which accounts are traded, which in part determines
the quality of trade executions.
10. The allocation of orders to open or close positions.
Thus, the results of the Fund, as a result of differences in the above
factors, may experience better or worse performance than the composite
performance results shown for the CTAs.
LIMITED PRIOR PERFORMANCE AND REGULATORY NOTICE
THIS POOL BEGAN TRADING IN NOVEMBER, 1996, AND, THEREFORE, HAS LIMITED
PERFORMANCE HISTORY.
THE REGULATIONS OF THE CFTC AND NFA PROHIBIT ANY REPRESENTATION BY A PERSON
REGISTERED WITH THE CFTC OR BY ANY MEMBER OF THE NFA, RESPECTIVELY, THAT SUCH
REGISTRATION OR MEMBERSHIP IN ANY RESPECT INDICATES THAT THE CFTC OR THE NFA,
AS THE CASE MAY BE, HAS APPROVED OR ENDORSED SUCH PERSON OR SUCH PERSON'S
TRADING PROGRAMS OR OBJECTIVES. THE REGISTRATIONS AND MEMBERSHIPS DESCRIBED
IN THIS PROSPECTUS MUST NOT BE CONSIDERED AS CONSTITUTING ANY SUCH APPROVAL OR
ENDORSEMENT. LIKEWISE, NO COMMODITY EXCHANGE HAS GIVEN OR WILL GIVE ANY SUCH
APPROVAL OR ENDORSEMENT.
PLAN OF DISTRIBUTION
The Units are being offered and sold through Futures Investment Company ("
Selling Agent" or "FIC"), 5916 N. 300 West, Fremont, Indiana 46737, an NASD
registered broker dealer and other broker dealers selected by the General
Partner, on a best efforts basis. Ms. Pacult, the sole shareholder, director,
and officer of the General Partner and her husband, Mr. Michael Pacult, are
the sole owners and are also registered representatives of FIC and they will
earn sales
21
<PAGE>
and trailing commissions as a result of the Units they sell and service. A
best efforts basis means there is no requirement that the General Partner or
any broker dealer (sometimes referred to as the underwriter) to purchase any
unsold Units, and no person or entity, including the General Partner and the
broker dealer have any obligation, currently or are expected at any time in
the future, to purchase any unsold Units. In addition, the General Partner
may, in its sole discretion, terminate this offering of Units at anytime.
There will be a selling commission of six percent (6%) paid to the broker
dealers selected, from time to time, to sell Units. FIC, the broker dealer,
is an Illinois corporation which was incorporated on December 6, 1983. Its
registration as a fully disclosed broker dealer with the NASD became effective
on July 28, 1997. The principal business functions of the broker dealer are
currently the offering and trading of securities and commodities as a CFTC
registered introducing broker. It is contemplated that the broker dealer will
participate in the offering of other commodity pools sponsored by the General
Partner or other persons or entities in competition with the Partnership.
LEGAL MATTERS
LITIGATION AND CLAIMS
There have been no material administrative, civil or criminal actions against
the General Partner (who is the Commodity Pool Operator), the principal of the
General Partner, Ms. Pacult, the Commodity Trading Advisor, the Futures
Commission Merchant, the Introducing Broker and Selling Agent, or any
principal or any Affiliate of any of them, pending, on appeal, or concluded,
threatened or otherwise known to them, within the five (5) years preceding the
date of the Prospectus.
LEGAL OPINION
The Scott Law Firm, P.A., 5121 Sarazen Drive, Hollywood, FL 33021, serves as
general counsel to the Partnership and the General Partner in regard to the
offering of Units and the preparation of the Prospectus, this Amendment, the
legality of the Units offered, and the classification of the Partnership as a
partnership for tax purposes. In addition, the Firm will advise the
Partnership and its General Partner, from time to time, in regard to the
maintenance of the tax status of the Partnership and the legality of
subsequent offers, if any, of sale of Units to and transfers by investors.
The General Partner has granted the right to the Law Firm to employ other law
firms to assist in specific matters which may now, or in the future, relate to
the sale of Units or the operation of the Partnership.
The Scott Law Firm, P.A. will not provide legal advice to any potential
investors or any Partners, other than the General Partner, in regard to this
offering. All parties other than the General Partner should seek investment,
legal, and tax advice from counsel of their choice.
EXPERTS
The financial Statements of the Partnership as of December 31, 1996 and
December 31, 1997 and the financial statements of the General Partner as of
December 31, 1996 included in this Supplement have been audited by Frank L.
Sassetti, & Co., 6611 West North Avenue, Oak Park, IL 60302, as indicated in
their reports included with each such statement. Such financial statements
have been included herein and in any filings to the SEC, CFTC, NFA, and
selected state administrators, relying upon the authority of Frank L.
Sassetti, & Co., as experts in accounting and auditing, in giving said
respective reports. Durland & Company, P.A., Certified Public Accountants,
340 Royal Palm Way, Suite 201, Palm Beach, FL 33480, were responsible for the
audit of the Partnership for the year ended December 31, 1997. The accountant
who established and maintains the original books and records for the
Partnership and handles the journal entries, prepares the monthly and annual
statements of account and financial statements, and prepares the Partnership
K-1s, is Mr. James Hepner, certified public accountant, 1824 N. Normandy,
Chicago, IL 60635. The General Partner will prepare and file the Federal and
applicable state tax returns for the Partnership. The General Partner is
required by CFTC rules and regulations to send monthly, unaudited, and annual
statements of account and financial statements, audited by an independent
certified public accountant, for the Partnership to each Partner. The
unaudited monthly statements will be sent as soon as practicable after the end
of each month and the audited annual financial statements will be sent within
90 days after the end of each calendar year.
ADDITIONAL INFORMATION
The Partnership, by its General Partner, has filed a Registration Statement on
Form S-1 and Post Effective Amendments to its Registration Statement with the
Securities and Exchange Commission with respect to the issuance and sale of
the
22
<PAGE>
limited partnership interests (the "Units") under the Securities Act of 1933.
The Prospectus and this Amendment do not contain all of the information set
forth in the Form S-1 filing, as amended, and reference is made to said Form
S-1, all amendments, and the Exhibits thereto (for example, the Selling
Agreement and the Customer Agreement). The description contained in the
Prospectus and this Supplement to the exhibits to the Registration Statement
are summaries. For further information regarding the Partnership and the
Units offered, the Prospectus, this Supplement, including the Exhibits and
other documents filed and periodic reports, may be inspected, without charge,
and copied at the public reference facilities of the Securities and Exchange
Commission at 450 Fifth Street, NW, Washington, D.C. 20549 and at its
Northeast Regional Office, 7 World Trade Center, Suite 1300, New York, New
York 10048; and Midwest Regional Office, Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and copies of all or any part of
this filing can be obtained by mail from the Securities and Exchange
Commission, at such offices, upon payment of the prescribed rates. This
document and other electronic filings made through the Electronic Data
Gathering, Analysis, and Retrieval (EDGAR) system are publicly available
through the Commission's Web site (http://www.sec.gov).
In addition, the books and records for the Partnership are maintained for six
years at 5916 N. 300 West, Fremont, Indiana 46737 with a duplicate set
maintained at the offices of Mr. James Hepner, Certified Public Accountant, at
1824 N. Normandy, Chicago, IL 60635, (312) 804-0074. Prospective investors
are invited to review any materials available to the General Partner relating
to the Partnership; the operations of the Partnership; this offering; the
commodity experience and trading history of the CTA; the General Partner and
the commodity brokers and their respective officers, directors and affiliates;
the advisory agreements between the Partnership and the CTA; the Customer
Agreements between the Partnership and the Commodity Brokers for the
Partnership; the Disclosure Documents of the CTA; the forms filed with the NFA
for any registered entity or person related to the Partnership; and any other
matters relating to this offering, the operation of the Partnership, or the
laws applicable to the offering or the Partnership. The officer and staff of
the General Partner will answer all reasonable inquiries from prospective
investors relating thereto. All such materials will be made available at any
mutually convenient location at any reasonable hour after reasonable prior
notice. The General Partner will afford prospective investors the opportunity
to obtain any additional information necessary to verify the accuracy of any
representations or information set forth in the Prospectus, this Supplement or
any exhibits attached thereto to the extent that the Partnership or the
General Partner possess such information or can acquire it without
unreasonable effort or expense. Such review is limited only by the
proprietary and confidential nature of the trading systems to be utilized by
the CTA and by the confidentiality of certain personal information relating to
investors.
[The balance of this page has been intentionally left blank]
23
<PAGE>
*******************************************************************************
FREMONT FUND, LIMITED PARTNERSHIP
(An Indiana Limited Partnership)
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
(With Auditors' Report Thereon)
<PAGE>
GENERAL PARTNER:
Pacult Asset Management, Inc.
2990 West 120
Fremont, Indiana 46737
<PAGE>
FREMONT FUND, LIMITED PARTNERSHIP
(An Indiana Limited Partnership)
YEARS ENDED DECEMBER 31, 1997 AND 1996
TABLE OF CONTENTS
Page
Independent Auditors' Report F-1
Financial Statements -
Balance Sheet F-2
Statement of Operations F-3
Statement of Partners' Equity F-4
Statement of Cash Flows F-5
Notes to Financial Statements F-6 - F-10
<PAGE>
Frank L. Sassetti & Co.
Certified Public Accountants
To The Partners
Fremont Fund, Limited Partnership
Fremont, Indiana
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying balance sheets of FREMONT FUND, LIMITED
PARTNERSHIP as of December 31, 1997 and 1996, and the related statements of
operations, partners' equity and cash flows for the years then 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 audits.
We conducted our audits 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 misstatement. 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 audits 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 FREMONT FUND,
LIMITED PARTNERSHIP as of December 31, 1997 and 1996, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
Accountants: Frank L. Sassetti & Co.
Certified Public Accountants
Date: June 8, 1998 By: s/Frank L. Sassetti & Co.
Frank L. Sassetti & Co.
Certified Public Accountants
F-1
<PAGE>
FREMONT FUND, LIMITED PARTNERSHIP
(An Indiana Limited Partnership)
BALANCE SHEET
DECEMBER 31, 1997 AND 1996
ASSETS
1997 1996
Cash (Note 7) $ 36,029 $161,388
United States Treasury Obligations (Note 6) 833,160 362,652
Accrued interest receivable 8,754 2,379
Equity in Commodity Futures Trading Accounts -
Cash (Note 6) 116,594 276,415
Net unrealized gain (loss) on open
commodity futures contracts (Note 8) (2,880) 17,889
Organization costs, net of amortization (Note 1) 915 2,135
$992,572 $822,858
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES
Accrued commissions payable $ 12,666 $ 14,062
Accrued management fees payable 6,544 1,834
Accrued incentive fees payable 1,716
Accrued accounting fees payable 2,023 734
Accrued auditing fees payable 3,500
Due to general partner 1,661 10,860
Partner redemptions payable 11,922
Total Liabilities 38,316 29,206
PARTNERS' CAPITAL
Limited partners - (1,207.47 units and
876.34 units in 1997 and 1996, respectively) 932,082 768,498
General partner - (25 units) 22,174 25,154
Total Partners' Capital 954,256 793,652
$992,572 $822,858
The accompanying notes are an integral part
of the financial statements.
F-2
<PAGE>
FREMONT FUND, LIMITED PARTNERSHIP
(An Indiana Limited Partnership)
STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
1997 1996
REVENUES
Realized loss from trading on futures $ (1,667) $ (57)
Realized gain from trading options 24,413
Realized gain on exchange rate fluctuation 335 28
Changes in unrealized gains on open commodity
futures contracts (20,769) 17,861
Interest income 49,620 6,259
Redemption penalty income 236
Total Revenues 52,168 24,091
EXPENSES
Commissions 112,058 8,542
Management fees 57,264 4,492
Incentive fees 1,717
Professional accounting and legal fees 27,137 1,499
Other operating and administrative expenses 1,382 637
Amortization of organization costs 1,220 305
Total Expenses 199,061 17,192
NET INCOME (LOSS) $(146,893) $ 6,899
NET INCOME (LOSS) -
Limited partnership unit $ (119.19) $ 7.65
General partnership unit $ (119.19) $ 7.65
The accompanying notes are an integral part
of the financial statements.
