<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
Commission file number 33-49716
Jefferson Futures Reserve I, L.P.
(Exact name of registrant as specified in its charter)
Delaware 36-3782502
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
161 Maiden Lane 010006-2778
4th Floor (Zip code)
New York, N.Y.
(Address of principal executive offices)
Registrant's telephone number, including area code:(212)843-2000.
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12 (g) of the Act:
Units of Limited Partnership Interest
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes X No
--- ---
Registrant is a limited partnership and thus has no voting stock held by
non-affiliates or otherwise.
DOCUMENTS INCORPORATED BY REFERENCE
(1) A portion of the Prospectus dated October 27, 1992, included within the
registration Statement on Form S-1 (File No. 33-49716) effective October 27,
1992 incorporated by reference into Parts I, II, III, and IV.
(2) A portion of the Partnership's Annual Report to Limited Partners for
the fiscal year ended December 31, 1999 (the "1999 Annual Report to Limited
Partners") are incorporated by reference into Part II and Part IV.
1
<PAGE> 2
PART I
Item 1. Business
(a) Jefferson Futures Reserve I, L.P. (the "Fund", the "Partnership", the
"Registrant) a limited partnership that was organized on August 14, 1991,
commenced trading on May 5, 1993. The business of the Fund is the speculative
trading of commodity interests. The General Partner for the Fund Advanced
Futures Strategies, Inc. (the "General Partner"). Lamborn Securities, Inc.
("Lamborn") will act as the selling agent for the Fund. There were changes made
during 1999 that affected asset allocation to the Trading Advisors. Willowbridge
Associates, Inc. was dropped as a trading advisor as of May 1, 1999, and the and
the allocation of the trading assets to Willowbridge Associates was increased
slightly. The commodity broker for the Fund is Fimat Futures U.S.A., Inc. (The
"Broker").
The Fund will terminate on December 31, 2011, or upon any occurrence that
would require dissolution as specified in the Funds prospectus.
The Fund will pay a flat fixed-rate commission fee of .75 of 1% (9%
annually) of the Partnerships Net Assets (before deducting for management and
incentive fees) to the Broker as of the end of each month. The Broker will then
pay all executions costs connected with the clearing the Partnerships account,
including all NFA, exchange, floor brokerage, give-up, clearing, and other fees.
The Broker may then remit to the Selling Agent a potion of such brokerage fee.
The Fund incurs ongoing legal, accounting, administrative, and other
miscellaneous costs.
The Fund has no Employees.
The fund does not engage in operations in any foreign countries other than
trading on foreign exchanges.
Trendlogic's management agreement remains in place from the previous year.
Pursuant to the terms of such agreement, the Fund, via the General Partner, pays
the Advisors a monthly management fee on all Net Allocated Assets (as defined in
the Fund's Prospectus), in the respective Advisor's trading account ranging from
0 - 2.5% annually. The Fund pays the Advisors a quarterly incentive fee ranging
from 10 - 17.5% of Trading Profits (as defined in the Prospectus), if any,
achieved on the Net Allocated Assets in the respective Advisor's account as of
such fiscal quarter. Trading Profits (Loss), as defined, are equal to the net of
gains and losses realized during such fiscal quarter from transactions initiated
by the Advisors, plus or minus the net change during such fiscal quarter in
unrealized gains or losses from transactions initiated by such advisor, less the
allocated portion of fixed brokerage commission fees paid or
2
<PAGE> 3
accrued), minus any accumulated Trading Loss relating to periods prior to such
fiscal quarter (adjusted as provided below for redemptions and distributions
allocated to the Advisors during such fiscal quarter) incurred by the Advisor
since the quarter end as of which an incentive fee was previously paid to the
Advisor or, if no incentive fee has ever been paid to the Advisor, from the
inception of trading. The Cumulative Trading Loss (CTL), if any, shall be
reduced as of each month-end in which distributions, redemptions, or
reallocations from the Advisor are deemed to have occurred. For purposes hereof,
redemptions are deemed to have occurred on the applicable Redemption Date (as
defined in the Limited Partnership Agreement) and distributions and redemptions
are deemed to have occurred as of the month-end in which such distributions were
payable or such reallocations were effected. The Fund's final prospectus dated
October 27, 1992 contains a more detailed description of the fee calculations.
