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Ais Futures Fund IV LP – ‘10-12G/A’ on 3/31/08

On:  Monday, 3/31/08, at 11:44am ET   ·   Private-to-Public:  Document/Exhibit  –  Release Delayed   ·   Accession #:  905148-8-2039   ·   File #:  0-52599

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 3/31/08  Ais Futures Fund IV LP            10-12G/A¶              2:1.1M                                   Sidley Austin LLP/FA

Amendment to Registration of Securities (General Form)   —   Form 10
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‘10-12G/A’   —   Amendment to Registration of Securities (General Form)


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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Amendment No. 3
 
to
 
FORM 10
 
GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934
 
AIS FUTURES FUND IV L.P.
(Exact name of registrant as specified in its charter)
 
DELAWARE
(State or other jurisdiction of
incorporation or organization)
 
13-3909977
(I.R.S. Employer
Identification No.)
     
c/o AIS FUTURES MANAGEMENT LLC
187 Danbury Road, P.O. Box 806
Wilton, Connecticut  06897
 
John Hummel
AIS Futures Management LLC
187 Danbury Road, P.O. Box 806
Wilton, Connecticut  06897
 
(203) 563-1180
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
 
__________________________
 
Copies to:
 
James Biery
Nathan A. Howell
Lauren Wolf
Sidley Austin LLP
One South Dearborn
Chicago, Illinois 60603
 
 
 
Securities to be registered pursuant to Section 12(b) of the Act:  NONE
   
Securities to be registered pursuant to Section 12(g) of the Act:     Limited Partnership Interests
       (Title of Class)
 
 
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (Check one):  
 
Large accelerated filer  [_]
Accelerated filer  [_]
   
Non-accelerated filer  [_]
Smaller reporting company  [X]

 
 
                                                                                                                                

                                                                                                                             
 
Item 13:   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
Financial statements required by this item, including unaudited financial statements for the quarter ending March 31, 2007, the report of McGladrey & Pullen, LLP for the fiscal year ended December 31, 2006, and the report of Salvatore Albanese & Co. for the fiscal years ended December 31, 2005 and 2004 are included herewith following the Index to Financial Statements and are incorporated by reference into this Item 13.

The supplementary financial information specified in Item 302 of Regulation S-K is not applicable.

Item 15:   FINANCIAL STATEMENTS AND EXHIBITS
 
(a)           Financial Statements
 
The financial statements required by this Item are included herewith, beginning following the Index to Financial Statements appearing after the signature page hereof, and are incorporated into this Item 15.
 
 (b)           Exhibits
 
The following documents (unless otherwise indicated) are filed herewith and made part of this registration statement.
 
Exhibit Designation
Description
   
*3.1
Certificate of Formation of AIS Futures Fund IV L.P.
   
+4.2
Fourth Amended and Restated Limited Partnership Agreement of AIS Futures Fund IV L.P., dated as of March 1, 2008
   
++10.1
Customer Agreement between Calyon Financial Inc. and AIS Futures Fund IV L.P.
   
*16.1
Letter re: Change in Certifying Accountant

_____________________
 
*This exhibit is incorporated by reference to the exhibit of the same number and description filed with the Partnership’s Registration Statement (File No. 000-52599) filed on April 30, 2007 on Form 10 under the Securities Exchange Act of 1934.
 
+This exhibit is incorporated by reference to the exhibit of the same number and description filed with the Partnership’s Current Report (File No. 000-52599) filed on March 5, 2008 on Form 8-K under the Securities Exchange Act of 1934.
 
++This exhibit is incorporated by reference to the exhibit of the same number and description filed with the Partnership’s Registration Statement (File No. 000-52599) filed on April 30, 2007 on Form 10 under the Securities Exchange Act of 1934.  As of January 2, 2008, Calyon Financial Inc. was renamed Newedge Financial Inc.  The existing Customer Agreement remains in effect, but under the new name.
 
 

 
SIGNATURES
 
Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
Dated:  March 31, 2008
AIS FUTURES FUND IV L.P.
 
By:AIS FUTURES MANAGEMENT LLC
 
By:  /S/ John Hummel
 
                                       
Name:  John Hummel
Title:  President
 
 


 

INDEX TO FINANCIAL STATEMENTS
 

AIS Futures Fund IV L.P, Financial Statements, March 31, 2007
 
Statements of Financial Condition, March 31, 2007 (Unaudited) and December 31, 2006 (Audited)
 
Condensed Schedule of Investments, March 31, 2007 (Unaudited)
 
Condensed Schedule of Investments, December 31, 2006 (Audited)
 
Statements of Operations For the Three Months Ended March 31, 2007 and 2006 (Unaudited)
 
Statements of Changes in Partners’ Capital (Net Asset Value) For the Three Months Ended March 31, 2007 and 2006 (Unaudited)
 
Notes to Financial Statements

AIS Futures Fund IV L.P. Annual Report, December 31, 2006
 
Report of Independent Registered Public Accounting Firm
 
Independent Auditor’s Report
 
Statements of Financial Condition, December 31, 2006 and 2005
 
Condensed Schedule of Investments, December 31, 2006
 
Condensed Schedule of Investments, December 31, 2005
 
Statements of Operations For the Years Ended December 31, 2006, 2005 and 2004
 
Statements of Changes in Partners’ Capital (Net Asset Value) For the Years Ended December 31, 2006, 2005 and 2004
 
Notes to Financial Statements
 
AIS Futures Management LLC Balance Sheet, December 31, 2006
 
Independent Auditor’s Report
 
Balance Sheet, December 31, 2006
 
Notes to Balance Sheet
 
AIS Futures Management LLC Balance Sheet, March 31, 2007
 
Balance Sheet, March 31, 2007 (Unaudited)
 
Notes to Balance Sheet (Unaudited)
 


 
AIS FUTURES FUND IV L.P.
STATEMENTS OF FINANCIAL CONDITION
March 31, 2007 (Unaudited) and December 31, 2006 (Audited)
_______________
 
         
   
(Unaudited)
   
(Audited)
 
ASSETS
           
Equity in broker trading account
           
Cash
  $
2,644,108
    $
3,341,803
 
United States government securities
   
54,933,551
     
50,875,254
 
Unrealized gain (loss) on open contracts
   
1,784,483
      (1,978,076 )
Interest receivable
   
5,654
     
2,712
 
Deposits with broker
   
59,367,796
     
52,241,693
 
Cash
   
372,311
     
546,030
 
Total assets
  $
59,740,107
    $
52,787,723
 
                 
LIABILITIES
               
Accounts payable
  $
70,143
    $
51,208
 
Commissions and other trading fees on open contracts
    19,336       19,112  
Management Fee payable
   
82,307
     
72,095
 
Accrued General Partner Profit Share allocation
   
492,605
     
0
 
General Partner Profit Share allocation payable
   
0
     
83,935
 
Selling Agent administrative and service fee payable
   
159,054
     
140,573
 
Subscriptions received in advance
   
372,301
     
546,000
 
Redemptions payable
   
413,950
     
130,526
 
Total liabilities
   
1,609,696
     
1,043,449
 
                 
PARTNERS’ CAPITAL (Net Asset Value)
               
General Partner - Series B
   
196,008
     
179,169
 
Limited Partners - Series A
   
57,934,403
     
51,565,105
 
Total partners’ capital (Net Asset Value)
   
58,130,411
     
51,744,274
 
    $
59,740,107
    $
52,787,723
 
 
See accompanying notes.
 
F-1


AIS FUTURES FUND IV L.P.
CONDENSED SCHEDULE OF INVESTMENTS
March 31, 2007 (Unaudited)
_______________
 
UNITED STATES GOVERNMENT SECURITIES
 
Face Value
 
Maturity Date
Description
 
Fair Value
 
$
8,000,000
 
04/05/07
U.S. Treasury Bills
  $
7,993,379
      13.75 %
 
9,000,000
 
05/03/07
U.S. Treasury Bills
   
8,957,751
      15.41 %
 
7,000,000
 
05/10/07
U.S. Treasury Bills
   
6,960,255
      11.97 %
 
6,000,000
 
05/31/07
U.S. Treasury Bills
   
5,949,056
      10.23 %
 
6,000,000
 
07/05/07
U.S. Treasury Bills
   
5,920,810
      10.19 %
 
2,000,000
 
07/12/07
U.S. Treasury Bills
   
1,971,362
      3.39 %
 
1,000,000
 
07/26/07
U.S. Treasury Bills
   
983,638
      1.69 %
 
6,000,000
 
08/02/07
U.S. Treasury Bills
   
5,896,886
      10.14 %
 
5,000,000
 
08/09/07
U.S. Treasury Bills
   
4,909,360
      8.45 %
 
1,500,000
 
08/16/07
U.S. Treasury Bills
   
1,471,403
      2.53 %
 
4,000,000
 
08/23/07
U.S. Treasury Bills
   
3,919,651
      6.74 %
       
Total United States government securities *
               
       
(cost, plus accrued interest, - $54,933,551)
  $
54,933,551
      94.49 %

LONG FUTURES CONTRACTS
 
 
Description
 
Fair Value
 
 
Agricultural
  $ (1,472,364 )     (2.53 )%
 
Currencies
    (162,750 )     (0.28 )%
 
Energy
   
3,288,732
      5.66 %
 
Metals
   
129,640
      0.22 %
 
Total long futures contracts
   
1,783,258
      3.07 %

SHORT FUTURES CONTRACTS
 
Number of Contracts
 
Description
           
   
Stock Index
    (226,650 )     (0.39 )%
 
360     
 
Interest Rates (30 Year U.S. Treasury Bond, expires 06/2007)
   
227,875
      0.39 %
     
Total short futures contracts
   
1,225
      0.00 %
     
Total futures contracts
  $
1,784,483
      3.07 %

See accompanying notes.
 
*  Pledged as collateral for the trading of futures and options on futures contracts.
 
