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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10K

         Annual report pursuant to Section 13 or 15(d) of the Securities
                              Exchange Act of 1934

<TABLE>
<S>                                               <C>
For the fiscal year ended                         Commission File Number 0-17555
    December 31, 2005
</TABLE>

                             The Everest Fund, L.P.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                          <C>
              Iowa                                                42-1318186
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)
</TABLE>

<TABLE>
<S>                                                               <C>
1100 North 4th Street, Suite 143, Fairfield, Iowa                   52556
     (Address of principal executive offices)                     (Zip Code)
</TABLE>

               Registrant's telephone number, including area code:
                                 (641) 472-5500

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:
                      Units of Limited Partnership Interest

  Indicate by check mark if the registrant is a well-known seasoned issuer, as
                   defined in Rule 405 of the Securities Act.

                                  Yes     No  X
                                      ---    ---

    Indicate by check mark if the registrant is not required to file reports
               pursuant to Section 13 or Section 15(d) of the Act.

                                  Yes  X  No
                                      ---    ---

NOTE - Checking the box above will not relieve any registrant required to file
reports pursuant to Section 13 or 15(d) of the Exchange Act from their
obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                  Yes  X  No
                                      ---    ---

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation SK is not contained herein and will not be contained to the best
of the Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of Form 10K or any amendment to this Form
10-K: [X]


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Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):

Large accelerated filer       Accelerated filer       Non-accelerated filer  X
                        ---                     ---                         ---

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). Yes     No  X
                            ---    ---

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common equity, as of
the last business day of the registrant's most recently completed second fiscal
quarter. $35,977,051

NOTE.--If a determination as to whether a particular person or entity is an
affiliate cannot be made without involving unreasonable effort and expense, the
aggregate market value of the common stock held by non-affiliates may be
calculated on the basis of assumptions reasonable under the circumstances,
provided that the assumptions are set forth in this Form.

              APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

                                   Yes     No
                                       ---    ---

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the Part
of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is
incorporated: (1) Any annual report to security holders; (2) Any proxy or
information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or
(c) under the Securities Act of 1933. The listed documents should be clearly
described for identification purposes (e.g., annual report to security holders
for fiscal year ended December 24, 1980). None


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                                     Part I

Item 1. Business

The Everest Fund, L.P. (the "Partnership") is a limited partnership organized on
June 20, 1988 under the Iowa Uniform Limited Partnership Act. The business of
the Partnership is the speculative trading of commodity futures contracts and
other commodity interests, including forward contracts on foreign currencies
(Commodity Interests) either directly or through investing in other, including
subsidiary, partnerships, funds or other limited liability entities. The
Partnership commenced its trading operations on February 1, 1989. Its General
Partner is Everest Asset Management, Inc. (the "General Partner") a Delaware
corporation organized in December, 1987.

The Partnership was initially organized on June 20, 1988 under the name Everest
Energy Futures Fund, L.P. On September 12, 1991, the Partnership changed its
name to "Everest Futures Fund, L.P." The Partnership thereafter has traded
futures contracts and options on futures contracts on a diversified portfolio of
financial instruments and precious metals as well as forward contracts on
currencies. In November 2003 the Partnership changed its name to its present
form.

During its operation, the Partnership has had various advisors. In December
1990, John W. Henry & Company, Inc. (JWH) began trading for the Partnership as
one of the Partnership's trading advisors. In May 1994, JWH became the sole
advisor to the Partnership. In March 1996, the Partnership transferred all of
its assets to, and became the sole limited partner of, Everest Futures Fund II,
L.P. (Everest II) and JWH began trading for Everest II. In July 2000, the
Partnership redeemed approximately 50% of its assets from Everest II and
allocated them to Trilogy Capital Management, LLC's (Trilogy) Barclay Futures
Index Program (BFIP). The Partnership instructed Trilogy to trade its account
using twice the leverage of Trilogy's un-leveraged portfolio to attempt to
achieve a return greater than the return of the Index before fees and expenses.
Effective as of the close of business August 31, 2000, the Partnership
liquidated the balance of its investment in Everest II and opened a trading
account directly with JWH. JWH has used its Financial and Metals Portfolio while
trading for Everest II and the Partnership through June 30, 2001. Beginning July
1, 2001, JWH began trading its Strategic Allocation Program for the Partnership
with a trading allocation of $40 million. Trilogy was terminated as trading
advisor June 30, 2001. Effective September 1, 2001, Mount Lucas Management
Corporation (MLM) was added as trading advisor with an initial allocation of $10
million. This allocation represented notional funding for the Partnership.
Effective June 12, 2003 JWH began trading its GlobalAnalyticsR Family of
Programs, Worldwide Bond Program and Currency Strategic Allocation Programs for
the Partnership. Mount Lucas Management was terminated as trading advisor on
October 31, 2003. Effective June 4, 2004, the Partnership introduced a new share
category, Class I Units, or Institutional Units which have an ongoing Offering
and Organization fee of 1/12 of 0.10% of the NAV per unit per month. The Class A
Units, (retail shares) continue to be charged an initial 1% Offering and
Organization fee as a reduction to capital.


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Prior to mid October, 2005 the Partnership cleared all of its futures trades
through Refco, LLC (RL) and all of its foreign currency trading through Refco
Capital Markets, Ltd. (RCM).

Subsequent to the purchase of Cargill Investor Services ("CIS") by Refco, Inc.
("RI") and the replacement of CIS by RL as the Fund's futures clearing broker on
September 1, 2005, RI, the parent company of RL, announced (on October 10, 2005)
that it had discovered through an internal review an accounting issue involving
a receivable owed to Refco, Inc. by an entity controlled by Philip R. Bennett,
the then Chief Executive Officer and Chairman of the Board of Directors of RI.
The amount at issue was approximately $430 million and was repaid by Mr. Bennett
on October 11, 2005. Mr. Bennett was subsequently relieved of his duties and has
been charged with securities fraud in connection with this matter. In addition,
various legal actions have been filed against RI in this regard.

On October 13, 2005, RI announced that liquidity within another of its operating
subsidiaries, RCM, was no longer sufficient to continue operations and that RCM
was imposing a fifteen day moratorium on all of its activities in an attempt to
protect the value of that business. As of such date RCM was the Fund's acting
foreign currency broker, and the fund had approximately 20% (approximately
$7,500,000) of its total assets on deposit in the accounts at that firm.

On October 17, 2005, RI and certain subsidiaries (including RCM) filed for
bankruptcy protection in the State of New York. Although RL was not involved in
this filing, the Fund nevertheless terminated RL as its futures clearing broker
and RCM as its foreign currency broker and replaced them with Calyon Financial,
Inc. (CFI) and Calyon Financial, SNC, (CFS), respectively.

Effective October 31, 2005 The Partnership created Classes AA and II of shares
and transferred to such classes the value of Partnership assets held in RCM as
of October 17, 2005 together with a reserve for the estimated expenses of
collection and related matters. The amount of such assets which will become
available to the Partnership, if any, is dependent on several matters associated
with the bankruptcy of RCM. Depending on the disposition of these matters, the
final net asset value may differ materially from the preliminary amounts which
the Partnership has published since October 31, 2005. Until the final net asset
value can be determined, redemptions and certain fees will be calculated and
paid on a preliminary basis using the net asset value of Class A and Class I
units only, thus excluding the assets held by RCM and the reserve established in
connection with the RCM legal proceedings. The Fund described the foregoing
events in more detail in a general letter to Limited Partners October 20, 2005
(the "Letter"). The Letter appears as an attachment to a filing on Form 8-K by
the Fund on October 21, 2005. Both the substance of the Form 8-K and its
attached letter exhibit have been incorporated into this Form 10-K by reference.

On September 13, 1996 the Commission accepted a voluntary filing by the
Partnership of a Form 10 - General Form for Registration of Securities, and
public reporting of Units of the Partnership sold as a private placement
commenced at that time and has continued to the present.

Upon fifteen days written notice, a Class A Limited Partner may require the
Partnership to redeem all or part of his Units effective as of the close of
business (as determined by the General Partner) on the last day of any month at
the Net Asset Value thereof on such date. Upon forty-five days written notice, a
Class I Limited Partner may require the Partnership to redeem all or part of his
Units effective as of the close of business of the last day of any quarter at
the Net Asset Value thereof on such date. Notwithstanding


                                                                               4

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the above, pursuant to the Amended and Restated Agreement of Limited
Partnership, the General Partner may, in its sole discretion, and on ten days'
notice, require a Limited Partner to redeem all or part of his Units in the
Partnership as of the end of any month. There are no additional charges to the
Limited Partner at redemption. The Partnership's Amended and Restated Agreement
of Limited Partnership contains a full description of redemption and
distribution procedures.

Since commencing trading operations, the Partnership has engaged in the
speculative trading of Commodity Interests and will continue to do so until its
dissolution and liquidation, which will occur on the earlier of December 31,
2020 or the occurrence of any of the events set forth in Paragraph 4(a) of the
Agreement of Limited Partnership. Such events are (i) an election to dissolve
the Partnership made by over 50% of the Limited Partnership Units at least 90
days prior to dissolution, (ii) withdrawal, insolvency, or dissolution of the
General Partner (unless a new general partner is substituted), (iii) decline in
the Net Asset Value of the Partnership at the close of any business day to less
than $300,000, or (iv) any event which will make it unlawful for the existence
of the Partnership to be continued or requiring termination of the Partnership.

The address of the General Partner and the Partnership is 1100 North 4th Street,
Suite 143, Fairfield, Iowa 52556, and the telephone number is (641) 472-5500.
The General Partner changed its name as of March 1, 1994 and amended its
Certificate of Incorporation, with no other changes, accordingly. In accordance
with the provisions of the Commodity Exchange Act and the rules of the National
Futures Association (NFA), the General Partner is registered as a commodity pool
operator and a commodity trading advisor, JWH is registered as a commodity
trading advisor and the Commodity Broker is registered as a futures commission
merchant, each subject to regulation by the Commodity Futures Trading Commission
(CFTC). Each is also a member of the NFA in such capacity.

The General Partner, to the exclusion of the limited partners of the Partnership
(the "Limited Partners"), manages and conducts the business of the Partnership.
Thus the General Partner (i) selects and monitors the independent commodity
trading advisor(s) and the Commodity Broker; (ii) allocates and/or reallocates
assets of the Partnership to or from JWH and/or the advisor(s); (iii) determines
if an advisor or commodity broker should be removed or replaced; (iv) negotiates
management fees, incentive fees and brokerage commissions; (v) determines its
own compensation with respect to management and administrative fees; and (vi)
performs such other services as the Partnership may from time to time request,
except that all trading decisions are made by JWH and not the General Partner.
In addition, the General Partner selects the commodity broker(s) that will clear
trades for the advisor(s). Calyon Financial, Inc. currently acts as Everest's
commodity broker and Calyon Financial, SNC, an affiliate of Calyon Financial
Inc., acts as Everest's currency dealer.

The General Partner is responsible for the preparation of monthly and annual
reports to the Limited Partners; filing reports required by the CFTC, the NFA,
the SEC and any other federal or state agencies having jurisdiction over the
Partnership's operations; calculation of the Net Asset Value (meaning the total
assets less total liabilities of the Partnership {for a more precise definition,
see the Exhibit "Form 10 - General Form for Registration of Securities"
incorporated by reference hereto}) and directing payment of the management and
incentive fees payable to JWH or the


                                                                               5

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advisor(s)under an advisory agreement(s) entered into with the commodity trading
advisor(s).

Effective November 2003, the General Partner charges the Partnership a monthly
management fee equal to 0.50% of the Partnership's Class A beginning-of-month
net asset value. From May 2002 through October 2003, the General Partner charged
the Partnership a monthly management fee of either 0.5104% or 0.5156%, depending
on the total amount which the Partnership had allocated to trading, including
notional funding. Prior to May 2002, the General Partner charged the Partnership
a monthly management fee equal to 0.5052% of the Partnership beginning-of-month
net asset value, as defined. Prior to September 1, 2001, the monthly management
fee was 0.5%. The General Partner pays a portion of its fees for actual
commission charges to its Clearing Broker.

Effective June 2004, the General Partner charges the Partnership a monthly
management fee equal to 0.229% of the Partnership's Class I beginning-of-month
net asset value. From this amount the General Partner deducts the round turn
trading costs and related exchange fees (between $5.80 to $10.70 per round turn
trade on domestic exchanges, and higher for foreign exchanges ) and pays the
selling agents and certain other parties, if any, up to 50% of the fee retained
by the General Partner.

In addition, the Partnership reimburses the General Partner for the actual
organization and offering expenses advanced by it, not to exceed one percent of
the Class A Net Asset Value of Units sold. The Partnership reimburses the
General Partner for the actual organization and offering expenses advanced by
it, not to exceed one tenth of one percent of the Class I Net Asset Value of
Units sold annually. Organization and offering expenses shall mean all expenses
incurred by the Partnership or the General Partner in connection with and in
preparation to offer and distribute the Units to investors, including, but not
limited to, expenses for traveling, printing, engraving, mailing, salaries of
employees while engaged in sales activity, charges of transfer agents,
registrars, trustees, escrow holder, depositories, experts, expenses of
qualification of the sales of its securities under state law, including taxes
and fees and accountants' and attorneys' fees.

Everest pays John W. Henry & Company, Inc., its current commodity trading
advisor, a monthly management fee equal to 0.167% (approximately 2% annually) of
Everest's month-end Allocated Assets, as defined, and a quarterly incentive fee
equal to 20% of Everest's trading profits allocable to its trading exclusive of
interest income on Allocated Assets, as defined. The incentive fee is retained
by JWH even though trading losses may occur in subsequent quarters; however, no
further incentive fees are payable until any such trading losses (other than
losses attributable to redeemed units and losses attributable to assets
reallocated to another advisor) are recouped by Everest.

MLM received a monthly management fee of 0.0625% (0.75% annually) of the
Partnership's month-end allocated assets as defined. As MLM used the MLM
Index-Unleveraged, they did not receive an incentive fee. Effective February
2003, the management fee was reduced to 0.04167% (0.50% annually).

Trilogy received a monthly management fee equal to 0.075% (approximately 0.90%
annually) of Everest's month-end allocated assets, as defined. Trilogy did not
receive an incentive fee.

The Commodity Broker has agreed to pay Everest interest on 95% of Everest assets
(including open trade equity) deposited with it during a month at the


                                                                               6

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average of 91-day U.S. Treasury Bills purchased by the Commodity Broker during
each month. The Commodity Broker will retain all excess interest, if any, earned
on the Everest assets, above the amount of interest paid to Everest. The
interest rate to be paid by the Commodity Broker to Everest is a negotiated rate
which has been negotiated between the Commodity Broker and the General Partner.
The actual interest income on Everest's assets earned by the Commodity Broker
may be greater than or less than the negotiated rate to be paid by the Commodity
Broker to Everest. The Commodity Broker will also be responsible for execution
and clearance of futures contracts (and possibly certain other Commodity
Interests).

The Partnership pays no selling commission but does pay an ongoing compensation
fee equal to 3% of the Net Asset Value of Class A Units sold, unless waived in
whole or in part by the General Partner, to the selling agents in connection
with the sale of the Units. The Partnership pays no selling commission but does
pay an ongoing compensation fee equal to 1% of the Net Asset Value of Class I
Units sold, unless waived in whole or in part by the General Partner, to the
selling agents in connection with the sale of the Units. The General Partner may
pay up to 100% of the funds it receives to the selling agents as additional
selling commission. The Partnership is obligated to pay its periodic operating
expenses and extraordinary expenses. Although those expenses will vary depending
on the Partnership's size, it is estimated that the periodic operating expenses
will be approximately $65,000 annually. Extraordinary expenses for these
purposes include expenses associated with significant non-recurring litigation
including, but not limited to, class action suits and suits involving the
indemnification provisions of the Agreement of Limited Partnership or any other
agreement to which the Partnership is a party. By their nature, the dollar
amount of extraordinary expenses cannot be estimated. With respect to Class AA
and II extraordinary expenses paid or accrued were $26,016 as of 12/31/05. All
expenses shall be billed directly and paid for by the Partnership. The
Partnership's operating expenses for the years 2001-2005 can be found in the
table in Item 6 below.

The Partnership has no Employees. As of December 31, 2005, the General Partner
had 4 employees. Further, the General Partner, in its capacity as a
CFTC-regulated commodity pool operator, contracts certain services of research,
administration, client support and management information systems and analysis
to Capital Management Partners, Inc. (Capital). Capital is a CFTC-regulated
introducing broker, and an NFA member. Capital is also registered with the
National Association of Securities Dealers (NASD) as a broker dealer. As of
December 31, 2005 Capital had 12 employees.

The Partnership's business constitutes only one segment for financial reporting
purposes; and the purpose of this limited partnership is to trade, buy, sell,
spread or otherwise acquire, hold or dispose of Commodity Interests including
futures contracts, forward contracts, physical commodities and related options
thereon. The objective of the Partnership's business is appreciation of its
assets through speculative trading in such Commodity Interests. Financial
information about the Partnership's business, as of December 31, 2005 is set
forth under Items 6 and 7 herein.

For a description of commodity trading and its regulation, see the Prospectus
filed on Form S-18 and the Confidential Private Placement Memorandum filed as
part of the Form 10 and included in the exhibits hereto.