The Trading Advisors and the General Partner are required to be registered
under regulations of the CFTC and the NFA, a commodity industry self-regulatory
organization. The Commodity Broker is required to be registered with the CFTC
and the NFA as a Future Commission Merchant and is subject to certain financial
and other requirements in order to maintain its registration.
Item 2. Properties.
The Fund does not own or lease any real property. The General Partner uses
its offices to perform administrative services for the Fund at no cost to the
Fund.
Item 3. Legal Proceedings.
The General Partner is not aware of any pending legal proceedings to which
the Fund or the General Partner is a party or to which any of its assets are
subject.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted during the fiscal year ended December 31, 1999 to
a vote of security holders through the solicitation of proxies or otherwise.
PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholders Matters.
3
<PAGE> 4
There is no established public trading market for the Units, nor will one
develop. Units may be transferred or redeemed subject to the condition imposed
by the Agreement of Limited Partnership. As of December 31, 1999 a total of 437
Units were outstanding and held by approximately 65 Unit Holders including 26.0
Units of General Partnership interest.
The General Partner, pursuant to the Limited Partnership Agreement, has the
sole discretion in determining what distributions, if any, the Partnership will
make to its Unit Holders. The General Partner has not made any distributions as
of December 31, 1999.
Item 6. Selected Financial Data.
The following is a summary of operations and total assets of the
Partnership for the years ended December 31, 1999, December 31, 1998, December
31, 1997, December 31, 1996, and December 31, 1995.
See Following Page For Selected Financial Data.
4
<PAGE> 5
JEFFERSON FUTURES RESERVE I, L.P.
SELECTED FINANCIAL DATA
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
REVENUE
Gross realized gains from trading (88,192) 236,406 (1,065) 198,534 592,008
Change in unrealized gains/(loss)
from trading 22,177 (52,135) 63,253 (69,828) (64,535)
Interest Income 6,807 5,809 23,888 21,603 0
Total Revenue (59,208) 190,080 86,076 150,309 527,473
EXPENSES
Brokerage commissions/fees $ 40,393 59,644 87,950 114,665 155,762
Advisory fees 10,562 40,916 64,816 45,315 120,790
Other administrative expenses 57,975 58,000 48,000 46,840 41,000
Total Expenses $ 108,930 158,560 200,766 206,820 317,552
Net Income/(Loss) $(168,138) 31,520 (114,690) (56,511) 209,921
TOTAL ASSETS $ 295,871 697,219 783,601 1,166,477 1,652,303
TOTAL LIABILITIES $ 32,109 38,573 71,089 62,034 109,379
PARTNERS CAPITAL
Limited Partner 248,082 634,607 689,743 1,027,849 1,515,452
General Partner 15,680 24,039 22,769 26,594 27,472
TOTAL LIABILITIES AND PARTNERS CAPITAL 295,871 697,219 783,601 1,116,477 1,652,303
NUMBER OF OUTSTANDING UNITS 437 712 813 1,031 1,460
NET ASSET VALUE PER UNIT (ROUNDED) 603 925 876 1,023 1,057
</TABLE>
5
<PAGE> 6
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Liquidity
The Partnership's assets are on deposit in separate commodity interest
trading accounts with the Broker and are used by the Partnership as margin to
engage in commodity futures, forward contracts and other commodity interest
trading. The Broker holds such assets in either non-interest bearing bank
accounts or in securities approved by the CFTC for investment of customer funds.
The Partnership's assets held by the Broker may be used as margin solely for the
Partnership's trading. Since the Partnership's sole purpose is to trade in
commodity futures contracts and other commodity interests, it is expected that
the Partnership will continue to own such liquid assets for margin purposes.
The Partnership's investment in commodity futures contracts, forward
contracts and other commodity interests may be illiquid. If the price for a
futures contract for a particular commodity has increased or decreased by an
amount equal to the "daily limit", positions in the commodity can neither be
taken nor liquidated unless traders are willing to effect trades at or within
the limit. Commodity futures prices have occasionally moved the daily limit for
several consecutive days with little or no trading. Such market conditions could
prevent the Partnership from promptly liquidating its commodity futures
positions.