F-3
<PAGE>
FREMONT FUND, LIMITED PARTNERSHIP
(An Indiana Limited Partnership)
STATEMENT OF PARTNERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
Limited General Total
Partners Partners Partners' Equity
Amount Units Amount Units Amount Units
Balance -
December 31, 1995 $ 963 1 $ 963 1 $ 1,926 2
Additions of
899.34 units 760,827 875 24,000 24 784,827 899
Net income 6,708 191 6,899
Balance -
December 31, 1996 768,498 876 25,154 25 793,652 901
Additions of 362 units 331,221 362 331,221 362
Withdrawals of
31 units (23,724) (31) (23,724) (31)
Net loss (143,913) (2,980) (146,893)
Balance -
December 31, 1997 $932,082 1,207 $22,174 25 $954,256 1,232
Value per unit at December 31, 1997 $774.26
Total partnership units at
December 31, 1997 1,232.47
Value per unit at December 31, 1996 $880.53
Total partnership units at
December 31, 1996 901.34
The accompanying notes are an integral part
of the financial statements.
F-4
<PAGE>
FREMONT FUND, LIMITED PARTNERSHIP
(An Indiana Limited Partnership)
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(146,893) $ 6,899
Adjustments to reconcile net income to
net cash provided by operating
activities -
Amortization of organization costs 1,220 305
Changes in operating assets and
liabilities -
(Increase) decrease in Equity in
Commodity Future Trading Accounts 180,590 (294,304)
Increase in accrued interest receivable (6,375) (2,379)
Increase in U. S. Treasury Obligations (470,508) (362,652)
Increase (decrease) in accrued
commissions payable (1,396) 14,062
Increase in management and incentive
fees payable 2,994 3,550
Increase in accounting fees payable 1,289 734
Increase in auditing fees payable 3,500
Increase in due to partners 2,723 10,860
Net Cash Used in
Operating Activities (432,856) (622,925)
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in organization costs (2,440)
CASH FLOWS FROM FINANCING ACTIVITIES
Gross proceeds from sale of units 352,363 830,327
Syndication and registration costs (21,142) (45,500)
Partner redemptions (23,724)
Net Cash Provided by
Financing Activities 307,497 784,827
NET INCREASE (DECREASE) IN CASH (125,359) 159,462
CASH -
Beginning of period 161,388 1,926
End of period $ 36,029 $ 161,388
The accompanying notes are an integral part
of the financial statements.
F-5
<PAGE>
FREMONT FUND, LIMITED PARTNERSHIP
(An Indiana Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Fremont Fund, Limited Partnership (the Fund) was formed January 12, 1995.
The Fund is engaged in speculative trading of futures contracts in
commodities. Pacult Asset Management, Inc. is the General Partner and the
commodity pool operator (CPO) of Fremont Fund, Limited Partnership. The
commodity trading advisor (CTA) is Michael J. Frischmeyer, who has the
authority to trade so much of the Fund's equity as is allocated to him by the
General Partner.
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.
Organizational Costs - Organizational costs are capitalized and amortized
over twenty-four months on a straight line method starting when operations
began, payable from profits or capital subject to a 2% annual capital
limitation. All organizational costs paid to date have been capitalized.
Amortization expense of $1,220 and $305 was recorded for the year ended
December 31, 1997 and 1996, respectively.
Registration Costs - Costs incurred for the initial registration with the
Securities and Exchange Commission, National Association of Securities
Dealers, Inc., 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. 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 accompanying 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 closing
quotations.
F-6
<PAGE>
FREMONT FUND, LIMITED PARTNERSHIP
(An Indiana Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
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.
Statement of Cash Flows - Net cash provided by operating activities includes
no cash payments for interest or income taxes for the years ended December
31, 1997 and 1996 since the Fund has no debt nor pays federal income taxes.
For purposes of the Statement of Cash Flows, the Fund considers only cash and
money market funds to be cash equivalents.
2. 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 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.
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.
F-7
<PAGE>
FREMONT FUND, LIMITED PARTNERSHIP
(An Indiana Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
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 Partner.
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
Advisor 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 six months
after the commencement of trading. A Limited Partner may withdraw any part
or all of his units from the Partnership at the Net Asset Value per Unit as
of the last day of any month on ten days prior written notice to the General
Partner. A redemption fee payable to the Partnership of a percentage of the
value of the redemption request bears the following schedule.
* 4% if such request is received prior to the nineteenth day of the
twelfth month after the commencement of trading.
* 3% if such request is received during the next seven to twelve months.
* 2% if such request is received during the next thirteen to eighteen
months.
* 1% if such request is received during the next nineteen to twenty-four
months.
* 0% thereafter.
F-8
<PAGE>
FREMONT FUND, LIMITED PARTNERSHIP
(An Indiana Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
4. FEES
The Fund is charged the following fees on a monthly basis since the
commencement of trading on November 14, 1996.
* A management fee of 4% (annual rate) of the Fund's net assets allocated
to the CTA to trade will be paid to the CTA and 2% of equity to the
Fund's General Partner.
* An incentive fee of 15% of "new trading profits" will be paid to the
CTA. "New trading profits" includes all income earned by the 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.
* The Fund will pay fixed commissions of 12% (annual rate) of net assets,
payable monthly, to the Introducing Broker affiliated with the General
Partner. 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.
5. REALIZED GAIN ON EXCHANGE RATE FLUCTUATIONS
The Fund is investing in certain foreign currency futures contracts. The
difference in the exchange rates from the trade date to the end of the fiscal
year is being recorded as a realized gain or loss on exchange rate
fluctuation.
6. PLEDGED ASSETS
The U. S. Treasury Obligations and cash in trading accounts are pledged as
collateral for commodities trading on margin.
F-9
<PAGE>
FREMONT FUND, LIMITED PARTNERSHIP
(An Indiana Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997 AND 1996
7. 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.
8. 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 a gross contract value of
$272,220 on long positions at December 31, 1997 and $3,891,594 on long
positions and $180,775 on short positions at December 31, 1996.
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 (loss) on open commodity future contracts at December 31,
1997 and 1996 was $(2,880) and $17,889, respectively.
F-10
<PAGE>
******************************************************************************
PACULT ASSET MANAGEMENT, INC.
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996 AND 1995
<PAGE>
PACULT ASSET MANAGEMENT, INC.
YEARS ENDED DECEMBER 31, 1996 AND 1995
TABLE OF CONTENTS
Page
Independent Auditors' Report 1
Financial Statements -
Balance Sheet 2
Statement of Income and Retained Earnings 3
Statement of Cash Flows 4
Notes to Financial Statements 5 - 6
<PAGE>
Frank L. Sassetti & Co.
Certified Public Accountants
To The Shareholders
Pacult Asset Management, Inc.
Fremont, Indiana
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying balance sheets of PACULT ASSET MANAGEMENT,
INC. as of December 31, 1996 and 1995, and the related statements of income
and retained earnings and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits 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 misstatement. 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 audits 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 PACULT ASSET MANAGEMENT,
INC. as of December 31, 1996 and 1995, and the results of its operations and
its cash flows for the years then ended, in conformity with generally
accepted accounting principles.
Frank L. Sassetti & Co.
February 19, 1996
Oak Park, Illinois
1
<PAGE>
PACULT ASSET MANAGEMENT, INC.
BALANCE SHEET
DECEMBER 31, 1996 AND 1995
ASSETS
1996 1995
CURRENT ASSETS
Cash $ 60,196 $ 62,445
Due from Fremont Fund (Note 2) 10,860 34,204
-------- --------
71,056 96,649
Investments (Note 3) 26,410 1,000
-------- --------
$ 97,466 $ 97,649
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES
Current Liabilities
Accrued interest payable $ 6,500 $ 500
Long-Term Debt (Note 4) 100,000 100,000
Stockholder's Equity
Capital stock (common 1,500 shares
authorized, no par value; 1,000
issued and outstanding) 1,000 1,000
Accumulated deficit (10,034) (3,351)
--------- ---------
Total Stockholder's Equity (9,034) (2,351)
$ 97,466 $ 97,649
The accompanying notes are an integral part
of the financial statements
2
<PAGE>
PACULT ASSET MANAGEMENT, INC.
STATEMENT OF INCOME AND RETAINED EARNINGS
DECEMBER 31, 1996 AND 1995
1996 1995
----------- -----------
REVENUES $1,645 $________
EXPENSES (Note 4)
Registration and dues 670
Professional accounting, legal and
audit fees 858 2,199
Licenses and fees 1,154 160
Other administrative expenses 226
Interest expense 6,500
-------- --------
Total Expenses 8,738 3,029
NET INCOME (LOSS) BEFORE EQUITY
IN LIMITED PARTNERSHIP (7,093)
EQUITY IN LIMITED PARTNERHSIP (NOTE 3) 410
-------- --------
NET INCOME (LOSS) (6,683) (3,029)
ACCUMULATED DEFICIT
Beginning of period (3,351) (322)
End of period $(10,034) $(3,351)
The accompanying notes are an integral part
of the financial statements
3
<PAGE>
PACULT ASSET MANAGEMENT, INC.
STATEMENT OF CASH FLOWS
DECEMBER 31, 1996 AND 1995
1996 1995
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (6,683) $ (3,029)
Adjustments to reconcile net (loss)
to net cash used in operating
activities -
Equity in limited partnership (410)
Changes in operating assets and
liabilities -
Increase in accrued interest
payable 6,500
-------- --------
Net Cash (Used In)
Operating Activities (593) (3,029)
CASH FLOWS FROM INVESTING ACTIVITIES
(Increase) decrease in due from
Fremont Fund 23,344 (28,204)
Purchase of investment interest in
limited partnership 25,000 (1,000)
-------- --------
Net Cash (Used In)
Investing Activities (1,656) (29,204)
CASH FLOWS FROM FINANCING ACTIVITIES
(Decrease) increase in advances
from stockholder (10,000)
Loan proceeds from stockholder ________ 100,000
Net Cash Provided by
Financing Activities ________ 90,000
-------- --------
NET INCREASE (DECREASE) IN CASH (2,249) 57,767
CASH -
Beginning of period 62,445 4,678
End of period $60,196 $ 62,445
The accompanying notes are an integral part
of the financial statements
4
<PAGE>
PACULT ASSET MANAGEMENT, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Pacult Asset Management, Inc. (the Company) was formed primarily to act as
general partner of the Fremont Fund, Limited Partnership (the Fund).
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 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.
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.
Statement of Cash Flows - Net cash provided by operating activities includes
no cash payment for interest nor income taxes for the years ended December 31,
1996 and 1995.
2. CORPORATE AFFILIATION
The Company's sole shareholder is also a joint owner of Futures Investment
Company. In addition, the Company is the general partner of Fremont Fund, a
limited partnership. During 1994, Futures Investment Company advanced $9,000
to the Company, and Ms. Shira Pacult, sole principal to the Company, advanced
$18,000 to the Company. These advances were not collateralized, bore no
interest and were repaid in 1995.
5
<PAGE>
PACULT ASSET MANAGEMENT, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
2. CORPORATE AFFILIATION - CONTINUED
Also, the Company, in its capacity as general partner, had been advancing the
organization, registration and syndication costs of Fremont Fund. In
addition, the Company receives a management fee of 2% of the equity of the
Fund. As of December 31, 1996, the Fund owed the Company $10,860 in advanced
costs of the Fund and unpaid management fees. These funds are not
collateralized and bear no interest.
3. INVESTMENTS
During 1995, the Company purchased an interest as the general partner in a
limited partnership with an initial investment of $1,000. During 1996, the
Company purchased one limited partner unit of the limited partnership for
$1,000 and made an additional $24,000 investment in the partnership as general
partner. The investments are being accounted for under the equity method and
earned $410 in equity during the year.
4. LONG-TERM DEBT
The Company and its sole shareholder signed a subordinated loan agreement on
April 26, 1995, whereby the Company can borrow up to $265,000 from the
shareholder. The loan agreement bears interest at the rate of 6% per annum
and is payable on or before January 12, 2017. On November 28, 1995, the
Company borrowed $100,000 against this commitment, which will mature January
12, 2017, in part to fund the expenses of the Company and to advance proceeds
to the limited partnership.
6
<PAGE>
*******************************************************************************
PACULT ASSET MANAGEMENT
FREMONT, INDIANA
AUDITED FINANCIAL STATEMENTS
DECEMBER 31, 1997
<PAGE>
Pacult Asset Management, Inc.