The Current Offering


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On July 1, 1995 the Partnership reopened for investment as a Regulation D, Rule
506 private placement offering an unlimited amount of limited partnership
interests. On September 19, 1996 the Commission accepted a Form 10 - General
Form for Registration of Securities submitted by the Partnership thereby making
the Partnership a public reporting private placement offering. It also qualified
the Partnership as a "publicly offered security" as defined in the Employee
Retirement Income Security Act of 1974 (ERISA) rules permitting it to accept
investment of an unlimited amount of plan assets as defined in ERISA. Hitherto,
as a private placement the Partnership could accept ERISA plan assets
representing no more than 25% of the total investment in the Partnership. The
limited partnership interests are offered by the Selling Agent and additional
selling agents with a Class A minimum subscription amount of $25,000. (The Class
A minimum subscription amount for employee benefit plans and individual
retirement accounts is $10,000). Class I minimum subscription amount is
$5,000,000, subject to the discretion of the General Partner to accept
subscriptions of lesser amounts.

Competition

JWH and any other advisor(s) of the Partnership, its or their respective
principals, affiliates and employees are free to trade for their own accounts
and to manage other commodity accounts during the term of the Advisory Agreement
and to use the same information and trading strategy which JWH obtains, produces
or utilizes in the performance of services for the Partnership through its
investment in Everest. To the extent that JWH recommends similar or identical
trades to the Partnership and other accounts which it manages, the Partnership
may compete with those accounts for the execution of the same or similar trades.

Other trading advisors who are not affiliated with the Partnership may utilize
trading methods which are similar in some respects to those methods used by JWH,
or any other future Partnership's advisor(s). These other trading advisors could
also be competing with the Partnership for the same or similar trades as
requested by the Partnership's advisor(s).

Item 1A. Risk Factors

GENERAL

     TRADING IN COMMODITY INTERESTS IS SPECULATIVE. Commodity interest prices
are highly volatile. Price movements for futures contracts, for example, which
may fluctuate substantially during a short period of time, are influenced by
numerous factors that affect the commodities markets, including, but not limited
to: changing supply and demand relationships, government programs and policies,
national and international political and economic events, and changes in
interest rates. See, "Risk Factors -- Commodity Interests Trading May Be
Illiquid."

     COMMODITY INTERESTS TRADING IS HIGHLY LEVERAGED. The low margin deposits
normally required in trading commodity interests permit an extremely high degree
of leverage. Accordingly, a relatively small price movement in a commodity
interest may result in an immediate and substantial loss to the investor. For
example, if at the time of purchase 5% of the price of a futures contract is
deposited as margin, a 5% decrease in the price of the futures contract would,
if the contract were then closed out,


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result in a total loss of the margin deposit (brokerage commission expense would
also be incurred). Like other leveraged investments, any commodity interest
trade may result in losses in excess of the amount invested. Although more than
the initial margin can be lost on a trade, the Partnership, and not investors
personally, will be subject to margin calls.

     THE PARTNERSHIP'S TRADING ACCOUNT WILL BE LEVERAGED. The use of notional
funds by the Partnership in its trading account with JWH will result in
increased trading leverage. The Fund is currently trading approximately $1.14
for every $1.00 in the Fund. The general partner may, in its sole discretion,
periodically adjust the size of the trading account with JWH by increasing or
decreasing the cash, other assets or notional funds allocated to it (and thus
the amount by which the Partnership's assets are leveraged). Because the trading
account will be leveraged, (i) the Partnership will incur greater risk since the
Partnership may experience greater losses, as measured by a percentage of assets
actually allocated to JWH, due to the notional funds component; (ii) the
Partnership's returns may experience greater volatility compared to the returns
which the Partnership would have achieved on a non-leveraged basis; and (iii)
the Partnership may receive more frequent and larger margin calls.

     COMMODITY INTERESTS TRADING MAY BE ILLIQUID. Most U.S. commodity futures
exchanges impose daily limits regulating the maximum amount above or below the
previous day's settlement price which a futures contract price may fluctuate
during a single day. During a single trading day no trades may be executed at
prices beyond the daily limit. Once the price of a particular futures contract
has increased or decreased to the limit point, it may be difficult, costly or
impossible to liquidate a position. Futures prices in particular contracts have
occasionally moved the daily limit for several consecutive days with little or
no trading. If this occurs, the Partnership might be prevented from promptly
liquidating unfavorable positions, which could result in substantial losses.
Those losses could significantly exceed the margin initially committed to the
trades involved. In addition, even if prices have not moved the daily limit or
there are no limits for the contracts traded, trades might not be able to be
executed at favorable prices if little trading in the contracts is taking place.
It is also possible that an exchange or the Commodity Futures Trading Commission
(CFTC) may suspend trading in a particular contract, order immediate settlement
of a contract, or order the liquidation of open positions only.

     EXCHANGE FOR PHYSICAL. JWH may make use of a trading technique referred to
as "exchange for physical" in which a cash or spot market position (which may be
a forward contract) is exchanged, often outside of regular trading hours, for a
comparable futures position. The CFTC has released a study of the exchange for
physical market that recommended that a number of new regulatory restrictions be
applied to it. If these recommendations or restrictions are adopted, the ability
of JWH to use this market may be curtailed.

     TRADING DECISIONS BASED ON TECHNICAL ANALYSIS. JWH uses trading programs
that employ "technical" factors in identifying price moves. The success of
technical analysis depends upon the occurrence in the future of price movements.
Technical systems will not be profitable, and may in fact produce losses, if
there are no market moves of the kind the system seeks to follow. Any factor
that would make it more difficult to execute the trades identified, such as a
reduction of liquidity, also would reduce profitability. There is no assurance
that the trading systems of JWH will generate profits under all or any market
conditions.


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     POSSIBLE EFFECTS OF OTHER SIMILAR SYSTEMS. Commodity trading systems, which
use market data like JWH uses, are not new. If many traders follow similar
systems, these systems may generate similar buy and sell orders at the same
time. Depending on the liquidity of a market, this could cause difficulty in
executing orders. Everest believes that, although there has been an increase in
the number of trading systems in recent years, there also has been an increase
in the overall trading volume and liquidity in the futures markets. Any increase
in the proportion of funds traded using trend-following systems could alter
trading patterns or affect execution of trades to the detriment of the
Partnership.

     NO ASSURANCE OF JWH'S CONTINUED SERVICES. JWH has exclusive responsibility
for trading commodity interests allocated to it. JWH is dependent on the
services of certain key persons. The loss of the services of such persons would
make it difficult or impossible for JWH to continue to provide services to the
Partnership. In addition, the advisory contract between the Partnership and JWH
may be terminated by either party on sixty (60) days written notice.

     CHANGES IN TRADING STRATEGIES. The trading strategies of most trading
advisors are continually developing. JWH is free to make any changes in trading
strategies. Changes in commodity interests traded or leverage used are not
considered changes in trading strategy.

     POSSIBLE EFFECTS OF SPECULATIVE POSITION LIMITS. The CFTC and U.S.
exchanges have established "speculative position limits." These limits control
the number of net long or net short speculative futures or options (on futures)
positions any person may hold or control in futures or options contracts traded
on U.S. exchanges. JWH controls the commodity trading of other accounts. All
positions and accounts owned or controlled by JWH and its principals are
combined with the Partnership's positions established by JWH for position limit
purposes. In order to avoid exceeding position limits, it is possible that JWH
will have to modify its trading instructions, and that positions held by the
Partnership will have to be liquidated. That could have a negative effect on the
operations of the Partnership and its profitability. See, "Risk Factors
-Increase in Amount of Funds Managed." In addition, all commodity accounts of
the General Partner and its affiliates may also be combined with the Partnership
for position limit purposes.

     INCREASE IN AMOUNT OF FUNDS MANAGED. JWH expects to manage additional funds
in the future. It is not known if managing additional funds, including funds
raised in this offering, will have any effect on its performance or trading
strategies. In many cases, the rates of return achieved by an advisor
deteriorate as assets under management increase. Increases in funds managed may
affect the number of futures or options positions an advisor would otherwise
hold for each account it manages because of speculative position limits imposed
by U.S. exchanges. There is no assurance that changes in strategies, if any, in
response to increased funds will be successful. There can be no guarantee that
the investment results of that portion of the assets allocated to JWH will be
similar to those achieved by it in the past in its other accounts.

     POSSIBILITY OF TRADING IN OPTIONS. Although successful commodity options
trading and futures trading require many of the same skills, the risks involved
are somewhat different. For example, if an account buys an


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option (either to buy or sell a contract), it will pay a "premium" representing
the market value of the option. Unless it becomes profitable to exercise or
offset the option before it expires, the account will lose the entire amount of
the premium. On the other hand, if the account sells an option (either to sell
or purchase a futures contract), its broker credits the premium but the account
must deposit margin in case the option is exercised. Traders who sell options
are subject to the entire loss that may occur in the underlying futures position
(less any premium received). Both the CFTC and the exchanges regulate commodity
options trading on U.S. exchanges.

     CHANGES IN THE NUMBER OF AVAILABLE FUTURES CONTRACTS AND RELATED OPTIONS.
U.S. and foreign exchanges have established new futures and options contracts in
the past few years. This trend could continue. If JWH trades these contracts in
the future, there is no assurance that its trading strategies will produce
profits.

     PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. Although
some of the client accounts of JWH have been profitable in the past, you should
take seriously the warning the CFTC and the National Futures Association (NFA)
require. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. AN
INVESTMENT IN THE PARTNERSHIP IS SPECULATIVE AND INVOLVES A SUBSTANTIAL RISK OF
LOSS.

     HORIZON CASH MANAGEMENT, L.L.C. A substantial portion of the Partnership's
assets is held in an omnibus custody account on behalf of the Partnership at The
Northern Trust Company in the name of the Partnership. The Partnership has
entered into an advisory contract with Horizon pursuant to which Horizon manages
such assets in an attempt to maximize their yield through investment in various
short-term interest bearing instruments including U.S. Treasury Securities, U.S.
Government Agencies' Securities, Bankers' Acceptances, Certificates of Deposit,
Time Deposits, Commercial Paper, Loan Participation Notes and Repurchase
Agreements - U.S. Treasury Securities and U.S. Government Agencies' Securities.
As a result, the Partnership's assets managed by Horizon are subject to
potential loss resulting from interest rate fluctuations and default.

JWH PROGRAMS

     EFFECTS OF TRADING MULTIPLE INVESTMENT PROGRAMS. JWH makes trading
decisions for each of its investment programs independently of trading decisions
for the other JWH investment programs. Because the CSAP Program which JWH
employs in trading the Partnership's assets uses multiple JWH investment
programs, it could hold opposite positions in the same or similar contracts at
or about the same time or during the same period of time, with no net change in
holdings.

In addition, due to similarities among JWH's investment programs, the potential
diversification benefits of trading CSAP may be less than would be the case with
multiple trading programs offered by independent managers. The Partnership loses
risk control benefits of market diversification during these periods when an
investment program's positions are concentrated in a limited number of markets.

     THE CSAP PROGRAM IS DISCRETIONARY. CSAP employs discretionary, judgmental
asset allocation decisions among the JWH investment programs and currency
trading models. The investment programs and models themselves are


                                                                              11

<PAGE>

primarily technical and systematic in character. Since CSAP's discretion relates
to allocations, not trading, reliance on judgment and discretion may, over time,
produce less consistent results than implementing a systematic allocation
approach. JWH has more experience implementing systematic methodologies as
opposed to discretionary strategies. The Partnership may incur losses due to
JWH's relative inexperience in implementing this discretionary strategy.

     THE CSAP PROGRAM MAY UNDER PERFORM INDIVIDUAL PROGRAMS. Even if individual
JWH investment programs are successful, there can be no assurance that CSAP will
be successful. The active allocation among the investment programs makes it
possible for the program to incur losses even during periods in which a number
of the individual investment programs are profitable.

     MANDATORY CLOSING OUT OF OFFSETTING POSITIONS. CFTC rules require
offsetting positions taken by JWH for clients be closed out. This means that
positions taken pursuant to different investment programs included in CSAP must
be closed out, even though the positions are taken in different investment
programs. JWH does not believe that the requirement of liquidating offsetting
positions for CSAP by the different investment programs will, at this point,
impede the operation of CSAP. It is possible under certain circumstances that
the requirement to close out offsetting positions could adversely affect the
performance of the Partnership's account.

     ELECTRONIC TRADING. JWH expects to trade increasingly through electronic
trading systems provided by the brokerage firms used by JWH's clients. Trades
placed by electronic means are governed by the terms of the relevant electronic
brokerage trading agreements and by exchange rules. Electronic trading systems
vary in terms of order matching procedures, opening and closing procedures and
prices, error trade policies, trading limitations or requirements,
qualifications for access, grounds for terminating access, and limitations on
the types of orders that may be entered. Additional risk may occur due to
limitation of system access, varying response times and security requirements.
In the case of Internet-based systems, there may be additional risks related to
service providers and the receipt and monitoring of electronic mail. In the
event of electronic system or component failure, it might not be possible to
enter new orders, execute existing orders or modify or cancel orders that were
previously entered, and orders may be lost or lose priority. JWH will retain the
capability of placing orders by the traditional means of telephone and
telecopier, and will use those methods if electronic trading is not possible for
a period of time. Exchanges may have adopted rules to limit their liability, the
liability of futures brokers and software and communication system vendors and
the amount that may be collected for system failures and delays. Although JWH
believes that electronic trading will provide benefits in the efficiency of
order placement, no assurance can be given that JWH's potential use of
electronic trading will result in better order placement or trade execution than
other methods of order placement which have been historically employed by JWH.

PARTNERSHIP ISSUES

     SUBSTANTIAL CHARGES TO PARTNERSHIP. The Partnership pays substantial fees
and charges and has substantial operating costs. As a result, it must make
substantial profits for your units to increase in value. These include


                                                                              12

<PAGE>

an incentive fee to JWH that is based on, among other things, unrealized
appreciation in open commodity interest positions. The incentive fee is paid
(and retained by JWH) even if that portion of the Partnership's assets traded by
it experience subsequent losses or the appreciation is never realized. It is
therefore possible that the Partnership may pay an incentive fee in years in
which the Partnership breaks even or experiences losses.

     POSSIBLE MISALLOCATION OF INCENTIVE FEES. The Partnership pays quarterly
incentive fees on trading profits, if any, earned by JWH. Trading profits are
calculated on the overall profits earned by JWH on its allocated assets and not
just on increases in the Net Asset Value of each unit. As a result, the
Partnership might pay incentive fees even if Partnership units decline in value.
In addition, if, at the time limited partners purchase units, there is an
accrued incentive fee expense, that accrued expense will reduce the purchase
price of their units. If the accrual is reversed because of later losses, the
incentive fee will be misallocated because the reversal of the accrued incentive
fee expense will be allocated equally to all outstanding units rather than only
to those outstanding during the period when the incentive fee expense accrued.
Similarly, if you buy units after an incentive fee has been paid and after a
later loss attributable to JWH, your units will not be assessed an incentive fee
until there are new trading profits, even if your units have increased in value.

     THERE IS NO INTRINSIC VALUE TO THE PARTNERSHIP'S INVESTMENTS. The
Partnership must be profitable for it to provide beneficial diversification to a
limited partner's portfolio. Trading in commodity interests is a "zero-sum"
activity in which for every gain there is an equal and offsetting loss
(disregarding transaction costs). This differs from a typical securities
investment, in which there is an expectation of consistent yields (in the case
of bonds) or participation over time in general economic growth (in the case of
stocks). The Partnership could lose money while stock and bond prices rise.
Stocks and bonds (except penny stocks) generally have some intrinsic value.
Limited partners generally can realize some value for their stocks or bonds even
if they sell in a down market. In trading commodity interests, on the other
hand, investors risk losing all of their investment if prices move against them.
In general, performance statistics do not reflect the different risk profiles or
tax treatment of traditional and managed commodity interest investments. See,
"Risk Factors - Limited Partners Will Be Taxed on Profits whether or Not
Distributed or Realized."

     FUND TRADING IS NOT TRANSPARENT. JWH Advisor makes all of the trading
decisions for the portion of the Partnership's assets allocated to it. While the
General Partner receives daily trade confirmations from the commodity broker,
only the monthly performance of the Partnership is reported to limited partners.
Accordingly, an investment in the Partnership does not offer limited partners
the same transparency, i.e., an ability to review all investment positions daily
that a personal trading account offers.

     NON-CORRELATED, NOT NEGATIVELY CORRELATED, PERFORMANCE OBJECTIVE.
Historically, managed futures have been generally non-correlated to the
performance of other asset classes such as stocks and bonds. Non-correlation
means that there is no statistically valid relationship between the past
performance of futures and forward contracts on the one hand and stocks or bonds
on the other hand (as opposed to negative correlation, where the performance
would be exactly opposite between two asset classes).


                                                                              13

<PAGE>

Because of this non-correlation, the Partnership cannot be expected to be
automatically profitable during unfavorable periods for the stock market, or
vice versa. The futures and forward markets are fundamentally different from the
securities markets in that for every gain in futures and forward trading, there
is an equal and offsetting loss. If the Partnership's investments do not perform
in a manner non-correlated with the general financial markets, or do not perform
successfully, limited partners will obtain no diversification benefits by
investing in the units and the Partnership may have no gains to offset their
losses from other investments.

     LIMITED PARTNERS WILL NOT PARTICIPATE IN MANAGEMENT. Limited Partners will
not participate in the management of the Partnership. Under principles of
limited partnership law, limited partners' participation in the Partnership's
management could result in unlimited liability for them. The limited partnership
agreement provides that certain actions may be taken, or approved, by the vote
of limited partners owning more than 50% of the units, but their role in the
Partnership is passive and the profitability of their investment depends
entirely on the efforts of others.

     INDEMNIFICATION OF PARTNERSHIP BY LIMITED PARTNERS. If someone signs the
subscription agreement and the General Partner accepts their subscription, they
will become a limited partner. Under the agreement, they will be required to
indemnify the Partnership for any liability that it incurs as a result of their
actions.

