-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IbbFXcGRo15KMbqSg2ZHtCICqGCG/yZXdUpt2AkgGdSLp3UFrYFSJYiv/DjNvfEw ReMO5JG+Vfyd1GdcGLSRVA== 0000950137-99-000776.txt : 19990402 0000950137-99-000776.hdr.sgml : 19990402 ACCESSION NUMBER: 0000950137-99-000776 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990331 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MAXIMUS FUND I LLC CENTRAL INDEX KEY: 0001037403 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES [6200] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 333-25331 FILM NUMBER: 99583133 BUSINESS ADDRESS: STREET 1: 8318 N UNIVERSITY CITY: PEORIA STATE: IL ZIP: 61615 BUSINESS PHONE: 3096915706 MAIL ADDRESS: STREET 1: 8218 N UNIVERSITY CITY: PEORIA STATE: IL ZIP: 61615 10-K 1 FORM 10-K DATED 12/31/98 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, 1998 Commission file number __________ Maximus Fund I, L.L.C. (Exact name of registrant as specified in its charter) Delaware 36-4161664 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 8218 N. University 61615 Peoria, IL (Zip code) (Address of principal executive offices) Registrant's telephone number, including area code:(309)691-5706. Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12 (g) of the Act: 0 0 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 No X ---- ---- Registrant is a limited partnership and thus has no voting stock held by non-affiliates or otherwise. 1 2 Item 1. Business (a) Maximus Fund I, L.L.C. (the "Company", the "Partnership", the "Registrant") a limited liability company was organized on January 17, 1997. The Company commenced trading as of February 3, 1998. The business of the Fund is the speculative trading of commodity interests. The General Partner for the Fund is Maximus Capital Management, Inc.(the "General Partner"). Maximus Capital Management, Inc. will also initially act as the Company's Trading Advisor. The Clearing broker for the Company is Iowa Grain Company (the "Clearing Broker"). The Company's trades are introduced to the Clearing Broker by D&R Commodities, Inc. (the "Introducing Broker"). In accordance with the Company's prospectus, the Company commenced trading after receiving a minimum of $1,000,000 in initial membership interests. Trading began after initial subsriptions of $1,009,106 were received. The Company offers both Class "A" and "B" interests. Class "A" interests are charged a monthly management fee equal to 1/12 of 1% (1% annually)of the Net Asset Value. Class "B" interests are charged both a 1/12 of 1% management fee and a quarterly incentive fee equal to 25% of the net trading profits. Brokerage fees for both share classes are $65.00 per round turn. The Company's prospectus dated September 4, 1997 contains a more detailed description of the fee calculations. The Company incurs ongoing legal, accounting, administrative, and other miscellaneous costs. The Company has no Employees. 2 3 The Company does not engage in operations in any foreign countries other than trading on foreign exchanges. 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 Clearing Broker and Introducing Broker are required to be registered with the CFTC and the NFA and are subject to certain financial and/or 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, 1998 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. 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, 1998 a total of 335 "A" Units and 229 "B" units were outstanding, with the General Partner holding 25 "A" units. 3 4 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, 1998. Item 6. Selected Financial Data. The following is a summary of operations and total assets of the Partnership for the year ended December 31, 1998 and the period from March 15, 1997 (Inception) through December 31, 1997. See Following Page For Selected Financial Data. 4 5 MAXIMUS FUND I, L.L.C. SELECTED FINANCIAL DATA FOR THE YEARS ENDED DECEMBER 31, 1998 and 1997
1998 1997 REVENUE Gross realized gains from trading $ 27,366 $ 0 Change in unrealized gains/(loss) from trading $ 4,737 $ 0 Interest Income $ 20,950 $ 0 ------------------------- Total Revenue $ 53,053 $ 0 EXPENSES Brokerage commissions/fees $ 41,714 $ 0 Advisory fees $ 3,288 $ 0 Other administrative expenses $ 29,050 Organizational expenses $ 7,093 $ 0 ------------------------- Total Expenses $ 81,145 $ 0 ------------------------- Net Income/(Loss) $ (28,092) $ 0 ========================= TOTAL ASSETS $ 550,999 $1,000 ========================= TOTAL LIABILITIES $ 14,490 $ 0 PARTNERS CAPITAL Limited Partner "A" Units $ 294,914 $ 0 General Partner "A" Units $ 23,804 $1,000 Limited Partner "B" Units $ 217,790 $ 0 ------------------------- ------------------------- TOTAL LIABILITIES AND PARTNERS CAPITAL $ 536,508 $ 0 ========================= NUMBER OF OUTSTANDING "A" 'UNITS 335 1 NET ASSET VALUE PER "A"UNIT (ROUNDED) $ 951 $1,000 NUMBER OF OUTSTANDING "B" 'UNITS 229 NET ASSET VALUE PER "B"UNIT (ROUNDED) $ 951