Table of Contents
Independent Auditors' Report...........................................F-2
Balance Sheet..........................................................F-3
Statement of Operations................................................F-4
Statement of Stockholder's Equity......................................F-5
Statement of Cash Flows................................................F-6
Notes to Financial Statements..........................................F-7
F-1
<PAGE>
DURLAND & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
A PROFESSIONAL ASSOCIATION
340 ROYAL PALM WAY, SUITE 201
PALM BEACH, FL 33480
(561) 822-9995 * FAX 822-9942
To the Shareholders
Pacult Asset Management, Inc.
Fremont, Indiana
INDEPENDENT AUDITORS'REPORT
We have audited the accompanying balance sheet of Pacult Asset Management,
Inc., (a Delaware Corporation) as of December 31, 1997, and the related
statement of operations, stockholder's equity, and cash flows for the year
then ended. These financial statements are the responsibility of the
Corporation'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
from material misstatement 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 provides 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 Pacult Asset Management,
Inc. as of December 31, 1997, and the results of its operations and its cash
flows for the year then ended, in conformity with generally accepted
accounting principles.
s/ Durland & Company, CPAs, P.A.
Durland & Company, CPAs, P.A.
March 26, 1998 Palm Beach, Florida
F-2
<PAGE>
PACULT ASSET MANAGEMENT, INC.
Balance Sheet
December 31, 1997
ASSETS 1997
Current Assets
Cash $ 88,763
Accrued interest receivable 215
Due from Fremont Fund 3,778
Total current assets 92,756
Investments in Freemont Fund, Limited Partnership 23,183
Total investments 23,183
Total Assets 115,939
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES
Current Liabilities
Accrued interest payable $ 18,500
Subordinated long term debt 100,000
Total Liabilities 118,500
STOCKHOLDER'S EQUITY
Common stock, no par value (1,500 shares authorized,
1,000 shares issued and outstanding) 1,000
Accumulated deficit (3,561)
Total Stockholder's Equity (2,561)
Total Liabilities and Stockholder's Equity $ 115,939
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
PACULT ASSET MANAGEMENT, INC.
Statement of Operations
Year ended December 31, 1997
1997
Revenues $ 24,050
Expenses
Registration and dues 685
Professional accounting, legal and audit fees 1,600
Licenses, fees and taxes 65
Interest expenses 12,000
Total expenses 14,350
Net income before loss of equity in limited partnership 9,700
Loss of equity in limited partnership (3,227)
Net income $ 6,473
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
PACULT ASSET MANAGEMENT, INC.
Statement of Stockholder's Equity
Year ended December 31, 1997
Total
Number of No Par Value Accumulated Stockholder's
Shares Common Stock Deficit Equity
BEGINNING BALANCE,
January 1, 1997 1,000 $ 1,000 $ (10,034) (9,034)
Net profit 0 0 6,473 6,473
BALANCE,
December 31, 1997 1,000 $ 1,000 $ (3,561) $ (2,561)
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE>
PACULT ASSET MANAGEMENT, INC.
Statement of Cash Flows
Year ended December 31, 1997
1997
Cash Flows from Operating Activities
Net income $ 6,473
Adjustment to reconcile net to net cash used in operating
activities - Loss of equity in limited partnership 3,227
Changes in operating assets and liabilities
(Increase) in accrued interest receivable (215)
Decrease in due from Fremont Fund 7,082
Increase in accnied interest payable 12,000
Net cash (used in) operating activities 28,567
Cash Flows from 1nvesting Activities
Net cash (used in) investing activities 0
Cash Flows from financing activities
Net cash provided by financing activities 0
Net increase in cash 28,567
Cash
Beginning of period 60,196
End of period 88,763
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE>
PACULT ASSET MANAGEMENT, INC.
Notes to Financial Statements
December 31, 1997
(1) Nature of Business and Significant Accounting Policies
THE COMPANY. Pacult Asset Management, Inc. (the Company) was formed on
October 13, 1994 under the laws of the State of Delaware to act as general
partner of the Fremont Fund, Limited Partnership (the Fund). The Fund is a
publicly offered commodity pool. It is currently operating, but sales of
Units were suspended in March, 1997. Sales of the Fund are expected to resume
during 1998. In 1998, the Company became the general partner of Auburn Fund,
Limited Partnership. Units in Auburn Fund are currently being offered as a
private placement.
The responsibilities of the general partner, in addition to selection of the
commodity trading advisors, 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 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.
a) 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 effect the disclosure of contingent assets and
liabilities at the date of the financial statements, and effect the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from these estimates.
b) STATEMENT OF CASH FLOWS. There have not been cash payments for interest
for the year ended December 31, 1997. The Company has elected to be treated
as an S- Corporation for Federal and State tax purposes, and thus there is no
provision for income taxes or benefits at the corporation level.
(2) CORPORATE AFFILIATION. The Company's sole shareholder is also owner of
Ashley Capital Management, Inc., a Delaware corporation, formed to serve as
the general partner of Atlas Futures Fund, Limited Partnership, which is to
be offered as a public commodity pool. The sole shareholder is a joint owner
of Futures Investment Company, an Illinois corporation, formed on December 6,
1983,( formerly CDTA, Inc.). Futures Investment Company serves as an
introducing broker (commodities) to members of the public and, subsequently,
for the commodity pools formed under the direction of Ms. Shira Del Pacult,
the principal of the Company. In addition, the Company is the general partner
of Fremont Fund, an Indiana limited partnership and Auburn Fund, a Delaware
limited partnership, as discussed in note (1) above.
(3) INVESTMENTS. During 1995, the Company purchased its interest in the Fund
with an initial investment of S 1,000. During 1996, the Company purchased one
limited partner unit of the limited partnership for $ 1,000 arid made an
additional $24,000 investment in the partnership as its general partner,
These investments are being accounted for under the equity method. The
Company reported its share of the Fund equity losses of $3,227 during the
year.
(4) LONG-TERM DEBT. The Company and its sole shareholder signed a
subordinated loan agreement on April 26, 1995, whereby the Company could
borrow up to $265,000 from the shareholder until April 25, 1997. The
underlying promissory note bears interest at tile rate of 12% per annum and
is payable on or before January 12, 2017. The purpose of the loan arrangement
was, in part, to fund the expenses of the Company and to advance proceeds to
the limited partnership, and also to fulfill its obligation under applicable
securities and tax laws requiring general partner capital.
F-6
<PAGE>
*******************************************************************************
APPENDIX I
COMMODITY TERMS AND DEFINITIONS
Identification of the parties and knowledge of various terms and concepts
relating to trading in futures and forward contracts and this offering are
necessary for a potential investor to identify the risks of investment in the
Fund. Please refer to the Prospectus dated August 12, 1996, for a complete
glossary. Following are definitions which supersede the definitions of those
terms in the Prospectus:
"Futures Investment Company". The selling agent (the "Selling Agent") and
introducing broker (the "IB"), 5916 N. 300 West, Fremont, IN 46737 which will
introduce the trades to the FCM for a fixed commission of 12% of equity on
deposit at the FCM allocated by the General Partner to trade. The principal
of the General Partner, Ms. Shira Del Pacult is also one of the principals of
the IB, with her husband.
"Selling Agent". The NASD member broker dealer, Futures Investment Company,
5916 N. 300 West, Fremont, IN 46737, selected by the General Partner to offer
the Units for sale. The General Partner and the Selling Agent may select
Additional Selling Agents to also offer Units for sale. See Plan of
Distribution in the Prospectus and this Amendment.
[The balance of this page has been intentionally left blank]
1
<PAGE>
*******************************************************************************
APPENDIX II
Performance Record of the Fund
Trader: Michael J. Frischmeyer, CTA
[To keep the rows of the following table from exceding 132 characters,
it has been broken into two tables where the first table contains columns
1-12 and the second contains columns 1-7 and 13-15.]
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
Gross Net Change In Change Operation
Realized Realized Unrealized In Mgt. and
Period Beginning Capital Capital Trading Broker Trading Trading Net Accrued Incentive Net Ending
End Capital Adds W/Ds Profits Comm. Profits Profits Int. Comm. Fees Performance Capital
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1996
Init. 0 610,968 0 0 0 0 0 0 0 0 0 610,968
Nov. 610,968 93,998 0 0 3,039 -3,039 0 7,965 0 58,843 -53,917 651,049
Dec. 651,049 127,360 0 -29 5,502 -5,531 17,861 4,362 0 1,449 15,242 793,651
1996 Performance -6.69%
1997
Jan. 793,651 58,220 0 -18,666 6,504 -25,170 9,481 7,494 0 6,393 -14,588 837,283
Feb. 837,283 164,226 0 24,690 7,557 17,133 -17,870 13,198 0 6,084 6,377 1,007,886
Mar. 1,007,886 44,189 0 10,964 8,124 2,840 -11,728 6,511 0 6,791 -9,168 1,042,907
Apr. 1,042,907 44,831 0 -17,532 9,708 -27,240 5,504 6,466 0 6,974 -22,244 1,065,494
May 1,065,494 0 0 11,527 9,848 1,679 -3,676 4,548 0 9,627 -7,076 1,058,418
Jun. 1,058,418 0 0 2,660 10,141 -7,481 6,553 4,565 0 7,730 -4,093 1,054,325
Jul. 1,054,325 0 0 -18,832 10,380 -29,212 25,576 4,686 0 8,884 -6,834 1,047,491
Aug. 1,047,491 0 0 7,900 10,286 -2,386 -20,248 4,527 0 8,825 -26,932 1,020,559
Sep. 1,020,559 0 0 4,051 9,921 -5,870 3,258 4,386 0 7,211 -5,437 1,015,122
Oct. 1,015,122 0 0 23,014 9,951 -32,965 27,768 4,523 0 7,082 -7,756 1,007,366
Nov. 1,007,366 0 -11,891 42,303 9,852 32,451 -40,647 4,228 0 6,968 -10,936 984,629
Dec. 984,629 0 -11,922 -3,246 9,779 -13,025 -5,465 4,470 0 6,972 -20,992 951,715
1997 Performance -12.21
1998
Jan. 951,715 0 0 -14,099 9,394 -23,493 6,544 9,668 0 6,777 -14,058 937,657
Feb. 937,657 0 0 10,289 9,176 1,113 -1,161 -1,836 0 6,704 -8,588 929,069
Mar. 929,069 0 -77,251 -1,164 9,163 10,327 20,025 3,961 0 6,766 6,893 858,711
Apr. 858,711 0 -84,073 -5,762 9,199 -14,961 -13,528 5,301 0 6,514 -29,702 744,936
1998 Performance Y.T.D. -5.06%
</TABLE>
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5) (6) (7) (13) (14) (15)
Gross Net Change In
Realized Realized Unrealized Total NAV
Period Beginning Capital Capital Trading Broker Trading Trading Outstanding Per %
End Capital Adds W/Ds Profits Comm. Profits Profits Units Unit Chg.
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1996
Init. 0 610,968 0 0 0 0 0 940
Nov. 610,968 93,998 0 0 3,039 -3,039 0 759.64 857 -8.83%
Dec. 651,049 127,360 0 -29 5,502 -5,531 17,861 904.85 877 2.34%
1996 Performance Y.T.D. -6.69%
1997
Jan. 793,651 58,220 0 -18,666 6,504 -25,170 9,481 972.00 861 -1.79%
Feb. 837,283 164,226 0 24,690 7,557 17,133 -17,870 1,161.77 868 0.71%
Mar. 1,007,886 44,189 0 10,964 8,124 2,840 -11,728 1,213.17 860 -0.91%
Apr. 1,042,907 44,831 0 -17,532 9,708 -27,240 5,504 1,266.46 841 -2.13%
May 1,065,494 0 0 11,527 9,848 1,679 -3,676 1,266.46 836 -0.66%
Jun. 1,058,418 0 0 2,660 10,141 -7,481 6,553 1,266.46 832 -0.39%
Jul. 1,054,325 0 0 -18,832 10,380 -29,212 25,576 1,266.46 827 -0.65%
Aug. 1,047,491 0 0 7,900 10,286 -2,386 -20,248 1,266.46 806 -2.57%
Sep. 1,020,559 0 0 4,051 9,921 -5,870 3,258 1,266.46 802 -0.53%
Oct. 1,015,122 0 0 23,014 9,951 -32,965 27,768 1,266.46 795 -0.76%
Nov. 1,007,366 0 -11,891 42,303 9,852 32,451 -40,647 1251.46 787 -1.09%
Dec. 984,629 0 -11,922 -3,246 9,779 -13,025 -5,465 1,235.98 770 -2.13%
1997 Performance -12.21
1998
Jan. 951,715 0 0 -14,099 9,394 -23,493 6,544 1,235.98 759 -1.48%
Feb. 937,657 0 0 10,289 9,176 1,113 -1,161 1,235.98 752 -0.92%
Mar. 929,069 0 -77,251 -1,164 9,163 10,327 20,025 1,133.96 757 0.74%
Apr. 858,711 0 -84,073 -5,762 9,199 -14,961 -13,528 1,018.96 731 -3.46%
1998 Performance Y.T.D. -5.06%
</TABLE>
1
<PAGE>
*******************************************************************************
APPENDIX III
Supplemental Performance Information For Epic Trading
The trading system used was developed entirely by Bradley Jordan ("the
Advisor"). The Advisor thoroughly research the accuracy of the systems buy
and sell signals within his own personal trading account. Implemented in
January of 1997, the system encompassed one year of proprietary trading.