F-2

 
AIS FUTURES FUND IV L.P.
CONDENSED SCHEDULE OF INVESTMENTS
December 31, 2006 (Audited)
_______________
UNITED STATES GOVERNMENT SECURITIES
 
Face Value
 
Maturity Date
 
Description
 
Fair Value
   
% of Net
Asset Value
 
$
9,000,000
 
01/04/07
 
U.S. Treasury Bills
  $
8,992,318
      17.38 %
 
2,000,000
 
01/11/07
 
U.S. Treasury Bills
   
1,996,279
      3.86 %
 
500,000
 
01/18/07
 
U.S. Treasury Bills
   
498,584
      0.96 %
 
6,000,000
 
02/01/07
 
U.S. Treasury Bills
   
5,971,749
      11.54 %
 
8,000,000
 
04/05/07
 
U.S. Treasury Bills
   
7,893,629
      15.26 %
 
11,000,000
 
05/03/07
 
U.S. Treasury Bills
   
10,811,138
      20.89 %
 
9,000,000
 
05/10/07
 
U.S. Treasury Bills
   
8,836,491
      17.08 %
 
6,000,000
 
05/31/07
 
U.S. Treasury Bills
   
5,875,066
      11.35 %
         
Total United States government securities *
               
         
(cost, plus accrued interest, - $50,875,254)
  $
50,875,254
      98.32 %

LONG FUTURES CONTRACTS
 
 
Description
 
Fair Value
   
% of Net
Asset Value
 
 
Agricultural
  $
10,090
      0.02 %
 
Currencies
    (953,587 )     -1.84 %
 
Energy
    (732,312 )     -1.42 %
 
Stock Index
   
43,050
      0.08 %
 
Metals
    (1,423,598 )     -2.75 %
 
Total long futures contracts
    (3,056,357 )     -5.91 %

SHORT FUTURES CONTRACTS

Number of Contracts
 
Description
           
 
335
 
Interest Rates (30 Year U.S. Treasury Bond, expires 03/2007)
   
1,078,281
      2.08 %
     
Total futures contracts
  $ (1,978,076 )     -3.83 %
 
*  Pledged as collateral for the trading of futures and options on futures contracts.
 
See accompanying notes.
 
F-3

 
AIS FUTURES FUND IV L.P.
STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2007 and 2006 (Unaudited)
_______________
 
   
Three Months Ended
 
     
       
2006
 
   
(Unaudited)
   
(Unaudited)
 
TRADING GAINS (LOSSES)
           
Trading gains (losses)
           
Realized
  $
700,600
    $
1,276,611
 
Change in unrealized
   
3,762,559
     
801,217
 
Brokerage commissions
    (43,458 )     (29,916 )
Total trading gains
   
4,419,701
     
2,047,912
 
                 
NET INVESTMENT INCOME
               
Income
               
Interest income
   
681,447
     
379,945
 
                 
Expenses
               
Selling Agent Administrative and Service Fee
   
395,095
     
241,510
 
Management Fees
   
242,295
     
114,827
 
Operating expenses
   
24,950
     
9,450
 
                 
Total expenses
   
662,340
     
365,787
 
                 
Net investment income
   
19,107
     
14,158
 
                 
NET INCOME
   
4,438,808
     
2,062,070
 
                 
Less: General Partner Profit Share allocation
   
496,660
     
321,381
 
                 
Net income for pro rata allocation to all partners
  $
3,942,148
    $
1,740,689
 
                 
 
See accompanying notes.
 
F-4


AIS FUTURES FUND IV L.P.
STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL (NET ASSET VALUE)
For the Three Months Ended March 31, 2007 and 2006 (Unaudited)
_______________
 
   
Partners’ Capital
 
   
Series B
General
Partner
   
Series A
Limited
Partners
   
Total
 
                   
Balances at December 31, 2006
  $
179,169
    $
51,565,105
    $
51,744,274
 
Net income for the three months
                       
                       
General Partner Profit Share allocation
   
4,055
     
0
     
4,055
 
Pro rata allocation to all partners
   
16,839
     
3,925,309
     
3,942,148
 
Subscriptions
   
0
     
3,621,627
     
3,621,627
 
Redemptions
    (4,055 )     (1,177,638 )     (1,181,693 )
Balances at March 31, 2007
  $
196,008
    $
57,934,403
    $
58,130,411
 
Balances at December 31, 2005,
                       
as previously reported
  $
170,968
    $
28,194,561
    $
28,365,529
 
                         
Restatement for redemptions (Note 1)
                       
   
0
      (481,198 )     (481,198 )
                       
as restated
   
170,968
     
27,713,363
     
27,884,331
 
Net income for the three months
                       
                       
General Partner Profit Share allocation
   
3,651
     
0
     
3,651
 
Pro rata allocation to all partners
   
12,674
     
1,728,015
     
1,740,689
 
Subscriptions
   
0
     
5,124,118
     
5,124,118
 
Redemptions
    (3,651 )     (480,052 )     (483,703 )
Balances at March 31, 2006
  $
183,642
    $
34,085,444
    $
34,269,086
 
                         
 
See accompanying notes.
 
F-5


AIS FUTURES FUND IV L.P.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
_______________
 
Note 1.
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
A.           General Description of the Partnership
 
AIS Futures Fund IV L.P. (the Partnership) is a Delaware limited partnership, which operates as a commodity investment pool.  The Partnership engages in the speculative trading of futures contracts and options on futures contracts.  The Partnership is subject to the regulations of the Commodity Futures Trading Commission, an agency of the United States (U.S.) government which regulates most aspects of the commodity futures industry; rules of the National Futures Association, an industry self-regulatory organization; and the requirements of commodity exchanges and Futures Commission Merchants (brokers) through which the Partnership trades.
 
The limited partnership agreement provides, among other things, that the Partnership shall dissolve no later than December 31, 2026.
 
B.           Method of Reporting
 
The Partnership’s financial statements are presented in accordance with accounting principles generally accepted in the United States of America, which require the use of certain estimates made by the Partnership’s management.  Actual results could differ from those estimates.
 
C.           Futures and Options on Futures Contracts
 
Futures and options on futures are recorded on trade date and reflected at fair value, based on quoted market prices.  Gains or losses are realized when contracts are liquidated.  Net unrealized gains or losses on open contracts (the difference between contract trade price and quoted market price) are reflected in the statement of financial condition.  Any change in net unrealized gain or loss from the preceding period is reported in the statement of operations.  Brokerage commissions include other trading fees and are charged to expense when contracts are opened.
 
D.           Securities
 
United States government securities are stated at cost plus accrued interest, which approximates fair value.
 
E.           Income Taxes
 
The Partnership prepares calendar year U.S. and applicable state information tax returns and reports to the partners their allocable shares of the Partnership’s income, expenses and trading gains or losses.  No provision for income taxes has been made in these financial statements as each partner is individually responsible for reporting income or loss based on its respective share of the Partnership’s income and expenses as reporting for income tax purposes.
 
F-6


AIS FUTURES FUND IV L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (Unaudited)
_______________
 
Note 1.
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
F.           Capital Accounts
 
The Partnership offers two Series of Units.  The Series A Units are available to all qualified investors, subject to applicable conditions and restrictions.  The Series B Units are available for sale to the General Partner and its principals.  The Partnership does not report net asset value per unit, as each investors net asset value per unit may vary due to timing of subscriptions and redemptions and applicability of the General Profit Share allocation based on each Limited Partner’s capital account balances rather than the Partnership as a whole. The Partnership accounts for subscriptions, allocations and redemptions on a per partner capital account basis.  Income or loss, prior to the General Partner Profit Share allocation, is allocated pro rata to the capital accounts of all partners.  The General Partner Profit Share allocation applicable to each Limited Partner is allocated to the General Partner’s capital account from the Limited Partner’s capital account at the end of each calendar year or upon redemption by a Limited Partner.  For interim accounting periods, the General Partner Profit Share allocation is accrued, based on defined New Trading Profit to date, and is reflected as a liability of the Partnership in the statement of financial condition.
 
G.           Redemptions
 
Limited Partners may require the Partnership to redeem some or all of their capital upon ten days prior written notice.  Partner redemptions are recorded on their effective date, which is generally the last day of the month.
 
H.           Statement of Cash Flows
 
The Partnership has elected not to provide statements of cash flows as permitted by Statement of Financial Accounting Standards No. 102, “Statements of Cash Flows – Exemption of Certain Enterprises and Classification of Cash Flows from Certain Securities Acquired for Resale.”
 
I.           Recently Issued Accounting Pronouncements
 
In July 2006, the Financial Accounting Standards Board (FASB) issued Interpretation No. 48 (FIN 48) entitled “Accounting For Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109.”  FIN 48 prescribes the minimum recognition threshold a tax position must meet in connection with accounting for uncertainties in income tax positions taken or expected to be taken by an entity before being measured and recognized in the financial statements.  Adoption of FIN 48 was required for the fiscal year beginning January 1, 2007.  The adoption of FIN 48 did not have a material effect on the Partnership’s financial statements.
 
In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157).  FAS 157 defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America, and expands disclosures about fair value measurements.  While FAS 157 does not require any new fair value measurements, for some entities, the application of FAS 157 may change current practice.
 
F-7

 
AIS FUTURES FUND IV L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (Unaudited)
_______________
 
Note 1.
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
FAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years.  The implementation of FAS 157 is not expected to have a material impact on the Partnership’s financial statements.
 
J.           Fair Value
 
All of the Partnership’s assets and liabilities are considered financial instruments and are reflected at fair value, or at carrying amounts that approximate fair value because of the short maturity of the instruments.
 
K.           Change in Accounting Principle and Prior Period Restatement
 
Pursuant to the provisions of Statement of Financial Accounting Standards No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity” (FAS 150), redemptions approved by the General Partner prior to year end with a fixed effective date and fixed amount should be recorded as redemptions payable as of year end.  FAS 150 became effective for the Partnership during the year ended December 31, 2005.  The December 31, 2005 financial statements have been restated to reflect redemptions payable of $481,198, which was previously reported as partners’ capital.
 
L.           Interim Financial Statements
 
The financial statements included herein were prepared by us without audit according to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America may be omitted pursuant to such rules and regulations. The financial statements reflect, in the opinion of management, all adjustments necessary that were of normal and recurring nature and adequate disclosures to present fairly the financial position and results of operations as of and for the periods indicated. The results of operations for the three months ended March 31, 2007 and 2006 are not necessarily indicative of the results to be expected for the full year or for any other period.
 
These financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Form 10 previously filed with the Securities and Exchange Commission.
 
Note 2.
GENERAL PARTNER
 
The General Partner and commodity trading advisor of the Partnership is AIS Futures Management LLC, which conducts and manages the business and trading activities of the Partnership.
 
The Second Amended and Restated Limited Partnership Agreement (the “Limited Partnership Agreement”) provides for the General Partner to receive a monthly Management Fee equal to 1/12 of 2% (2% annually) of each Series A Limited Partner’s month-end Net Assets, as defined.  The General Partner also receives a Profit Share allocation equal to 20% of any New Trading Profit, as defined, attributable to each Series A Limited Partner’s Interest achieved as of each calendar year-end or upon redemption.
 