LIQUIDITY

     LIMITED ABILITY TO LIQUIDATE INVESTMENT IN UNITS. Limited partners cannot
immediately liquidate their units. There is no market for the units and none is
likely to develop. They may, however, redeem their Class A units, without
penalty, on the last day of any month on fifteen (15) days prior written notice
to the General Partner or such lesser time as is acceptable to the General
Partner. For Class I, they may redeem on the last day of any quarter on
forty-five (45) days prior written notice to the General Partner or such lesser
time as is acceptable to the General Partner. Because of the time delay between
your Class A notice to the General Partner and the end of the month (or for your
Class I notice, the end of the quarter) when their investment is redeemed, the
value of their investment on the date of redemption may be substantially less
than at the time they notify the General Partner of their request to redeem.

     POSSIBLE EFFECT OF REDEMPTIONS ON UNIT VALUES. The Partnership will lose
money if it has to sell positions at a loss in order to raise capital so that
the Partnership can pay substantial redemptions. If a large number of
redemptions occur simultaneously, the need to liquidate positions could continue
even after the redemption date. The Partnership would have fewer assets to trade
after a high level of redemptions. This might make it more difficult for it to
recover losses or generate trading profits. Market illiquidity could make it
difficult to liquidate positions on favorable terms, and may also result in
losses and thus a decline in the value of Partnership units.

     AUTOMATIC TRADING SUSPENSION. Limited Partners should buy units only if you
are looking for a long-term investment. If the net asset value per unit declines
as of the close of business on any day to a trading suspension level (50% of the
highest prior month-end net asset value per unit, after adjustment for prior
distributions), the Partnership will liquidate its open


                                                                              14

<PAGE>

positions and notify limited partners. The Partnership cannot assure limited
partners that it can liquidate its investments without incurring substantial
additional losses or that limited partner will receive any specific value for
the units they own. See, "Risk Factors - Commodity Interest Trading May Be
Illiquid."

     COUNTERPARTY CREDITWORTHINESS -- U.S. MARKETS. Commodity exchanges provide
centralized market facilities for trading in futures contracts relating to
specified commodities. Each of the commodity exchanges in the United States has
an associated "clearinghouse." Once trades made between members of an exchange
have been confirmed, the clearing house becomes substituted for the clearing
member acting on behalf of each buyer and each seller of contracts traded on the
exchange and in effect becomes the other party to the trade. Thereafter, each
clearing member firm party to the trade looks only to the clearinghouse for
performance. Clearinghouses do not deal with customers, but only with member
firms, and the "guarantee" of performance under open positions provided by the
clearinghouse does not run to customers. If a customer's commodity broker
becomes bankrupt or insolvent, or otherwise defaults on such broker's
obligations to such customer, the customer in question may not receive all
amounts owing to such customer in respect of his or her trading, despite the
clearing house fully discharging all of its obligations.

FOREIGN INSTRUMENTS

     COUNTERPARTY CREDITWORTHINESS -- NON-U.S. MARKETS. JWH may trade commodity
interests on foreign exchanges and in the over-the-counter markets. Unlike U.S.
exchange traded futures contracts where the exchange clearing corporation acts
as the counterparty to each customer transaction, the over-the-counter markets
and some foreign markets are "principals' markets". This means that the
performance of the contract is the responsibility only of the individual firm or
member on the other side of the trade and not of any exchange or clearing
corporation. In those transactions, the Partnership will be subject to the risk
of the inability of, or refusal by, the counterparty to perform.

     TRADING ON FOREIGN EXCHANGES AND CURRENCY EXCHANGE RATE FLUCTUATIONS.
Neither existing CFTC regulations nor regulations of any other U.S. governmental
agency apply to transactions on foreign markets. If a foreign clearinghouse
default or bankruptcy occurs, the Partnership's rights and responsibilities are
likely to differ from those existing on U.S. exchanges. The Partnership is at
risk for fluctuations in the exchange rate between the currencies in which the
commodity interest is traded and U.S. dollars. It also is possible that in the
future, U.S. or foreign governments could impose exchange controls. There is no
restriction on how much of the Partnership's trading can be conducted on foreign
markets. The Partnership may pay brokerage commissions in foreign currencies. If
the exchange rate of those currencies and the U.S. dollar fluctuates, the
commission rate paid for those trades might increase (decrease).

     POSSIBILITY OF FORWARD AND CASH TRADING. The Partnership might make spot
and forward contracts for certain commodities, primarily currencies with U.S. or
foreign banks or dealers. A forward contract is a contractual right to purchase
or sell a commodity, such as a currency, at or before a specific date in the
future at a specific price. Because forward contracts are not traded on
exchanges, there is no regulatory protection provided by any exchange or the
CFTC. There is no limit on daily price moves for


                                                                              15

<PAGE>

forward contracts. Banks and dealers are not required to continue to make
markets in any commodity. In the past, there have been times when certain banks
have refused to quote prices for forward contracts or have quoted prices with an
unusually wide spread between the price at which the bank is prepared to buy and
that at which it is prepared to sell. There is a risk that the banks or dealers
through which the Partnership trades could fail or refuse to perform.

     The CFTC is studying questions about the regulation of "off-exchange
instruments" such as forward contracts. A number of the major U.S. commodity
exchanges have also expressed concerns about these instruments. The CFTC has
indicated that it would regard marketing of forward contracts on a retail basis
to the U.S. public at large as a violation of the CEAct. The CFTC might, in the
future, prohibit the Partnership from trading in the forward markets.

TAX AND REGULATORY ISSUES

     POSSIBILITY OF TAXATION AS A CORPORATION. Everest believes that under
current federal income tax law and regulations the Partnership will be
classified as a partnership and not as an association taxable as a corporation.
The General Partner will not obtain a ruling from the Internal Revenue Service
(IRS) or an opinion of counsel to confirm its belief. If the Partnership is
taxed as a corporation for federal income tax purposes in any taxable year, its
income or losses will not be passed through to you, and the Partnership will be
subject to tax on its income at the corporate tax rate. In addition, any
distributions made to you could be taxable to you as dividend or capital gain
income, and those distributions will not be deductible in computing taxable
income.

     POSSIBLE LEGISLATIVE TAX CHANGES. All of the statements in this Memorandum
about taxes are based upon the current Internal Revenue Code (the Code).
Congress and the IRS regularly revise the Code and the regulations. Those
revisions could materially affect you and the Partnership.

     UNRELATED BUSINESS TAXABLE INCOME (UBTI) FOR EMPLOYEE BENEFIT PLANS. If the
Partnership were a publicly-traded partnership and limited partners are a
tax-exempt entity, or if they are a tax-exempt entity and debt finance their
investment, their share of gross income less Partnership deductions is treated
as UBTI, and subject to tax. The General Partner does not believe that the
Partnership is publicly-traded for this purpose. However, if it were decided
that the Partnership is publicly-traded, it may not be an appropriate investment
for employee benefit plans, including individual retirement accounts (IRAs). In
addition, if investing in commodity interests results in UBTI, each partner that
is a tax-exempt entity would take into account its share of the Partnership's
UBTI and the deductions attributable to that income (including a $1,000
deduction against UBTI which is generally available to all tax-exempt entities)
in computing its tax liability. Benefit plan investors should consult with their
own legal and financial advisers about the tax consequences of plan investments
in the Partnership.

     LIMITED PARTNERS WILL BE TAXED ON PROFITS WHETHER OR NOT DISTRIBUTED OR
REALIZED. The Partnership is not required, and the General Partner does not
intend, to distribute profits. If the Partnership has taxable income for a
fiscal year, the income will be taxable to them based on their distributive
share of Partnership profit even if no profits have been distributed. As a
result, limited partners might owe taxes on undistributed


                                                                              16

<PAGE>

profits. It is also possible that those profits could be lost by the Partnership
after the end of its fiscal year, so that limited partners might never receive
the profits on which they are taxed. However, they may redeem units to pay
taxes, but this would result in a reduction in their interest in the
Partnership's future profits (if any).

     FOREIGN LIMITED PARTNERS. If limited partners are not citizens or residents
of the U.S. and are not otherwise engaged in a trade or business in the U.S.,
they will generally not be required to pay U.S. income tax on capital gains from
commodity interest trading. Interest income will be taxable to them, if they are
a foreign investor, unless there is an exemption from tax in an appropriate tax
treaty. If the law requires the General Partner to withhold a portion of the
income they earn because they are a foreign limited partner, the General Partner
may redeem their units to pay the U.S. Department of Treasury taxes they owe. If
a limited partner believes amounts were improperly withheld, they must deal
directly with the U.S. Department of Treasury.

     FAILURE OF COMMODITY BROKERAGE FIRMS. Futures commission merchants must
maintain the Partnership's assets in a segregated account. If CFI becomes
bankrupt, the Partnership could lose money. In addition, even if CFI adequately
segregates the assets of the Partnership, the Partnership may be able to recover
only a pro rata share of the property available for distribution to all of CFI's
customers.

     FOREX TRADING COUNTERPARTY CREDITWORTHINESS. The Partnership will enter
into an agreement with CFS which will result in CFS acting as the counter-party
to the Partnership's foreign currency transactions. That is, CFS will be the
seller of all forex instruments purchased by the Partnership and the buyer of
all forex instruments sold by the Partnership. CFS's financial benefit from
entering into these transactions with the Partnership is derived from its
ability to participate in the foreign exchange interbank markets, which are only
available to large institutional investors. CFS's compensation will be derived
from a mark-up on the bid/ask spread price quoted to the Partnership on each
transaction, and CFS's ability to offset these transactions in the foreign
exchange interbank market. In the event that CFS is unable to successfully
participate in this market, the ability of CFS to enter into transactions with
the Partnership may be interrupted. In addition, CFS has entered into similar
agreements with other persons, and thus acts as the counter-party in
transactions effected by these other persons. Because CFS acts as counter-party
in these transactions, the Partnership is subject to the additional risk that
CFS will be unable to fulfill its obligations to the Partnership. Moreover, in
the event of a bankruptcy of CFS, the Partnership may be unable to recover
assets held at CFS, even if such assets are directly traceable to the
Partnership. In the event of CFS's bankruptcy, there is no equivalent of the
Securities Investors Protection Corporation insurance as applicable in the case
of securities broker dealers' bankruptcies.

     A substantial portion of the Partnership's assets are held in a custodial
account and managed by Horizon. Failure of this firm might result in losses to
the Partnership.

     POSSIBILITY OF TAX AUDIT. The IRS might audit the tax returns of the
Partnership, or adjustments to its returns might be made as a result of an
audit. Uncertainty regarding the federal income tax treatment of certain
management and incentive fees paid by the Partnership, or ongoing fees paid


                                                                              17

<PAGE>

to others, may increase the likelihood of an audit. If an audit results in an
adjustment, limited partners may be required to pay additional taxes, interest
and penalties and may be subject to audit. The IRS is currently authorized to
impose an interest penalty on tax deficiencies based on prevailing private
sector interest rates.

     RISK THAT UNITS WILL NOT BE CONSIDERED "PUBLICLY-OFFERED SECURITIES" UNDER
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 (ERISA). Everest believes
that it is reasonable to take the position that the units qualify as
"publicly-offered securities" under Title I of ERISA, and that the underlying
assets of the Partnership will therefore not be considered for any purposes of
ERISA or Section 4975 of the Code to be assets of employee benefit plans and
IRAs that purchase units. However, this position is not binding on the
Department of Labor (DOL) and, therefore, there is no certainty that the units
qualify. If the units are determined not to qualify as such "publicly-offered
securities," The General Partner intends to redeem units held by certain limited
partners that are employee benefit plans or IRAs to the extent necessary to
prevent the underlying assets of the Partnership from thereafter being
considered for purposes of Title I of ERISA or Section 4975 of the Code to be
assets of such employee benefit plans or IRAs. However, for any period that the
underlying assets of the Partnership are considered to be assets of employee
benefit plans or IRAs, the provisions of Title I of ERISA and Section 4975 of
the Code would apply to the operation of the Partnership and could adversely
affect the Partnership's investments and activities.

ABSENCE OF REGULATION APPLICABLE TO INVESTMENT COMPANIES. The Partnership is not
registered as a securities investment company or mutual fund. Therefore, the SEC
does not regulate it under the Investment Company Act of 1940 (the 1940 Act).
Although the Partnership has the right to invest in securities, limited partners
are not protected by the 1940 Act. Everest is, however, registered with the CFTC
as commodity pool operator (CPO), JWH is registered with the CFTC as a CTA and
CFI is registered with the CFTC as a futures commission merchant (FCM).

Item 2. Properties

The Partnership does not utilize any physical properties in the conduct of its
business. The General Partner uses its offices to perform its administrative
functions.

Item 3. Legal Proceedings

The Partnership is a creditor of RCM in the bankruptcy case filed in the United
States Bankruptcy Court, Southern District of New York, captioned In re Refco
Inc., et al., case number 05-60006 (RDD). Based on information provided to the
Partnership by RCM, the Partnership has cash and open trade equity in neutral
currency positions of approximately $7,500,000 remaining at RCM. The amount of
such assets which the Partnership will ultimately recover, if any, is unknown at
this time.

In October 2000, there was a discrepancy between the performance of the Barclay
Futures Index Program (BFIP) as traded for the Partnership and the Barclay
Futures Index (BFI). Certain transactions executed by Trilogy on behalf of the
Partnership resulted in a loss of approximately $520,000 that


                                                                              18

<PAGE>

was recorded in the statement of operations. The General Partner believes that
these transactions were not executed in accordance with the provisions of BFIP
and has demanded that Trilogy reimburse the Partnership for the loss. The
parties are currently attempting to resolve the issue.

Until a final resolution is reached, the parties have agreed that the management
fees otherwise payable to Trilogy under its advisory contract would be applied
as a credit to offset the losses. The offset is not in settlement, partial
settlement, or indemnification of any kind and is without prejudice to any
rights or claims by either side. Beginning in November 2000, and until
approximately July 1, 2001, at which time Trilogy was terminated, all of the
management fees that would otherwise be paid to Trilogy were deposited into a
separate account for the benefit of those limited partners that were limited
partners on November 1, 2000 and to cover the expenses associated with the
collection of the losses. The separate account is not included in the financial
statements of the Partnership. After its termination, Trilogy demanded that such
fees be returned to it. The General Partner rejected Trilogy's demand and is
assessing its options for collection.

A demand for arbitration was filed with the NFA on October 3, 2002. Trilogy has
responded to the demand for arbitration and has counterclaimed for the amount of
$130,210, together with attorney's fees, interest and costs of suit. That figure
represents the amount of management fees, otherwise payable to Trilogy under its
advisory contract, that both parties agreed would be held as a credit to the
Partnership to offset the losses. The General Partner has a letter to that
effect which was signed by the president of Trilogy on January 29, 2001.

The General Partner anticipates a hearing in front of an NFA arbitration panel
in the coming months, but no date has been set for the hearing. At the present
time, the General Partner is unable to determine whether any of the losses will
be recovered.

Item 4. Submission of Matters to a Vote of Security Holders

     None

                                     PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities.

     (a) There is no established public market for the Units and none is
expected to develop.

     (b) As of December 31, 2005, there were 9,879.80 Class A Units held by
Limited Partners. There were 1,097.96 Class I Units held by Limited Partners and
zero units held by the General partner. There were 3,008.60 Class AA Units and
326.71 Class II Units held by Limited partners. A total of 3059.28 Units were
redeemed by Class A Limited Partners, of which 337.06 units were transferred
from Class A to Class I. During this same period, there were 105.61 Units
redeemed by Class I Limited Partners and 12.32 Class I Units were redeemed by
the General Partner. Additionally, there were 3008.60 Units transferred from
Class A to Class AA and 326.71 Units


                                                                              19
<PAGE>

transferred from Class I to Class II. The Seventh Amended and Restated Agreement
of Limited Partnership for the Partnership contains a full description of
redemption and distribution procedures.

     (c) To date no distributions have been made to partners of the Partnership.

The Agreement of Limited Partnership does not provide for regular or periodic
cash distributions, but gives the General Partner sole discretion in determining
what distributions, if any, the Partnership will make to its partners. The
General Partner has not declared any such distributions to date, and does not
currently intend to declare any such distributions.

Item 6. Selected Financial Data

<TABLE>
<CAPTION>
                              2001      2002      2003      2004      2005
                            -------   -------   -------   -------   --------
                                (In thousands, except amounts per Unit)
<S>                         <C>       <C>       <C>       <C>       <C>
1. Operating Revenues  *    $ 4,688   $14,528   $ 8,248   $ 5,098   $    165
2. Income (Loss) from
   Continuing Operations      1,284     8,454     4,846     2,466     -2,302
3. Income (Loss)
   Per Unit: A Shares         48.46    405.48    184.01    175.60    -193.95
             I Shares                                      365.10    -122.38
            AA Shares                                                  -7.77
            II Shares                                                  -8.08
4. Total Assets              42,235    43,174    34,590    37,126     33,192
5. Long Term Obligations          0         0         0         0          0
6. Cash Dividend per Unit         0         0         0         0          0
</TABLE>

*    Certain prior year amounts have been reclassified to conform to the current
     year presentation.

Item 7. Management's Discussion and Analysis of Financial Condition and Results
     of Operations.

Liquidity and Capital Resources

Most U.S. commodity exchanges limit by regulations the amount of fluctuation in
commodity futures contract prices during a single trading day. These regulations
specify what are referred to as "daily price fluctuation limits" or "daily
limits". The daily limits establish the maximum amount the price of a futures
contract may vary either up or down from the previous day's settlement price at
the end of a trading session. Once the daily limit has been reached in a
particular commodity, no trades may be made at a price beyond the limit.
Positions in the commodity could then be taken or liquidated only if traders are
willing to effect trades at or within the limit during the period from trading
on such day. Because the "daily limit" rule only governs price movement for a
particular trading day, it does not limit losses. In the past, futures prices
have moved the daily limit for numerous consecutive trading days and thereby
prevented prompt liquidation


                                                                              20

<PAGE>

of futures positions on one side of the market, subjecting commodity futures
traders holding such positions to substantial losses for those days.