There is no limitation on daily price moves in trading forward contracts on
foreign currencies. The markets for some world currencies have low trading
volume and are illiquid, which may prevent the Partnership from trading in
potentially profitable markets or prevent the Partnership from promptly
liquidating unfavorable positions in such markets and subjecting it to
substantial losses.
Either of these market conditions could result in restrictions on
redemptions.
Capital Resources
The purpose of the Fund is to trade commodity interests; as such, the Fund
does not have, nor does it expect to have, any capital assets and has no
material commitments for capital expenditures. The Fund's use of assets is
solely to provide necessary margin or premiums for, and to pay for any losses
incurred in connection with its trading activities.
6
<PAGE> 7
Results of Operations
Total assets of the partnership as of December 31, 1999 were $295,871,
$697,219, at December 31, 1998, $783,601, at December 31, 1996 were $1,116,477,
at December 31, 1995 were $1,652,303, and at December 31, 1994 they were
$1,715,818. The Fund permits units to be redeemed after the first six months of
operation of the Fund, with a redemption charge of 4% for any withdrawals from
6-9 months. The other redemption fees will be 3%, 2%, 1%, and 0%, for
redemptions occurring 10-12 months, 13-15 months, 16-18 months, and after 18
months, respectively. During the year ended December 31, 1994 total redemptions
were $236,626, during 1995 redemptions totaled $294,488, during 1996 redemptions
totaled $431,970, during 1997 redemptions totaled $227,241, during 1998
redemptions totaled $85,385, and during 1999 redemptions totaled $226,746.
As of December 31, 1999, the Net Asset Value per Unit was $603, a loss of
34.9%. At December 31, 1998, the Net Asset Value per Unit was approximately
$925, a gain of 5.54% over the prior years N.A.V. As of December 31, 1997, the
Net Asset Value per Unit was approximately $876, a loss of 14.38% over the prior
years N.A.V. At December 31, 1996, the Net Asset Value per Unit was
approximately $1,023, a loss of 3.2% over the prior years N.A.V. As of December
31, 1995, the Net Asset Value per Unit was approximately $1,057, a gain of 13.2%
over the prior years N.A.V. At December 31, 1994, the Net Asset Value per Unit
was approximately $934, which reflects a net gain of 2.3% for the year ended
December 31, 1994.
In 1999, the partnership had a net loss of $168,138, with the Advisors
having a combined trading loss of $123,613. In 1998, the partnership had a net
gain of $31,519, with the Advisors having a combined trading gain of $99,515. In
1997, the partnership had a net loss of $114,690, with the Advisors having a
combined trading loss of $25,762. In 1996, the partnership had a net loss of
$56,511, with the Advisors having a combined trading gain of $14,041 for the
same period. In 1995, the partnership had a net gain of $209,921, with the
Advisors having a combined trading gain of $371,711 for the same period. The
partnership had a net gain for the year ended December 31, 1994 of $30,498. For
the same period, the Advisors had a combined trading gain of $142,627.
Item 8. Financial Statements and Supplementary Data.
The information required by this item is attached hereto.
Item 9. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure.
None
7
<PAGE> 8
PART III
Item 10. Directors and Executive Officers of the Registrant.
The Fund has no directors or executive officers, as it is managed by the
General Partner. There are no "significant employees" of the fund.
The Funds General Partner is Advanced Futures Strategies, Inc., a Delaware
corporation incorporated on August 1, 1991. The General Partner has been
registered with the CFTC as a Commodity Pool Operator and Commodity Trading
Advisor since October 29, 1991, and is also an NFA member.
In July 1994, Mr George D.F. Lamborn acquired all the shares of the General
Partner that he did not previously own. Mr. Lamborn has been a majority
shareholder of the General Partner since inception. There were no material
changes in the General Partner's management or activities.