Third party records of these trades are available to clients upon request. All
trades in their entirety were executed with the Advisor fully exposed to real
profits, losses, and trading expenses. Please see "The Commodity Trading
Advisors - EPIC Trading" in the main body of this Supplement for the Business
Background of EPIC Trading and the Description of the Trading Program.
Proprietary Trading Account
This summary represents the Advisor's best effort to accurately represent the
past risk/reward characteristics of the trading system as they apply the
program offered. Performance is shown as a percent return and adjusted to
include the Advisor's 20% incentive fee on new trading profits and the
difference in commissions. The summary does not reflect the difference in
returns based upon the leverage of the accounts. The leverage ratio between
the proprietary account and an account of the system varies as much as 13 to
1. Therefore, an actual account of the trader who will only be trading one
contract would have experienced significantly lower returns than the
proprietary account. The following capsule performance summary does not
reflect rates of return for actual managed accounts. The following capsule
shows the past performance of the Advisor's Proprietary Trading Account since
the inception of trading (in January, 1997) through the close of trading
(December, 1997). PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE
RESULTS.
<TABLE>
Proprietary Trading Account - % Rate of Return
(Computed on a compounded monthly basis)*
<CAPTION>
MONTH 1998
<S> <C>
January 36.35
February 3.58
March 8.88
April 10.13
May (2.79)
June 18.11
July 13.66
August 5.79
September 1.23
October 3.34
November 6.81
December 4.01
Year 171.00
<FN>
Name of the Commodity Trading Advisor: EPIC Trading
Name of the Trader: Bradley Jordan
Largest Monthly Draw-Down**: 5-97 / 2.79%
Worst Peak-to-Valley Draw-Down***: 5-97 / 2.79% of net assets
* Rate of return is computed by dividing the net performance by the sum of
the beginning net asset value and net additions, capital withdrawals and
redemptions.
** "Draw-down" is defined by applicable CFTC regulations to mean losses
experienced by an account over the specified period.
*** Worst Peak-to-Valley Draw-Down means the greatest cumulative percentage
decline in month-end net asset value due to losses sustained by a pool,
account or trading program during any period in which the initial month-
end net asset value is not equaled or exceeded by a subsequent month-end
net asset value.
</TABLE>
1
<PAGE>
APPENDIX IV
Supplemental Performance Information For
Michael J. Frischmeyer
The following is a pro forma performance summary for Michael J. Frischmeyer
under the Fremont Fund Fee Schedule. Certain assumptions were made in the
compilation of the pro forma data, which are disclosed on page 8 of this
Appendix.
Please see "The Commodity Trading Advisors - Michael J. Frischmeyer" in the
main body of this Supplement for the Business Background of Mr. Frischmeyer
and the Description of the Trading Program.
Pro Forma Performance Record, ICL Managed Account Program under Fremont Fund
Fee Schedule
The following capsule shows the pro forma performance of Mr. Frischmeyer's
Managed Account Program, Iowa Commodities Fee Schedule from inception to the
current year-to-date (through April 30, 1998).
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
<TABLE>
Pro Forma Performance Record, ICL Managed Account Program
Percentage Rate of Return
(Computed on a compounded monthly basis)*
<S> <C> <C> <C> <C> <C>
1981 1982 1983 1984 1985 1986
(23.64) 4.15 104.70 192.45 (1.46) (32.06)
1987 1988 1989 1990 1991 1992
101.88 73.65 54.46 (5.98) (0.46) 25.07
Year-to-date
1993 1994 1995 1996 1997 1998
144.23 11.29 40.06 (17.29) (15.18) (5.69)
<FN>
Name of Commodity Trading Advisor: Michael J. Frischmeyer
Name of Trading Program: Managed Account Program, Iowa Commodities Fee
Schedule ("ICL Program")
Date Commodity Trading Advisor Began Trading Client Accounts: March 1, 1976
Date When Client Funds Began Being Traded Pursuant To The ICL Program:
January 1, 1981
Number of Accounts Directed Pursuant To The ICL Program: 61
Total Assets Under Management of Mr. Frischmeyer: $21,366,515
Total Assets Traded Pursuant To The ICL Program: $11,648,120
Largest Monthly Draw-Down**: 8-93/35.47% of client funds
Worst Peak-to-Valley Draw-Down***: 4-96 to 4-98/74.70% of net asset value
* Rate of Return is computed by dividing the net trading results by
beginning net asset value for the period.
** "Draw-down" is defined by applicable CFTC regulations to mean losses
experienced by an account over the specified period.
*** Worst Peak-to-Valley Draw-Down means the greatest cumulative percentage
decline in month-end net asset value due to losses sustained by a pool,
account or trading program during any period in which the initial month-
end net asset value is not equaled or exceeded by a subsequent month-end
net asset value.
</TABLE>
1
<PAGE>
[To keep the rows of the following tables from exceding 132 characters,
Column 'L' and its resulting value has been placed in brackets following
the 'Total's for each year.]
<TABLE>
Michael J. Frischmeyer SUPPLEMENTAL INFORMATION
ICL Managed Account Program PRO FORMA PERFORMANCE RECORD
Under Fremont Fund Fee Schedule
<CAPTION>
(A) (B) (C) (D) (E) (F) (G) (H) (I) (J) (K)
Pro Forma Pro Forma Pro Forma Pro Forma
Beg. Net Net Trading End. Net Rate of Accrual for Annual Int- Rate of Continuous
Month Assets Additions Withdrawals Results Assets Return 15% Fee erest 4% Return Value of
Investment
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1981 1,000
January 659,341 1,500 - (69,172) 591,669 -10.49% - 1,756 -10.22% 898
February 591,669 94,209 - 95,028 780,905 16.06% (3,878) 1,576 15.67% 1,038
March 780,905 27,000 - (70,742) 737,164 -9.06% 3,878 2,080 -8.30% 952
April 737,164 - (3,790) (170,055) 563,319 -23.07% - 1,964 -22.80% 735
May 563,319 - - 23,509 586,828 4.17% - 1,501 4.44% 768
June 586,828 - - 150,312 737,139 25.61% - 1,563 25.88% 966
July 737,139 - - 14,330 751,469 1.94% - 1,964 2.21% 988
August 751,469 - (75,011) 281,107 957,566 37.41% (38,147) 2,002 32.60% 1,310
September 957,566 - (8,100) (76,836) 872,630 -8.02% 11,525 2,551 -6.55% 1,224
October 872,630 7,129 - 183,371 1,063,130 21.01% (27,506) 2,325 18.13% 1,446
November 1,063,130 - (21,387) (394,134) 647,609 -37.07% 27,506 2,832 -34.22% 951
December 647,609 - - (129,411) 518,198 -19.98% - 1,725 -19.72% 764
--------- ---------- ----------
Totals 129,838 (108,287) (162,694)
[(L) Pro Forma Annual Rate of Return: -23.64%]
1982
January 518,198 3,447 - (2,449) 519,196 -0.47% - 1,380 -0.21% 762
February 519,196 - (29,817) (10,603) 478,776 -2.04% - 1,383 -1.78% 749
March 478,776 - (31,389) 201 447,588 0.04% - 1,275 0.31% 751
April 447,588 - (23,456) 61,520 485,652 13.74% - 1,192 14.01% 856
May 485,652 - - (57,224) 428,428 -11.78% - 1,294 -11.52% 757
June 428,428 - - 2,250 430,677 0.53% - 1,141 0.79% 763
July 430,677 527 - (51,961) 379,243 -12.06% - 1,147 -11.80% 673
August 379,243 - (851) (30,819) 347,573 -8.13% - 1,010 -7.86% 620
September 347,573 - - 65,014 412,587 18.71% - 926 18.97% 738
October 412,587 - (64,500) 57,058 405,145 13.83% - 1,099 14.10% 842
November 405,145 - (5,248) (28,490) 371,408 -7.03% - 1,079 -6.77% 785
December 371,408 - (3,785) 3,778 371,400 1.02% - 989 1.28% 795
--------- ---------- ----------
Totals 3,973 (159,045) 8,274
[(L) Pro Forma Annual Rate of Return: 4.15%]
1983
January 371,400 11,205 - 38,298 420,903 10.31% - 989 10.58% 879
February 420,903 7,725 - 50,535 479,164 12.01% - 1,121 12.27% 987
March 479,164 - (20,550) 206,178 664,792 43.03% - 1,276 43.30% 1,415
April 664,792 - (65,250) 61,858 661,400 9.30% (3,745) 1,771 9.01% 1,542
May 661,400 - - (81,132) 580,267 -12.27% 3,745 1,762 -11.43% 1,366
June 580,267 - (1,000) (87,886) 491,381 -15.15% - 1,546 -14.88% 1,163
July 491,381 - (296) 3,979 495,064 0.81% - 1,309 1.08% 1,175
August 495,064 6,454 - 105,230 606,747 21.26% - 1,319 21.52% 1,428
September 606,747 - - 3,160 609,907 0.52% - 1,616 0.79% 1,439
October 609,907 37,500 - (13,362) 634,045 -2.19% - 1,625 -1.92% 1,412
November 634,045 70,645 - 85,395 790,085 13.47% (6,053) 1,689 12.78% 1,592
December 790,085 - (54,796) 18,481 753,770 2.34% (2,772) 2,105 2.25% 1,628
--------- ---------- ----------
Totals 133,529 (141,892) 390,733
[(L) Pro Forma Annual Rate of Return: 104.70%]
1984
January 753,770 13,600 - 134,411 901,782 17.83% (20,162) 2,008 15.42% 1,879
February 901,782 1,747 - (28,961) 874,568 -3.21% 4,344 2,402 -2.46% 1,833
March 874,568 - (10,000) (63,809) 800,759 -7.30% 9,571 2,330 -5.94% 1,724
April 800,759 9,000 - 133,569 943,328 16.68% (20,035) 2,133 14.44% 1,973
May 943,328 - (17,000) (22,533) 903,795 -2.39% 3,380 2,513 -1.76% 1,938
June 903,795 10,000 - 266,174 1,179,969 29.45% (39,926) 2,408 25.30% 2,428
July 1,179,969 - (43,500) 850,133 1,986,602 72.05% (127,520) 3,143 61.51% 3,922
August 1,986,602 - (133,902) (198,201) 1,654,499 -9.98% 29,730 5,292 -8.21% 3,600
September 1,654,499 - (26,500) (85,190) 1,542,809 -5.15% 12,778 4,408 -4.11% 3,452
October 1,542,809 - (28,000) 103,821 1,618,630 6.73% (15,573) 4,110 5.99% 3,659
November 1,618,630 - (22,500) 549,515 2,145,644 33.95% (82,427) 4,312 29.12% 4,724
December 2,145,644 - (16,500) 12,812 2,141,956 0.60% (1,922) 5,716 0.77% 4,761
--------- ---------- ----------
Totals 34,347 (297,902) 1,651,741
[(L) Pro Forma Annual Rate of Return: 192.45%]
</TABLE>