It is also possible for an exchange or the CFTC to suspend trading in a
particular contract, order immediate settlement of a particular contract, or
direct that trading in a particular contract be for liquidation only.

For the year ended December 31, 2005, Limited Partners redeemed a total of
3,059.28 Class A Units for $7,034,769. The General Partner redeemed a total of
12.32 Class I Units for $27,328. Additionally, there were 3,008.60 Units
transferred from Class A to Class AA and 326.71 Units transferred from Class I
to Class II.

For the year ended December 31, 2004, Limited Partners redeemed a total of
4,365.49 Class A Units for $9,890,705, of which 1,174.87 units were transferred
to Class I and the General Partner redeemed a total of 0.42 Class A Units for
$1,012.

During 2005, investors purchased 2,232.26 Class A Units for $5,071,517 and none
of the Units were purchased by the General Partner. 344.34 Class I Units were
purchased by Limited Partners for $828,035, of which 326.03 units were
transferred from Class A to Class I.

The Partnership trades on recognized global futures exchanges. In addition, the
Partnership trades over the counter contracts in the form of forward foreign
currency transactions. As of December 31, 2005, the Partnership had $1,549,367
on deposit at CFS.

As of the fiscal quarter ended December 31, 2005, the Partnership was exposed to
credit risk in connection with the bankruptcy filing by RCM, the Partnership's
former foreign currency broker. See Item 1 and 3 above for additional
information.

See Footnote 4 of the Financial Statements for procedures established by the
General Partner to monitor and minimize market and credit risks for the
Partnership. The General Partner of the Partnership reviews on a daily basis
reports of the performance of the Partnership, including monitoring the daily
net asset value of the Partnership. The financial situation of the Commodity
Broker is monitored on a monthly basis to monitor specific credit risks. The
Commodity Broker does not engage in proprietary trading and thus has no direct
market exposure which provides the General Partner with assurance that the
Partnership, will not suffer trading losses through the Commodity Broker.

RESULTS OF OPERATIONS

CALENDAR YEAR 2005

At December 31, 2005 the Partnership had approximately $22.1 million in Class A
assets and approximately $2.6 million in Class I assets. The JWH allocation was
approximately $28.2 million which includes $3.5 million of notional funding.

The Partnership recorded a loss of $2,301,625, or $193.95 per Class A unit, for
the year 2005. That represents a loss of 7.97% for the year. The


                                                                              21

<PAGE>

Partnership recorded a loss of $122.38 per Class I Unit, which represents a loss
of 4.97% for the year.

First Quarter 2005

The Partnership recorded a loss of $3,249,420 or $218.23 per Unit of Class A
Units ($202.84 for Class I Units) for the first quarter of 2005. This compares
to a gain of $2,087,470 or $143.50 per Class A Unit for the first quarter of
2004. The first quarter 2005 showed a loss of 8.97% for the Class A Units of the
fund (a loss of 8.23% for the Class I Units).

The Partnership continued to employ John W. Henry & Company, Inc.'s (JWH)
GlobalAnalyticsR Family of Programs, Worldwide Bond Program and Currency
Strategic Allocation Program.

Class A Units were negative 6.29% for January 2005 resulting in a net asset
value per unit of $2,279.03 as of January 31, 2005.

Class I Units for January 2005 were also negative with a loss of 6.03% resulting
in a net asset value per unit of $2,315.40.

The Fund's performance was negative in January. While both the fixed-income and
agricultural sectors had gains for the month, they weren't enough to offset the
losses in other sectors. The Fund's underperformance was driven by the strength
of the US dollar, which rebounded from last year's weakening trend. The dollar's
sudden turnaround was the dominant factor that drove most market sectors during
the month, and therefore resulted in the overall loss for the program.

A significant portion of January's loss was directly related to the strength of
the US dollar against most major currencies. The weak US dollar trend, which had
dominated the markets during the second half of last year, began to reverse
itself as market expectations of a Yuan revaluation by the Chinese central bank
began to diminish. The largest gain was achieved in the Brazilian real, while
the largest loss occurred in the euro.

Trading in both metals and stock indices were also negative during the month.
The loss in metals was due to the weakness in both gold and silver. Gold, which
recently has had a strong inverse relationship with the US dollar, came under
pressure as the US dollar strengthened throughout the month. The Fund's returns
in the indices sector further hindered performance. The loss in indices resulted
from a sell off in world equity markets as stocks weakened because energy prices
rose during the month. The largest gain in the indices sector was achieved in
the Eurostoxx 50, while the largest loss occurred in the Nasdaq e-mini.

Higher prices in energies led to negative performance in this sector. In
addition to the events in the Middle East, weather dominated the sector's price
action. Oil prices surged as colder-than-expected weather, as well as a
blizzard, moved into the eastern U.S., which accounts for 80 percent of
residential heating oil usage.

Both the agricultural and fixed income sectors provided positive returns. Wheat
helped returns as prices fell to a 20-month low after a report showed that U.S.
exports slowed when the European Union indicated it would subsidize exports of
the grain for the first time since June 2003. Corn slightly boosted returns as
prices fell to the lowest level since June 2001 on slumping demand for record
supplies in the U.S., which is the world's largest producer and exporter of the
grain. In addition, in the fixed income sector the Japanese Government bonds


                                                                              22

<PAGE>

(JGBs) rose during the month after Japanese government reports showed household
spending and industrial production fell. However, the positive returns in both
sectors were not enough to offset losses in the rest of the fund. The largest
gain in the agricultural sector was achieved in wheat, while the largest loss
occurred in cotton. In the fixed income sector the largest gain was achieved in
the JGBs, while the largest loss occurred in the Australian 10-year bond.

Class A Units showed a loss of 4.47% resulting in a net asset value per unit of
$2,177.09 as of February 28, 2005.

For Class I, the Fund showed a loss of 4.21% in February. The net asset value
per unit was $2,217.90 as of February 28, 2005.

The Fund's performance was negative in February. While both stock indices and
the energy sectors had gains for the month, it wasn't enough to offset the
combined losses in the other sectors traded. The Fund's underperformance was
driven by the apparent end to some long-term trends in the global fixed-income
market and the unfavorable performance in the currency sector.

A significant portion of February's losses was directly related to the
fixed-income sector as the European, Japanese and U.S. bond markets sold off.
The catalyst for the dramatic move higher in world interest rates was the
cumulative effect of various events and economic data released during the month.

Currencies were the other main contributor to the Fund's losses as the weakness
of the Japanese yen against the U.S. dollar during the first half of February
hurt performance. On February 10th, the U.S. dollar rose to a three-month high
against the yen after a Commerce Department report showed the U.S. trade deficit
narrowed in January from a previous record high. The recent dollar strength
began six days earlier when Chairman Alan Greenspan predicted that the deficit
in the U.S. current account, the broadest measure of trade, may shrink. The
energy sector had positive returns and was the Fund's best performing sector.
Energies rallied as commodity prices surged to a 24-year high due to signs of
growing global demand for everything energy-related. The International Energy
Agency raised its prediction for global consumption, and forecasts of colder
temperatures across Europe and the U.S. also helped to drive energy prices even
higher. All components of this sector were positive with the largest gain
achieved in London gas oil.

The Fund's three other sectors, indices, metals, and agriculture all had
relatively little effect on overall performance during the month. Indices posted
gains as the Nikkei rallied throughout the month on hopes that quicker U.S.
growth would help Japan start an export-led economic recovery. The metals sector
posted negative returns, as inflation fears in the U.S. pushed gold prices
higher. All components of this sector were negative with the largest loss coming
from silver. Lastly, agriculture was slightly negative, as profits from the
rally in NY coffee caused by forecasts of a dry season in Brazil, were offset by
losses in various other agricultural markets.

Class A Units showed a gain of 1.69% resulting in a net asset value per unit of
$2,213.82 as of March 31, 2005.

Class I Units showed a gain of 1.95% resulting in a net asset value per unit of
$2,261.13 as of March 31, 2005.

The Fund's performance was positive for the month of March. The energy sector
exhibited strong returns and the agricultural sector also contributed to the
Fund's positive performance. The combined positive performance in these two
sectors was able to offset the losses suffered in the other sectors. Continuing
worries over supply drove profits in energies, while a strengthening U.S.


                                                                              23

<PAGE>

dollar, as well as increasing inflation fears dominated performance in most
other sectors.

The energy sector was the Fund's best performing sector as crude oil and
gasoline surged to near all-time highs on speculation that rising domestic
demand may outpace U.S. refinery production during peak summer demand resulting
in strained global oil supplies.

The Fund's performance in the agriculture sector was profitable for the month.
The Fund was able to benefit from rising New York coffee prices as production
declined and stocks held by roasters and producers fell to their lowest level in
15 years. These profits combined with profits from cotton and London coffee were
enough to offset the negative returns in other markets within the sector.

Currencies were the most unprofitable sector during the month. The single most
influential factor driving performance in this sector was the U.S. dollar. At
the start of the month, the dollar weakened against other major currencies as
the U.S. trade deficit widened to $58.3 billion, the second-highest level ever.
However, the weakening trend reversed itself as the price of oil soared and the
yield on the benchmark 10-year Treasury note rose to its highest level in seven
months. Furthermore, demand for the greenback increased when the Federal Reserve
raised borrowing costs by a quarter percentage point for a seventh time since
last June and indicated that inflation pressures were picking up. The largest
gain in this sector was achieved in the Japanese yen, while the largest loss
occurred in the Swiss franc.

The Fund was unprofitable in the fixed income sector for the month as European
and Domestic markets sold off and the Japanese bond markets rallied. Increases
in both energy prices and inflation expectations were the catalyst for the
dramatic move higher in most of the world interest rates. The largest gain in
this sector was achieved in the U.S. ten-year note, while the largest loss
occurred in the bund.

Precious metals had losses for the Fund during March 2005, as gold and silver
were driven by the volatility in the U.S. dollar during the month. Precious
metals tend to have an inverse relationship with the U.S. dollar. Thus, as the
dollar weakened at the beginning of the month gold and silver strengthened; and
as the dollar rallied, gold sold off when the dollar became a more attractive
asset to hold. All components of this sector were negative, with the largest
loss coming from silver.

The Fund's performance in stock indices was slightly down for the month as
equity markets weakened around the world. Higher bond yields and oil prices made
equities less attractive to investors as inflationary pressures started to weigh
on the global economy.

During the reporting period, fiscal quarter ending March 31, 2005, additional
Units sold consisted of 906.45 limited partnership Units; there were zero
general partnership Units sold during the quarter. Additional Units sold during
the quarter represented a total of $2,017,381. Investors redeemed a total of
242.589 Units during the quarter and the General Partner redeemed 12.32 Units.
At the end of the quarter there were 14,405.55 Units outstanding (including 0
Units owned by the General Partner).

During the fiscal quarter ended March 31, 2005, the Partnership had no credit
exposure to a counterparty, which is a foreign commodities exchange, or to any
counter party dealing in over the counter contracts, which was material.


                                                                              24

<PAGE>

Second Quarter 2005

The Partnership recorded a gain of $1,781,153 or $113.12 per Unit of Class A
Units ($134.00 for Class I Units) for the second quarter of 2005. This compares
to a loss of $6,680,337 or $443.36 per Class A Unit for the second quarter of
2004 ($137.75 for I shares from inception to June 30, 2004). The second quarter
2005 showed a gain of 5.11% for the Class A Units of the fund (a gain of 5.93%
for the Class I Units).

The Partnership continued to employ John W. Henry & Company, Inc.'s (JWH)
GlobalAnalyticsR Family of Programs, Worldwide Bond Program and Currency
Strategic Allocation Program.

Class A Units were negative 6.97% for April 2005 resulting in a net asset value
per unit of $2,059.50 as of April 30, 2005.

Class I Units were negative 6.71% for April 2005 resulting in a net asset value
per Unit of $2109.44 as of April 30, 2005.

The Fund's performance was negative for the month of April. Fixed-income was the
only sector that was positive for the month. However, this positive performance
was not enough to offset the losses in the other sectors. The Fund's
underperformance was driven by the Federal Reserve changing its view on
inflationary pressures. Economic data released in March showed a pickup in
inflation within the U.S. due to recent higher energy prices, even as other
reports indicated that an economic slowdown was more pronounced than the markets
had expected. Such divergent statistics, combined with increased speculation
over a possible Chinese yuan revaluation, led to unfavorable and trendless
markets for the Fund.

The fixed income sector posted positive returns during the month. The majority
of the sector's gains came from the strength in Germany's and Japan's
fixed-income markets. The energy sector was the most unprofitable sector during
the month. Energies which had been trending higher experienced a sudden
turnaround as supplies increased and OPEC boosted output in an effort to lower
prices and to ensure adequate inventories to meet summer fuel demands. Crude oil
prices plunged 15 percent after recording a high on April 4th, as U.S. supplies
jumped. Currencies also contributed to the Fund's underperformance during April.
This was mainly due to the Japanese yen. The Japanese yen strengthened against
the dollar after a state-sponsored newspaper in China said the government may
let the yuan peg trade more freely. A stronger Chinese yuan could make China's
exports less competitive compared with those from Japan and other Asian
countries, giving those nations room to let their currencies appreciate versus
the dollar. Stock indices were also down for the month as volatility dominated
the equity markets around the world. IBM and 3M led the decline after missing
earnings estimates, while energy shares, such as Exxon Mobil Corp., fell along
with oil prices. The metals and agricultural sectors were unprofitable for the
month.

Class A Units were up 6.53% for May 2005 resulting in a net asset value per unit
of $2,193.98 as of May 31, 2005.

Class I Units were up 6.79% for May 2005 resulting in a net asset value per unit
of $2,252.70 as of May 31, 2005.

The currency and fixed-income sectors led profitability with robust gains that
were more than enough to offset lackluster returns in the other sectors. The
substantial gains in currencies came at the expense of the euro and Swiss franc.
France's rejection of the European Union Constitution drove the currency's


                                                                              25

<PAGE>

weakness. In the fixed-income sector, a slowing European economy, as well as
diminishing fears about inflation in the U.S., were the key factors that also
drove performance for the month.

The currency sector was the Fund's strongest performer for the month, as the
euro fell to a seven-month low against the U.S. dollar and weakened against most
other major currencies. France's rejection of the European Union constitution
was the catalyst for the euro's dramatic move lower. The fixed-income sector was
the Fund's other solid performer, as both European and American bonds rose
during the month. The benchmark German 10-year bund rose to a record high, as
market conjecture grew that the European Central Bank (ECB) would have to cut
interest rates as the European economy slowed. Further supporting the rally in
the German bund was the expected negative economic effects from the rejection of
the European Union Constitution in France. Meanwhile, U.S. Treasuries also
rallied as the 10-year note broke 4% for the first time since February. U.S.
fixed-income advanced on diminished inflation fears and on the downgrade of both
GM's and Ford's credit ratings to below investment grade. The Fund's performance
in the metals sector was slightly positive during the month as volatility in
various markets limited the Fund's ability to achieve returns. The Fund was able
to benefit as gold traded near a three-month closing low as the U.S. dollar
strengthened.

The energy sector was negative, as energies weakened for the majority of the
month. Performance in the agriculture sector was negative for the month as
trading in cotton, NY coffee and CBOT wheat affected returns. Global Stock
Indices were negative for the month. Most of the world indices were higher on
the month, which was the cause of the sector's underperformance. Stock indices
rallied worldwide on lower inflation expectations: however, news of Ford's and
GM's credit rating downgrades caused the markets to trade lower before
recovering to end the month stronger.

Overall the Fund's performance was very strong for the month of May as JWH's
systematic trend following approach was able to profit as new trends emerged.

Class A Units were up 6.06% for June 2005 resulting in a net asset value per
unit of $2,326.94 as of June 30, 2005.

Class I Units were up 6.32% for June 2005 resulting in a net asset value per
unit of $2,395.13 as of June 30, 2005.

The currency and fixed income sectors led profitability on the strength of the
U.S. dollar and the global fixed income markets. These gains were mainly due to
the U.S. Federal Reserve raising interest rates another quarter point to 3.25
percent and reiterating its intention to continue to raise rates at a "measured"
pace. Hindering performance was volatility in the metals and agriculture
sectors.

The currency sector was the Fund's strongest performer for the month. The U.S.
dollar posted its largest quarterly gain against the euro since 2001 and rose
against the yen as the market anticipated the quarter point increase by the
Federal Reserve on June 30th. The dollar also benefited from the yield advantage
against the Japanese yen, Swiss franc and the euro.

The fixed income sector was the Fund's other solid performer, as global bond
markets continued to rally. The majority of the sector's gains came from the
strength in both Germany's and Japan's fixed income markets.

The energy sector was profitable for the month as volatility dominated these
markets. The entire sector rallied during the first half of the month as


                                                                              26

<PAGE>

expectations increased that global demand for oil would reach a record 86.4
million barrels a day in the 4th quarter. As a result, oil for August delivery
hit a record high $60.95 a barrel during the month. However, energy prices fell
towards the end of the month as many speculators booked profits in addition to
an Energy Department report that supplies unexpectedly surged as refineries
increased production of gasoline and other fuels. Most components of this sector
were positive; however the loss from natural gas hindered the sector's returns.