The only principals of the General Partner are as follows:
George D.F. Lamborn is the President and sole principal shareholder of the
General Partner. Since December 1990, Mr. Lamborn has also served as the
President, Director and sole shareholder of Lamborn Asset Management Inc.,
("LAMI") and introducing broker guaranteed by the Broker and the parent company
of Lamborn Securities Inc. ("LSI"), the Selling Agent and an introducing broker
guaranteed by the Broker, and of Lamborn Commodity Pool Management, Inc., a
Commodity Pool Operator. Mr. Lamborn has also served in various industry
positions, including serving as President of the Futures Industry Association,
as a co-founder and Director of NFA, on several CFTC and Exchange Advisory
Committees, as well as serving as Chairman for the Coffee, Sugar & Cocoa
Exchange and the CSC Clearing Corporation. From August 1989 through December
1990, He was Chairman for Balfour Maclaine Futures, Inc., a futures commission
merchant. From 1985 through August, 1989, he served as a Senior Vice President
and Manager of the Futures Division at Thompson McKinnon Securities, Inc. From
1983 to 1985, he was the Chairman of Donaldson, Lufkin & Jenrette Futures, Inc.
From 1981 to 1983, he was Co-Chairman of Refco International. He previously held
the positions of Senior Managing Director at Shearson American Express and
President of Donaldson, Lufkin & Jenrette Futures. Mr. Lamborn attended Brown
University.
Phillip L. Fondren, is the Vice-President and Secretary of
8
<PAGE> 9
the General Partner. In 1975 he joined Shearson Hayden Stone and managed its
Metals Department until 1983. It was under his guidance that it developed its
bullion trading business and became an international bullion dealer. In 1983 he
became Executive Vice President of Commodity Services of Shearson Lehman
Brothers. In 1987 Mr. Fondren joined Thompson McKinnon Securities, Inc. and
developed its foreign exchange, metals, and energy business. In 1989 he joined
the Balfour Maclaine Corporation to establish its foreign exchange and bullion
business. He was also responsible for managing its Portfolio Management
business. From December 1990 to December 1991, he was the President of Balfours'
futures brokerage company. In February, 1992, Mr. Fondren started his own firm,
Altra Management Services, Inc., a consulting business which provides services
in the foreign exchange and managed futures industries.
Item 11. Executive Compensation.
The Fund has no officers or directors. the General Partner or the Broker
performs the services for the Fund as described in the Prospectus.
The General Partner may receive an incentive fee from the Fund in the
amount of the difference between 20% of the Net Increase in Net Asset Value and
the actual incentive fees accrued and paid to the Advisors for trading gains
which are calculated on their allocated portion of the Fund assets.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The Partnership has no directors or officers: the Limited
Partnership Agreement delegates all management of the Partnership's affairs to
the General Partner. The registrant does not know of any arrangement the
operation of which may at a subsequent date result in a change in control of the
registrant.
As of December 31, 1999, the General Partner owned 26 units of General Partner
Interest valued at $15,680. As of December 31, 1999, the following persons were
known to the registrant to be beneficial owners of more than 5% of the Units
Title of Name and Address Amount and Nature Percent of
Class Of Beneficial Owner of Beneficial Ownership Class
- -------- ------------------- ----------------------- ----------
Limited Chester Jarmolowski $ 15,077 5.8%
Partner- 2301 Ferguson Road
ship Allison Park, PA
Unit 15101
Item 13. Certain Relationships and Related Transactions.
9
<PAGE> 10
Except as described in the Prospectus and Items 11 and 12 above, there are no
relationships or related transaction which are required to be described herein
other than as described below.
The public offering of the Units began on October 27, 1992 and concluded as
of May 4, 1993. Lamborn Securities Inc. acted as the selling agent of the Units
and received commission payments from the Broker totaling $ 77,572 as of
December 1993. There were no new partnership units sold during 1999, 1998, 1997,
1996, 1995 or 1994. In addition, Advanced Computer Strategies, Inc. paid for the
organizational and offering expenses of the Partnership, totaling $615,000. ACS
was partially reimbursed for its payment of such expenses by the Partnership
from a payment of 5% of subscription proceeds and will receive non-trading
income earned on the Partnership's assets, and redemption penalties charged for
early redemption of Units up to a maximum of a total of 15% of the Fund's
subscription proceeds.