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS
2
<PAGE>
<TABLE>
Michael J. Frischmeyer SUPPLEMENTAL INFORMATION
ICL Managed Account Program PRO FORMA PERFORMANCE RECORD
Under Fremont Fund Fee Schedule
<CAPTION>
(A) (B) (C) (D) (E) (F) (G) (H) (I) (J) (K)
Pro Forma Pro Forma Pro Forma Pro Forma
Beg. Net Net Trading End. Net Rate of Accrual for Annual Int- Rate of Continuous
Month Assets Additions Withdrawals Results Assets Return 15% Fee erest 4% Return Value of
Investment
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1985
January 2,141,956 - (57,738) (572,332) 1,511,887 -26.72% - 5,706 -26.45% 3,501
February 1,511,887 - (26,500) 543,943 2,029,330 35.98% - 4,028 36.24% 4,770
March 2,029,330 - (207,821) (583,498) 1,238,011 -28.75% - 5,406 -28.49% 3,411
April 1,238,011 - (8,000) (106,724) 1,123,287 -8.62% - 3,298 -8.35% 3,126
May 1,123,287 10,500 - 99,682 1,233,469 8.87% - 2,992 9.14% 3,412
June 1,233,469 - - (46,342) 1,187,127 -3.76% - 3,286 -3.49% 3,293
July 1,187,127 - (2,500) 104,887 1,289,514 8.84% - 3,163 9.10% 3,593
August 1,289,514 - (10,000) 369,258 1,648,772 28.64% - 3,435 28.90% 4,631
September 1,648,772 - (36,755) 82,811 1,694,828 5.02% - 4,392 5.29% 4,876
October 1,694,828 - (45,748) (187,184) 1,461,896 -11.04% - 4,515 -10.78% 4,351
November 1,461,896 - (7,000) (45,479) 1,409,417 -3.11% - 3,894 -2.84% 4,227
December 1,409,417 - (27,800) 151,157 1,532,774 10.72% - 3,755 10.99% 4,692
--------- ---------- ----------
Totals 10,500 (429,862) (189,820)
[(L) Pro Forma Annual Rate of Return: -1.46%]
1986
January 1,532,774 - (105,720) 222,569 1,649,624 14.52% (4,912) 4,083 14.47% 5,370
February 1,649,624 - (241,535) 480,081 1,888,170 29.10% (72,012) 4,395 25.00% 6,713
March 1,888,170 - (23,803) (645,257) 1,219,110 -34.17% 76,925 5,030 -29.83% 4,710
April 1,219,110 37,000 - 129,226 1,385,336 10.60% - 3,248 10.87% 5,222
May 1,385,336 - (1,400) (3,838) 1,380,099 -0.28% - 3,691 -0.01% 5,222
June 1,380,099 - (71,614) (147,292) 1,161,193 -10.67% - 3,677 -10.41% 4,678
July 1,161,193 - (25,219) 75,526 1,211,500 6.50% - 3,093 6.77% 4,995
August 1,211,500 - - (303,038) 908,462 -25.01% - 3,227 -24.75% 3,759
September 908,462 23,000 - (73,920) 857,542 -8.14% - 2,420 -7.87% 3,463
October 857,542 16,642 - (53,245) 820,939 -6.21% - 2,284 -5.94% 3,257
November 820,939 2,435 - (15,173) 808,202 -1.85% - 2,187 -1.58% 3,206
December 808,202 - (27,325) (6,766) 774,111 -0.84% - 2,153 -0.57% 3,187
--------- ---------- ----------
Totals 79,077 (496,615) (341,126)
[(L) Pro Forma Annual Rate of Return: -32.06%]
1987
January 774,111 11,477 (3,104) 205,251 987,734 26.51% - 2,062 26.78% 4,041
February 987,734 - (12,985) 40,861 1,015,611 4.14% - 2,631 4.40% 4,219
March 1,015,611 - (11,600) (75,510) 928,501 -7.43% - 2,706 -7.17% 3,916
April 928,501 - (40,000) (15,377) 873,124 -1.66% - 2,474 -1.39% 3,862
May 873,124 - - (116,930) 756,194 -13.39% - 2,326 -13.13% 3,355
June 756,194 2,035 - (40,527) 717,702 -5.36% - 2,015 -5.09% 3,184
July 717,702 - - (82,888) 634,814 -11.55% - 1,912 -11.28% 2,825
August 634,814 - - 96,481 731,295 15.20% - 1,691 15.46% 3,262
September 731,295 - (13,200) 244,210 962,305 33.39% - 1,948 33.66% 4,360
October 962,305 - (5,000) 17,979 975,284 1.87% - 2,564 2.13% 4,453
November 975,284 60,000 - 280,221 1,315,505 28.73% (3,424) 2,598 28.65% 5,729
December 1,315,505 - (5,000) 186,679 1,497,184 14.19% (28,002) 3,505 12.33% 6,435
--------- ---------- ----------
Totals 73,512 (90,889) 740,450
[(L) Pro Forma Annual Rate of Return: 101.88%]
1988
January 1,497,184 - (265,000) 204,320 1,436,504 13.65% (30,648) 3,988 11.87% 7,198
February 1,436,504 13,842 (22,100) (77,646) 1,350,600 -5.41% 11,647 3,827 -4.33% 6,887
March 1,350,600 19,000 (11,500) 339,964 1,698,064 25.17% (50,995) 3,598 21.66% 8,379
April 1,698,064 - (207,000) 137,327 1,628,391 8.09% (20,599) 4,524 7.14% 8,977
May 1,628,391 - (9,000) (44,018) 1,575,373 -2.70% 6,603 4,338 -2.03% 8,795
June 1,575,373 19,000 (54,105) (31,011) 1,509,257 -1.97% 4,652 4,197 -1.41% 8,671
July 1,509,257 - (12,000) 549,714 2,046,972 36.42% (82,457) 4,021 31.23% 11,378
August 2,046,972 20,000 - 465,539 2,532,510 22.74% (69,831) 5,453 19.60% 13,608
September 2,532,510 - (1,000) (146,591) 2,384,919 -5.79% 21,989 6,747 -4.65% 12,975
October 2,384,919 - (232,500) (428,451) 1,723,968 -17.96% - 6,353 -17.70% 10,679
November 1,723,968 20,000 - (68,491) 1,675,478 -3.97% - 4,593 -3.71% 10,283
December 1,675,478 10,000 - 140,761 1,826,239 8.40% - 4,463 8.67% 11,174
--------- ---------- ----------
Totals 101,842 (814,205) 1,041,419
[(L) Pro Forma Annual Rate of Return: 73.65%]
</TABLE>
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS
3
<PAGE>
<TABLE>
Michael J. Frischmeyer SUPPLEMENTAL INFORMATION
ICL Managed Account Program PRO FORMA PERFORMANCE RECORD
Under Fremont Fund Fee Schedule
<CAPTION>
(A) (B) (C) (D) (E) (F) (G) (H) (I) (J) (K)
Pro Forma Pro Forma Pro Forma Pro Forma
Beg. Net Net Trading End. Net Rate of Accrual for Annual Int- Rate of Continuous
Month Assets Additions Withdrawals Results Assets Return 15% Fee erest 4% Return Value of
Investment
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1989
January 1,826,239 279,080 - 17,053 2,122,372 0.93% - 4,865 1.20% 11,308
February 2,122,372 - - (111,670) 2,010,702 -5.26% - 5,654 -5.00% 10,743
March 2,010,702 - - 229,915 2,240,617 11.43% - 5,357 11.70% 12,000
April 2,240,617 - (12,000) 274,379 2,502,996 12.25% (8,025) 5,969 12.15% 13,459
May 2,502,996 - (5,000) 441,674 2,939,670 17.65% (66,251) 6,668 15.27% 15,514
June 2,939,670 - (7,257) (440,179) 2,492,234 -14.97% 66,027 7,831 -12.46% 13,580
July 2,492,234 - (38,000) 520,622 2,974,856 20.89% (78,093) 6,639 18.02% 16,028
August 2,974,856 20,500 - (284,729) 2,710,627 -9.57% 42,709 7,925 -7.87% 14,767
September 2,710,627 - (53,000) (9,738) 2,647,889 -0.36% 1,461 7,221 -0.04% 14,761
October 2,647,889 - (36,500) 503,862 3,115,251 19.03% (75,579) 7,054 16.44% 17,188
November 3,115,251 - (3,388) (162,887) 2,948,975 -5.23% 24,433 8,299 -4.18% 16,470
December 2,948,975 - (17,000) 157,112 3,089,086 5.33% (23,567) 7,856 4.79% 17,259
--------- ---------- ----------
Totals 299,580 (172,145) 1,135,413
[(L) Pro Forma Annual Rate of Return: 54.46%]
1990
January 3,089,086 165,382 (97,000) 306,791 3,464,260 9.93% (46,019) 8,229 8.71% 18,762
February 3,464,260 20,000 (2,000) (88,501) 3,393,759 -2.55% 13,275 9,229 -1.91% 18,405
March 3,393,759 60,000 (130,500) 153,743 3,477,002 4.53% (23,062) 9,041 4.12% 19,163
April 3,477,002 - (33,500) 603,433 4,046,935 17.35% (90,515) 9,263 15.02% 22,040
May 4,046,935 195,000 (3,000) (491,629) 3,747,306 -12.15% 73,744 10,781 -10.06% 19,823
June 3,747,306 - (29,500) 201,444 3,919,249 5.38% (30,217) 9,983 4.84% 20,782
July 3,919,249 93,000 (69,000) 185,657 4,128,906 4.74% (27,849) 10,441 4.29% 21,674
August 4,128,906 30,000 - (785,827) 3,373,079 -19.03% 27,849 10,999 -18.09% 17,753
September 3,373,079 - - 161,826 3,534,905 4.80% - 8,986 5.06% 18,652
October 3,534,905 - (2,000) (478,138) 3,054,767 -13.53% - 9,417 -13.26% 16,179
November 3,054,767 39,000 (2,500) (122,422) 2,968,845 -4.01% - 8,138 -3.74% 15,573
December 2,968,845 - (4,000) 116,780 3,081,626 3.93% - 7,909 4.20% 16,227
--------- ---------- ----------
Totals 602,382 (373,000) (236,843)
[(L) Pro Forma Annual Rate of Return: -5.98%]
1991
January 3,081,626 51,274 (6,000) 67,767 3,194,667 2.20% - 8,209 2.47% 16,628
February 3,194,667 - (39,000) (33,866) 3,121,801 -1.06% - 8,511 -0.79% 16,496
March 3,121,801 - (10,610) (279,573) 2,831,619 -8.96% - 8,316 -8.69% 15,062
April 2,831,619 52,692 (70,000) (13,953) 2,800,358 -0.49% - 7,543 -0.23% 15,028
May 2,800,358 - (12,564) (113,808) 2,673,986 -4.06% - 7,460 -3.80% 14,457
June 2,673,986 49,900 (16,171) (64,435) 2,643,280 -2.41% - 7,123 -2.14% 14,148
July 2,643,280 - (42,600) (3,042) 2,597,638 -0.12% - 7,042 0.15% 14,169
August 2,597,638 - (15,300) (52,266) 2,530,072 -2.01% - 6,920 -1.75% 13,922
September 2,530,072 - - 317,559 2,847,632 12.55% - 6,740 12.82% 15,706
October 2,847,632 623 (46,000) 23,733 2,825,987 0.83% - 7,586 1.10% 15,879
November 2,825,987 1,100,674 (21,883) 151,776 4,056,555 5.37% - 7,528 5.64% 16,774
December 4,056,555 - (22,106) (161,038) 3,873,411 -3.97% - 10,807 -3.70% 16,153
--------- ---------- ----------
Totals 1,255,164 (302,234) (161,144)
[(L) Pro Forma Annual Rate of Return: -0.46%]
1992
December 4,056,555 - (22,106) (161,038) 3,873,411 -3.97% - 10,807 -3.70% 16,153
January 3,873,411 104,810 (62,558) (108,982) 3,806,681 -2.81% - 10,319 -2.55% 15,741
February 3,806,681 - (37,950) (221,109) 3,547,621 -5.81% - 10,141 -5.54% 14,869
March 3,547,621 212,862 (213,862) (111,802) 3,434,819 -3.15% - 9,451 -2.89% 14,440
April 3,434,819 24,435 (90,942) 97,644 3,465,957 2.84% - 9,150 3.11% 14,889
May 3,465,957 303 (38,600) (201,980) 3,225,680 -5.83% - 9,233 -5.56% 14,061
June 3,225,680 25,519 (21,250) 250,775 3,480,723 7.77% - 8,593 8.04% 15,191
July 3,480,723 235 (29,000) (244,547) 3,207,412 -7.03% - 9,273 -6.76% 14,165
August 3,207,412 - (9,000) 393,722 3,592,133 12.28% - 8,545 12.54% 15,941
September 3,592,133 - - (65,283) 3,526,851 -1.82% - 9,569 -1.55% 15,694
October 3,526,851 1,286 (123,124) 500,534 3,905,548 14.19% - 9,396 14.46% 17,963
November 3,905,548 - (10,000) 126,302 4,021,850 3.23% - 10,404 3.50% 18,592
December 4,021,850 7,348 (61,798) 337,694 4,305,095 8.40% - 10,714 8.66% 20,202
--------- ---------- ----------
Totals 376,799 (698,084) 752,969
[(L) Pro Forma Annual Rate of Return: 25.07%]