5 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 accounts with the Broker and are used by the Partnership as margin to engage in commodity futures 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, once trading commences. 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 6 7 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. Results of Operations Total assets of the partnership were $536,508 as of December 31, 1999 and $36,000 at December 31, 1997. Total redemptions for 1998 were $576,567. As of December 31, 1998, the Net Asset Value per Unit was $951.36, a loss of 4.86% over the prior years NAV. At December 31, 1997, the Net Asset Value per Unit was $1,000, as no trading had yet commenced. In 1998, the partnership had a net loss of $28,092. Trading activity accounted for $9611 of this loss. 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 PART III Item 10. Directors and Executive Officers of the Registrant. 7 8 The Company has no directors or executive officers, as it is managed by the General Partner. There are no "significant employees" of the Company. The Company's General Partner is Maximus Capital Management, Inc. an Illinois corporation incorporated in December 1996. The General Partner has been registered with the CFTC as a Commodity Pool Operator and Commodity Trading Advisor since December 13, 1996, and is also an NFA member. The two principals of the General Partner are as follows: Darren Frye is the President and sole shareholder of the General Partner. Mr. Frye has run D&R Enterprises, a fertilizer dealership, from October 1987 to present. Mr. Frye also runs his own soil-testing and consulting business, Midwest Soil Services, since September 1991. Mr. Frye started D&R Marketing in December 1994, in response to his customers demand for grain marketing advice. In February 1995, Mr. Frye founded D&R Commodities, a sole proprietorship which operated as an introducing broker. In May 1996, this sole proprietorship was incorporated as D&R Commodities, Inc. And Mr. Frye became the sole shareholder. D&R Commodities, Inc. Is registered with the NFA and CFTC as an Introducing Broker and Commodity Trading Advisor. Eric Sampson is the Director of Operations of the General Partner. Mr. Sampson graduated from Bradley University in December 1992 with a degree in finance, while he also worked as a bookkeeper for Dunlap State Bank from 1991 until graduation. In August 1992, Mr. Sampson entered the securities industry as a registered broker with Walnut Street Securities. In February 1994, Mr. Sampson became as Associated Person of bates Commodities, an introducing broker. He left Bates in February 1995 to accept a job with D&R Commodities, where he became an associated person in may 1995. Mr. Sampson has also served a representative of D&R Marketing and became a principal of D&R Commodities in December 1995. Item 11. Executive Compensation. The Company has no officers or directors. The General Partner performs the services for the Fund as described in the Prospectus. 8 9 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, 1998, the General Partner owned 25.02 unit in the Company. As of December 31, 1998, the following persons were known to the registrant to be beneficail owners of more than 5% of the Units. Name and Address of Amount and Nature Percent of Class Beneficial Owner of Beneficail Ownership Class - ----- ------------------- ----------------------- ---------- "A" Maschoff Pork Farms $95,136 29.8% Item 13. Certain Relationships and Related Transactions. 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 September 4, 1997. The General Partner has paid for the organizational and offering expenses of the Company, totaling $115,000. The General Partner will be reimbursed for such expenses through the allocation of interest earned by the Company until such expenses have been reimbursed. As of December 31, 1998, $7,093 was reimbursed to the General Partner for such expenses. PART IV 9 10 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. *1.00 1997 Independent Auditors Report 1.01 1998 Independent Auditors Report * Incorporated by reference from the Partnerships 1997 Form 10-K. The registrant has no subsidiaries. (b) Reports on Form 8-K None 10 11 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 29th day of March 1999. Maximus Fund I, L.L.C. (Registrant) /s/ -------------------------------- Darren Frye, President Maximus Capital Management, 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 29th day of March 1999. /s/ - -------------------------------- Darren Frye, President Maximus Capital Management, Inc. General Partner 11 EX-1.01 2 1998 INDEPENDENT AUDIT 1 EXHIBIT 1.01 MAXIMUS FUND I, LLC Annual Report December 31, 1998 INDEPENDENT AUDITOR'S REPORT To the Member: Maximus Fund I, LLC We have audited the accompanying statement of financial condition of Maximus Fund I, LLC at December 31, 1998, and the related statements of operations, and changes in Members' equity for the period March 16, 1998 (inception) to December 31, 1998. These financial statements are the responsibility of the Fund'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. These 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 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 Maximus Fund I, LLC at December 31, 1998 and the results of its operations for the period March 16, 1998 (inception) to December 31, 1998 in conformity with generally accepted accounting principles. Jeffrey Vorisek Certified Public Accountant McHenry, IL March 25, 1999 2 MAXIMUS FUND I, LLC STATEMENT OF FINANCIAL CONDITION December 31, 1998