F-8


AIS FUTURES FUND IV L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (Unaudited)
_______________
 
Note 2.
GENERAL PARTNER (CONTINUED)
 
During the three months ended March 31, 2007 and 2006, certain Series A Limited Partners were charged Management Fees at a rate lower than described above, to offset the effect of the additional 1.5% per annum Selling Agent Service Fee described in Note 3.  Accordingly, for the three months ended March 31, 2007 and 2006, Management Fees were reduced by approximately $43,500 and $44,500, respectively.
 
Note 3.
SELLING AGENT ADMINISTRATIVE AND SERVICE FEES
 
Certain Series A Limited Partners that were solicited by  Selling Agents are charged an Administrative and Service Fee (the “Service Fee” equal to 1/12 of 2.5% (2.5% annually) of each Series A Limited Partner’s month-end Net Assets, as defined, sold by them which remain outstanding as of each month-end.  The Selling Agents may pass on a portion of the Service Fee to its investment executives.  In the event the Service Fee is no longer payable to a Selling Agent, the relevant Limited Partner who was solicited by such Selling Agent will no longer be charged the Service Fee.  For the three months ended March 31, 2007 and 2006, certain Limited Partners were not subject to the Service Fee.
 
For investment executives associated with the sale of Limited Partner Interests in excess of $500,000, the investment executive’s firm will receive an additional 1.5% per annum Service Fee with respect to such Limited Partner Interests in excess of $500,000, for the first twelve months following the sale of such Limited Partner Interests.  The additional Service Fee is paid by the Partnership, however, the General Partner reduces its Management Fee (see Note 2) related to the Limited Partner’s Interest.  Accordingly,  this additional Service Fee does not affect the total fees charged to the Limited Partner.
 
Note 4.
DEPOSITS WITH BROKER
 
The Partnership deposits funds with its clearing broker subject to Commodity Futures Trading Commission regulations and various exchange and broker requirements.  Margin requirements are satisfied by the deposit of U.S. Treasury bills and cash with such broker.  Accordingly, assets used to meet margin and other broker or regulatory requirements are partially restricted.  The Partnership earns interest income on its assets deposited with the broker.
 
Note 5.
SUBSCRIPTIONS, DISTRIBUTIONS AND REDEMPTIONS
 
Investments in the Partnership are made by subscription agreement, subject to acceptance by the General Partner.  A selling commission of up to 2% of the subscription amount may be deducted from the subscription proceeds and paid to the applicable Selling Agent, if any.  For the three months ended March 31, 2007 and 2006, $0 and $350 in selling commissions were charged to Limited Partners.  Limited Partner additions, as presented in the statement of changes in partners’ capital (net asset value), are net of such selling commissions.
 
The Partnership is not required to make distributions, but may do so at the sole discretion of the General Partner.  A Limited Partner may request and receive partial or full redemptions of their capital account as of the close of business on the last business day of any month, subject to restrictions in the Limited Partnership Agreement.
 
F-9


AIS FUTURES FUND IV L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (Unaudited)
_______________
 
Note 6.
TRADING ACTIVITIES AND RELATED RISKS
 
The Partnership engages in the speculative trading of U.S. futures contracts and for a brief period of time in 2006 traded options on U.S. futures contracts.  The Partnership is exposed to both market risk, the risk arising from changes in the market value of the contracts, and credit risk, the risk of failure by another party to perform according to the terms of a contract.
 
Purchase and sale of futures and options on futures contracts requires margin deposits with the broker. Additional deposits may be necessary for any loss on contract value.  The Commodity Exchange Act requires a broker to segregate all customer transactions and assets from such broker’s proprietary activities. A customer’s cash and other property (for example, U.S. Treasury bills) deposited with a broker are considered commingled with all other customer funds subject to the broker’s segregation requirements.  In the event of a broker’s insolvency, recovery may be limited to a pro rata share of segregated funds available.  It is possible that the recovered amount could be less than total cash and other property deposited.
 
For futures and options on futures contracts, risks arise from changes in the market value of the contracts. Theoretically, the Partnership is exposed to a market risk equal to the notional contract value of futures contracts purchased and unlimited liability on such contracts sold short.  As both a buyer and seller of options, the Partnership pays or receives a premium at the outset and then bears the risk of unfavorable changes in the price of the contract underlying the option.  Written options expose the Partnership to potentially unlimited liability; for purchased options, the risk of loss is limited o the premiums paid.
 
In addition to market risk, in entering commodity interest contracts, there is a credit risk that a counterparty will not be able to meet its obligations to the Partnership.  The counterparty for futures and options on futures contracts traded in the United States and on most non-U.S. futures exchanges is the clearinghouse associated with such exchange.  In general, clearinghouses are backed by the corporate members of the clearinghouse who are required to share any financial burden resulting from the nonperformance by one of their members and, as such, should significantly reduce the credit risk.
 
The Partnership maintains its cash in bank deposit accounts that, at times, may exceed federally insured limits.  The Partnership has not experienced any losses in such accounts.  The General Partner believes the Partnership is not exposed to any significant credit risk on cash.
 
The General Partner has established procedures to actively monitor market risk and minimize credit risk, although there can be no assurance that it will, in fact, succeed in doing so.  The Limited Partners bear the risk of loss only to the extent of their respective investments and, in certain specific circumstances, distributions and redemptions received.
 
Note 7.
INDEMNIFICATIONS
 
In the normal course of business, the Partnership enters into contracts and agreements that contain a variety of representations and warranties and which provide general indemnifications.  The Partnership’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Partnership that have not yet occurred.  The Partnership expects the risk of any future obligation under these indemnifications to be remote.
 
F-10


AIS FUTURES FUND IV L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (Unaudited)
_______________
 
Note 8.
FINANCIAL HIGHLIGHTS
 
The following information presents the financial highlights of the Partnership for the three months ended March 31, 2007 and 2006.  This information has been derived from information presented in the financial statements.
 
   
Three months ended
 
   
March 31,
     
       
2006
 
   
(Unaudited)
   
(Unaudited)
 
Total return for Series A Limited Partners taken as a whole
           
Total return before Profit Share allocation (3)
    8.18 %     6.21 %
Profit Share allocation (3)
    (0.92 )%     (0.90 )%
Total return after Profit Share allocation
    7.26 %     5.31 %
                 
Supplemental Data for Series A Limited Partners
               
                 
Ratio of expenses to average net asset value:
               
Expenses, excluding Profit Share allocation (2)
    4.79 %     4.71 %
Profit Share allocation (3)
    5.69 %     5.74 %
Total expenses
    2.10 %     2.21 %
Net investment income (1) (2)
    0.12 %     0.16 %
                 
The total returns and ratios are presented for Series A Limited Partners taken as a whole based on the Partnership’s standard Management Fee, Service Fee and Profit Share allocation arrangements.  An individual partner’s total returns and ratios may vary from the above total returns and ratios based on the timing of their capital additions and redemptions and given potentially different fee arrangements for a Series A Limited Partner.
 
The total returns and ratios exclude the effects of any 2% upfront selling commissions charged by Selling Agents.
 
______________
 
(1)
The net investment income is comprised of interest income less total expenses, excluding the General Partner Profit Share allocation.
 
(2)
Annualized.
 
(3)
Not annualized.
 
F-11

 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners
AIS Futures Fund IV L.P.
Wilton, Connecticut

We have audited the accompanying statement of financial condition, including the condensed schedule of investments, of AIS Futures Fund IV L.P. as of December 31, 2006 and the related statements of operations and changes in partners’ capital for the year 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 audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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 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 AIS Futures Fund IV L.P. as of December 31, 2006, and the results of its operations for the year then ended in conformity with U.S. generally accepted accounting principles.

/s/ McGladrey & Pullen, LLP

Chicago, Illinois
March 28, 2007
 
 
F-12

 
 
Salvatore Albanese & Co.
CERTIFIED PUBLIC ACCOUNTANTS


INDEPENDENT AUDITOR’S REPORT

To the Partners
AIS Futures Fund IV L.P.
Wilton, Connecticut

We have audited the accompanying statement of financial condition, including the condensed schedule of investments, of AIS Futures Fund IV L.P. as of December 31, 2005, and the statements of operations and changes in partners’ capital for the years ended December 31, 2005 and 2004. These financial statements are the responsibility of the Partnership’s management. Our responsibility to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 AIS Futures Fund IV L.P. as of December 31, 2005, and the results of its operations for the years ended December 31, 2005 and 2004, in conformity with accounting principles generally accepted in the United States of America.

Our audits were conducted for the purpose of forming an opinion on the 2005 and 2004 basic financial statements taken as a whole. The supplementary information is presented for purposes of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by Regulation 4.22(c) under the Commodity Exchange Act. Such information as of December 31, 2005 and 2004 has been subjected to the auditing procedures applied in the audit of the 2005 and 2004 basic financial statements taken as a whole.

/s/ Salvatore Albanese
New York, New York
March 19, 2006

875 Avenue of the Americas, New York, NY 10001
Tel: (212) 714-0064 Fax: (212) 629-9553
65 East John Street, Hicksville, NY 11801
Tel: (516) 417-8503 Fax: (516) 213-4895
www.salabanese.com
 
 
F-13

 
 
AIS FUTURES FUND IV L.P.
STATEMENTS OF FINANCIAL CONDITION
December 31, 2006 and 2005


 
 
 
         
2005
 
 ASSETS  
2006
   
(As Restated)
 
     Equity in broker trading account            
        Cash   $ 3,341,803     $ 366,808  
        United States government securities     50,875,254       26,017,706  
        Unrealized gain (loss) on open contracts     (1,978,076 )     2,770,383  
        Interest receivable     2,712       2,624  
                 
               Deposits with broker     52,241,693       29,157,521  
                 
        Cash     546,030       1,869,915  
                 
               Total assets   $ 52,787,723     $ 31,027,436  
                 
 LIABILITIES   $ 51,208     $ 16,942  
     Accounts payable                
     Commissions and other trading fees                
       on open contracts     19,112       12,013  
     Management Fee payable     72,095       34,612  
     General Partner Profit Share allocation payable     83,935       635,438  
     Selling Agent administrative and service fee payable     140,573       93,017  
     Subscriptions received in advance     546,000       1,869,885  
     Redemptions payable     130,526       481,198  
                 
                Total liabilities     1,043,449       3,143,105  
                 
PARTNERS’ CAPITAL (Net Asset Value)
               
     General Partner - Series B                
       (57.468 units outstanding at December 31, 2006 and 2005)     179,169       170,968  
     Limited Partners - Series A                
       (30,118.862 and 16,141.872 (as restated) units                
          outstanding at December 31, 2006 and 2005     51,565,105       27,713,363  
                 
                Total partners’ capital (Net Asset Value)      51,744,274       27,884,331  
                 
    $ 52,787,723     $ 31,027,436  


See accompanying notes.
 