</TABLE>
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS
4
<PAGE>
<TABLE>
Michael J. Frischmeyer SUPPLEMENTAL INFORMATION
ICL Managed Account Program PRO FORMA PERFORMANCE RECORD
Under Fremont Fund Fee Schedule
<CAPTION>
(A) (B) (C) (D) (E) (F) (G) (H) (I) (J) (K)
Pro Forma Pro Forma Pro Forma Pro Forma
Beg. Net Net Trading End. Net Rate of Accrual for Annual Int- Rate of Continuous
Month Assets Additions Withdrawals Results Assets Return 15% Fee erest 4% Return Value of
Investment
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1993
December 4,021,850 7,348 (61,798) 337,694 4,305,095 8.40% - 10,714 8.66% 20,202
January 4,305,095 73,914 (248,150) 192,419 4,323,278 4.47% - 11,469 4.74% 21,159
February 4,323,278 13,000 (6,000) 387,131 4,717,409 8.95% (37,388) 11,517 8.36% 22,927
March 4,717,409 - (8,000) 1,059,621 5,769,031 22.46% (158,943) 12,567 19.36% 27,366
April 5,769,031 32,119 (224,900) 737,455 6,313,704 12.78% (110,618) 15,369 11.13% 30,412
May 6,313,704 10,000 (119,082) 642,234 6,846,857 10.17% (96,335) 16,820 8.91% 33,123
June 6,846,857 4,460 (52,000) 1,831,758 8,631,075 26.75% (274,764) 18,240 23.01% 40,743
July 8,631,075 176,000 (280,900) 2,920,344 11,446,519 33.84% (438,052) 22,993 29.03% 52,569
August 11,446,519 50,000 (307,000) (2,319,311) 8,870,208 -20.26% 347,897 30,494 -16.96% 43,655
September 8,870,208 120,000 (51,600) 42,873 8,981,481 0.48% (6,431) 23,630 0.68% 43,951
October 8,981,481 - (55,500) (11,466) 8,914,515 -0.13% 1,720 23,927 0.16% 44,020
November 8,914,515 81,500 (24,000) (134,238) 8,837,778 -1.51% 20,136 23,748 -1.01% 43,574
December 8,837,778 5,126 (311,826) 1,348,061 9,879,139 15.25% (202,209) 23,544 13.23% 49,340
--------- ---------- ----------
Totals 566,120 (1,688,958) 6,696,882
[(L) Pro Forma Annual Rate of Return: 144.23%]
1994
January 9,879,139 180,551 (192,400) (1,265,598) 8,601,692 -12.81% - 26,318 -12.54% 43,150
February 8,601,692 316,403 (50,000) 430,695 9,298,789 5.01% - 22,915 5.27% 45,426
March 9,298,789 636,000 (117,197) (331,152) 9,486,440 -3.56% - 24,772 -3.29% 43,929
April 9,486,440 12,000 (93,000) (62,073) 9,343,367 -0.65% - 25,272 -0.39% 43,759
May 9,343,367 147,000 (30,000) 1,309,156 10,769,523 14.01% - 24,891 14.28% 50,007
June 10,769,523 33,212 (212,668) (534,096) 10,055,971 -4.96% - 28,690 -4.69% 47,660
July 10,055,971 130,000 (93,000) 1,268,349 11,361,319 12.61% (122,292) 26,789 11.66% 53,219
August 11,361,319 598,314 (126,000) 810,535 12,644,168 7.13% (121,580) 30,267 6.33% 56,588
September 12,644,168 41,000 (277,000) (272,564) 12,135,604 -2.16% 40,885 33,684 -1.57% 55,702
October 12,135,604 19,953 (34,000) 325,895 12,447,453 2.69% (48,884) 32,329 2.55% 57,121
November 12,447,453 430,000 (70,000) 24,175 12,831,628 0.19% (3,626) 33,160 0.43% 57,368
December 12,831,628 475,000 (105,869) (636,417) 12,564,343 -4.96% 52,511 34,183 -4.28% 54,910
--------- ---------- ----------
Totals 3,019,432 (1,401,134) 1,066,905
[(L) Pro Forma Annual Rate of Return: 11.29%]
1995
January 12,564,343 336,988 (277,673) (87,339) 12,536,319 -0.70% - 33,471 -0.43% 54,675
February 12,536,319 15,000 (62,111) (955,879) 11,533,329 -7.62% - 33,397 -7.36% 50,651
March 11,533,329 420,000 (81,842) (602,980) 11,268,507 -5.23% - 30,725 -4.96% 48,138
April 11,268,507 19,492 (90,396) (1,160,706) 10,036,898 -10.30% - 30,019 -10.03% 43,308
May 10,036,898 201,263 (28,737) (683,838) 9,525,586 -6.81% - 26,738 -6.55% 40,473
June 9,525,586 - (4,000) (381,378) 9,140,208 -4.00% - 25,376 -3.74% 38,960
July 9,140,208 90,000 (18,000) 557,452 9,769,660 6.10% - 24,350 6.37% 41,440
August 9,769,660 - - 1,762,340 11,532,000 18.04% - 26,026 18.31% 49,026
September 11,532,000 293,542 (54,000) 3,300,251 15,071,793 28.62% (219,237) 30,721 26.98% 62,255
October 15,071,793 10,000 (11,500) 1,045,574 16,115,868 6.94% (156,836) 40,151 6.16% 66,092
November 16,115,868 270,000 (156,000) (547,883) 15,681,984 -3.40% 82,182 42,933 -2.62% 64,358
December 15,681,984 240,000 (180,000) 3,548,210 19,290,194 22.63% (532,231) 41,777 19.50% 76,907
--------- ---------- ----------
Totals 1,896,286 (964,258) 5,793,824
[(L) Pro Forma Annual Rate of Return: 40.06%]
1996
January 19,290,194 334,093 (544,882) 200,864 19,280,269 1.04% (30,130) 51,389 1.15% 77,792
February 19,280,269 363,000 (12,000) 393,190 20,024,459 2.04% (58,979) 51,363 2.00% 79,348
March 20,024,459 670,000 (142,000) (1,854,076) 18,698,383 -9.26% 89,108 53,345 -8.55% 72,565
April 18,698,383 120,000 (680,000) 6,195,724 24,334,107 33.14% (740,355) 49,812 29.44% 93,930
May 24,334,107 65,000 (50,000) (3,184,626) 21,164,481 -13.09% 477,694 64,826 -10.86% 83,732
June 21,164,481 95,000 (37,500) (1,259,008) 19,962,973 -5.95% 188,851 56,382 -4.79% 79,721
July 19,962,973 41,271 (57,500) 455,591 20,402,335 2.28% (68,339) 53,181 2.21% 81,480
August 20,402,335 80,000 (10,000) (2,625,248) 17,847,087 -12.87% 68,339 54,352 -12.27% 71,485
September 17,847,087 - (9,000) (2,010,333) 15,827,754 -11.26% - 47,545 -11.00% 63,624
October 15,827,754 48,000 (44,500) 673,737 16,504,991 4.26% - 42,165 4.52% 66,501
November 16,504,991 42,000 - (229,193) 16,317,798 -1.39% - 43,969 -1.12% 65,755
December 16,317,798 35,000 (25,500) (575,194) 15,752,104 -3.52% - 43,471 -3.26% 63,612
--------- ---------- ----------
Totals 1,893,364 (1,612,882) (3,818,572)
[(L) Pro Forma Annual Rate of Return: -17.29%]
</TABLE>
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS
5
<PAGE>
<TABLE>
Michael J. Frischmeyer SUPPLEMENTAL INFORMATION
ICL Managed Account Program PRO FORMA PERFORMANCE RECORD
Under Fremont Fund Fee Schedule
<CAPTION>
(A) (B) (C) (D) (E) (F) (G) (H) (I) (J) (K)
Pro Forma Pro Forma Pro Forma Pro Forma
Beg. Net Net Trading End. Net Rate of Accrual for Annual Int- Rate of Continuous
Month Assets Additions Withdrawals Results Assets Return 15% Fee erest 4% Return Value of
Investment
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997
January 15,752,104 276,271 (115,155) (517,826) 15,395,394 -3.29% - 41,964 -3.02% 61,691
February 15,395,394 129 (45,217) (398,372) 14,951,933 -2.59% - 41,013 -2.32% 60,259
March 14,951,933 1,050 (45,300) (235,984) 14,671,700 -1.58% - 39,832 -1.31% 59,468
April 14,671,700 160,000 (86,300) (761,704) 13,983,696 -5.19% - 39,085 -4.93% 56,539
May 13,983,696 121,000 (237,360) 210,806 14,078,142 1.51% - 37,253 1.77% 57,542
June 14,078,142 236,582 (39,676) 141,467 14,416,514 1.00% - 37,504 1.27% 58,274
July 14,416,514 296,000 (42,500) (59,101) 14,610,913 -0.41% - 38,406 -0.14% 58,190
August 14,610,913 185,243 (5,000) (468,557) 14,322,599 -3.21% - 38,923 -2.94% 56,479
September 14,322,599 - (47,700) (639,001) 13,635,898 -4.46% - 38,155 -4.20% 54,110
October 13,635,898 - (338,702) 327,000 13,624,196 2.40% - 36,326 2.66% 55,551
November 13,624,196 - (251,359) (248,858) 13,123,979 -1.83% - 36,295 -1.56% 54,685
December 13,123,979 - - (209,177) 12,914,802 -1.59% - 34,962 -1.33% 53,959
--------- ---------- ----------
Totals 1,276,276 (1,254,270) (2,859,307)
[(L) Pro Forma Annual Rate of Return: -15.18%]
1998
January 12,914,802 331,130 (513,637) (372,758) 12,359,537 -2.89% - 34,405 -2.62% 52,545
February 12,359,537 28,000 (242,059) 220,322 12,365,800 1.78% - 32,926 2.05% 53,622
March 12,365,800 80,000 (50,403) 73,899 12,469,295 0.60% - 32,942 0.86% 54,085
April 12,469,295 - (51,000) (770,176) 11,648,120 -6.18% - 33,218 -5.91% 50,888
--------- ---------- ----------
Totals 439,130 (857,100) (848,713)
[(L) Pro Forma Annual Rate of Return: -5.69%]
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS
THE COMPOSITE PERFORMANCE ANALYSIS INCLUDES ACCOUNTS IN EXISTENCE FROM 1981
THROUGH THE PRESENT.
[The balance of this page has been intentionally left blank]
6
<PAGE>
SUPPLEMENTAL INFORMATION
FOOTNOTES TO PRO FORMA PERFORMANCE RECORD
COMPILED UNDER FREMONT FUND FEE SCHEDULE
A. Month designates the period to which the table entries relate.
B. Beginning Net Assets is equal to the ending net asset value of the previous
period and represents the total assets minus total liabilities, determined
in accordance with generally accepted accounting principles, with each
position in a commodity interest accounted for at fair market value.
C. Additions represents additional trading funds provided to the CTA during
the period by clients.
D. Withdrawals represents trading funds withdrawn by clients during the
period.
E. Net Trading Results takes into account all trading profits and losses,
brokerage commissions and all other expenses, and represents the change in
net asset value, net of additions and withdrawals.
F. Ending Net Assets represents beginning net asset value plus or minus
additions, withdrawals, and net trading results.
G. Rate Of Return is computed by dividing net trading results by beginning net
asset value for the period. The CTA believes this method of computation
most accurately reflects the true performance results. Subsequent to 1990,
for months when additions or withdrawals exceed ten percent of beginning
net assets, the Time-Weighting Of Additions And Withdrawals method is used
to compute rates of return. To date, the month of November, 1991, is the
only period requiring such adjustment.
H. Pro Forma Accrual For 15% Fee represents the pro forma monthly accrual to
Net Trading Results, as shown in column E, to accrue the 15% of New Trading
Profit to be paid to the CTA by Fremont Fund. Whenever the cumulative Net
Trading Results achieve a new high value, a debit equaling 15% of the new
increment is accrued, and paid to the CTA at the end of each quarter.