Metals were negative for the month as volatility also hurt this sector's
performance. Gold rose for the majority of the month as crude oil surged,
boosting the precious metal as a hedge against inflation. However, towards the
later part of the month gold fell as the U.S. dollar strengthened and the U.S.
Federal Reserve raised interest rates. Higher interest rates make holding gold
and silver less attractive because the metals have no fixed returns, unlike
bonds. All components of this sector were negative during the month. Performance
in the agriculture sector was down for the month as trading in cotton, CBOT
wheat and soybeans hindered returns.

Performance was slightly positive in global stock indices during the month.
Overall, stocks fell during the month as the Federal Reserve raised its
benchmark interest rate for the ninth time this year and signaled that more
increases were to come.

In conclusion, performance was positive for the month of June as the Fund
continued to profit from strong trends that started to emerge in May. The fixed
income and currency sectors once again led profitability.

On June 22, 2005, CIS and Refco Group Ltd., LLC, ("Refco") a provider of
execution and clearing services for exchange-traded derivatives and one of the
then world's largest independent derivative brokers, announced that they had
entered into a definitive agreement for Refco to acquire the global brokerage
operations of CIS, the current clearing broker for the Everest Fund. After the
closing, the futures broker for the Fund will be Refco, LLC, a wholly-owned
subsidiary of Refco Group Ltd., LLC and a registered futures commission
merchant. The transaction will close upon receipt of necessary regulatory
approvals and satisfaction of other contractual closing conditions. The General
Partner will inform the Fund's investors when and if this transaction is
finalized.

During the reporting period, fiscal quarter ending June 30, 2005, additional
Units sold consisted of 850.37 limited partnership Units; there were no general
partnership Units sold during the period. Additional Units sold during the
period represented a total of $1,894,841. Investors redeemed a total of 971.42
Units during the period and the General Partner redeemed no Units. At the end of
the period there were 15,444.18 Units outstanding (including zero Units owned by
the General Partner).

During the fiscal quarter ended June 30, 2005, the Partnership had no credit
exposure to a counterparty, which is a foreign commodities exchange, or to any
counter party dealing in over the counter contracts, which was material.

Third Quarter 2005

The Partnership recorded a gain of $801,389 or $49.22 per Unit of Class A Units
($69.81 for Class I Units) for the fiscal quarter ended September 30, 2005. This
compares to a gain of $1,689,808 or $113.60 per unit of Class A Units ($129.94
for Class I Units) for the fiscal quarter ended September 30, 2004. The quarter
ended September 30, 2005 showed a loss of 2.30% (total return) for the Class A
Units of the fund (a gain of 0.04% (total return) for the Class I Units).


                                                                              27

<PAGE>

The third quarter 2005 showed a gain of 2.12% for Class A (2.91% for Class I).

The Partnership continued to employ John W. Henry & Company, Inc.'s (JWH)
GlobalAnalyticsR Family of Programs, Worldwide Bond Program and Currency
Strategic Allocation Program.

Class A Units were negative 2.18% for the month of July 2005 resulting in a net
asset value per unit of $2,276.28 as of July 31, 2005.

Class I Units were negative 1.92% for July 2005 resulting in a net asset value
per unit of $2,349.25 as of July 31, 2005.

The Fund's performance was negative for the month of July. The Fund's systematic
trading approach enabled it to contain losses caused by volatile market
conditions that resulted from terror attacks in London and a surprise
devaluation of the Chinese yuan. Losses in the interest rate, metal, and
agricultural sectors limited the Fund's overall returns, as stronger economic
conditions in Europe, Japan and the US led to weakening in the global bond
markets. The energy and currency sectors led the positive performing sectors
along with more moderate gains in the indices sector. Currencies benefited from
the continued strength of the US dollar, while energies profited from higher
trending prices.

Currencies were the Fund's strongest performer for the month in the face of
extremely volatile markets. The violent price moves were a reaction to China
ending its long-standing policy of pegging its currency at 8.3 yuan to the US
dollar. China revalued the yuan for the first time in a decade. Nevertheless,
the Fund profited in this sector as the dollar continued to benefit from the
growing yield advantage against the Japanese yen, British pound and Swiss franc.
The energy sector was also profitable during the month, with positive returns in
every market traded within the sector. Natural gas and crude oil had the most
significant impact, as crude oil futures surpassed $62 a barrel on July 7, 2005,
the highest price at the time since trading began on the New York Mercantile
Exchange in 1983. Economic growth in the two largest oil consumers, the US and
China, was a main contributor to the record prices. Performance in global stock
indices was positive during the month. The rally in the global equity markets
contributed to the Fund's profitable performance, as the majority of the markets
traded within the sector were positive for the month. Stocks rose as companies
posted better-than-expected earnings while economic reports showed tame
inflation and growth in retail sales. The Nikkei (Osaka) was the sector's top
performer, as the index rose 2.7 percent for the month.

The fixed income sector was unprofitable for the month, as
stronger-than-expected economic growth in the US, Europe and Japan caused a sell
off in global bond markets. US Treasuries fell for the fifth week in a row, the
longest slump this year, as reports showed the economy may be growing fast
enough to spur inflation. The Fund's performance in the agriculture sector was
slightly negative during the month, as volatility in various markets prevented
the Fund from achieving any returns. The metals sector was unprofitable for the
month. Gold prices fell from recent highs as the US dollar strengthened,
reducing the metal's appeal as an alternative investment. Silver, the only other
market traded within the metal sector was also negative on the month.

In conclusion, the performance was negative for the month as the Fund's
trend-following approach enabled it to withstand extreme market volatility in
the currency sector.


                                                                              28

<PAGE>

Class A Units were positive 3.43% for August 2005, resulting in a net asset
value per unit of $2,354.33 as of August 31, 2005.

Class I Units were positive 3.69% for August 2005, resulting in a net asset
value per unit of $2,435.97 as of August 31, 2005.

The Fund's performance was positive for the month of August 2005. The systematic
trading approach employed by the Fund's Trading Advisor enabled it to withstand
volatile market conditions that resulted from Hurricane Katrina. The energy
sector was the Fund's best performer, along with smaller gains achieved in both
the indices and agricultural sectors. The Fund's exposure to the energy sector
helped performance as Hurricane Katrina affected the U.S. gulf coast, shutting
oil and gas production, as well as creating spot fuel shortages throughout the
U.S. The storm's impact also added to some of the losses in the remaining
sectors thus hindering the Fund's overall return.

Performance in the agriculture sector was positive on the month as trading in
N.Y coffee, London sugar and cotton helped bolster returns within the sector.
Performance in the global stock indices sector was positive during the month as
the Nikkei (Osaka) rose to a four year high on signs that the world's second
largest economy grew for the third straight quarter. Nevertheless, the sector's
gains were limited as the majority of world's equity markets weakened during the
month on concerns that record oil prices, caused by Hurricane Katrina, may slow
global economic growth.

The currency sector was the Fund's most unprofitable sector for the month as the
U.S. dollar fell 1.8% against the euro and 1.7% against the yen. The dollar's
weakness was a result of speculation that the record high oil prices would slow
U.S. economic growth thereby reducing expectations for how much the Federal
Reserve will raise interest rates this year, if at all. The fixed income sector
was also unprofitable for the month, as Hurricane Katrina sparked an unexpected
rally in global bond markets. The month began with an expected 25 basis point
rate hike by the Federal Reserve and for the majority of the month both the U.S.
and Japanese bond markets were falling. However, as it became apparent that
Hurricane Katrina would make landfall and cause widespread damage to the U.S.
gulf coast region and its industries global bond markets rallied. The metals
sector was unprofitable for the month as volatility typified trading in gold
during the month. The cumulative effects of violent price action in the
currencies and fixed income markets, along with the market impact of Hurricane
Katrina, led gold to be the worst performer in the sector. However, the positive
performance of silver helped to limit the losses within the sector.

In conclusion, the Fund finished positive for the month of August 2005, as
global markets saw extreme volatility as a result of Hurricane Katrina.

Class A Units were positive 0.93% for September 2005, resulting in a net asset
value per unit of $2376.16 as of September 30, 2005.

Class I Units were positive 1.19% for September 2005, resulting in a net asset
value per unit of $2464.94 as of September 30, 2005.

The Fund's performance was positive for the month of September 2005. The stock
indices, energy and currency sectors led performance along with more moderate
gains in agriculture and metals. Energies benefited from record high natural gas
prices that occurred as a result of Hurricane Katrina and the threat of
Hurricane Rita, while metals profited from higher trending prices in gold. The
Fund's overall returns in September 2005 were limited however, as the storms
induced volatility and fear grew over increased global inflation. This resulted
in losses in the interest rate sector.


                                                                              29

<PAGE>

During the quarter ended September 30, 2005, additional Units sold consisted of
809.81 limited partnership Units; there were no general partnership Units sold
during the period. Additional Units sold during the period represented a total
of $1,914,840. Investors redeemed a total of 899.71 Units during the period and
the General Partner redeemed no Units. At the end of the period there were
15,354.29 Units outstanding (including zero Units owned by the General Partner).

During the fiscal quarter ended September 30, 2005, the Partnership had no
credit exposure to a counterparty, which is a foreign commodities exchange, or
to any counter party dealing in over the counter contracts, which was material.

Fourth Quarter 2005

The Partnership recorded a loss of $1,634,747 or $138.06 per Unit of Class A
Units ($123.35 for Class I Units, $7.77 for Class AA Units and $8.08 for Class
II Units) for the fiscal quarter ended December 31, 2005. This compares to a
gain of $5,362,972 or $361.86 per Class A Unit for the fiscal quarter ending
December 31, 2004, ($372.90 for Class I Units). The quarter ended December 31,
2005 showed a loss of 5.81% (total return) for the Class A Units of the fund; a
loss of 5.00% (total return) for the Class I Units, and 0.33% for Class AA and
II Units.

Class A Units were a negative 0.93% in October 2005 resulting in a Net Asset
Value of $2,354.05.

Class I Units were a negative 0.67% resulting in a Net Asset Value of $2,448.46
as of October 31, 2005.

The Fund's performance was negative for the month of October 2005. The currency
and interest rate sectors led the positive performing sectors for the month as
expectations of higher U.S. interest rates grew due to rising fears of
inflation. The Fund's overall return was negative as losses in the energy,
indices, agriculture and metal sectors outweighed the gains in the other
sectors. Energies underperformed as natural gas retreated from all time highs,
while global stock indices suffered from increased volatility within the sector.
The fixed income sector was the Fund's most profitable sector for the month as
the fixed income markets in the U.S., Europe and Japan sold-off over fears of
their respective central banks raising interest rates. The currency sector was
the Fund's other solid performer for the month. The U.S. dollar rallied 2.4
percent against the Japanese yen as U.S. economic growth continued to outpace
Japan's.

The energy sector was the Fund's worst performer during the month as natural gas
prices retreated from record highs set in September, which resulted when
Hurricanes Katrina and Rita struck the Gulf Coast. The metals sector was also
negative for the month as gold backed away from an 18-year high on a stronger
dollar and falling oil prices. The global stock indices sector underperformed
for the month as concerns that higher fuel costs, which began at the beginning
of the month, would hurt corporate profit growth, spur inflation and push the
Federal Reserve to keep raising interest rates. Performance in the agriculture
sector was also negative for the month as trading in N.Y coffee and cotton
hindered returns.

The net asset value shown has been calculated assuming complete collectibility
of certain Fund Assets held by Refco Capital Markets, Ltd. (RCM), the prior
foreign exchange broker for the Fund which filed for protection from creditors
under federal bankruptcy laws on October 17, 2005. In order to account for the


                                                                              30

<PAGE>

assets at RCM which the Fund cannot currently access, the Fund's Class A units
have been divided into Class A and Class AA units.

The Class AA units reflect the proportion of the former Class A units that are
being held at RCM together with a reserve created for expenses incurred in
connection with RCM's bankruptcy filing. The Class A units have been reduced by
the amount that has been placed in the Class AA units. The amount of such assets
which will become available to the Fund, if any, is dependent on several matters
associated with the bankruptcy of RCM. Depending on the disposition of these
matters, the final net asset value may differ materially from the preliminary
amounts shown above. Until the final net asset value can be determined,
redemptions and certain fees will be calculated and paid on a preliminary basis
using the net asset value of the Class A units only, thus excluding the assets
transferred into Class AA units.

Please note that the same structure used to value the A and AA units has been
applied to the I units, which have been divided into I units and II units.

Class A Units showed a gain of 5.77%% in November 2005 resulting in a Net Asset
Value of $2,489.94.

Class I Units showed a gain of 5.56% resulting in a Net Asset Value of
$2,584.63.

The Fund's performance was positive for the month of November 2005. The currency
sector led performance with robust gains as the Fund's systematic
trend-following approach enabled it to profit from interest rate differentials
which favored the U.S. dollar. The metals and indices sectors also added to the
positive performance as gold and silver continued to trend higher, and the
indices sector benefited from stronger economic data in the U.S. and Japan. The
energy and agriculture sectors had more modest gains due to continued
volatility. The interest rate sector was the only sector with a loss as U.S. and
Japanese fixed income markets reversed their recent trends.

The currency sector was the Fund's strongest performer for the month. The U.S.
dollar posted its first three-month gain against the euro and yen in almost four
years. This can be attributed to the U.S. economy expanding faster than Europe
and Japan, as well as the Fed's continued commitment to signal higher interest
rates. The metals sector was also profitable for the month as gold reached
$506.70 on November 29th, the highest price for a most-active contract since
December 1987. The precious metal has gained 15 percent since August 30th, the
day crude oil hit a record $70.85 a barrel as investors continue to view gold as
a hedge against inflation. All components of this sector were positive, with the
largest gain achieved in silver. The global stock indices sector was positive
for the month as Asian stocks rose after U.S. reports on consumer confidence and
durable goods added to evidence that growth will be sustained in the world's
largest economy, boosting corporate earnings. The Nikkei rallied 9.3 percent in
November, its seventh straight monthly gain. The Nikkei 225 stock average
actually traded above 15,000 for the first time in almost five years. The
agriculture sector was also positive on the month as New York sugar prices rose
on concern exports will decline from Europe and Brazil, the world's largest
producer. Brazil is diverting more sugar cane to make ethanol after a surge in
gasoline prices spurred an increase in alternative fuel cars. Performance was
limited however as NY coffee fell on expectations that Brazil, who grows about a
third of the world's Arabica coffee, will have a coffee harvest bigger than
previously forecast. Performance in the energy sector was positive but
volatility within the sector limited gains.


                                                                              31

<PAGE>

The fixed-income sector was the Fund's only negative sector as the Japanese
10-year bonds (JGB's) gained in November, snapping the longest stretch of
monthly losses since February 2002. Also hurting performance was the U.S.
fixed-income market as investors pushed 10-year treasuries to their first
monthly gain since August on optimism that inflation was contained despite the
growing U.S. economy. However, European fixed income markets helped to limit the
sectors losses as the Fund was able to profit from the third monthly decline in
the European 10-year government bund.

In conclusion, the Fund was positive for the month, with the currency sector
recording the largest gains on the strength of the U.S. dollar. As always, the
Fund stands ready to potentially take advantage of any continuing or new trends
that may emerge.

Class A Units showed a loss of 10.11% in December 2005, resulting in a Net Asset
Value of $2,238.10.

Class I Units showed a loss of 9.40% resulting in a Net Asset Value of
$2,341.59.

JWH's performance for the month of December 2005 put the Fund into negative
territory for 05. Although the Fund remains somewhat leveraged - we are trading
approximately $1.14 for every $1.00 in the Fund, the performance in December
reflected the overall performance in our 3 investment programs at JWH.

While both the metals and indices sectors had gains for the month, they weren't
enough to offset the combined losses in other sectors. The Fund's
underperformance was driven by sudden and strong reversals in various markets
throughout the Fund. The dollar's sudden turnaround against the Japanese yen and
the volatility in natural gas were the dominate factors that drove the
unprofitability of the Fund during the month.

The energy sector was the Fund's most unprofitable sector for the month. Natural
gas had the most significant impact on this sector as gas futures fell 29
percent after reaching a record high of $15.78 on December 13th. The dramatic
fall in prices was a result of private and government forecasters calling for
warmer than normal temperatures across the country for the beginning of January.
The currency sector was unprofitable as the sudden reversal in the strength of
the U.S. dollar against the yen was the key factor. The fixed income sector was
also unprofitable for the month as European and Japanese fixed income markets
fell and the U.S. yield curve inverted. The largest loss occurred in the
Japanese government bonds. Performance in the agriculture sector was slightly
negative for the month as trading in N.Y coffee hindered performance. Coffee
rallied on concerns Brazil's coffee harvest may be less than previously
expected. Losses were limited however, by gains made in N.Y. and London sugar.

The metals sector was the most profitable sector for the month as gold ended
2005 at $517 an ounce, the highest since 1980, after having reached a 24-year
high of $541 an ounce on December 12th. The precious metals finished the year up
18 percent, on concerns over widening U.S. budget and current account deficits.
Silver added to the profitable performance as it reached a high on December
13th.

The indices sector was also positive for the month. The Nikkei 225 (Osaka),
EuroStoxx 50 and the All Ords Index were the main contributors to the positive
performance in this sector. The Nikkei 225 (Osaka) completed its biggest annual
jump in almost two decades on continued expectations that Japan's economy would
continue its recent economic expansion.


                                                                              32

<PAGE>

In conclusion, performance in December was negative as the currency and energy
sectors drove performance. However, the trading advisor remains prepared to
potentially capitalize on any trends that may emerge and will continue to remain
vigilant while seeking out opportunities that best suit our trading methodology.