 
F-14

 
AIS FUTURES FUND IV L.P.
CONDENSED SCHEDULE OF INVESTMENTS
December 31, 2006



UNITED STATES GOVERNMENT SECURITIES
 
                 
% of Net
Face Value
 
 Maturity Date
   Description  
Fair Value
   
Asset Value
                     
$ 9,000,000  
 01/04/07
 
 U.S. Treasury Bills
  $ 8,992,318       17.38 %
  2,000,000  
 01/11/07
    U.S. Treasury Bills     1,996,279       3.86  %
  500,000  
 01/18/07
    U.S. Treasury Bills     498,584       0.96 
  6,000,000  
 02/01/07
    U.S. Treasury Bills     5,971,749       11.54  %
  8,000,000  
 04/05/07
    U.S. Treasury Bills     7,893,629       15.26  %
  11,000,000  
 05/03/07
    U.S. Treasury Bills     10,811,138       20.89  %
  9,000,000  
 05/10/07
    U.S. Treasury Bills     8,836,491       17.08  %
  6,000,000  
 05/31/07
    U.S. Treasury Bills     5,875,066       11.35  %
                           
         Total United States government securities*              
         (cost, plus accrued interest, - $50,875,254)   $ 50,875,254       98.32  %
                           
LONG FUTURES CONTRACTS                     
                           
             
 
      % of Net 
     
 Description
     
 Fair Value
      Asset Value
                       
       Agricultural       $ 10,090       0.02  %
       Currencies         (953,587)       (1.84)  %
       Energy         (732,312)       (1.42)  %
       Stock Index         43,050       0.08  %
       Metals         (1,423,598)       (2.75)  %
                           
      Total long futures contracts       (3,056,357)       (5.91)  %
                           
  SHORT FUTURES CONTRACTS                     
                           
 
Number of 
                       
   
 Description
                   
                           
  335     Interest Rates (30 Year U.S. Treasury Bond, expires 03/2007)     1,078,281       2.08  %
                       
       Total futures contracts   $ (1,978,076)       (3.83) %
 

* Pledged as collateral for the trading of futures and options on futures contracts.


 

See accompanying notes.
 
 
F-15

 
 
AIS FUTURES FUND IV L.P.
CONDENSED SCHEDULE OF INVESTMENTS
December 31, 2005


 
UNITED STATES GOVERNMENT SECURITIES
 
 
                 
% of Net
Face Value
 
 Maturity Date
   Description  
Fair Value
   
Asset Value
                     
$ 1,500,000  
01/19/06
 
 U.S. Treasury Bills
  $ 1,497,128       5.37  %
  3,000,000  
02/16/06
 
 U.S. Treasury Bills 
    2,985,077       10.71  %
  2,000,000  
03/02/06
   U.S. Treasury Bills     1,987,160       7.13  %
  900,000  
03/09/06 
   U.S. Treasury Bills     893,809       3.21  %
  1,500,000  
03/10/06
   U.S. Treasury Bills     1,438,002       5.16  %
  7,000,000  
04/05/06 
   U.S. Treasury Bills     6,908,829       24.77  %
  500,000  
04/13/06
   U.S. Treasury Bills     494,270       1.77  %
  1,500,000  
05/25/06 
   U.S. Treasury Bills     1,474,886       5.29  %
  2,000,000  
06/08/06
   U.S. Treasury Bills     1,963,376       7.04  %
  3,500,000  
06/08/06
   U.S. Treasury Bills     3,435,299       12.32  %
  3,000,000  
06/22/06
   U.S. Treasury Bills     2,939,870       10.54 
                           
         Total United States government securities*              
         (cost, plus accrued interest, - $26,017,706)   $ 26,017,706        93.31  %
                           
LONG FUTURES CONTRACTS                     
                           
             
 
      % of Net 
     
 Description
     
 Fair Value
      Asset Value
                       
       Agricultural       $ 564,451       2.02  %
       Currencies         365,200       1.31  %
       Energy         793,521       2.85  %
       Metals         832,055       2.98  %
                           
      Total long futures contracts       2,555,227       9.16 %
                           
  SHORT FUTURES CONTRACTS                     
                           
 
Number of 
                       
   
 Description
                   
                           
  153     Interest Rates (30 Year U.S. Treasury Bond, expires 03/2006)     215,156       0.77   %
                       
       Total futures contracts   $ 2,770,383       9.93 %
 
 

* Pledged as collateral for the trading of futures and options on futures contracts.





See accompanying notes.
 
 
F-16

 
 
AIS FUTURES FUND IV L.P.
STATEMENTS OF OPERATIONS
For the Years Ended December 31, 2006, 2005 and 2004
 

 
   
2006
   
2005
   
2004
 
 TRADING GAINS (LOSSES)                  
                   
        Trading gains (losses)
                 
            Realized   $ 2,560,006     $ 234,113     $ 1,646,683  
            Change in unrealized     (4,748,459 )     3,310,504       (675,165 )
            Brokerage commissions     (125,731 )     (104,850 )     (35,296 )
                         
               Total trading gains (losses)     (2,314,184 )     3,439,767       936,222  
                         
NET INVESTMENT INCOME
                       
         Income                        
            Interest income     2,140,749       477,981       77,745  
                         
         Expenses                        
            Selling Agent Administrative and Service Fee     1,292,554       490,891       139,825  
            Management Fees     687,913       279,667       102,578  
            Operating expenses     69,180       38,677       24,306  
                         
             Total expenses     2,049,647       809,235       266,709  
                         
               Net investment income (loss)      91,102       (331,254     (188,964 )
                         
               NET INCOME (LOSS)      (2,223,082     3,108,513       747,258  
                         
               Less: General Partner Profit Share allocation     141,714       692,016       175,476  
                         
               Net income (loss) for pro rata allocation to all partners   $ (2,364,796 )   $ 2,416,497     $ 571,782  
                         
NET INCOME (LOSS) PER GENERAL AND LIMITED PARTNER UNIT
                       
                         
 General Partner (based on weighted average number of units outstanding during the
 periods of 57.468)
  $ 142.71     $ 815.08     $ 541.61  
                         
     Limited Partner (based on weighted average number of units outstanding
     during the period of 24,586.648, 10,466.912, 3,961.073)
  $ (96.52 )   $ 226.39     $ 136.49  
                         
NET ASSET VALUE PER UNIT
                       
                         
     General Partner   $ 3,117.72     $ 2,975.01     $ 2,159.93  
      Limited Partner   $ 1,712.05     $ 1,716.86     $ 1,372.57  
 
                                                                                                                                                                                                 
 




See accompanying notes.
 
 
 
F-17

 
AIS FUTURES FUND IV L.P.
STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL (NET ASSET VALUE)
For the Years Ended December 31, 2006, 2005 and 2004
 

 
 
 
 
   
 Partners’ Capital
   
Series B
   
Series A
       
   
General
   
Limited
       
   
Partner
   
Partners
   
Total
 
                   
 Balances at December 31, 2003   $ 93,002     $ 2,576,567     $ 2,669,569  
                         
 Net income for the year ended                        
      December 31, 2004                        
         General Partner Profit Share allocation     175,476       0       175,476  
         Pro rata allocation to all partners     31,125       540,657       571,782  
                         
 Subscriptions     0       4,646,278       4,646,278  
                         
 Redemptions     (175,476     0       (175,476 )
                         
 Balances at December 31, 2004     124,127       7,763,502       7,887,629  
                         
 Net income for the year ended                        
      December 31, 2005                        
         General Partner Profit Share allocation      692,016       0       692,016  
         Pro rata allocation to all partners     46,841       2,369,656       2,416,497  
                         
 Subscriptions     0       19,891,772       19,891,772  
                         
 Redemptions      (692,016 )     (1,830,369 )     (2,522,385 )
                         
 Balances at December 31, 2005                        
      As previously reported     170,968       28,194,561       28,365,529  
                         
 Restatement for redemptions (Note 1)
                       
     December 31, 2005      0       (481,198 )     (481,198 )
                         
 Balances at December 31, 2005                         
     as restated      170,968       27,713,363       27,884,331  
                         
Net income (loss) for the year ended 
                       
     December 31, 2006                         
        General Partner Profit Share allocation      141,714       0       141,714  
        Pro rata allocation to all partners      8,201       (2,372,997     (2,364,796 )
                         
Subscriptions      0       29,483,774       29,483,774  
                         
 Redemptions     (141,714 )     (3,259,035 )     (3,400,749 )
                         
 Balances at December 31, 2006   $ 179,169     $ 51,565,105     $ 51,744,274  
 

 
See accompanying notes.
 
 
F-18

 
 
AIS FUTURES FUND IV L.P.
NOTES TO FINANCIAL STATEMENTS
 


 

Note 1. 
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. 
General Description of the Partnership

AIS Futures Fund IV L.P. (the Partnership) is a Delaware limited partnership, which operates as a commodity investment pool. The Partnership engages in the speculative trading of futures contracts and options on futures contracts. The Partnership is subject to the regulations of the Commodity Futures Trading Commission, an agency of the United States (U.S.) government which regulates most aspects of the commodity futures industry; rules of the National Futures Association, an industry self-regulatory organization; and the requirements of commodity exchanges and Futures Commission Merchants (brokers) through which the Partnership trades.

The limited partnership agreement provides, among other things, that the Partnership shall dissolve no later   than December 31, 2026.

B. 
Method of Reporting

The Partnership’s financial statements are presented in accordance with accounting principles generally accepted in the United States of America, which require the use of certain estimates made by the Partnership’s management. Actual results could differ from those estimates.

C. 
Futures and Options on Futures Contracts

Futures and options on futures are recorded on trade date and reflected at fair value, based on quoted market prices. Gains or losses are realized when contracts are liquidated. Net unrealized gains or losses on open contracts (the difference between contract trade price and quoted market price) are reflected in the statement of financial condition. Any change in net unrealized gain or loss from the preceding period is reported in the statement of operations. Brokerage commissions include other trading fees and are charged to expense when contracts are opened.

D. 
Securities

United States government securities are stated at cost plus accrued interest, which approximates fair value.

E. 
Income Taxes

The Partnership prepares calendar year U.S. and applicable state information tax returns and reports to the partners their allocable shares of the Partnership’s income, expenses and trading gains or losses. No provision for income taxes has been made in these financial statements as each partner is individually responsible for reporting income or loss based on its respective share of the Partnership’s income and expenses as reporting for income tax purposes.