Negative fees, shown as positive entries in this column, will occur
I. Pro Forma Annual Interest 4% represents interest earnings to the Fremont
Fund assuming interest is earned at an annual rate of 4% on a balance
equaling 80% of the beginning net assets for each month.
J. Pro Forma Rate Of Return is computed by dividing net trading results,
adjusted for the pro forma accrual for the CTA 15% incentive fee and the
interest accrual, by beginning net asset value for the period. The CTA
believes this method of computation most accurately reflects the true
performance results. Subsequent to 1990, for months when additions or
withdrawals exceed ten percent of beginning net assets, the Time-Weighting
Of Additions And Withdrawals method is used to compute rates of return. To
date, the month of November, 1991, is the only period requiring such
adjustment.
K. Pro Forma Continuous Value Of Investment assumes an investment of $1,000.00
in January of 1981. For each month, the value of the investment is
adjusted by the pro forma rate of return for that month, providing a
continuous performance record from January 1, 1981, to the present.
L. Pro Forma Annual Rate Of Return shows the percentage change between the
figure shown in column K for December of the current year and the figure
shown in column K for December of the previous year.
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. NO
REPRESENTATION IS MADE THAT THE COMMODITY ACCOUNT WILL ACHIEVE RESULTS EQUAL
TO THOSE SET FORTH.
7
<PAGE>
SUPPLEMENTAL INFORMATION
ASSUMPTIONS UNDERLYING THE PRO FORMA PERFORMANCE RECORD
COMPILED UNDER FREMONT FUND FEE SCHEDULE
Data appearing in pro forma table columns A, B, C, D, E, F and G is original
data. The Rate Of Return column, G, shows the monthly rate of return for the
accounts comprising the original data generated from managed accounts under
the Iowa Commodities Fee Structure. Column H contains the monthly pro forma
accruals for the 15% of New Trading Profits to be paid to the CTA as an
incentive fee. Column I contains the monthly interest earned by Fremont Fund
assuming that 80% of the beginning month balance earns interest at an annual
rate of 4%. Columns J and K are a derived Rate Of Return and Value Of
Investment, incorporating column H with the original data in columns A, B, C,
D, E, and F.
The assumptions used in the pro forma performance table are as follows:
1. Start with the original data as displayed in columns A through G
2. The accounts summarized pay round-turn trading commissions averaging $70.00
per contract, exchange fees (where applicable), and NFA fees, but incur no
other costs.
3. Exchange fees and NFA fees are the same for all accounts (original and pro
forma).
4. In addition to exchange fees and NFA fees, the pro forma accounts pay
round-turn trading commissions of $50.00 and give-up fees of $4.00.
5. The pro forma accounts pay the CTA a management fee of .33% of assets at
each month-end for an annual rate of 3%. (0.33% * 12 = 3.96%)
6. The pro forma accounts pay the CTA an incentive fee of 15% of profits, paid
quarterly.
7. The CTA trades at the rate of 2700 contracts / $1,000,000 / year.
8. Assumptions 2 and 7 cause the pro forma accounts to pay 18.9% of equity in
trading commissions annually. ((2700 * 70) / 1,000,000) = 0.189
9. Assumptions 4, 5, and 7 cause the pro forma accounts to pay 14.58% of
equity in trading commissions and give-up fees annually. ((2700 * (50 +
4)) / 1,000,000) = 0.1458
10. The combination of trading commission, give-up fees, and the annual
management fee of 3% of assets charged to the pro forma accounts, equal an
annual load that is no greater than the annual load paid in trading
commissions by the original accounts. (14.58% + 4% = 18.58%) vs. 18.9%
11. The pro-forma adjustment for the incentive fee of 15% of New Trading
Profits paid to the CTA is made in column H.
12. Annual interest at the assumed rate of 4% on 80% of Fremont Fund assets is
made in column I.
The information concerning the CTA was supplied by the Advisor and, although
such information is believed by the General Partner to be complete and
correct, no independent investigation has been made to verify the facts stated
herein by the General Partner or by any other person on behalf of the
Partnership.
THE PRO FORMA RESULTS ARE HYPOTHETICAL ONLY AND SHOULD NOT BE USED OR
CONSIDERED AS ESTIMATES OF THE RESULTS TO BE ACHIEVED BY THE PARTNERSHIP IN
THE FUTURE. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
8
<PAGE>
*******************************************************************************
FREMONT FUND, LIMITED PARTNERSHIP EXHIBIT D
UNITS OF LIMITED PARTNERSHIP INTEREST
SUBSCRIPTION INSTRUCTIONS
Any person considering subscribing for
Units should carefully read and review the Prospectus.
The Units are speculative and involve a high degree of risk. No person
may invest more than 10% of his or her liquid net worth (exclusive of home,
furnishings and automobiles) in the Partnership. No entity-and, in particular,
no ERISA plan-may invest more than 10% of its liquid net worth (readily
marketable securities) in the Partnership.
A Subscription Agreement and Power of Attorney Signature Page (the
"Signature Page") is attached to these Subscription Instructions and the
following Subscription Agreement and Power of Attorney. The Signature Page is
the document which you must execute if you wish to subscribe for Units. One
copy of such Signature Page should be retained by you for your records and the
others delivered to your Registered Representative.
FILL IN ALL OF THE INFORMATION ON THE ATTACHED SIGNATURE PAGE, USING
BLACK INK ONLY, AS FOLLOWS
Item 1 - Enter the dollar amount (no cents) of the purchase.
Items 2 - Enter the Social Security Number or Taxpayer ID Number
and check the appropriate box to indicate the type of
individual ownership desired or of the entity that is
subscribing. In the case of joint ownership, either
Social Security Number may be used.
The Signature Page is self-explanatory for most ownership types;
however, the following specific instructions are provided for certain of the
ownership types identified on the Signature Page:
Trusts-Enter the trust's name on Line 3 and the trustee's name on Line
4, followed by "Ttee." If applicable, use Line 7 also for the custodian's
name. Be sure to furnish the Taxpayer ID Number of the trust. Custodian Under
Uniform Gifts to Minors Act-Complete Line 3 with the name of minor followed by
"UGMA." On Line 7, after the custodian's name followed by "Custodian." Be sure
to furnish the minor's Social Security Number. Partnership or Corporation-The
partnership's or corporation's name is required on Line 3. Enter a partner's
or officer's name on Line 4. Be sure to furnish the Taxpayer ID Number of the
partnership or corporation. A subscriber who is not an individual must provide
a copy of documents evidencing the authority of such entity to invest in the
Partnership.
Item 8 - The investor(s) must execute the Subscription Agreement
and Power of Attorney Signature Page and review the
representations relating to backup withholding tax or
non-resident alien status underneath the signature and
telephone number lines in Item 9.
Item 9 - Registered Representative must complete.
The Selling Agent's copy of the Subscription Agreement and Power of Attorney
Signature Page may be required to be retained in the Branch Office.
<PAGE>
FREMONT FUND, LIMITED PARTNERSHIP
UNITS OF LIMITED PARTNERSHIP INTEREST
BY EXECUTING THIS SUBSCRIPTION AGREEMENT AND POWER OF ATTORNEY
SUBSCRIBERS ARE NOT WAIVING ANY RIGHTS UNDER THE
SECURITIES ACT OF 1933 OR THE SECURITIES
EXCHANGE ACT OF 1934
SUBSCRIPTION AGREEMENT AND
POWER OF ATTORNEY
Pacult Asset Management, Incorporated
General Partner ____________________________
2990 W. 120 Social Security Number or
P. O. Drawer C Taxpayer ID Number
Fremont, IN 46737
Dear General Partner:
1. Subscription For Units. I hereby subscribe for the number of Limited
Partnership Units ("Units") in Fremont Fund, Limited Partnership (the "Fund")
set forth below (minimum $15,000) in the Subscription Agreement and Power of
Attorney Signature Page, at the Net Asset Value per Unit as set forth in the
Prospectus (the "Prospectus") of the Partnership dated August 12, 1996 and the
Post Effective Amendment to the Prospectus dated July 6, 1998 (the
"Amendment"). The undersigned's check payable to "Fremont Fund, Limited
Partnership" in the full amount of the undersigned's subscription (additional
investments above $15,000 may be made in multiples of $1,000 or at month-end
Net Asset Value per Unit as described in the Prospectus and the Amendment), is
transmitted with the Subscription Agreement and Power of Attorney Signature
Page. The General Partner may, in its sole and absolute discretion, accept or
reject this subscription, in whole or in part. If this subscription is
accepted, subscribers will earn additional Units in lieu of interest earned
on the undersigned's subscription during any period of time, if any, such
subscription is held in escrow. If this subscription is rejected, all funds
remitted by the undersigned will be returned, together with any interest
earned from escrow, if any. All subscriptions once submitted are irrevocable.
2. Representations and Warranties of Subscriber. I have received a copy of
the Prospectus and Amendment no less than five days prior to the effective
date of my purchase. I understand that by submitting this Subscription
Agreement and Power of Attorney I am making the representations and warranties
set forth in "Exhibit C - Subscription Requirements" contained in the
Prospectus, including, without limitation, representations and warranties
relating to my net worth and annual income.
3. Power of Attorney. In connection with my acceptance of an Interest in the
Partnership, I do hereby irrevocably constitute and appoint the General
Partner, and its successors and assigns, as my true and lawful Attorney-in-
Fact, with full power of substitution, in my name, place and stead, to (i)
file, prosecute, defend, settle or compromise litigation, claims or
arbitration on behalf of the Partnership; and, (ii) make, execute, sign,
acknowledge, swear to, deliver, record and file any documents or instruments
which may be considered necessary or desirable by the General Partner to carry
out fully the provisions of the Limited Partnership Agreement of the
Partnership, which is attached as Exhibit A to the Prospectus, including,
without limitation, the execution of the said Agreement itself and by
effecting all amendments permitted by the terms thereof. The Power of
Attorney granted hereby shall be deemed to be coupled with an interest and
shall be irrevocable and shall survive, and shall not be affected by, my
subsequent death, incapacity, disability, insolvency or dissolution or any
delivery by me of an assignment of the whole or any portion of my interest in
the Partnership.
4. Irrevocability; Governing Law. I hereby acknowledge and agree that I am
not entitled to cancel, terminate or revoke this subscription or any of my
agreements hereunder after the Subscription Agreement and Power of Attorney
have been submitted (and not rejected) and that this subscription and such
agreements shall survive my death or disability. This Subscription Agreement
and Power of Attorney shall be governed by and interpreted in accordance with
the laws of the State of Indiana.
5. Suitability and Acceptance of Risks. In addition to the suitability
requirements set forth in Exhibit C, I represent and warrant to the General
Partner and Selling Agent that (i) I have the capacity of understanding the
fundamental aspects of the Partnership (or, if I do not have such fundamental
understanding, I have so advised the Selling Agent of such fact); and, (ii) I
understand the fundamental risks and possible financial hazards of an
investment in the Partnership (disclosed in the Prospectus and Amendment under
"Risk Factors" identified on the face page, in the Summary, and described in
the Prospectus at page 9), including, but not limited to, the lack of
liquidity of my investment in the Partnership, the management and control by
the General Partner, and the tax consequences of the investment.
<PAGE>
FREMONT FUND, LIMITED PARTNERSHIP
Units of Limited Partnership Interests
Subscription Agreement and Power of Attorney
Signature Page
The investor named below, by execution and delivery of this Subscription
Agreement and Power of Attorney, by payment of the purchase price for Limited
Partnership Interests (the "Units") in Fremont Fund, Limited Partnership (the
"Partnership"), and by enclosing a check payable to "Fremont Fund, Limited
Partnership", hereby subscribes for the purchase of Units, at the next month
end Net Asset Value per Unit.
The named investor further, by signature below, acknowledges receipt of the
Prospectus of the Partnership dated August 12, 1996, as amended, and the Post
Effective Amendment to the Prospectus dated July 25, 1997 no less than five
(5) days prior to the acceptance of the subscription by the General Partner or
the purchase of Units in the Partnership and that such Prospectus and
Amendment include the Partnership's Limited Partnership Agreement, and the
Subscription Requirements and the Subscription Agreement and Power of Attorney
set forth therein, the terms of which govern the investment in the Units being
subscribed for hereby.
By my signature below, I represent that I satisfy the requirements relating to
net worth and annual income as set forth in Exhibit C to the Prospectus.