ASSETS 1998 Cash $175,990 Cash at Broker 370,272 Unrealized net trading gains 4,737 ------------ Total Assets $550,999 ============ LIABILITIES Accrued commissions $ 8,435 Accrued management fees 288 Accrued administrative fees 5,057 Organization costs payable 443 Pending Member additions 267 ------------ Total Liabilities 14,490 ------------ MEMBER EQUITY Managing Member, 25 units outstanding 23,804 Class A Members, 310 units outstanding 294,914 Class B Members, 229 units outstanding 217,791 ------------ Total Member Equity 536,509 ------------ Total Liabilities and Member Equity $ 550,999 ============
See accompanying notes to financial statements. 3 MAXIMUS FUND I, LLC STATEMENT OF OPERATIONS For the period March 16, 1998 to December 31, 1998
REVENUES 1998 Realized net trading gains $ 27,366 Change in unrealized net trading gains 4,737 Interest income 20,950 ----------- Total Revenue 53,053 ----------- EXPENSES Commissions 40,046 Management fees 3,288 Administrative fees 30,718 Organizational costs 7,093 ----------- Total Expenses 81,145 ----------- Net loss $(28,092) =========== 1998 per unit information Managing Member net loss per unit $ (47.84) =========== Class A Members net loss per unit $ (47.84) =========== Class B Members net loss per unit $ (47.84) ===========
See accompanying notes to financial statements. MAXIMUS FUND I, LLC AFFIRMATION OF THE MANAGING MEMBER To the best of my knowledge and belief, the information contained herein is accurate and complete. Darren R. Frye, President Maximus Capital Management, Inc. General Partner and CPO Maximus Fund I, LLC 4 MAXIMUS FUND I, LLC STATEMENT OF MEMBERS' EQUITY For the period March 16, 1998 to December 31, 1998
Class A Class B Limited Limited Managing Members Members Member Total Beginning Equity -- -- -- -- Additions $862,355 $253,812 $ 25,000 $1,141,167 Net Loss (20,228) (6,668) (1,196) (28,092) Withdrawals (547,214) (29,353) -- (576,567) --------------------------------------------- 12/31/98 Equity $294,913 $217,791 $ 23,804 $ 536,508 ============================================= 12/31/98 per unit information Net asset value $ 951.36 $ 951.36 $ 951.36 $ 951.36 ============================================= Units outstanding 310 229 25 564 =============================================
See accompanying notes to financial statements. 5 MAXIMUS FUND I, LLC NOTES TO FINANCIAL STATEMENTS Note 1. Significant Accounting Policies NATURE OF BUSINESS AND ORGANIZATION: Maximus Fund I, LLC (the "Fund") is a limited liability company organized under the Delaware Limited Liability Company Act on January 17, 1997. The Fund seeks capital appreciation through the speculative trading of futures and options on futures in US markets. The Fund commenced trading During February 1998. The Fund will terminate December 31, 2027 or earlier upon certain circumstances as defined in the Limited Liability Company Agreement. NET ASSETS: The valuation of net assets includes unliquidated commodity futures and options contracts owned by the Fund, if any, at the end of the period. The unrealized gain or loss on these contracts, if any, has been calculated based on closing prices on the last business day of the year of 1998. Net asset Value is determined by subtracting liabilities from assets, which also equals Member equity. Net asset value per unit is determined by dividing member capital, by units outstanding at period end for each Class. THE FUND accounts for subscriptions, allocations, redemption's and management and incentive fees on a per unit basis by class. INCOME TAXES: No provision for income taxes has been made since the Fund is not subject to taxes on income. Each member is individually liable for the tax on its share of income or loss. The Fund prepares a calendar year information tax return. REVENUE RECOGNITION: Commodity futures and options are recorded on the trade date, and open futures positions are reflected in the accompanying statement of financial condition as the difference between the original contract value and the market value on the last business day of the reporting period. The market value of commodity futures and options contracts is based upon the most recent available settlement price on the appropriate commodity exchanges. US Treasury Securities are reported at cost plus accrued interest, which approximates market. Changes in unrealized gains or (losses) represent the total increases (decreases) in unrealized gains or (increases) decreases in unrealized losses on open positions during the period. INTEREST INCOME RECOGNITION: The Fund records interest income in the period it is earned. STATEMENT OF CASH FLOWS: The Fund has elected not to provide a statement of cash flows as permitted by Statement of Accounting Standards 102 "Statement of Cash Flows". Note 2. Agreements and Related Party Transactions: The Limited Liability Company