During the reporting period, fiscal quarter ended December 31, 2005, additional
Units sold consisted of 9.85 limited partnership Units; there were no general
partnership Units sold during the period. Additional Units sold during the
period represented a total of $22,277. Investors redeemed a total of 1,051.17
Units during the period. Additionally, there were 3008.60 Units transferred from
Class A to Class AA and 326.71 Units transferred from Class I to Class II. At
the end of the period there were 14,313.07 Units outstanding (including no Units
owned by the General Partner).

As of December 31, 2005 the estimated Class AA NAV was $2,346.28 and the
estimated Class II NAV was $2,440.38.

See Footnote 4 of the Financial Statements for procedures established by the
General Partner to monitor and minimize market and credit risks for the
Partnership. In addition to the procedures set out in Footnote 4, the General
Partner reviews on a daily basis reports of the Partnership's performance,
including monitoring of the daily net asset value of the Partnership. The
General Partner also reviews the financial situation of the Partnership's
Clearing Broker on a monthly basis. The General Partner relies on the policies
of the Clearing Broker to monitor specific credit risks. The Clearing Broker
does not engage in proprietary trading and thus has no direct market exposure,
which provides the General Partner assurance that the Partnership will not
suffer trading losses through the Clearing Broker.

During the fiscal quarter ended December 31, 2005, the Partnership was exposed
to credit risk in connection with the bankruptcy filing by RCM, the
Partnership's former foreign currency broker. See Items 1 and 3 above for
additional information.

Inflation

Inflation does have an effect on commodity prices and the volatility of
commodity markets; however, inflation is not expected to have an adverse effect
on the Partnership's operations or assets.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Introduction

Past Results Are Not Necessarily Indicative of Future Performance

The Partnership is a speculative commodity pool. The market sensitive
instruments held by it are acquired for speculative trading purposes, and all or
substantially all of the Partnership's assets are subject to the risk of trading
loss. Unlike an operating company, the risk of market sensitive instruments is
integral, not incidental, to the main line of business of the Partnership.


                                                                              33

<PAGE>

Market movements result in frequent changes in the fair market value of the open
positions of the Partnership and, consequently, in its earnings and cash flow.
The market risk of the Partnership is influenced by a wide variety of factors,
including the level and volatility of interest rates, exchange rates, equity
price levels, the market value of financial instruments, the diversification
effects among the open positions of the Partnership and the liquidity of the
markets in which it trades.

The Partnership can acquire and/or liquidate both long and short positions in a
wide range of different financial and metals markets. Consequently, it is not
possible to predict how a particular future market scenario will affect
performance, and the past performance of the Partnership is not necessarily
indicative of its future results.

Value at Risk is a measure of the maximum amount which the Partnership could
reasonably be expected to lose in a given market sector. However, the inherent
uncertainty of the Partnership's speculative trading and the recurrence in the
markets traded by the Partnership of market movements far exceeding expectations
could result in actual trading or non-trading losses far beyond the indicated
Value at Risk or the experience of the Partnership to date (i.e., "risk of
ruin"). In light of the foregoing as well as the risks and uncertainties
intrinsic to all future projections, the inclusion of the quantification
included in this section should not be considered to constitute any assurance or
representation that the losses of the Partnership in any market sector will be
limited to Value at Risk or by the attempts of the Partnership to manage its
market risk.

Standard of Materiality

Materiality as used in this section, "Qualitative and Quantitative Disclosures
About Market Risk," is based on an assessment of reasonably possible market
movements and the potential losses caused by such movements, taking into account
the leverage, optionality and multiplier features of the market sensitive
instruments of the Partnership.

Quantifying the Trading Value at Risk of the Partnership

Qualitative Forward-Looking Statements

The following quantitative disclosures regarding the market risk exposures of
the Partnership contain "forward-looking statements" within the meaning of the
safe harbor from civil liability provided for such statements by the Private
Securities Litigation Reform Act of 1995 (set forth in Section 27A of the
Securities Act and Section 21E of the Securities Exchange Act of 1934). All
quantitative disclosures in this section are deemed to be forward-looking
statements for purposes of the safe harbor, except for statements of historical
fact.

The risk exposure of the Partnership in the various market sectors traded by the
commodity trading advisor is quantified below in terms of Value at Risk. Due to
the mark-to-market accounting of the Partnership, any loss in the fair value of
the Partnership's open positions is directly reflected in the earnings (realized
or unrealized) of the Partnership and cash flow (at least in the case of
exchange-traded contracts in which profits and losses on open positions are
settled daily through variation margin).


                                                                              34

<PAGE>

Exchange maintenance margin requirements have been used by the Partnership as
the measure of its Value at Risk. Maintenance margin requirements are set by
exchanges to equal or exceed the maximum losses reasonably expected to be
incurred in the fair value of any given contract in 95%-99% of any one-day
intervals. The maintenance margin levels are established by dealers and
exchanges using historical price studies as well as an assessment of current
market volatility (including the implied volatility of the options on a given
futures contract) and economic fundamentals to provide a probabilistic estimate
of the maximum expected near-term one-day price fluctuation. Maintenance margin
has been used rather than the more generally available initial margin, because
initial margin includes a credit risk component which is not relevant to Value
at Risk.

In the case of market sensitive instruments which are not exchange traded
(almost exclusively currencies in the case of the Partnership), the margin
requirements for the equivalent futures positions have been used as Value at
Risk. In those rare cases in which a futures-equivalent margin is not available,
margins of the dealers have been used.

In quantifying the Value at Risk of the Partnership, 100% positive correlation
in the different positions held in each market risk category has been assumed.
Consequently, the margin requirements applicable to the open contracts have
simply been aggregated to determine the aggregate Value at Risk for each trading
category. The diversification effects resulting from the fact that the positions
of the Partnership are rarely, if ever, 100% positively correlated have not been
reflected.

The Trading Value at Risk in Different Market Sectors of the Partnership

The following table indicates the trading Value at Risk associated with the open
positions of the Partnership by market category as of December 31, 2005. All
open position trading risk exposures of the Partnership have been included in
calculating the figures set forth below. As of December 31, 2005, the total
capitalization of the Partnership was approximately $32,539,251. Excluding Class
AA and Class II the capitalization was approximately $24,682,936.

December 31, 2005

<TABLE>
<CAPTION>
                                    % of Total
Market Sector     Value at Risk   Capitalization
-------------     -------------   --------------
<S>               <C>             <C>
Interest Rates     0.46%              1.41%
Currencies         1.91%              5.87%
Stock Indices      0.26%              0.81%
Precious Metals    0.35%              1.07%
Commodities        0.40%              1.23%
Energies           0.31%              0.95%
                   ------------      -----
   Total           3.69 million      11.34%
</TABLE>

Material Limitations on Value at Risk as an Assessment of Market Risk


                                                                              35

<PAGE>

The face value of the market sector instruments held by the Partnership is
typically many times the applicable maintenance margin requirement (maintenance
margin requirements generally ranging between approximately 1% and 10% of
contract face value) as well as many times the capitalization of the
Partnership. The magnitude of the open positions of the Partnership creates a
"risk of ruin" not typically found in most other investment vehicles. Because of
the size of its positions, certain market conditions that are unusual, but
historically recurring from time to time, could cause the Partnership to incur
severe losses over a short period of time. The foregoing Value at Risk table, as
well as the past performance of the Partnership, give no indication of this
"risk of ruin."

Non-Trading Risk

The Partnership has non-trading market risk on its foreign cash balances not
needed for margin. However, these balances (as well as any market risk they
represent) are immaterial.

The Partnership holds a portion of its assets in cash on deposit with CFI and
CFS with substantially all of the remainder on deposit with Horizon Cash
Management, LLC. (Horizon) in short term, highly liquid investments. The
Partnership has cash flow risk on these cash deposits because if interest rates
decline, so will the interest paid out by CFI and CFS at the 91-day Treasury
bill rate. In addition, should short term interest rates decline, so will the
interest earnings for assets on deposit with Horizon. The Partnership assets
managed by Horizon are deposited in an account in the custodial department of
the Northern Trust Company, and invested in U.S. government securities and other
interest-bearing obligations at the direction of Horizon. Horizon is responsible
for the investment management of the assets of the Partnership not deposited
with CFI and CFS as margin monies or held in Partnership operating accounts.
Horizon is registered with the Securities and Exchange Commission (SEC) as an
investment adviser. Horizon may invest in U.S. government securities and other
instruments as permitted by the Agreement. Horizon receives an annual fee of
0.25% payable monthly on the assets it manages. However, Horizon only receives
its service fee if the accrued monthly interest income earned on the assets of
the Partnership managed by Horizon exceeds the 91-day U.S. Treasury Bill rate.
As of December 31, 2005, the Partnership had approximately $33 million in cash
on deposit with CFI, CFS and Horizon, including approximately $7.5 million at
Refco Capital Markets, Ltd.

Qualitative Disclosures Regarding Primary Trading Risk Exposures

The following qualitative disclosures regarding the market risk exposures of the
Partnership, except for (i) those disclosures that are statements of historical
fact and (ii) the descriptions of how the Partnership and the Trading Advisor
manage the primary market risk exposures of the Partnership, constitute
forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Securities Exchange Act. The primary market risk
exposures of the Partnership as well as the strategies used and to be used by
the Trading Advisor for managing such exposures are subject to numerous
uncertainties, contingencies and risks, any one of which could cause the actual
results of the risk controls of the Partnership to differ materially from the
objectives of such strategies. Government interventions, defaults and
expropriations, illiquid markets, the emergence of dominant fundamental factors,
political upheavals, changes in historical


                                                                              36

<PAGE>

price relationships, an influx of new market participants, increased regulation
and many other factors could result in material losses as well as in material
changes to the risk exposures and the risk management strategies of the
Partnership. There can be no assurance that the current market exposure and/or
risk management strategies of the Partnership will not change materially or that
any such strategies will be effective in either the short- or long-term.
Investors must be prepared to lose all or substantially all of their investment
in the Partnership.

The following were the primary trading risk exposures of the Partnership as of
December 31, 2005, by market sector.

Interest Rates. Interest rate risk is a major market exposure of the
Partnership. Interest rate movements directly affect the price of the sovereign
bond positions held by the Partnership and indirectly the value of its stock
index and currency positions. Interest rate movements in one country as well as
relative interest rate movements between countries materially impact the
profitability of the Partnership. The primary interest rate exposure of the
Partnership is to interest rate fluctuations in the United States and the other
G-7 countries. However, the Partnership also takes positions in the government
debt of smaller nations - e.g., Australia. The General Partner anticipates that
G-7 interest rates will remain the primary market exposure of the Partnership
for the foreseeable future. The changes in interest rates which have the most
effect on the Partnership are changes in long-term, as opposed to short-term,
rates. Most of the speculative positions held by the Partnership are in medium
to long-term instruments. However, since February 2000, the JWH program added a
European short rate, the Euribor, which is closely tied to the actions of the
European Central Bank. This was done to add short term interest rate
diversification.

Currencies. The currency exposure of the Partnership is to exchange rate
fluctuations, primarily fluctuations which disrupt historical pricing
relationships between different currencies and currency pairs. These
fluctuations are influenced by interest rate changes as well as political and
general economic conditions. The Partnership trades in a large number of
currencies, including cross-rates - i.e., positions between two currencies other
than the U.S. dollar. However, the Partnership's major exposures have typically
been in the dollar/yen, dollar/Euro, dollar/Swiss franc, dollar/Australian
dollar and dollar/pound positions. The General Partner does not anticipate that
the risk profile of the Partnership's currency sector will change significantly
in the future. The currency trading Value at Risk figure includes foreign margin
amounts converted into U.S. dollars with an incremental adjustment to reflect
the exchange rate risk inherent to the dollar-based Partnership in expressing
Value at Risk in a functional currency other than dollars.

Stock Indices. The primary equity exposure of the Partnership is to equity price
risk in the G-7 countries. The stock index futures traded by the Partnership are
by law limited to futures on broadly based indices. Ordinarily the primary
exposures are in the FTSE (England), Nikkei (Japan) and All Ordinaries
(Australia) stock indices. However, in February 2000, the JWH firm added the
German DAX Index Futures. The General Partner anticipates little trading in
non-G-7 stock indices. The Partnership is primarily exposed to the risk of
adverse price trends or static markets in the major U.S., European and Japanese
indices. (Static markets would not


                                                                              37

<PAGE>

cause major market changes but would make it difficult for the Partnership to
avoid being "whipsawed" into numerous small losses.)

Metals. The metals market exposure of the Partnership is to fluctuations in the
price of gold and silver (precious metals) and the base metals of copper,
aluminum, zinc, and nickel at JWH.

Commodities. The exposure to commodities of the Partnership from JWH GAP
includes corn, soybeans, soybean meal, soybean oil, wheat, and the softs of
coffee, cotton, and sugar, as well as a full complement of other agricultural
commodities.

Energy. The exposure of the Partnership to energy contracts in the JWH GAP is
heating oil, unleaded gasoline, crude oil natural gas and others.

Qualitative Disclosures Regarding Non-Trading Risk Exposure

The following were the only non-trading risk exposures of the Partnership as of
December 31, 2005.

Foreign Currency Balances. The primary foreign currency balances of the
Partnership are in Japanese yen, Euros, British pounds and Australian dollars.
The Partnership controls the non-trading risk of these balances by regularly
converting these balances back into dollars (no less frequently than twice a
month).

Cash Position. The Partnership holds a portion of its assets in cash at CFI and
CFS. 95% of these assets earn interest at the average rate paid on 91-day U.S.
Treasury Bills purchased during the month. Substantially all of remainder is
held at Horizon in short term liquid investments.

Qualitative Disclosures Regarding Means of Managing Risk Exposure

The General Partner monitors the performance of the Partnership and the
concentration of its open positions, and consults with the commodity trading
advisor concerning the overall risk profile of the Partnership. If the General
Partner felt it necessary to do so, the General Partner could require the
commodity trading advisor to close out individual positions as well as entire
programs traded on behalf of the Partnership. However, any such intervention
would be a highly unusual event. The General Partner primarily relies on the
commodity trading advisor's own risk control policies while maintaining a
general supervisory overview of the Partnership's market risk exposures.

Risk Management

JWH attempts to control risk in all aspects of the investment Process - from
confirmation of a trend to determining the optimal exposure in a given market,
and to money management issues such as the startup or upgrade of investor
accounts. JWH double checks the accuracy of market data, and will not trade a
market without multiple price sources for analytical input. In constructing a
portfolio, JWH seeks to control overall risk as well as the risk of any one
position, and JWH trades only markets that have been identified as having
positive performance characteristics. Trading discipline requires plans for the
exit of a market as well as for entry. JWH factors the point of exit into the
decision to enter (stop loss). The size of the JWH positions in a particular
market is not a matter of how


                                                                              38

<PAGE>

large a return can be generated but of how much risk it is willing to take
relative to that expected return.

To attempt to reduce the risk of volatility while maintaining the potential for
excellent performance, proprietary research is conducted on an ongoing basis to
refine the JWH investment strategies. Research may suggest substitution of
alternative investment methodologies with respect to particular contracts; this
may occur, for example, when the testing of a new methodology has indicated that
its use might have resulted in different historical performance. In addition,
risk management research and analysis may suggest modifications regarding the
relative weighting among various contracts, the addition or deletion of
particular contracts from a program, or a change in position size in relation to
account equity. The weighting of capital committed to various markets in the
investment programs is dynamic, and JWH may vary the weighting at its discretion
as market conditions, liquidity, position limit considerations and other factors
warrant.

JWH may determine that risks arise when markets are illiquid or erratic, such as
may occur cyclically during holiday seasons, or on the basis of irregularly
occurring market events. In such cases, JWH at its sole discretion may override
computer-generated signals and may at times use discretion in the application of
its quantitative models, which may affect performance positively or negatively.

Adjustments in position size in relation to account equity have been and
continue to be an integral part of the JWH investment strategy. At its
discretion, JWH may adjust the size of a position in relation to equity in
certain markets or entire programs. Such adjustments may be made at certain
times for some programs but not for others. Factors which may affect the
decision to adjust the size of a position in relation to account equity include
ongoing research, program volatility, assessments of current market volatility
and risk exposure, subjective judgment, and evaluation of these and other
general market conditions.

Item 8. Financial Statements and Supplementary Data

Reference is made to the financial statements and the notes thereto attached to
this report.

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

None.

Item 9A. Controls and Procedures

As of December 31, 2005, the General Partner carried out an evaluation, under
the supervision and with the participation of the General Partner's management,
including its principal executive officer and principal financial officer, of
the effectiveness of the design and operation of the Partnership's disclosure
controls and procedures as contemplated by Rule 13a-15 of the Securities
Exchange Act of 1934, as amended. Based on and as of the date of that
evaluation, the General Partner's principal executive officer and principal
financial officer concluded that the Partnership's disclosure controls and
procedures are effective, in all material respects,


                                                                              39

<PAGE>

in timely alerting him to material information relating to the Partnership
required to be included in the reports required to be filed or submitted by the
Partnership with the SEC under the Exchange Act.

There was no change in the Partnership's internal control over financial
reporting in the 12 months ended December 31, 2005 that has materially affected,
or is reasonably likely to materially affect, the Partnership's internal control
over financial reporting.

Item 9B. Other Information.

None

                                    Part III

Item 10. Directors and Executive Officers of the Registrant.

The General Partner, Everest Asset Management, Inc., is the sole General Partner
and commodity pool operator of the Partnership. It is a Delaware corporation
incorporated in 1987, is and has been registered with the CFTC as a commodity
pool operator since July 1, 1988 and is and has been a member of the National
Futures Association since that date. Its address is 1100 North 4th Street, Suite
143, Fairfield, Iowa 52556 and its telephone number is (641) 472-5500.