1) Total $ Amount _________ (minimum of $15,000, unless lowered to less than
$15,000 but not less than $5,000 by the General Partner; $1,000 minimum
for investors making an additional investment)
2) Social Security Number _____-___-_____ Taxpayer ID # ___________________
Taxable Investors (check one):
__ Individual Ownership __ Trust other than a Grantor or Revocable Trust
__ Joint Tenants with Right of Survivorship __Estate __UGMA/UTMA (Minor)
__ Tenants in Common __Community Property __Partnership __Corporation
__ Grantor or Other Revocable Trust
Non-Taxable Investors (check one):
__ IRA __ Profit Sharing __ IRA Rollover __Defined Benefit
__ Pension __ Other (specify) __ SEP
3) Investor's Name __________________________________________________________
4) __________________________________________________________________________
Additional Information (for Estates, Trusts and Corporations)
5) Resident Address
of Investor _________________________________________________________
Street (P.O. Box not acceptable) City State Zip Code
6) Mailing Address
(if different) _________________________________________________________
Street City State Zip Code
7) Custodian Name
& Mailing Address_________________________________________________________
Street (P.O. Box not acceptable) City State Zip Code
SIGNATURE(S) - DO NOT SIGN WITHOUT FAMILIARIZING YOURSELF WITH THE INFORMATION
IN THE PROSPECTUS AND AMENDMENT, INCLUDING: (I) THE FUNDAMENTAL RISKS AND
FINANCIAL HAZARDS OF THIS INVESTMENT, INCLUDING THE RISK OF LOSING YOUR ENTIRE
INVESTMENT; (II) THAT THE PARTNERSHIP IS THE FIRST CLIENT ACCOUNT TO TRADE IN
THE FREMONT FUND PORTFOLIO; (III) THE PARTNERSHIP'S SUBSTANTIAL CHARGES; (IV)
THE PARTNERSHIP'S HIGHLY LEVERAGED TRADING ACTIVITIES; (V) THE LACK OF
LIQUIDITY OF THE UNITS; (VI) THE EXISTENCE OF ACTUAL AND POTENTIAL CONFLICTS
OF INTEREST IN THE STRUCTURE AND OPERATION OF THE PARTNERSHIP; (VII) THAT
UNITHOLDERS MAY NOT TAKE PART IN THE MANAGEMENT OF THE PARTNERSHIP; AND (VIII)
THE TAX CONSEQUENCES OF THE PARTNERSHIP.
8) INVESTOR(S) MUST SIGN
X_______________________________________________________
Signature of Investor Date Telephone No.
X_______________________________________________________
Signature of Investor Date
Executing and delivering this Subscription Agreement and Power of Attorney
shall in no respect be deemed to constitute a waiver of any rights under the
Securities Act of 1933 or under the Securities Exchange Act of 1934.
UNITED STATES INVESTORS ONLY
I have checked the following box if I am subject to backup withholding under
the provisions of Section 3406(a)(1)(C) of the Internal Revenue Code: [ ].
Under the penalties of perjury, by signature above I hereby certify that the
Social Security Number or Taxpayer ID Number set forth in Item 2 above is my
true, correct and complete Social Security Number of Taxpayer ID Number and
that the information given in the immediately preceding sentence is true,
correct and complete.
NON-UNITED STATES INVESTORS ONLY
Under the penalties of perjury, by signature above, I hereby certify that (a)
I am not a citizen or resident of the United States or (b) (in the case of an
investor which is not an individual) the investor is not a United States
corporation, partnership, estate or trust: [ ].
9) REGISTERED REPRESENTATIVE MUST SIGN
I hereby certify that I have informed the investor of all pertinent facts
relating to the: risks; tax consequences; liquidity and marketability;
management; and control of the Managing Owner with respect to an investment
in the Units, as set forth in the Prospectus and Amendment. I have also
informed the investor of the unlikelihood of a public trading market
developing for the Units. I do not have discretionary authority over the
account of the investor.
I have reasonable grounds to believe, based on information obtained from the
investor concerning his/her investment objectives, other investments,
financial situation and needs and any other information known by me, that an
investment in the Partnership is suitable for such investor in light of
his/her financial position, net worth and other suitability characteristics.
The Registered Representative MUST sign below in order to substantiate
compliance with Article III, Section 34 of the NASD's Rules of Fair
Practice.
X_______________________________________________________
Registered Representative Signature Date
X_______________________________________________________
Office Manager Signature Date
(if required by Selling Agent procedures)
10) REGISTERED REPRESENTATIVE 11) SELLING AGENT
Name: Shira Del Pacult Name: Futures Investment Company
Address: 5916 N. 300 West Address: 5916 N. 300 West
Fremont, IN 46737 Fremont, IN 46737
Tel. Number: (219) 833-1306 Tel. Number: (219) 833-1306
<PAGE>
<F9>**************************************************************************
POST EFFECTIVE AMENDMENT NUMBER THREE TO FORM S-1
Registration No. 33-96292
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS OR
ANY POST EFFECTIVE AMENDMENT THERETO
Item 13. Other Expenses of Issuance and Distribution.
(b) The Selling Agreement between Futures Investment Company and the
Registrant contains an indemnification from the General Partner to the
effect that the disclosures in the Prospectus and this Amendment are in
compliance with Rule 10b5 and otherwise true and complete. This
indemnification speaks from the date of the first offering of the Units
through the end of the applicable statute of limitations. The
Partnership has assumed no responsibility for any indemnification to
Futures Investment Company and the General Partner is prohibited by the
Partnership Agreement from receiving indemnification for breach of any
securities laws or for reimbursement for insurance for coverage for any
such claims. See Article X, Section 10.4 (b) and (e).
(d) There are no indemnification agreements which are not contained in the
Limited Partnership Agreement attached as Exhibit A, the Selling
Agreement or the Clearing Agreement.
Item 16. Exhibits and Financial Statement Schedules.
The following documents (unless indicated) are filed herewith and made a
part of this Registration Statement:
(a) Exhibits.
</TABLE>
<TABLE>
<CAPTION>
Exhibit
Number Description of Document Date Filed
<S> <C> <C>
(1) - 01 Selling Agreement dated March 12, 1996, among the Partnership, the
General Partner, and World Invest Corporation, the Broker/Dealer. March 12, 1996
(1) - 02 Selling Agreement dated July 22, 1997, among the Partnership, the July 30, 1997
General Partner, and Futures Investment Company, the Broker/Dealer.
(2) None
(3) - 01 Articles of Incorporation of the General Partner August 28, 1995
(3) - 02 By-Laws of the General Partner August 28, 1995
(3) - 03 Board Resolution of General Partner to authorize formation of
Indiana Limited Partnership August 28, 1995
(3) - 04 Amended and Restated Agreement of Limited Partnership of the
Registrant dated January 15, 1996
(included as Exhibit A to the Prospectus). July 17, 1996
(3) - 05 Indiana Secretary of State acknowledgment of filing of Certificate
of Limited Partnership April 11, 1996
(3) - 06 Certificate of Limited Partnership, Designation of Registered Agent
and Certificate of Initial Capital filed with the Indiana Secretary
of State on January 12, 1996 April 11, 1996
(4) - 01 Amended and Restated Agreement of Limited Partnership of the
Registrant dated January 15, 1996
(included as Exhibit A to the Prospectus). July 17, 1996
(5) - 01 Opinion of The Scott Law Firm relating to the legality of the
Partnership Units. August 28, 1995
(6) Not Applicable
(7) Not Applicable
(8) - 01 Opinion of The Scott Law Firm with respect to Federal income tax
consequences. March 12, 1996
(9) None
1
<PAGE>
(10) - 01 Form of Advisory Agreement between the Partnership and the CTA
(included as Exhibit F to the Prospectus) August 28, 1995
(10) - 02 Form of New Account Agreement between the Partnership and the FCM March 12, 1996
(10) - 03 Form of Subscription Agreement and Power of Attorney
(included as Exhibit D to the Prospectus). July 6, 1998
(10) - 04 Escrow Agreement among Escrow Agent, Underwriter, and the
Partnership. (included as Exhibit E to the Prospectus). August 28, 1995
(10) - 05 Introducing Broker Clearing Agreement dated the 19th day of October,
1995, by and between The Chicago Corporation as futures commission
merchant (the "FCM") and Futures Investment Co. as introducing
broker (the "IB") April 11, 1996
(11) Not Applicable - start-up business
(12) Not Applicable
(13) Not Required
(14) None
(15) None
(16) Not Applicable
(17) Not Required
(18) Not Required
(19) Not Required
(20) Not Required
(21) None
(22) Not Required
(23) - 01 Consent of Frank L. Sassetti & Co., Certified Public Accountants July 6, 1998
(23) - 02 Consent of James Hepner, Certified Public Accountant August 28, 1995
(23) - 03 Consent of The Scott Law Firm. December 8, 1997
(23) - 04 Consent of Michael J. Frischmeyer, CTA December 8, 1997
(23) - 05 Consent of World Invest Corporation August 5, 1996
(23) - 06 Consent of Escrow Agent August 28, 1995
(23) - 07 Consent of The Chicago Corporation June 7, 1996
(23) - 08 Consent of Futures Investment Company December 8, 1997
(24) None
(25) None
(26) None
(27) Not Applicable
(28) Not Applicable
(99) - 01 Subordinated Loan Agreement for Equity Capital April 11, 1996
(99) - 02 Representative's Agreement between World Invest Corporation and
Shira Del Pacult dated December 10, 1992 June 7, 1996
(99) - 03 Representative's Agreement between Futures Investment Company and
Shira Del Pacult dated July 28, 1997 June 7, 1996
</TABLE>
(b) Financial Statement Schedules.
No Financial Schedules are required to be filed herewith.
Item 17. Undertakings.
(a) (1) The undersigned registrant hereby undertakes to file, during any
period in which offers or sales are being made, a post-effective amendment to
this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the Securities
Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represents a fundamental: change in the information set forth in the
registration statement;
2
<PAGE>
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for the purpose of
determining any liability under the Securities Act of 1933, each
post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) The General Partner has provided an indemnification to Futures
Investment Company, the best efforts selling agent. The Partnership (issuer)
has not made any indemnification to Futures Investment Company.
Insofar as indemnification for liabilities under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant including, but not limited to, the General Partner pursuant to the
provisions described in Item 14 above, or otherwise, the Registrant had been
advised that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any such action, suit
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
3
<PAGE>
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the General
Partner of the Registrant has duly caused this Post Effective Amendment
Number Three to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Fremont in the State
of Indiana on the 2nd day of July, 1998.
PACULT ASSET MANAGEMENT, INC. FREMONT FUND
BY PACULT ASSET MANAGEMENT, INC.
GENERAL PARTNER
By: s/ MS. SHIRA PACULT By: s/ MS. SHIRA PACULT
MS. SHIRA PACULT MS. SHIRA PACULT
PRESIDENT PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement Post Effective Amendment Number Two has been signed
below by the following person on behalf of Pacult Asset Management, Inc.,
General Partner of the Registrant in the capacities and on the date indicated.
s/ MS. SHIRA PACULT
MS. SHIRA PACULT Date: July 2, 1998
PRESIDENT
(Being the principal executive officer, the principal financial and
accounting officer and the sole director of Pacult Asset Management, Inc.,
General Partner of the Fund)
CONSENT OF ROBERT W. KRONE, CPA
and FRANK L. SASSETTI & CO.
The undersigned, Frank L. Sassetti & Co., hereby consents to the use of the
audit reports and certifications for the periods ended December 31, 1996,
and December 31, 1997 for Fremont Fund, Limited Partnership and to the use
of the audit reports and certifications for the period ended December 31,
1996 for Pacult Asset Management, Inc. in the Post Effective Amendment
Number Three to Form S-1.
The undersigned hereby further consents to the inclusion of its name and the
other information under the section "Experts" in the Post Effective
Amendment Number Three to Form S-1 registration statement to be filed with the
Securities and Exchange commission and the states to be selected by the
General Partner. Without further consent of the undersigned, the General
Partner will cause such changes to the Post Effective Amendment Number Three
to Form S-1 as are appropriate in response to the comments of said Commission
and administrators and, thereafter, deliver the Prospectus to prospective
investors with respect to the offering of up to $5,000,000 aggregate amount
of limited partnership interest (the "Units") in Fremont Fund, Limited
Partnership.
s/ Robert W. Krone, CPA
Frank L. Sassetti & Co.
6611 West North Avenue
Oak Park, Illinois 60302
(708) 386-1433
Date: July 2, 1998