PART IV
Item 14. Exhibits, Financial Statements Schedules, and Reports
on Form 8-K.
(a) (1) and (2)Financial Statements and Financial Statements
Schedules.
The Financial Statements and Report of Independent Auditors listed in the
accompanying index are file as part of this annual report.
(3) Exhibits.
---------
*3.01 Limited Partnership Agreement of the Partnership
*3.02 Certificate of Limited Partnership of the Registrant
*3.03 Request for Redemption
*4.01 Specimen of Unit Certificate
*10.01 Form of Customer Agreement and Supplement to Customer Agreement
between Registrant and Brody, White & Company, Inc.
*10.02 Form of Subscription Agreement
*10.03 Form of Escrow Agreement between Registrant and United Missouri
Bank, n.a.
10
<PAGE> 11
*10.04 Form of Management Agreement among Registrant, Advanced Computer
Strategies, Inc. and Chang-Crowell Management Corporation.
*10.05 Form of Management Agreement among Registrant, Advanced Computer
Strategies, Inc. and G.K. Capital Management, Inc.
*10.06 Form of Management Agreement among Registrant, Advanced Computer
Strategies, Inc. and Oppenheimer Futures Trading Advisory
Services, Inc.
*10.07 Form of Management Agreement among Registrant, Advanced Computer
Strategies, Inc. and Intertrade, Inc.
*10.08 Form of Management Agreement among Registrant, Advanced Computer
Strategies, Inc. and Willowbridge Associates, Inc.
*10.08(a) Form of Amendment No. 1 to the Management Agreement among
Registrant, Advanced Computer Strategies, Inc. and Willowbridge
Associates, Inc.
**10.09 Form of Management Agreement among Registrant, Advanced Computer
Strategies, Inc. and Witter & Lester, Inc.
***10.10 Form of Management Agreement among Registrant, Advanced Computer
Strategies, Inc. and Silver Knight Investment Management, Ltd.
****10.11 Form of Management Agreement among Registrant, Advanced Computer
Strategies, Inc. and Crow Trading, Inc.
****10.12 Form of Management Agreement among Registrant, Advanced Computer
Strategies, Inc. and FX 500 Ltd.
*******10.13 Form of Management Agreement among Registrant, Advanced Computer
Strategies, Inc. and TrendLogic Associates, Inc.
** 13.01 1993 Annual Report to Limited Partners.
*** 13.02 1994 Annual Report to Limited Partners.
**** 13.03 1995 Annual Report to Limited Partners
*****13.04 1996 Annual Report to Limited Partners
11
<PAGE> 12
******13.05 1997 Annual Report to Limited Partners
*******13.06 1998 Annual Report to Limited Partners
13.07 1999 Annual Report to Limited Partners
* Incorporated by reference from the Partnership's Registration Statement on
Form S-1 (File No. 33-49716).
** Incorporated by reference from the Partnership's 1993 Form 10K
*** Incorporated by reference from the Partnership's 1994 Form 10K
**** Incorporated by reference from the Partnership's 1995 Form 10K
***** Incorporated by reference from the Partnership's 1996 Form 10K
****** Incorporated by reference from the Partnership's 1997 Form 10K
******* Incorporated by reference from the Partnership's 1998 Form 10K
Exhibit 13.06 is filed herewith in.
The registrant has no subsidiaries.
(b) Reports on Form 8-K
None
12
<PAGE> 13
SIGNATURES
Pursuant to the requirement of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized on the 20th day of
March 2000.
JEFFERSON FUTURES RESERVE I, L.P.
(Registrant)
/s/ George Lamborn
------------------------------------
George Lamborn, President
Advance Computer Strategists, Inc.
General Partner
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities indicated on the 20th day of March 2000.
/s/ George Lamborn
- ---------------------------------------
George Lamborn, President and Director
Advance Computer Strategists, Inc.
General Partner
13
<PAGE> 1
EXHIBIT 13.07
[LETTERHEAD OF MICHAEL COGLIANESE]
INDEPENDENT AUDITOR'S REPORT
TO THE PARTNERS OF JEFFERSON FUTURES RESERVE I, L.P.