Agreement vests all responsibility and powers for the management of the business and affairs of the Fund with the Managing Member, Maximus Capital Management, Inc. 6 MAXIMUS FUND I, LLC NOTES TO FINANCIAL STATEMENTS The Managing Member is registered with the Commodity Futures Trading Commission as a Commodity Pool Operator and Commodity Trading Advisor; and is also a member of the National Futures Association. The Managing Member is the Trading Advisor for the Fund. The Fund pays the Managing Member a monthly management fee as follows: Class A Interests - .083 (approximately 1% annually) of month end net asset value. Class B Interests - .083 (approximately 1% annually of month end net asset value. Class B Interests also pay a quarterly incentive fee to the Managing Member equal to 25% of new trading profits. The registered commodity broker is Iowa Grain Company, which clears futures transactions for the Partnership. The Partnership pays commissions to the commodity broker. The Introducing Broker of the Fund is D&R Commodities. The Introducing Broker may share in the commissions paid by the Fund to the Commodity Broker. The principal of the Managing Member is also a principal of the Introducing Broker. Administrative expenses are borne by the Partnership. Note 3. Member Equity and Redemption's: Members may withdraw all or part of their interests at month end net asset value with 10 days prior written notice. New Members are admitted at net asset value per unit as of the end of each calendar month. Note 4. Financial Instruments with Off-Balance Sheet Credit and Market Risk: Included in the definition of financial instruments forward contracts, options, and futures. The Fund invests in various futures and futures option contracts for speculative purposes. These contracts are marked to market daily, with variations in the value settled on a daily basis with the exchange upon which they are traded. For these contracts the unrealized gain or loss rather than the notional amounts, represents the approximate future cash requirements. At December 31, 1998 the Fund owned open positions that would have provided $4,737 if settled. Theoretically, the Fund is exposed to a market risk (loss) equal to the notional value of financial instruments purchased and unlimited liability on financial instruments sold short. Generally financial instruments can be closed out at the discretion of the Trading Advisor. However, if the market is illiquid, it could prevent the timely closeout of any unfavorable positions or require the Fund to hold these positions until maturity, regardless of the changes in their value or the Trading Advisor's investment strategies. 7 MAXIMUS FUND I, LLC NOTES TO FINANCIAL STATEMENTS Credit risk represents the accounting loss that would be recognized at the reporting date if counterparties failed completely to perform as contracted. Concentrations of credit risk (whether on or off balance sheet) that arise from financial instruments exist for groups of counterparties when they have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions. Futures contracts have little credit risk because futures exchanges are the counterparties. Note 5. 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. 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 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 are equivalent to the aggregate face value of the derivative financial instruments. Notional amounts do not represent the amounts exchanged by the parties to derivatives and do not measure the Fund's exposure to credit or market risks. The amounts exchanged are based on the notional amounts and other terms of the derivatives. The Fund 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. The Fund has assets at the Clearing Broker in accounts which are used to meet minimum margin requirements for all of the Fund's open positions. These requirements are adjusted, as needed, due to daily fluctuations in the values of the underlying assets. At December 31, 1998 the Fund had assets at the Commodity broker of $375,009. 8 NOTES TO FINANCIAL STATEMENTS The Fund had realized net gains from trading for the year ended 1998 of $27,366 as reported in the statement of operations. The Fund had income from the change in unrealized gains of $4,737 for the same period, as reported in the statement of operations. Note 6. Selected Financial Data Net realized and unrealized trading gains (losses), interest income, net income (loss) and increases (decreases) in net asset value per unit for the year ended December 31, 1998 and total assets as of December 31, 1998.
Net realized and unrealized trading gains (losses) net of brokerage commissions and fees $ 7,943 ============= Interest income $ 20,950 ============= Net loss $ (28,092) ============= Decrease in net asset value per unit $ (47.84) ============= Total assets $ 550,999 =============
EX-27 3 FDS
6 YEAR DEC-31-1998 JAN-01-1998 DEC-31-1998 0 0 0 550,999 0 550,999 0 0 14,490 14,490 0 0 0 0 0 0 0 0 0 536,509 0 20,950 0 0 0 27,366 4737 0 0 0 0 0 0 0 0 549,999 0 0 0 0 3,288 0 0 0 1000 0 (49) 0 0 0 951 0 0 0
-----END PRIVACY-ENHANCED MESSAGE-----