 
F-19


AIS FUTURES FUND IV L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)


 

Note 1. 
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

F. 
Capital Accounts

The Partnership offers two Series of Units.  The Series A Units are available to all qualified investors, subject to applicable conditions and restrictions.  The Series B Units are available for sale to the General Partner and its principals.  The Partnership accounts for subscriptions, allocations and redemptions on a per partner capital account basis.  Income or loss, prior to the General Partner Profit Share allocation, is allocated pro rata to the capital accounts of all partners.  The General Partner Profit Share allocation applicable to each Limited Partner is allocated to the General Partner’s capital account from the Limited Partner’s capital account at the end of each calendar year or upon redemption by a Limited Partner.

The reported net income (loss) per unit and net asset value per unit is determined based on the fund as a whole.  An individual Limited Partner’s net asset value per unit may vary from what is reported due to the timing of subscriptions and redemptions and applicability of the General Profit Share allocation based on each Limited Partner’s capital account balances rather than the fund as a whole.

G. 
Redemptions

Limited Partners may require the Partnership to redeem some or all of their capital upon ten days prior written notice. Partner redemptions are recorded on their effective date, which is generally the last day of the month.

H. 
Reclassifications

Certain amounts in the 2005 financial statements were reclassified to conform with the 2006 presentation.

I. 
Statement of Cash Flows

The Partnership has elected not to provide statements of cash flows as permitted by Statement of Financial Accounting Standards No. 102, “Statements of Cash Flows - Exemption of Certain Enterprises and Classification of Cash Flows from Certain Securities Acquired for Resale.”
 
 
F-20

 
 

AIS FUTURES FUND IV L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

 
 

Note 1. 
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
 
 J. 
  Recently Issued Accounting Pronouncements
 
In July 2006, the Financial Accounting Standards Board (FASB) issued Interpretation No. 48 (FIN 48) entitled “Accounting For Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109.” FIN 48 prescribes the minimum recognition threshold a tax position must meet in connection with accounting for uncertainties in income tax positions taken or expected to be taken by an entity before being measured and recognized in the financial statements. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006. The implementation of FIN 48 is not expected to have a material impact on the Partnership’s financial statements.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157). FAS 157 defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America, and expands disclosures about fair value measurements. While FAS 157 does not require any new fair value measurements, for some entities, the application of FAS 157 may change current practice.

FAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The implementation of FAS 157 is not expected to have a material impact on the Partnership’s financial statements.

In September 2006, the SEC issued Staff Accounting Bulletin No. 108 (“SAB 108”), “Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements”, providing guidance on quantifying financial statement misstatement and implementation (e.g., restatement or cumulative effect to assets, liabilities and retained earnings) when first applying this guidance. SAB 108 is effective for the Partnership for the year ending December 31, 2006. The adoption of SAB 108 did not have a material effect on the Partnership’s financial statements.

K. 
Fair Value

All of the Partnership’s assets and liabilities are considered financial instruments and are reflected at fair value, or at carrying amounts that approximate fair value because of the short maturity of the instruments.

L. 
Change in Accounting Principle and Prior Period Restatement

Pursuant to the provisions of Statement of Financial Accounting Standards No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity” (FAS 150), redemptions approved by the General Partner prior to year end with a fixed effective date and fixed amount should be recorded as redemptions payable as of year end. FAS 150 became effective for the Partnership during the year ended December 31, 2005. The December 31, 2005 financial statements have been restated to reflect redemptions payable of $481,198, which was previously reported as partners’ capital.
 
 
F-21

 

AIS FUTURES FUND IV L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)



Note 2. 
GENERAL PARTNER

The General Partner and commodity trading advisor of the Partnership is AIS Futures Management LLC, which conducts and manages the business and trading activities of the Partnership.

The Second Amended and Restated Limited Partnership Agreement (the “Limited Partnership Agreement”) provides for the General Partner to receive a monthly Management Fee equal to 1/12 of 2% (2% annually) of each Series A Limited Partner’s month-end Net Assets, as defined. The General Partner also receives a Profit Share allocation equal to 20% of any New Trading Profit, as defined, attributable to each Series A Limited Partner’s Interest achieved as of each calendar year-end or upon redemption.

During 2006 and 2005, certain Series A Limited Partners were charged Management Fees at a rate lower than described above, to offset the effect of the additional 1.5% per annum Selling Agent Service Fee described in Note 3. Accordingly, for the years ended December 31, 2006 and 2005, Management Fees were reduced by approximately $195,000 and $63,000, respectively.

Note 3. 
SELLING AGENT ADMINISTRATIVE AND SERVICE FEES

Certain Series A Limited Partners that were solicited by Selling Agents are charged an Administrative and Service Fee (the “Service Fee” equal to 1/12 of 2.5% (2.5% annually)) of each Series A Limited Partner’s month-end Net Assets, as defined, sold by them which remain outstanding as of each month-end. The Selling Agents may pass on a portion of the Service Fee to its investment executives. In the event the Service Fee is no longer payable to a Selling Agent, the relevant Limited Partner who was solicited by such Selling Agent will no longer be charged the Service Fee. For the year ended December 31, 2006, certain Limited Partners were not subject to the Service Fee. For the year ended December 31, 2005, all Limited Partners were subject to the Service Fee.

For investment executives associated with the sale of Limited Partner Interests in excess of $500,000, the investment executive’s firm will receive an additional 1.5% per annum Service Fee with respect to such Limited Partner Interests in excess of $500,000, for the first twelve months following the sale of such Limited Partner Interests. Effectively, the additional Service Fee is paid by the General Partner, not the Limited Partner, through a reduced Management Fee, as discussed in Note 2.

Note 4. 
DEPOSITS WITH BROKER

The Partnership deposits funds with its clearing broker subject to Commodity Futures Trading Commission regulations and various exchange and broker requirements. Margin requirements are satisfied by the deposit of U.S. Treasury bills and cash with such broker. Accordingly, assets used to meet margin and other broker or regulatory requirements are partially restricted. The Partnership earns interest income on its assets deposited with the broker.
 
 
F-22


 

AIS FUTURES FUND IV L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)



Note 5.
SUBSCRIPTIONS, DISTRIBUTIONS AND REDEMPTIONS

Investments in the Partnership are made by subscription agreement, subject to acceptance by the General Partner. A selling commission of up to 2% of the subscription amount may be deducted from the subscription proceeds and paid to the applicable Selling Agent, if any. For the years ended December 31, 2006 and 2005, $1,350 and $0 in selling commissions were charged to Limited Partners. Limited Partner additions, as presented in the statement of changes in partners’ capital (net asset value), are net of such selling commissions.

The Partnership is not required to make distributions, but may do so at the sole discretion of the General Partner. A Limited Partner may request and receive partial or full redemptions of their capital account as of the close of business on the last business day of any month, subject to restrictions in the Limited Partnership Agreement.

Note 6. 
TRADING ACTIVITIES AND RELATED RISKS

The Partnership engages in the speculative trading of U.S. futures contracts and for a brief period of time in 2006 traded options on U.S. futures contracts. The Partnership is exposed to both market risk, the risk arising from changes in the market value of the contracts, and credit risk, the risk of failure by another party to perform according to the terms of a contract.

Purchase and sale of futures and options on futures contracts requires margin deposits with the broker. Additional deposits may be necessary for any loss on contract value. The Commodity Exchange Act requires a broker to segregate all customer transactions and assets from such broker’s proprietary activities. A customer’s cash and other property (for example, U.S. Treasury bills) deposited with a broker are considered commingled with all other customer funds subject to the broker’s segregation requirements. In the event of a broker’s insolvency, recovery may be limited to a pro rata share of segregated funds available. It is possible that the recovered amount could be less than total cash and other property deposited.

For futures and options on futures contracts, risks arise from changes in the market value of the contracts. Theoretically, the Partnership is exposed to a market risk equal to the notional contract value of futures contracts purchased and unlimited liability on such contracts sold short. As both a buyer and seller of options, the Partnership pays or receives a premium at the outset and then bears the risk of unfavorable changes in the price of the contract underlying the option. Written options expose the Partnership to potentially unlimited liability; for purchased options, the risk of loss is limited to the premiums paid.

In addition to market risk, in entering commodity interest contracts, there is a credit risk that a counterparty will not be able to meet its obligations to the Partnership. The counterparty for futures and options on futures contracts traded in the United States and on most non-U.S. futures exchanges is the clearinghouse associated with such exchange. In general, clearinghouses are backed by the corporate members of the clearinghouse who are required to share any financial burden resulting from the nonperformance by one of their members and, as such, should significantly reduce the credit risk.

The Partnership maintains its cash in bank deposit accounts that, at times, may exceed federally insured limits. The Partnership has not experienced any losses in such accounts. The General Partner believes the Partnership is not exposed to any significant credit risk on cash.
 
 
F-23

 

AIS FUTURES FUND IV L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)



Note 6. 
TRADING ACTIVITIES AND RELATED RISKS (CONTINUED)

The General Partner has established procedures to actively monitor market risk and minimize credit risk, although there can be no assurance that it will, in fact, succeed in doing so. The Limited Partners bear the risk of loss only to the extent of their respective investments and, in certain specific circumstances, distributions and redemptions received.

Note 7. 
INDEMNIFICATIONS

In the normal course of business, the Partnership enters into contracts and agreements that contain a variety of representations and warranties and which provide general indemnifications. The Partnership’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Partnership that have not yet occurred. The Partnership expects the risk of any future obligation under these indemnifications to be remote.
 
 
F-24

 

AIS FUTURES FUND IV L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)



Note 8. 
 FINANCIAL HIGHLIGHTS

The following information presents the financial highlights of the Partnership for the years ended December 31, 2006, 2005 and 2004. This information has been derived from information presented in the financial statements.
 
   
2006
 
2005
   
2004
 
                 
 Total return for Series A Limited Partners taken as a whole                
 Total return before Profit Share allocation      0.17%     31.78 %     27.82 %
 Profit Share allocation     (0.47)%     (7.18 )%      (6.82 )%
                         
       Total return after Profit Share allocation     (0.30)%     (24.59 )%     21.00 %
                         
 Supplemental Data for Series A Limited Partners                        
                         
 Ratio of expenses to average net asset value:                        
 Expenses, excluding Profit Share allocation     4.66 %     4.70 %     4.88 %
 Profit Share allocation     0.32 %     4.02     3.21 %
                         
       Total expenses     4.98 %     8.72 %     8.09 %
                         
       Net investment income (loss)1     0.17 %     (1.95 )%     (3.48 )%
 


The total returns and ratios are presented for Series A Limited Partners taken as a whole based on the Partnership’s standard Management Fee, Service Fee and Profit Share allocation arrangements. An individual partner’s total returns and ratios may vary from the above total returns and ratios based on the timing of their capital additions and redemptions and given potentially different fee arrangements for a Series A Limited Partner.