LIMITED PARTNERSHIP:
WE HAVE AUDITED THE ACCOMPANYING BALANCE SHEETS OF JEFFERSON FUTURES RESERVE I,
L.P. AS OF DECEMBER 31, 1999 AND 1998, AND THE RELATED STATEMENTS OF INCOME AND
PARTNERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998. THESE FINANCIAL
STATEMENTS ARE THE RESPONSIBILITY OF THE PARTNERSHIP'S MANAGEMENT. OUR
RESPONSIBILITY IS TO EXPRESS AN OPINION ON THESE FINANCIAL STATEMENTS BASED ON
OUR AUDIT.
WE CONDUCTED OUR AUDIT IN ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS.
THOSE STANDARDS REQUIRE THAT WE PLAN AND PERFORM THE AUDIT TO OBTAIN REASONABLE
ASSURANCE ABOUT WHETHER THE FINANCIAL STATEMENTS ARE FREE OF MATERIAL
MISSTATEMENTS. AN AUDIT INCLUDES EXAMINING, ON A TEST BASIS, EVIDENCE SUPPORTING
THE AMOUNTS AND DISCLOSURES IN THE FINANCIAL STATEMENTS. AN AUDIT ALSO INCLUDES
ASSESSING THE ACCOUNTING PRINCIPLES USED AND SIGNIFICANT ESTIMATES MADE BY
MANAGEMENT, AS WELL AS EVALUATING THE OVERALL FINANCIAL STATEMENT PRESENTATION.
WE BELIEVE THAT OUR AUDIT 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 JEFFERSON FUTURES RESERVE I,
L.P. AT DECEMBER 31, 1999 AND 1998, AND THE RESULTS OF ITS OPERATIONS AND
PARTNERS' EQUITY FOR THE YEARS THEN ENDED IN CONFORMITY WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES.
/S/ MICHAEL COGLIANESE
MICHAEL COGLIANESE
CERTIFIED PUBLIC ACCOUNTANT
BLOOMINGDALE, ILLINOIS
MARCH 1, 2000
<PAGE> 2
JEFFERSON FUTURES RESERVE I, L.P.
A DELAWARE LIMITED PARTNERSHIP
BALANCE SHEET
December 31, 1999 and 1998
1999 1998
ASSETS
CURRENT ASSETS
Cash held at bank $ 0 0
Amount due from brokers 262,102 685,627
Open Trade Equity 33,769 11,592
------------------------------
Total Current Assets $ 295,871 697,219
------------------------------
LIABILITIES & PARTNERSHIP EQUITY
CURRENT LIABILITIES
Accrued commissions $ 2,219 6,715
Accrued management fees 1,190 4,318
Due to bank 3,134 3,199
Accrued expenses 15,314 15,095
Redemptions payable 10,252 9,246
------------------------------
Total Liabilities $ 32,109 38,573
------------------------------
PARTNERSHIP EQUITY
General Partner $ 15,680 24,039
Limited Partners 248,082 634,607
------------------------------
Total Partners' Equity $ 263,762 658,646
------------------------------
Total Liabilities & Partners' Equity $ 295,871 697,219
==============================
See Notes to Financial Statements.
<PAGE> 3
JEFFERSON FUTURES RESERVE I, L.P.
A DELAWARE LIMITED PARTNERSHIP
STATEMENT OF INCOME
Years ended December 31, 1999 and 1998
1999 1998
REVENUE
Gross realized gains from trading $ (88,192) 236,406
Change in unrealized gains/(loss)
from trading 22,177 (52,135)
Interest income 6,807 5,809
------------------------------
Total Revenue $ (59,208) 190,080
EXPENSES
Brokerage commissions $ 37,534 55,259
Exchange and NFA fees 2,859 4,385
Management fees 10,562 15,848
Incentive fees 0 25,069
Other administrative expenses 57,975 58,000
------------------------------
Total Expenses $ 108,930 158,561
------------------------------
Net Income/(Loss) $(168,138) 31,519
==============================
See Notes to Financial Statements.
<PAGE> 4
JEFFERSON FUTURES RESERVE I, L.P.