The officers and directors of the General Partner as of December 31, 2004 are
listed below:

Peter Lamoureux. Mr. Lamoureux, (born in 1950), has been President, Treasurer
and Secretary of the General Partner since November 1996. He joined the General
Partner and Capital Management Partners, Inc., a selling agent and affiliate of
the Partnership, in 1991 and has had primary responsibility for Partnership
syndication since October 1994. Prior to joining the General Partner, Mr.
Lamoureux was Manager of Refined Products with United Fuels International, Inc.,
an energy brokerage firm in Waltham, Massachusetts. He received his B.S. in
Education from Rhode Island College, R.I.

The General Partner does not trade commodities for its own account but its
principals may. Because of their confidential nature, records of such trading
will not be available to Limited Partners for inspection.

There have been no material criminal, civil or administrative actions during the
preceding five years or ever against the General Partner or its principals.

Audit Committee Financial Expert

The Board of Directors of Everest Asset Management, Inc. has determined that
Peter Lamoureux, President, Treasurer and Secretary of the General Partner,
qualifies as an audit committee financial expert in accordance with the
applicable rules and regulations of the U.S. Securities and Exchange Commission.
Mr. Lamoureux is not "independent" as that term is defined in Item 7(a)(3)(iv)
of Schedule 14A under the Exchange Act.

Code of Ethics


                                                                              40
<PAGE>

The General Partner had adopted a code of ethics for its chief executive officer
and persons performing similar functions. A copy of the General Partner's code
of ethics may be obtained at no charge by written request to Everest Asset
Management, Inc., 1100 North 4th Street, Suite 143, Fairfield, Iowa 52356 or by
calling 641-472-5500.

Item 11. Executive Compensation.

The Partnership has no directors or executive officers. As a limited
partnership, the business of the Partnership is managed by its General Partner
which is responsible for the administration of the business affairs of the
Partnership and receives the compensation described in Item 1 "Business" hereof.
The officers and directors of the General Partner receive no compensation from
the Partnership for acting in their respective capacities with the General
Partner.

Item 12. Security Ownership of Certain Owners and Management and Related
Stockholder Matters.

     (a) As of December 31, 2005 the following persons were known to the
Partnership to own beneficially more than 5% of the outstanding Units:

<TABLE>
<CAPTION>
                                                         Amount and Nature of       Percent of
Title of Class            Name and Address               Beneficial Ownership          Class
--------------            ----------------               ---------------------      ----------
<S>              <C>                                 <C>                            <C>
Class I          James H. Henry Family Trust         313.34 Units, owned directly     28.54%
                 P.O. Box 1675, Gastonia, NC 28053
Class I          George F Henry III                  192.23 Units, owned directly     17.51%
                 P.O. Box 1675, Gastonia, NC 28053
Class I          William S. Henry                    93.45 Units, owned directly       8.51%
                 P.O. Box 1675, Gastonia, NC 28053
Class I          J.W. Quinn Family Trust             229.41 Units, owned directly     20.89%
                 P.O. Box 995, Gastonia, NC 28053
Class I          Boddie Family Investment, LP        111.90 Units, owned directly     10.19%
                 P.O. Box 1098
                 Rocky Mount, NC 27802-1908
Class I          Catherine S. Grier                  77.94 Units, owned directly       7.10%
                 101 N Tyron St., Ste. 1240
                 Charlotte, NC 28246
</TABLE>

     (b)  As of December 31, 2005, management ownership was:

<TABLE>
<CAPTION>
                                              Amount and Nature of      Percent of
Title of Class            Name                Beneficial Ownership         Class
--------------            ----                --------------------      ----------
<S>              <C>                      <C>                           <C>
Class I          Peter Lamoureux (401K)   13.90 Units, owned directly      1.27%
</TABLE>


                                                                              41

<PAGE>

<TABLE>
<CAPTION>
                                                        Amount  and Nature of      Percent of
Title of Class            Name and Address               Beneficial Ownership         Class
--------------            ----------------              ---------------------      ----------
<S>              <C>                                 <C>                           <C>
Class II         James H. Henry Family Trust         86.95 Units, owned directly     26.62%
                 P.O. Box 1675, Gastonia, NC 28053
Class II         George F Henry III                  53.35 Units, owned directly     16.33%
                 P.O. Box 1675, Gastonia, NC 28053
Class II         William S. Henry                    25.93 Units, owned directly      7.94%
                 P.O. Box 1675, Gastonia, NC 28053
Class II         J.W. Quinn Family Trust             63.66 Units, owned directly     19.49%
                 P.O. Box 995, Gastonia, NC 28053
Class II         Boddie Family Investment, LP        31.05 Units, owned directly      9.51%
                 P.O. Box 1098
                 Rocky Mount, NC 27802-1908
Class II         Catherine S. Grier                  21.63 Units, owned directly      6.62%
                 101 N Tyron St., Ste. 1240
                 Charlotte, NC 28246
</TABLE>

     (b)  As of December 31, 2005, management ownership was:

<TABLE>
<CAPTION>
                                               Amount and Nature of       Percent of
Title of Class            Name                 Beneficial Ownership          Class
--------------            ----                ---------------------       ----------
<S>              <C>                      <C>                             <C>
Class II         Peter Lamoureux (401K)   3.85712 Units, owned directly      1.18%
</TABLE>

     (c) As of December 31, 2005, no arrangements were known to the Partnership,
including no pledge by any person of Units of the Partnership or shares of the
General Partner or the affiliates of the General Partners, such that a change in
control of the Partnership may occur at a subsequent date.


                                                                              42

<PAGE>

Item 13. Certain Relationships and Related Transactions.

     (a)  None other than the compensation arrangements described herein.

     (b)  None.

     (c)  None.

     (d)  The Partnership filed Registration Statements on Form S-18 and
          Form 10, therefore this information is not required to be included.

Item 14. Principal Accounting Fees and Services

Audit Fees

For the years ended December 31, 2005 and 2004, the aggregate fees billed by
Spicer Jeffries LLP for professional services rendered for the audit of the
financial statements included in this annual report and review of the quarterly
10Q's for the years ended were $17,000 and $24,058, respectively.

Audit Related Fees

None.

Tax Fees

For the years ended December 31, 2005 and 2004, the aggregate fees billed by
Spicer Jeffries LLP for federal and state tax return preparation totaled $6,000
and $8,000, respectively.

All Other Fees

None.

                                     Part IV

Item 15. Exhibits, Financial Statement, Schedules.

     (a) The following documents are included herein:

          (1) Financial Statements:

               a. Report of Independent Registered Public Accounting Firm.
               (Independent Auditor's Report)

               b. Statements of Financial Condition, December 31, 2005 and 2004.

               c. Schedule of Investments, December 31, 2005

               d. Schedule of Investments, December 31, 2004


                                                                              43

<PAGE>

               e. Statements of Operations, Years Ended December 31, 2005, 2004,
               and 2003.

               f. Statements of Changes in Partners' Capital, Years Ended
               December 31, 2005, 2004, and 2003.

               g. Statements of Cash Flows, Years Ended December 31, 2005, 2004
               and 2003

               h. Notes to Financial Statements.

               i. Acknowledgment

          (2) All financial statement schedules have been omitted because the
          information required by the schedules is not applicable, or because
          the information required is contained in the financial statements
          included herein or the notes thereto.

          (3) Exhibits:

               See the Index to Exhibits annexed hereto.

     (b) Exhibits:

               See The Index to Exhibits annexed hereto.

     (c) Financial Statement Schedules

          None.


                                                                              44

<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Partnership has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

Date: March 29, 2006                    The Everest Fund, L.P.

                                        By: Everest Asset Management, Inc.
                                        (General Partner)


                                        By: /s/ Peter Lamoureux
                                            ------------------------------------
                                            Peter Lamoureux, President
                                            Secretary, Treasurer, and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Partnership and
in the capacities and on the date indicated.

Date: March 29, 2006

                                        By: /s/ Peter Lamoureux
                                            ------------------------------------
                                            Peter Lamoureux, President,
                                            Secretary, Treasurer, and Director


                                                                              45

<PAGE>

                               Index to Exhibits:

<TABLE>
<CAPTION>
Exhibit
  No.                                  Description
-------                                -----------
<S>       <C>
3.4       Amended and Restated Agreement of Limited Partnership dated as of May
          1, 1995.

10.5      Advisory Contract between the Partnership, the General Partner and
          John W. Henry & Company, Inc. dated December 1, 1990.

10.6      Amendment to Advisory Contract between the Partnership, the General
          Partner and John W. Henry & Company, Inc. dated April 1, 1995.

10.9      Certificate of Limited Partnership for Everest Futures Fund II L.P.
          dated March 15, 1996.

10.10     Limited Partnership Agreement for Everest Futures Fund II L.P. dated
          as of March 29, 1996.

28.1      Confidential Private Placement Memorandum and Disclosure Document
          dated August 21, 1996.
</TABLE>

Notes to the Exhibits:

Exhibits 3.4, 10.5, 10.6, 10.9, 10.10 and 28.1 are incorporated by reference to
the Partnership's Form 10 accepted on September 19, 1996.

The Exhibits referenced above bear the exhibit numbers corresponding to those
indicated in the Partnership's Registration Statements.

Number of Attached Exhibits

None.


                                                                              46
<PAGE>

                               EVEREST FUND, L.P.
                          (An Iowa Limited Partnership)
                              FINANCIAL STATEMENTS

                         YEARS ENDED DECEMBER 31, 2005,
                                  2004 AND 2003

<PAGE>

                               EVEREST FUND, L.P.
                          (An Iowa Limited Partnership)

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
Report of Independent Registered Public Accounting Firm                        2

Financial Statements and Schedules:
   Statements of Financial Condition, December 31, 2005 and 2004               3
   Schedule of Investments, December 31, 2005                                  4
   Schedule of Investments, December 31, 2004                                  5
   Statements of Operations, Years Ended December 31, 2005, 2004 and 2003      6
   Statements of Changes in Partners' Capital, Years Ended December
      31, 2005, 2004 and 2003                                                  7
   Statements of Cash flows, Years Ended December 31, 2005, 2004 and 2003      8

Notes to Financial Statements                                               9-14

Acknowledgement                                                               15
</TABLE>


                                                                               1

<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners of Everest Fund, L.P.

We have audited the accompanying statements of financial condition, including
the condensed schedules of investments, of Everest Fund, L.P. (An Iowa Limited
Partnership), (the "Partnership") as of December 31, 2005 and 2004, and the
related statements of operations and changes in partners' capital and cash flows
for the years ended December 31, 2005, 2004 and 2003. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits 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 the Everest Fund, L.P. (An Iowa
Limited Partnership) as of December 31, 2005 and 2004, and the results of its
operations and its cash flows for the years ended December 31, 2005, 2004 and
2003, in conformity with accounting principles generally accepted in the United
States of America.

                                        /s/ SPICER JEFFRIES LLP

Greenwood Village, Colorado
March 9, 2006


                                                                               2

<PAGE>

                               EVEREST FUND, L.P.
                          (An Iowa Limited Partnership)

                        STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
                                                                 DECEMBER 31, 2005   DECEMBER 31, 2004
                                                                 -----------------   -----------------
<S>                                                              <C>                 <C>
                            ASSETS
Cash and cash equivalents                                           $14,001,411         $24,898,966
Equity in commodity trading accounts:
   Cash                                                              11,584,453           9,890,324
   Net unrealized trading gains on open contracts                        31,920           2,213,429
Receivable from Refco Capital Markets, Ltd. (Note 1)                  7,482,332                  --
Interest receivable                                                      92,364             122,859
                                                                    -----------         -----------
      TOTAL ASSETS                                                  $33,192,480         $37,125,578
                                                                    ===========         ===========
               LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES:
   Redemptions payable                                              $   426,556         $   483,500
   General partner management fee payable                               120,693             141,451
   Advisor's management fee payable                                      48,461              59,145
   Advisor's incentive fee payable                                           --              85,111
   Accrued expenses                                                      57,519              47,319
                                                                    -----------         -----------
      TOTAL LIABILITIES                                                 653,229             816,526
                                                                    -----------         -----------
PARTNERS' CAPITAL
   General partners, I shares (0 and 12.32 units outstanding)                --              30,360
   Limited partners, A Shares (9,879.80 and 13,715.42 units
      outstanding)                                                   22,111,952          33,356,576
   Limited partners, I Shares (1,097.96 and 1,198.26 units
      outstanding)                                                    2,570,984           2,922,116
   Limited partners, AA Shares (3,008.60 and 0 units
      outstanding)                                                    7,059,021                  --
   Limited partners, II Shares (326.71 and 0 units
      outstanding)                                                      797,294                  --
                                                                    -----------         -----------
      TOTAL PARTNERS' CAPITAL                                        32,539,251          36,309,052
                                                                    -----------         -----------
      TOTAL LIABILITIES AND PARTNERS'
         CAPITAL                                                    $33,192,480         $37,125,578
                                                                    ===========         ===========
</TABLE>

The accompanying notes are an integral part of this statement.


                                                                               3
<PAGE>

                               EVEREST FUND, L.P.
                          (AN IOWA LIMITED PARTNERSHIP)

                        CONDENSED SCHEDULE OF INVESTMENTS
                                DECEMBER 31, 2004

<TABLE>
<CAPTION>
                                                                NUMBER OF   MARKET VALUE   % OF PARTNERS'
                                             EXPIRATION DATES   CONTRACTS       (OTE)          CAPITAL
                                             ----------------   ---------   ------------   --------------
<S>                                          <C>                <C>         <C>            <C>
LONG POSITIONS:
FUTURES POSITIONS
Interest rates                                Mar 06                40      $   113,116         0.35%
Metals                                        Feb 06 - Jun 06      136          377,690         1.16%
Energy                                        Mar 06                30         (768,992)       -2.36%
Agriculture                                   Mar 06               150          300,388         0.92%
Indices                                       Mar 06                30           25,020         0.08%
                                                                            -----------        -----
                                                                                 47,222         0.15%
FORWARD POSITIONS
Currencies                                    Mar 06                           (230,040)       -0.71%
                                                                            -----------        -----
   Total long positions                                                        (182,818)       -0.56%
                                                                            -----------        -----
SHORT POSITIONS:
FUTURES POSITIONS
Interest rates                                Mar 06 - Sep 06      315           25,628         0.08%
Energy                                        Mar 06                18           29,700         0.09%
Agriculture                                   Mar 06               284         (174,678)       -0.54%
Currencies                                    Dec 06                27            2,700         0.01%
Indices                                       Mar 06 - Sep 06      203         (102,822)       -0.32%
                                                                            -----------        -----
                                                                               (219,472)       -0.67%
FORWARD POSITIONS
Currencies                                    Mar 06                            434,210         1.33%
                                                                            -----------        -----
   Total short positions                                                        214,738         0.66%
                                                                            -----------        -----
TOTAL OPEN CONTRACTS                                                             31,920         0.10%

CASH AND CASH EQUIVALENTS                                                    14,001,411        43.03%
CASH ON DEPOSIT WITH BROKERS                                                 11,584,453        35.60%
LESS LIABILITIES IN EXCESS OF OTHER ASSETS                                    6,953,387        21.37%
                                                                            -----------        -----
NET ASSETS                                                                  $32,539,251          100%
                                                                            ===========        =====
</TABLE>

The accompanying notes are an integral part of this statement.


                                                                               4

<PAGE>
                               EVEREST FUND, L.P.
                          (An Iowa Limited Partnership)

                        CONDENSED SCHEDULE OF INVESTMENTS
                                DECEMBER 31, 2004

<TABLE>
<CAPTION>
                                                                NUMBER OF   MARKET VALUE   % OF PARTNERS'
                                             EXPIRATION DATES   CONTRACTS       (OTE)          CAPITAL
                                             ----------------   ---------   ------------   --------------
<S>                                          <C>                <C>         <C>            <C>
LONG POSITIONS:
FUTURES POSITIONS
Interest rates                                 Mar - Sep 05       1,040     $  (176,773)        -0.49%
Metals                                         Feb 05                84         (90,720)        -0.25%
Energy                                         Mar 05                76           4,375          0.01%
Agriculture                                    Mar 05                75         367,346          1.01%
Indices                                        Mar 05                76         104,275          0.29%
                                                                            -----------        ------
                                                                                208,503          0.57%
FORWARD POSITIONS
Currencies                                     Mar 05                         2,359,473          6.50%
                                                                            -----------        ------
   Total long positions                                                       2,567,976          7.07%
                                                                            -----------        ------

SHORT POSITIONS:
FUTURES POSITIONS
Interest rates                                 Mar 05                20          (1,875)        -0.01%
Energy                                         Mar 05                28          66,680          0.18%
Agriculture                                    Mar - May 05         443          60,605          0.17%
Indices                                        Mar 05                14         (90,207)        -0.25%
                                                                            -----------        ------
                                                                                 35,203          0.10%
FORWARD POSITIONS
Currencies                                     Mar 05                          (389,750)        -1.07%
                                                                            -----------        ------
   Total short positions                                                       (354,547)        -0.97%
                                                                            -----------        ------
   Total open contracts                                                       2,213,429          6.09%
CASH AND CASH EQUIVALENTS                                                    24,898,966         68.58%
CASH ON DEPOSIT WITH BROKERS                                                  9,890,324         27.24%
LESS LIABILITIES IN EXCESS OF OTHER ASSETS                                    1,519,762          4.18%
                                                                            -----------        ------
NET ASSETS                                                                  $36,309,052        100.00%
                                                                            ===========        ======
</TABLE>

The accompanying notes are an integral part of this statement.