The total returns and ratios exclude the effects of any 2% upfront selling commissions charged by Selling Agents.
 
--------------------
 
1
The net investment income (loss) is comprised of interest income less total expenses, excluding the General Partner Profit Share allocation.
 
 
F-25

 




INDEPENDENT AUDITOR’S REPORT
 

To the Members
AIS Futures Management LLC

We have audited the accompanying balance sheet of AIS Futures Management LLC as of December 31, 2006.  This financial statement is the responsibility of the Company’s management.  Our responsibility is to express an opinion on this financial statement based on our audit.
 
We conducted our audit in accordance with auditing standards generally accepted in the United States of America.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the balance sheet is free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the balance sheet.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall balance sheet presentation.  We believe that our audit provides a reasonable basis for our opinion.
 
In our opinion, the balance sheet referred to above presents fairly, in all material respects, the financial position of AIS Futures Management LLC as of December 31, 2006, in conformity with accounting principles generally accepted in the United States of America.
 
/s/ ARTHUR F. BELL, JR. & ASSOCIATES, L.L.C.
 

 
Hunt Valley, Maryland
May 31, 2007

F-26

 
 
 
AIS FUTURES MANAGEMENT LLC
BALANCE SHEET
December 31, 2006
_______________
 
ASSETS
           
             
Current assets
           
Cash and cash equivalents
        $
99,191
 
Equity in commodity broker trading account
         
95,845
 
Management fees receivable from sponsored funds
         
243,448
 
Other receivables from sponsored funds
         
545,500
 
Other fees receivable
         
27,130
 
Prepaid expenses
         
18,810
 
Investments in sponsored funds
             
AIS Futures Fund II L.P. (2X-4X)
  $
274,545
         
AIS Futures Fund L.P. (3x-6x)
   
952,709
         
AIS Futures Fund III L.P.
   
518,462
         
AIS Futures Fund IV L.P.
   
179,169
         
Total investments in sponsored funds
           
1,924,885
 
Total current assets
           
2,954,809
 
Property, equipment and leasehold improvements
               
Equipment
  $
117,444
         
Furniture & fixtures
   
128,519
         
Leasehold improvements
   
67,302
         
Less accumulated depreciation and amortization
    (264,549 )        
Total property, equipment and leasehold improvements, net
           
48,716
 
Security deposits
          $
25,351
 
Total other assets
           
74,067
 
Total assets
          $
3,028,876
 
                 
LIABILITIES
               
                 
Current liabilities
               
Accounts payable
          $
74,352
 
Compensation payable
           
126,000
 
Payable to profit sharing plan
           
175,000
 
Total current liabilities
           
375,352
 
Deferred rent
           
15,637
 
Total liabilities
           
390,989
 
                 
MEMBERS’ EQUITY
               
                 
Members’ equity
           
2,637,887
 
Total Liabilities and Members’ Equity
          $
3,028,876
 

See accompanying notes.
 
F-27

 
AIS FUTURES MANAGEMENT LLC
NOTES TO BALANCE SHEET
_______________
 
Note 1.
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
A.           General Description
 
AIS Futures Management LLC (the Company) is a Delaware limited liability company, which is registered with the Commodity Futures Trading Commission (CFTC) as a commodity pool operator and a commodity trading advisor.  The Company was formed under the laws of Delaware on April 14, 1997 and shall continue until December 31, 2047, unless sooner terminated in accordance with the Amended and Restated Limited Liability Company Agreement (Limited Liability Company Agreement).  The Company offers both retail and institutional investors investment advisory and portfolio management services, primarily in commodity interest contracts.  The Company also serves as the general partner and trading advisor of various sponsored funds.  The Company is subject to the regulations of the CFTC, an agency of the United States (U.S.) government, which regulates most aspects of the commodity futures industry.  The Company is also a member of and subject to the rules of the National Futures Association (NFA), an industry self-regulatory organization.
 
B.           Method of Reporting
 
The Company’s balance sheet is presented in accordance with accounting principles generally accepted in the United States of America, which require the use of certain estimates made by the Company’s management.  Actual results could differ from those estimates.
 
C.           Cash and Cash Equivalents
 
Cash and cash equivalents includes cash on deposits with banks and an investment in a money market mutual fund.  The Company, at times, may maintain cash balances with one financial institution in amounts greater then the federally insured limit of $100,000, or may maintain cash in money market mutual fund accounts which do not provide any federal or other deposit protection. The Company’s management believes this to be an acceptable business risk.
 
D.           Revenue Recognition
 
Management fees accrue monthly based on a percentage of assets under management.  Profit Share allocations may be earned by achieving defined performance objectives as outlined in agreements with the Company’s clients.  Profit Share allocations are accrued when the conditions of the applicable profit share allocation agreements are satisfied.
 
E.           Investments in Sponsored Funds

Investments in sponsored funds are reported at fair value at the balance sheet date, in accordance with the equity method.  Fair value is the value determined for each sponsored fund in accordance with such sponsored funds valuation policies and reported at the time of the Company’s valuation. Generally, the fair value of the Company’s investment in a sponsored fund equals the underlying net asset value and represents the amount the Company could reasonably expect to receive from such sponsored fund if the Company’s investment was redeemed at the date of valuation.
 
F-28

 
AIS FUTURES MANAGEMENT LLC
NOTES TO BALANCE SHEET (CONTINUED)
_______________
 
Note 1.
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
F.           Property, Equipment and Leasehold Improvements
 
Property, equipment and leasehold improvements are stated at cost.  The cost of property and equipment is depreciated over the estimated useful lives of the related assets using straight-line methods.  Such lives range from 3 to 7 years.  The cost of leasehold improvements is amortized over the lesser of the length of the related leases or the estimated useful lives of the assets.  Leasehold improvements are amortized using the straight-line method.
 
G.           Income Taxes
 
The Company prepares calendar year U.S. and applicable state information tax returns and reports to the Members their allocable shares of the Company’s taxable income.
 
H.           Recently Issued Accounting Pronouncements
 
In July 2006, the Financial Accounting Standards Board (FASB) issued Interpretation No. 48 (FIN 48) entitled “Accounting For Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109.”  FIN 48 prescribes the minimum recognition threshold a tax position must meet in connection with accounting for uncertainties in income tax positions taken or expected to be taken by an entity before being measured and recognized in the financial statements.  Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006.  The implementation of FIN 48 is not expected to have a material impact on the Company’s balance sheet.
 
In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157).  FAS 157 defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America, and expands disclosures about fair value measurements.  While FAS 157 does not require any new fair value measurements, for some entities, the application of FAS 157 may change current practice. FAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years.  The implementation of FAS 157 is not expected to have a material impact on the Company’s balance sheet.
 
Note 2.
RECEIVABLES FROM SPONSORED FUNDS
 
During 2006, the Company acted as General Partner and provided trading advisory services to various sponsored funds.  Management fees earned by the Company range from 0% to 4% annually, based on the various sponsored funds’ month-end net assets.  Also, the Company earns annual Profit Share allocations from sponsored funds that range from 20% to 26% of profits attributable to certain limited partner’s of the sponsored funds.  Profit shares receivable at December 31, 2006 are reflected as other receivables in the Company’s balance sheet.
 
F-29


AIS FUTURES MANAGEMENT LLC
NOTES TO BALANCE SHEET (CONTINUED)
_______________
 
Note 2.
RECEIVABLES FROM SPONSORED FUNDS (CONTINUED)
 
Receivables from sponsored funds consist of the following as of December 31, 2006:
 
   
Management
Fees
   
Other
Receivables
 
AIS Futures Fund II L.P. (2X-4X)
  $
53,210
    $
98,695
 
AIS Futures Fund L.P. (3x-6x)
   
118,143
     
18,833
 
AIS Futures Fund III L.P.
   
0
     
344,037
 
AIS Futures Fund IV L.P.
   
72,095
     
83,935
 
Total
  $
243,448
    $
545,500
 
                 
These receivables are reported in the Company’s balance sheet at the amount the Company expects to receive based on the related agreements with the sponsored funds.
 
Note 3.
INVESTMENTS IN SPONSORED FUNDS
 
Investments in sponsored funds consist of the following as of December 31, 2006:
 
AIS Futures Fund II L.P. (2X-4X)
 
The Company is the general partner and trading advisor of AIS Futures Fund II L.P. (2X-4X).  The net asset value of this fund is $24,496,424 at December 31, 2006.
 
AIS Futures Fund L.P. (3x-6x)
 
The Company is the general partner and trading advisor of AIS Futures Fund L.P. (3x-6x).  The net asset value of this fund is $62,791,888 at December 31, 2006.
 
AIS Futures Fund III L.P.
 
The Company is the general partner and trading advisor of AIS Futures Fund III L.P.  The net asset value of this fund is $22,739,003 at December 31, 2006.
 
AIS Futures Fund IV L.P.
 
The Company is the general partner and trading advisor of AIS Futures Fund IV L.P.  The net asset value of this fund is $51,744,274 at December 31, 2006.
 
Note 4.
EQUITY IN COMMODITY BROKER TRADING ACCOUNT
 
 
At December 31, 2006, the equity in the commodity broker trading account consists of the following:
 
   Cash
  $
81,928
 
   Open options on futures contracts
       
   at market value (cost – $28,494)
   
12,250
 
   Open futures contracts at market value
   
1,667
 
         
   Equity in commodity broker trading account
  $
95,845
 
 
F-30


AIS FUTURES MANAGEMENT LLC
NOTES TO BALANCE SHEET (CONTINUED)
_______________
 
Note 4.
EQUITY IN COMMODITY BROKER TRADING ACCOUNT (CONTINUED)
 
The details of the open futures contracts and open options on futures contracts at December 31, 2006 is as follows:
 
Open options on futures contracts
 
Value
 
       
Purchased Call Options
     
Soybeans (5 contracts, expire 10/26/07)
  $
11,000
 
Purchased Put Options
       
U.S. Treasury Bonds (10 contracts, expire 2/23/07)
   
1,250
 
         
Total at market value
  $
12,250
 
         
Open futures contracts
       
         
Long Futures Contracts
       
30 Day Interest Rate (10 contracts, 3/07)
  $
1,667
 
         
Futures contracts and options on futures contracts are recorded on trade date and are reflected at fair value based on quoted market prices.  Gains or losses are realized when contracts are liquidated.  Net unrealized gains or losses on open contracts (the difference between contract trade price and quoted market price) are reflected as a component of equity in commodity broker trading account in the balance sheet.
 