A DELAWARE LIMITED PARTNERSHIP
STATEMENT OF PARTNERSHIP EQUITY
For the years ended December 31, 1999 and 1998
Partners' Equity
General Limited Total
----------------------------------
Year ended December 31, 1998
Balance December 31, 1997 $ 22,769 689,743 712,512
Capital Contributions $ 0 0 0
Capital Withdrawals $ 0 (85,385) (85,385)
Net Income (Loss) $ 1,270 30,249 31,519
--------------------------------
Balance December 31, 1998 $ 24,039 634,607 658,646
Year ended December 31, 1999
Capital Contributions $ 0 0 0
Capital Withdrawals $ 0 (226,746) (226,746)
Net Income (Loss) $ (8,359) (159,779) (168,138)
--------------------------------
Balance December 31, 1999 $ 15,680 248,082 263,762
=================================
1999 1998
Number of Units Outstanding 437 712
NAV Per Unit $ 603 925
See Notes to Financial Statements.
<PAGE> 5
JEFFERSON FUTURES RESERVE I, L.P.
A DELAWARE LIMITED PARTNERSHIP
NOTES TO THE FINANCIAL STATEMENTS
Note 1.
Nature of the Business and Significant Accounting Policies
Organization of the Partnership
Jefferson Futures Reserve I, L.P., a Delaware Limited Partnership, was
formed as a limited partnership under the laws of the state of Delaware for
the purpose of engaging in speculative trading of commodities, futures and
options and forward contracts in foreign currencies. The Partnership began
its operations on May 5, 1993 and will continue in existence until December
31, 2011 or upon earlier occurrence of any event requiring termination as
prescribed in the Limited Partnership Agreement.
The General Partner is Advanced Computer Strategies, Inc. The General
Partner is registered with the Commodities Futures Trading Commission
(CFTC) as a Commodity Pool Operator and is also a member of National
Futures Association (NFA).
Significant accounting policies:
Open trades market :
The United States commodity futures exchanges employ a "marking to
market" system of accounting for every contract's gain or loss on a
daily basis. Under this system, all futures contracts held are valued
at market, which is the settlement price determined on the commodity
exchanges as of the end of each business day. The net gain or loss so
determined on all contracts held at the close of the last business day
is taken into income for the years ended December 31, 1999 and 1998.
In 1990, the Financial Accounting Standards Board adopted Statement
Number 105, "Disclosure of Information about Financial Instruments
with Concentrations of Credit Risk", which requires disclosure of
information concerning financial instruments with off-balance sheet
risk and financial instruments with concentrations of credit risk.
<PAGE> 6
JEFFERSON FUTURES RESERVE I, L.P.
A DELAWARE LIMITED PARTNERSHIP
NOTES TO THE FINANCIAL STATEMENTS
Jefferson Futures Reserve I, L.P. purchases and sells futures and
option contracts. The Fund is subject to market risk associated with
the changes in the value of the underlying financial instruments as
well as the loss of appreciation and risk that a counterparty will
fail to perform.
Income taxes:
Income taxes are not provided for by the Partnership because taxable
income (loss) of the Partnership is includable in the income tax
returns of the partners.
Statement of Cash Flows:
The Partnership has elected not to provide a statement of cash flows
as permitted by Statement of Financial Accounting Standard Number 102
"Statement of Cash Flows".
Note 2.
Net Asset Value Per Unit:
The Unit Value at December 31, 1999 and 1998 was computed by dividing the
Partnership Capital by the number of outstanding units.
Note 3.
Limited Partnership Agreement:
The Limited Partners and General Partner share in the profits and
losses of the Partnership in proportion to the number of units or unit
equivalents held by each. However, no Limited Partner is liable for
obligations of the Partnership in excess of his capital contribution
and profits, if any, and such other amounts as he may be liable for
pursuant to the Act.
Responsibility for managing the Partnership is vested solely in the
General Partner.
The Partnership bears all expenses incurred in connection with its
trading activities, including commodity brokerage commissions and fees
payable to the Trading Advisor.
<PAGE> 7
JEFFERSON FUTURES RESERVE, L.P.
A DELAWARE LIMITED PARTNERSHIP
NOTES TO THE FINANCIAL STATEMENTS
Note 4.
Advisory Agreement:
The Partnership has currently entered into advisory agreements with two
Trading Advisors. These agreements provide for monthly management fees of
up to 2.5% (per annum) on Net Assets allocated to each Advisor and
monthly/quarterly incentive fees ranging from 15% to 17.5% of new net
profits generated by each Advisor.
Note 5.
Agreement with Related Parties:
The General Partner will receive an incentive fee equal to 20% of the
appreciation in the net asset value of the fund, less the actual incentive
fees paid to the trading advisors. The General Partner and its affiliates
will also receive a portion of the brokerage commissions charged to the
Partnership.
Note 6.
Other Expenses:
The Partnership will pay all of the Partnership's ongoing expenses such as
legal, accounting, administrative, software, auditing, and miscellaneous
office expenses.
Note 7.
Derivative Financial Instruments and Fair Value of Financial Instruments.
A derivative financial instrument is a financial agreement whose value is
linked to, or derived from, the performance of an underlying asset. The
underlying asset can be currencies, commodities, interest rates, stocks, or
any combination. Changes in the underlying asset indirectly affect the
value of the derivative. All trading instruments are subject to market
risk, the risk that future changes in market conditions may make an
instrument less valuable or more onerous. As the instruments are recognized
at fair market value, those changes directly affect reported income.
<PAGE> 8
JEFFERSON FUTURES RESERVE, L.P.
A DELAWARE LIMITED PARTNERSHIP
NOTES TO THE FINANCIAL STATEMENTS
Financial instruments (including derivatives) used for trading purposes are
recorded in the statement of financial condition at fair value at the
reporting date. Realized and unrealized changes in fair values are
recognized in net trading revenue in the period in which the changes occur.
Interest income arising from trading instruments is included in the
statement of operations as part of interest income.
Notional amounts do not represent the amounts exchanged by the parties to
derivatives and do not measure the Partnership's exposure to credit or
market risks. The amounts exchanged are based on the notional amounts and
other terms of the derivatives.
The Partnership engages in the speculative trading of derivative financial
instruments which includes futures contracts. Futures contracts are
commitments to either purchase or sell designated financial instruments at
a future date for a specified price and may be settled in cash or through
delivery. Initial margin requirements are met in cash or other instruments,
and changes in the contract values are settled daily. The Partnership has
funds at the Commodity broker in segregated accounts as required by the
Commodity Exchange Act, as amended. These funds are used to meet minimum
margin requirements for all of the Partnership's open positions, as set by
the exchange upon which each futures contract is traded. These requirements
are adjusted, as needed, due to daily fluctuations in the values of the
underlying assets.
The Partnership had realized net trading gains from futures for the year
ended 1999 and 1998 of $-88,192 and $236,406 respectively, as reported in
the statement of operations. The Partnership had revenue from the change in
unrealized net trading gains of $22,177 and $-52,135 for the same period.
Unrealized holdings at December 31, 1999 Fair Value Notional Value
Futures contracts at a gain $ 35,249 $ 2,103,142
Futures contracts at a loss (1,480) 115,484
-------- -----------
Total $ 33,769 $ 2,218,626
======== ===========
<PAGE> 9
To the best of my knowledge and belief, the information contained in this
document is accurate and complete.
/s/ George Lamborn
- ---------------------------------------------
George Lamborn, President
Advanced Computer Strategies, Inc.
General Partner and Commodity Pool Operator
Jefferson Futures Reserve, L.P.
A Delaware Limited Partnership
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 295,871
<OTHER-ITEMS-ASSETS> 295,871
<TOTAL-ASSETS> 697,219
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 32,109
<TOTAL-LIABILITIES> 32,109
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 263,762
<DIVIDEND-INCOME> 6,807
<INTEREST-INCOME> (88,192)
<OTHER-INCOME> 22,177
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 236,406
<APPREC-INCREASE-CURRENT> (52,135)
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (401,348)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 10,562
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 925
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> (322)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 603
<EXPENSE-RATIO> 0
</TABLE>