The Company’s functional currency is the U.S. dollar; however, it transacts business in currencies other than the U.S. dollar.  Assets and liabilities denominated in currencies other than the U.S. dollar are translated into U.S. dollars at the rates in effect at the date of the balance sheet.
 
The Company deposits funds with Calyon Financial Inc. to act as commodity broker, subject to CFTC regulations and various exchange and broker requirements.  Margin requirements are satisfied by the deposit of cash with the commodity broker.  Accordingly, assets used to meet margin and other broker or regulatory requirements are partially restricted.  The Company earns interest income on its assets deposited with the commodity broker.
 
Note 5.
TRADING ACTIVITIES AND RELATED RISKS
 
The Company engages in the speculative trading of U.S. futures contracts and options on U.S. futures contracts.  Additionally, the sponsored funds in which the Company invests and acts as general partner also engage in the speculative trading of U.S. futures contracts and options on U.S. futures contracts.  The Company is exposed to both market risk, the risk arising from changes in the market value of the contracts, and credit risk, the risk of failure by another party to perform according to the terms of a contract.
 
F-31

 
AIS FUTURES MANAGEMENT LLC
NOTES TO BALANCE SHEET (CONTINUED)
_______________
 
Note 5.
TRADING ACTIVITIES AND RELATED RISKS (CONTINUED)
 
Purchase and sale of futures and options on futures contracts requires margin deposits with the commodity broker.  Additional deposits may be necessary for any loss on contract value.  The Commodity Exchange Act requires a commodity broker to segregate all customer transactions and assets from such broker’s proprietary activities.  A customer’s cash and other property (for example, U.S. Treasury bills) deposited with a commodity broker are considered commingled with all other customer funds subject to the commodity broker’s segregation requirements.  In the event of a commodity broker’s insolvency, recovery may be limited to a pro rata share of segregated funds available.  It is possible that the recovered amount could be less than total cash and other property deposited.
 
For futures and options on futures contracts, risks arise from changes in the market value of the contracts. Theoretically, the Company is exposed to a market risk equal to the notional contract value of futures contracts purchased and unlimited liability on such contracts sold short.  As both a buyer and seller of options, the Company pays or receives a premium at the outset and then bears the risk of unfavorable changes in the price of the contract underlying the option.  Written options expose the Company to potentially unlimited liability, and purchased options expose the Company to a risk of loss limited to the premiums paid.
 
In addition to market risk, in entering futures and options on futures contracts, there is a credit risk that a counterparty will not be able to meet its obligations to the Company.  The counterparty for futures and options on futures contracts traded in the United States and on most non-U.S. futures exchanges is the clearinghouse associated with such exchange.  In general, clearinghouses are backed by the corporate members of the clearinghouse who are required to share any financial burden resulting from the nonperformance by one of their members and, as such, should significantly reduce the credit risk.
 
The Company has established procedures to actively monitor the market risk of its own trading activity as well as the trading activity of the sponsored funds.  The Company has also established procedures to minimize its credit risk and the credit risk of the sponsored funds.  There is no guarantee that the Company will succeed in its objectives of monitoring market risk and minimizing credit risk.
 
Note 6.
LEASE OBLIGATIONS
 
The Company leases office facilities under a non-cancelable lease agreement, which provides for minimum base annual rentals plus a proportionate share of tax, operating and utility expenses.  Related to this lease, the Company has provided to the landlord a security deposit  in the amount of $24,665.  This lease expires on February 28, 2016.  Minimum base annual rentals through the current lease term are as follows:
 
Year Ending December 31:
     
2007
  $
131,401
 
2008
   
135,309
 
2009
   
139,379
 
2010
   
143,559
 
2011
   
147,870
 
2012
   
152,321
 
2013
   
156,874
 
2014
   
161,597
 
2015
   
166,429
 
2016
   
27,873
 
Total base annual rentals
  $
1,362,612
 
 
F-32

 
AIS FUTURES MANAGEMENT LLC
NOTES TO BALANCE SHEET (CONTINUED)
_______________
 
Note 6.
LEASE OBLIGATIONS (CONTINUED)
 
The Company recognizes rent expense under this agreement  on a straight-line basis resulting in a deferred rent liability of $15,637, as of December 31, 2006.
 
The Company has entered into a second lease for office facilities.  This lease expires on December 14, 2007.  Minimum base annual rentals through the lease term are $7,546.  The Company has provided to the landlord a security deposit of $686, relating to this lease.
 
The Company has entered into an non-cancelable operating lease agreement for office equipment, which provides for 48 monthly payments of $812.  The current lease expires on August 30, 2010.  Minimum rentals through the current lease term are $35,728.
 
Note 7.
PROFIT SHARING PLAN
 
The Company has established a Profit Sharing Plan (the Plan) for the benefit of its employees.  The Company is the Plan administrator and the president of the Company is the trustee of the Plan.  Under terms of the Plan, employees enter the Plan as a participant on the entry date as of which he or she satisfies the eligibility requirements.  All persons who are employees of the Company are considered eligible employees for purposes of the Plan.  The Company’s contributions to the Plan are totally discretionary, including the discretion to forego a contribution for one or more plan years.  For each plan year in which an employee is eligible to receive a share of any contribution the Company makes to the Plan, an amount is allocated to the employee’s account in the ratio that their compensation for the Plan year bears to the total compensation of all eligible participants for the Plan year.  Although the Plan is intended to be permanent, the Company can amend or terminate the Plan at any time.
 
Note 8.
INDEMNIFICATIONS
 
In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and which provide general indemnifications.  The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred.  The Company expects the risk of any future obligation under these indemnifications to be remote.
 
F-33

 
AIS FUTURES MANAGEMENT LLC
BALANCE SHEET
March 31, 2007 (Unaudited)
_______________
 
ASSETS
           
Current assets
           
Cash and cash equivalents
        $
347,871
 
Equity in commodity broker trading account
         
129,141
 
Management fees receivable from sponsored funds
         
282,538
 
Other receivables from sponsored funds
         
61,398
 
Other fees receivable
         
43,619
 
Prepaid expenses
         
19,855
 
               
Investments in sponsored funds
             
AIS Futures Fund II L.P. (2X-4X)
  $
300,638
         
AIS Futures Fund L.P. (3x-6x)
   
1,072,683
         
AIS Futures Fund III L.P.
   
566,981
         
AIS Futures Fund IV L.P.
   
196,008
         
Total investments in sponsored funds
           
2,136,310
 
Total current assets
           
3,020,732
 
                 
Property, equipment and leasehold improvements
               
Equipment
  $
117,444
         
Furniture & fixtures
   
128,519
         
Leasehold improvements
   
67,302
         
Less accumulated depreciation and amortization
    (276,397 )        
                 
Total property, equipment and leasehold
               
improvements, net
           
36,868
 
                 
Security deposits
           
25,351
 
                 
Total other assets
           
62,219
 
Total assets
          $
3,082,951
 
                 
LIABILITIES
               
Current liabilities
               
Accounts payable
          $
18,750
 
Total current liabilities
           
18,750
 
                 
Deferred rent
           
15,557
 
                 
Total liabilities
           
34,307
 
                 
MEMBERS’ EQUITY
               
Members’ equity
           
3,048,644
 
                 
Total Liabilities and Members’ Equity
          $
3,082,951
 

See accompanying notes.
 
F-34

 
AIS FUTURES MANAGEMENT LLC
NOTES TO BALANCE SHEET
_______________
 
Note 1.
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 
A.
General Description
 
AIS Futures Management LLC (the Company) is a Delaware limited liability company, which is registered with the Commodity Futures Trading Commission (CFTC) as a commodity pool operator and a commodity trading advisor.  The Company was formed under the laws of Delaware on April 14, 1997 and shall continue until December 31, 2047, unless sooner terminated in accordance with the Amended and Restated Limited Liability Company Agreement (Limited Liability Company Agreement).  The Company offers both retail and institutional investors investment advisory and portfolio management services, primarily in commodity interest contracts.  The Company also serves as the general partner and trading advisor of various sponsored funds.  The Company is subject to the regulations of the CFTC, an agency of the United States (U.S.) government, which regulates most aspects of the commodity futures industry.  The Company is also a member of and subject to the rules of the National Futures Association (NFA), an industry self-regulatory organization.
 
 
B.
Method of Reporting
 
The Company’s balance sheet is presented in accordance with accounting principles generally accepted in the United States of America, which require the use of certain estimates made by the Company’s management.  Actual results could differ from those estimates.
 
 
C.
Cash and Cash Equivalents
 
Cash and cash equivalents includes cash on deposits with banks and an investment in a money market mutual fund.  The Company, at times, may maintain cash balances with one financial institution in amounts greater then the federally insured limit of $100,000, or may maintain cash in money market mutual fund accounts which do not provide any federal or other deposit protection. The Company’s management believes this to be an acceptable business risk.
 
 
D.
Revenue Recognition
 
Management fees accrue monthly based on a percentage of assets under management.  Profit Share allocations may be earned by achieving defined performance objectives as outlined in agreements with the Company’s clients.  Profit Share allocations are accrued when the conditions of the applicable profit share allocation agreements are satisfied.

  E. Investments in Sponsored Funds
 
Investments in sponsored funds are reported at fair value at the balance sheet date, in accordance with the equity method.  Fair value is the value determined for each sponsored fund in accordance with such sponsored funds valuation policies and reported at the time of the Company’s valuation. Generally, the fair value of the Company’s investment in a sponsored fund equals the underlying net asset value and represents the amount the Company could reasonably expect to receive from such sponsored fund if the Company’s investment was redeemed at the date of valuation.
 
F-35


AIS FUTURES MANAGEMENT LLC
NOTES TO BALANCE SHEET (CONTINUED)
_______________
 
Note 1.
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
 
F.
Property, Equipment and Leasehold Improvements
 
Property, equipment and leasehold improvements are stated at cost.  The cost of property and equipment is depreciated over the estimated useful lives of the related assets using straight-line methods.  Such lives range from 3 to 7 years.  The cost of leasehold improvements is amortized over the lesser of the length of the related leases or the estimated useful lives of the assets.  Leasehold improvements are amortized using the straight-line method.
 
 
G.
Income Taxes
 
The Company prepares calendar year U.S. and applicable state information tax returns and reports to the Members their allocable shares of the Company’s taxable income.
 
 
H.
Recently Issued Accounting Pronouncements
 
In July 2006, the Financial Accounting Standards Board (FASB) issued Interpretation No. 48 (FIN 48) entitled “Accounting For Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109.”  FIN 48 prescribes the minimum recognition threshold a tax position must meet in connection with accounting for uncertainties in income tax positions taken or expected to be taken by an entity before being measured and recognized in the financial statements.  Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006.  The implementation of FIN 48 is not expected to have a material impact on the Company’s balance sheet.
 
In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157).  FAS 157 defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America, and expands disclosures about fair value measurements.  While FAS 157 does not require any new fair value measurements, for some entities, the application of FAS 157 may change current practice. FAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years.  The implementation of FAS 157 is not expected to have a material impact on the Company’s balance sheet.
 
Note 2.
RECEIVABLES FROM SPONSORED FUNDS
 
 
During the three months ended March 31, 2007, the Company acted as General Partner and provided trading advisory services to various sponsored funds.  Management fees earned by the Company range from 0% to 4% annually, based on the various sponsored funds’ month-end net assets.  Also, the Company earns annual Profit Share allocations from sponsored funds that range from 20% to 26% of profits attributable to certain limited partner’s of the sponsored funds.  Profit shares receivable at March 31, 2007 are reflected as other receivables in the Company’s balance sheet.
 
F-36


 
AIS FUTURES MANAGEMENT LLC
NOTES TO BALANCE SHEET (CONTINUED)
_______________
 
Note 2.
RECEIVABLES FROM SPONSORED FUNDS (CONTINUED)
 
Receivables from sponsored funds consist of the following as of March 31, 2007:
 
   
Management
   
Other
 
   
Fees
   
Receivables
 
AIS Futures Fund II L.P. (2X-4X)
  $
58,025
    $
30,112
 
AIS Futures Fund L.P. (3x-6x)
   
142,207
     
4,790
 
AIS Futures Fund III L.P.
   
0
     
22,945
 
AIS Futures Fund IV L.P.
   
82,306
     
3,551
 
                 
Total
  $
282,538
    $
61,398
 
                 
These receivables are reported in the Company’s balance sheet at the amount the Company expects to receive based on the related agreements with the sponsored funds.
 
Note 3.
INVESTMENTS IN SPONSORED FUNDS
 
Investments in sponsored funds consist of the following as of March 31, 2007:
 
AIS Futures Fund II L.P. (2X-4X)
 
The Company is the general partner and trading advisor of AIS Futures Fund II L.P. (2X-4X).  The net asset value of this fund is $22,980,593 at March 31, 2007.
 
AIS Futures Fund L.P. (3x-6x)
 
The Company is the general partner and trading advisor of AIS Futures Fund L.P. (3x-6x).  The net asset value of this fund is $73,408,910 at March 31, 2007.
 
AIS Futures Fund III L.P.
 
The Company is the general partner and trading advisor of AIS Futures Fund III L.P.  The net asset value of this fund is $22,233,433 at March 31, 2007.
 
AIS Futures Fund IV L.P.
 
The Company is the general partner and trading advisor of AIS Futures Fund IV L.P.  The net asset value of this fund is $58,130,411 at March 31, 2007.
 
Note 4.
EQUITY IN COMMODITY BROKER TRADING ACCOUNT
 
 
At March 31, 2007, the equity in the commodity broker trading account consists of the following:
 
Cash
  $
127,631
 
Open options on futures contracts
       
at market value
   
10,587
 
Open futures contracts at market value
    (9,077 )
Equity in commodity broker trading account
  $
129,141
 

F-37

 
AIS FUTURES MANAGEMENT LLC
NOTES TO BALANCE SHEET (CONTINUED)
_______________
 
Note 4.
EQUITY IN COMMODITY BROKER TRADING ACCOUNT (CONTINUED)
 
The details of the open futures contracts and open options on futures contracts at March 31, 2007 is as follows:
 
Open options on futures contracts
 
Value
 
       
Purchased Call Options
     
Soybeans (5 contracts, expire 10/26/07)
  $
14,312
 
Purchased Put Options
       
Silver (5 contracts, expire 4/26/07)
    (3,725 )
         
Total at market value
  $
10,587
 
         
Open futures contracts
       
         
Long Futures Contracts
       
30 Day Interest Rate (10 contracts, 3/07)
  $
833
 
Gold (2 contracts, 6/07)
    (860 )
Silver (2 contracts, 5/07)
    (9,050 )
         
Total at market value
  $ (9,077 )
         
Futures contracts and options on futures contracts are recorded on trade date and are reflected at fair value based on quoted market prices.  Gains or losses are realized when contracts are liquidated.  Net unrealized gains or losses on open contracts (the difference between contract trade price and quoted market price) are reflected as a component of equity in commodity broker trading account in the balance sheet.
 
The Company’s functional currency is the U.S. dollar; however, it transacts business in currencies other than the U.S. dollar.  Assets and liabilities denominated in currencies other than the U.S. dollar are translated into U.S. dollars at the rates in effect at the date of the balance sheet.
 
The Company deposits funds with Calyon Financial Inc. to act as commodity broker, subject to CFTC regulations and various exchange and broker requirements.  Margin requirements are satisfied by the deposit of cash with the commodity broker.  Accordingly, assets used to meet margin and other broker or regulatory requirements are partially restricted.  The Company earns interest income on its assets deposited with the commodity broker.
 
Note 5.
TRADING ACTIVITIES AND RELATED RISKS
 
 
The Company engages in the speculative trading of U.S. futures contracts and options on U.S. futures contracts.  Additionally, the sponsored funds in which the Company invests and acts as general partner also engage in the speculative trading of U.S. futures contracts and options on U.S. futures contracts.  The Company is exposed to both market risk, the risk arising from changes in the market value of the contracts, and credit risk, the risk of failure by another party to perform according to the terms of a contract.
 
F-38

 
AIS FUTURES MANAGEMENT LLC
NOTES TO BALANCE SHEET (CONTINUED)
_______________
 
Note 5.
TRADING ACTIVITIES AND RELATED RISKS (CONTINUED)
 
Purchase and sale of futures and options on futures contracts requires margin deposits with the commodity broker.  Additional deposits may be necessary for any loss on contract value.  The Commodity Exchange Act requires a commodity broker to segregate all customer transactions and assets from such broker’s proprietary activities.  A customer’s cash and other property (for example, U.S. Treasury bills) deposited with a commodity broker are considered commingled with all other customer funds subject to the commodity broker’s segregation requirements.  In the event of a commodity broker’s insolvency, recovery may be limited to a pro rata share of segregated funds available.  It is possible that the recovered amount could be less than total cash and other property deposited.
 
For futures and options on futures contracts, risks arise from changes in the market value of the contracts. Theoretically, the Company is exposed to a market risk equal to the notional contract value of futures contracts purchased and unlimited liability on such contracts sold short.  As both a buyer and seller of options, the Company pays or receives a premium at the outset and then bears the risk of unfavorable changes in the price of the contract underlying the option.  Written options expose the Company to potentially unlimited liability, and purchased options expose the Company to a risk of loss limited to the premiums paid.
 
In addition to market risk, in entering futures and options on futures contracts, there is a credit risk that a counterparty will not be able to meet its obligations to the Company.  The counterparty for futures and options on futures contracts traded in the United States and on most non-U.S. futures exchanges is the clearinghouse associated with such exchange.  In general, clearinghouses are backed by the corporate members of the clearinghouse who are required to share any financial burden resulting from the nonperformance by one of their members and, as such, should significantly reduce the credit risk.
 
The Company has established procedures to actively monitor the market risk of its own trading activity as well as the trading activity of the sponsored funds.  The Company has also established procedures to minimize its credit risk and the credit risk of the sponsored funds.  There is no guarantee that the Company will succeed in its objectives of monitoring market risk and minimizing credit risk.
 
Note 6.
LEASE OBLIGATIONS
 
The Company leases office facilities under a non-cancelable lease agreement, which provides for minimum base annual rentals plus a proportionate share of tax, operating and utility expenses.  Related to this lease, the Company has provided to the landlord a security deposit  in the amount of $24,665.  This lease expires on February 28, 2016.  Minimum base annual rentals through the current lease term are as follows:
 
Year Ending March 31:
     
2008
  $
132,372
 
2009
   
136,303
 
2010
   
140,413
 
2011
   
144,619
 
2012
   
148,966
 
2013
   
153,448
 
2014
   
158,031
 
2015
   
162,793
 
2016
   
153,300
 
Total base annual rentals
  $
1,330,245
 
         
 
F-39

 
AIS FUTURES MANAGEMENT LLC
NOTES TO BALANCE SHEET (CONTINUED)
_______________
 
Note 6.
LEASE OBLIGATIONS (CONTINUED)
 
The Company recognizes rent expense under this agreement  on a straight-line basis resulting in a deferred rent liability of $15,557, as of March 31, 2007.
 
The Company has entered into a second lease for office facilities.  This lease expires on December 14, 2007.  Minimum base annual rentals through the lease term are $5,488.  The Company has provided to the landlord a security deposit of $686, relating to this lease.
 
The Company has entered into an non-cancelable operating lease agreement for office equipment, which provides for 48 monthly payments of $812.  The current lease expires on August 30, 2010.  Minimum rentals through the current lease term are $33,292.
 
Note 7.
PROFIT SHARING PLAN
 
The Company has established a Profit Sharing Plan (the Plan) for the benefit of its employees.  The Company is the Plan administrator and the president of the Company is the trustee of the Plan.  Under terms of the Plan, employees enter the Plan as a participant on the entry date as of which he or she satisfies the eligibility requirements.  All persons who are employees of the Company are considered eligible employees for purposes of the Plan.  The Company’s contributions to the Plan are totally discretionary, including the discretion to forego a contribution for one or more plan years.  For each plan year in which an employee is eligible to receive a share of any contribution the Company makes to the Plan, an amount is allocated to the employee’s account in the ratio that their compensation for the Plan year bears to the total compensation of all eligible participants for the Plan year.  Although the Plan is intended to be permanent, the Company can amend or terminate the Plan at any time.
 
Note 8.
INDEMNIFICATIONS
 
In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and which provide general indemnifications.  The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred.  The Company expects the risk of any future obligation under these indemnifications to be remote.
 
 
 
F-40


Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-12G/A’ Filing    Date    Other Filings
12/31/26
2/28/16
8/30/10
Filed on:3/31/0810-Q,  8-K
3/5/088-K
3/1/08
1/2/08
12/14/07
11/15/07
5/31/07
4/30/0710-12G
3/31/07
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1/1/07
12/31/06
12/15/06
3/31/06
3/19/06
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12/31/04
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4/14/97
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