                                                                               5
<PAGE>

                               EVEREST FUND, L.P.
                          (AN IOWA LIMITED PARTNERSHIP)

                            STATEMENTS OF OPERATIONS
                    YEARS ENDED DECEMBER 31, 2005, 2004, 2003

<TABLE>
<CAPTION>
                                                         2005         2004          2003
                                                     -----------   ----------   -----------
<S>                                                  <C>           <C>          <C>
TRADING INCOME (LOSS)
Net realized trading gain (loss)
   on closed contracts                               $ 1,646,959   $4,432,830   $11,820,247
Change in net unrealized trading gain
  (loss) on open contracts                            (2,154,977)     492,388    (3,759,776)
Net foreign currency translation gain (loss)             (73,598)     (24,707)      111,596
Brokerage Commissions                                   (241,988)    (263,488)     (364,590)
                                                     -----------   ----------   -----------
   NET TRADING INCOME (LOSS)                            (823,604)   4,637,023     7,807,477

Interest income, net of cash management fees             988,314      461,372       441,270
                                                     -----------   ----------   -----------
   TOTAL INCOME                                          164,710    5,098,395     8,248,747
                                                     -----------   ----------   -----------

EXPENSES:
   General partner management fees                     1,686,472    1,664,314     1,796,008
   Advisor Management fees                               684,696      655,104       841,768
   Advisor Incentive fees                                     --      240,161       712,054
   Administrative expenses                                95,167       72,775        53,041
                                                     -----------   ----------   -----------
   TOTAL EXPENSES                                      2,466,335    2,632,354     3,402,871
                                                     -----------   ----------   -----------
NET INCOME                                           $(2,301,625)  $2,466,041   $ 4,845,876
                                                     ===========   ==========   ===========

NET INCOME (LOSS) PER UNIT OF PARTNERSHIP INTEREST
   A SHARES, OUTSTANDING ENTIRE PERIOD               $   (193.95)  $   175.60   $    184.01
                                                     ===========   ==========   ===========

NET INCOME (LOSS) PER UNIT OF PARTNERSHIP INTEREST       Since Inception (June 4, 2004)
   I SHARES, OUTSTANDING ENTIRE PERIOD               $   (122.38)  $   365.10           N/A
                                                     ===========   ==========   ===========

NET LOSS PER UNIT OF PARTNERSHIP INTEREST
   AA SHARES, OUTSTANDING SINCE OCTOBER 31, 2005     $     (7.77)
                                                     ===========

NET LOSS PER UNIT OF PARTNERSHIP INTEREST
   II SHARES, OUTSTANDING SINCE OCTOBER 31, 2005     $     (8.08)
                                                     ===========
</TABLE>

The accompanying notes are an integral part of these statements.


                                                                               6

<PAGE>

                               EVEREST FUND, L.P.
                          (An Iowa Limited Partnership)

                    STATEMENT OF CHANGES IN PARTNERS' CAPITAL
                    YEARS ENDED DECEMBER 31, 2005, 2004, 2003

<TABLE>
<CAPTION>
                                                             GENERAL                LIMITED     GENERAL
                                   UNITS     LIMITED PTRS      PTR       UNITS       PTRS         PTR
                                 A SHARES      A SHARES     A SHARES   I SHARES    I SHARES    I SHARES
                                ----------   ------------   --------   --------   ----------   --------
<S>                             <C>          <C>            <C>        <C>        <C>          <C>
BALANCES, December 31, 2002      20,613.69   $ 42,674,962   $ 45,742         --   $       --   $     --
Additional Units Sold             8,946.66     21,315,647         --         --           --         --
Redemptions                     (14,731.36)   (35,369,318)   (52,069)        --           --         --
Net Income                              --      4,838,611      7,265         --           --         --
                                ----------   ------------   --------   --------   ----------   --------
BALANCES, December 31, 2003      14,828.99     33,459,902        938         --           --         --
Additional Units Sold             3,252.34      7,327,540         --      35.73       50,000     25,000
Redemptions                      (3,190.62)    (7,020,090)        --         --           --         --
Transfers Between Classes        (1,175.29)    (2,870,615)    (1,012)  1,162.53    2,870,615      1,012
Less Offering Costs                     --             --         --         --         (266)       (13)
Net Income                              --      2,459,839         74         --        1,767      4,361
                                ----------   ------------   --------   --------   ----------   --------
BALANCES, December 31, 2004      13,715.42     33,356,576         --   1,198.26    2,922,116     30,360
Additional Units Sold             2,232.26      5,071,517         --      18.31       41,315         --
Redemptions                      (2,722.22)    (6,248,050)        --    (117.93)    (252,521)   (27,328)
Transfers Between Classes        (3,345.66)    (7,869,117)        --      (0.67)     (13,215)        --
Less Offering Costs                     --        (50,213)        --         --       (2,891)        (5)
Net Loss                                --     (2,148,761)        --         --     (123,820)    (3,027)
                                ----------   ------------   --------   --------   ----------   --------
BALANCES, December 31, 2005       9,879.80   $ 22,111,952         --   1,097.96   $2,570,984         --
                                ==========   ============   ========   ========   ==========   ========

Net asset value per unit,
   January 1, 2005, or
   since inception 10/31/05.                 $   2,432.05                         $ 2,463.97
Net profit (loss) per unit                        (193.95)                           (122.38)
                                             ------------                         ----------
Net asset value per unit
   December 31, 2005                         $   2,238.10                         $ 2,341.59
                                             ============                         ==========

<CAPTION>
                                  UNITS      LIMITED     UNITS    LIMITED
                                   AA        PTRS AA      II      PTRS II
                                 SHARES      SHARES     SHARES     SHARES        TOTAL
                                --------   ----------   ------   ---------   ------------
<S>                             <C>        <C>          <C>      <C>         <C>
BALANCES, December 31, 2002           --   $       --       --   $      --   $ 42,720,704
Additional Units Sold                 --           --       --          --     21,315,647
Redemptions                           --           --       --          --    (35,421,387)
Net Income                            --           --       --          --      4,845,876
                                --------   ----------   ------   ---------   ------------
BALANCES, December 31, 2003           --           --       --          --     33,460,840
                                      --           --       --          --      7,402,540
Additional Units Sold                 --           --       --          --     (7,020,090)
Redemptions                           --           --       --          --             --
Transfers Between Classes             --           --       --          --           (279)
Less Offering Costs                   --           --       --          --      2,466,041
Net Income                      --------   ----------   ------   ---------   ------------
                                      --           --       --          --     36,309,052
BALANCES, December 31, 2004           --           --       --          --      5,112,832
Additional Units Sold                 --           --       --          --     (6,527,899)
Redemptions                     3,008.60    7,082,398   326.71     799,934             --
Transfers Between Classes             --           --       --          --        (53,109)
Less Offering Costs                   --      (23,377)      --      (2,640)    (2,301,625)
Net Loss                        --------   ----------   ------   ---------   ------------
BALANCES, December 31, 2005     3,008.60   $7,059,021   326.71   $ 797,294   $ 32,539,251
                                ========   ==========   ======   =========   ============

Net asset value per unit,
   January 1, 2005, or
   since inception 10/31/05                $ 2,354.05            $2,448.46
Net profit (loss) per unit                      (7.77)               (8.08)
                                           ----------            ---------
Net asset value per unit
   December 31, 2005                       $ 2,346.28            $2,440.38
                                           ==========            =========
</TABLE>

The accompanying notes are an integral part of these statements.


                                                                               7
<PAGE>

                               EVEREST FUND, L.P.
                          (An Iowa Limited Partnership)

                            STATEMENTS OF CASH FLOWS
                    YEARS ENDED DECEMBER 31, 2005, 2004, 2003

<TABLE>
<CAPTION>
                                                                         JANUARY 1, 2005     JANUARY 1, 2004     JANUARY 1, 2003
                                                                             THROUGH             THROUGH             THROUGH
                                                                        DECEMBER 31, 2005   DECEMBER 31, 2004   DECEMBER 31, 2003
                                                                        -----------------   -----------------   -----------------
<S>                                                                     <C>                 <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss)                                                      $ (2,301,625)       $  2,466,041        $  4,845,876
   Adjustments to reconcile net income (loss) to net cash provided by
      (used in) operating activities:
      Decrease (increase) in commodity futures trading accounts:
         Cash                                                               (1,694,129)         (5,409,641)          9,971,451
         Unrealized gain or loss on open commodity futures contracts         2,181,509            (543,274)          3,759,776
      Decrease (increase) in interest receivable                                30,495             (78,392)            (29,842)
      Increase in receivable from Refco Capital Markets, Ltd.               (7,482,332)                 --                  --
      (Decrease) increase in incentive fees payable                            (85,111)             85,111                  --
      (Decrease) increase in management fees payable                           (10,684)              2,962             (28,802)
      Decrease in General partner management fees payable                      (20,758)             (1,868)             (6,710)
      (Decrease) increase in other accrued expenses                             10,200              16,614             (19,618)
                                                                          ------------        ------------        ------------
         NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                (9,372,435)         (3,462,446)         18,492,131
                                                                          ------------        ------------        ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Redemption of partnership units                                          (7,371,563)         (7,435,360)        (34,690,255)
   Sale of partnership units, net                                            5,846,443           7,402,260          21,315,647
                                                                          ------------        ------------        ------------
         NET CASH USED IN  FINANCING ACTIVITIES                             (1,525,120)            (33,100)        (13,374,608)
                                                                          ------------        ------------        ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                       (10,897,555)         (3,495,546)          5,117,523

CASH AND CASH EQUIVALENTS, AT BEGINNING OF YEAR                             24,898,966          28,394,512          23,276,989
                                                                          ------------        ------------        ------------
CASH AND CASH EQUIVALENTS, AT END OF YEAR                                 $ 14,001,411        $ 24,898,966        $ 28,394,512
                                                                          ============        ============        ============
</TABLE>

The accompanying notes are an integral part of these statements


                                                                               8
<PAGE>

                               EVEREST FUND, L.P.
                          (An Iowa Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

NOTE 1- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

Everest Fund, L.P., formerly Everest Futures Fund, L.P. (an Iowa Limited
Partnership"), (the "Partnership) is a limited partnership organized in June
1988, under the Iowa Uniform Limited Partnership Act (the "Act") for the purpose
of engaging in the speculative trading of commodity futures and options thereon
and forward contracts (collectively referred to as "Commodity Interests"). The
sole General Partner of the Partnership is Everest Asset Management, Inc. (the
"General Partner").

On July 1, 1995, the Partnership recommenced its offering under a Regulation D,
Rule 506 private placement. The private placement offering is continuing at a
gross subscription price per unit equal to net asset value (NAV) per unit, plus
an organization and offering cost reimbursement fee payable to the General
Partner, and an on going compensation fee equal to 3% of the net asset value of
Class A Units sold. The Class A Units (retail shares) continue to be charged an
initial 1% Offering and Organization fee as a reduction to capital.

Effective June 4, 2004, the Partnership introduced a new share category, Class I
Units or Institutional Units which have an ongoing Offering and Organization fee
of 1/12 of 0.10% of the NAV per unit (as defined) per month. The private
placement offering is continuing at a gross subscription price per unit equal to
net asset value per unit, plus an organization and offering cost reimbursement
to the General Partner, and an on going compensation fee equal to 1% of the net
asset value of Class I Units sold.

RECEIVABLE FROM REFCO CAPITAL MARKETS, LTD.

On October 13, 2005, Refco, Inc. ("Refco") announced that liquidity within one
of its operating subsidiaries, Refco Capital Markets, Ltd. ("RCM"), was no
longer sufficient to continue operations and that RCM was imposing a fifteen day
moratorium on all of its activities in an attempt to protect the value of that
business. RCM acted as the Partnership's foreign currency broker at that time
and as of such date, approximately 20% of the Partnership's assets were held on
deposit in accounts at RCM.

On October 17, 2005, Refco and certain subsidiaries filed a bankruptcy petition
in New York seeking protection from creditors under Chapter 11 of the United
States Bankruptcy Code. RCM was included in this filing and as a result, all of
the dealings with RCM are subject to control by the Bankruptcy Court. In
connection with the bankruptcy, the president of the General Partner was
appointed to the Official Creditors Committee on October 28, 2005. Based on
information provided to the Partnership by RCM, the Partnership has cash and
open trade equity in neutral currency positions of approximately $7,500,000
remaining at RCM. Management believes there are substantial assets at RCM, but
the amount of such assets which the Partnership will ultimately recover, if any,
is unknown at the present time.

Due to the above, effective October 31, 2005, the Partnership has created
Classes AA and II of shares and transferred to such classes the value of
Partnership assets held in RCM as of October 17, 2005, together with a reserve
for the estimated expenses of collection and related matters. The amount of such
assets which will become available to the Partnership, if any, is dependent on
several matters associated with the bankruptcy of RCM. Depending on the
disposition of these matters, the final net asset value may differ materially
from the preliminary amounts which the Partnership has published since October
31, 2005. Redemptions of Classes AA and II are restricted until the final net
asset value can be determined. Subsequent to October 31, 2005, redemptions and
certain fees will only be calculated and paid on the net asset value of Class A
and Class I units, thus segregating the assets held by RCM and the reserve
established in connection with the RCM legal proceedings.

CASH AND CASH EQUIVALENTS

Cash equivalents represent short-term highly liquid investments with maturities
of 90 days or less and include money market accounts, securities purchased under
agreements to resell, commercial paper, and U.S. Government and agency
obligations with variable rate and demand features that qualify them as cash
equivalents. These cash equivalents, with the exception of securities purchased
under agreement to resell, are stated at amortized cost, which approximates fair
value. Securities purchased under agreements to resell, with overnight maturity,
are collateralized by U.S. Government and agency obligations, and are carried at
the amounts at which the securities will subsequently be resold plus accrued
interest.


                                                                               9

<PAGE>

                               EVEREST FUND, L.P.
                          (An Iowa Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)

NOTE 1- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

RECLASSIFICATIONS

Certain prior year amounts have been reclassified to conform to the current year
classifications.

REVENUE RECOGNITION

Commodity futures contracts, forward contracts, physical commodities, and
related options are recorded on the trade-date basis. All such transactions are
recorded on the identified cost basis and marked to market daily. Unrealized
gains and losses on open contracts reflected in the statements of financial
condition represent the difference between original contract amount and market
value (as determined by exchange settlement prices for futures contracts and
related options and cash dealer prices at a predetermined time for forward
contracts, physical commodities, and their related options) as of the last
business day of the year or as of the last date of the financial statements.

NET INCOME PER UNIT OF PARTNERSHIP INTEREST

Net income per unit of partnership interest is the difference between the net
asset value per unit at the beginning and end of each period.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The financial instruments held by the Company are reported in the statements of
financial condition at market or fair value, or at carrying amounts that
approximate fair value, due to their highly liquid nature and short-term
maturity. Commodity futures contracts, forward contracts, physical commodities,
and related options re valued as described above. The receivable from RCM is
valued at management's best estimate as described above.

FOREIGN CURRENCY TRANSLATION

Assets and liabilities denominated in foreign currencies are translated at the
prevailing exchange rates as of the valuation date. Gains and losses on
investment activity are translated at the prevailing exchange rate on the date
of each respective transaction while year-end balances are translated at the
year-end currency rates. Realized and unrealized foreign exchange gains or
losses are included in trading income in the statements of operations.

INCOME TAXES

No provision for income taxes has been made in the accompanying financial
statements as each partner is responsible for reporting income (loss) based upon
the pro rata share of the profits or losses of the Partnership.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.


                                                                              10

<PAGE>

                               EVEREST FUND, L.P.
                          (An Iowa Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)

NOTE 2- LIMITED PARTNERSHIP AGREEMENT

The Limited Partners and General Partner share in the profits and losses of the
Partnership in proportion to the number of units or unit equivalents held by
each. However, no Limited Partner is liable for obligations of the Partnership
in excess of their capital contribution and profits, if any, and such other
amounts as they may be liable for pursuant to the Act. Distributions of profits
are made solely at the discretion of the General Partner.

Responsibility for managing the Partnership is vested solely in the General
Partner. The General Partner has delegated complete trading authority to an
unrelated party (see Note 3).

Subject to restrictions on the redemption of Series AA and Series II units by
existing investors as mentioned above, Limited Partners may cause any or all of
their Class A units to be redeemed as of the end of any month at the month end
net asset value on fifteen days' prior written notice to the Partnership, (for
Class I Units, as of the end of any quarter on forty-five days' notice), or such
lesser period as is acceptable to the Partnership. Although the Agreement does
not permit redemptions for the first six months following a Limited Partner's
admission to the Partnership, the Agreement does permit the Partnership to
declare additional regular redemption dates. The Partnership will be dissolved
on December 31, 2020, or upon the occurrence of certain events, as specified in
the Limited Partnership agreement.

NOTE 3- CONTRACTS AND AGREEMENTS

John W. Henry & Company, Inc. (JWH) began trading its Strategic Allocation
Program with a trading allocation of $40 million on July 1, 2001. JWH receives a
monthly management fee equal to 0.167% (2% annually) of the Partnership's
month-end net asset value, (as defined), and a quarterly incentive fee of 20% of
the Partnership's new net trading profits, (as defined). The incentive fee is
retained by JWH even though trading losses may occur in subsequent quarters;
however, no further incentive fees are payable until any such trading losses
(other than losses attributable to redeemed units and losses attributable to
assets reallocated to another advisor) are recouped by the Partnership.

Effective September 1, 2001, Mount Lucas Management Corporation ("MLM") was
added as a trading advisor with an initial allocation of $10 million. This
allocation represented notional funding for the Partnership. MLM received a
monthly management fee of 0.0625% (0.75% annually) of the Partnership's
month-end allocated assets (as defined). Effective February 2003, the management
fee was reduced to 0.04167% (0.50% annually). As MLM uses the MLM Index -
Unleveraged, they do not receive an incentive fee. MLM was terminated effective
October 31, 2003.

Beginning in June 2003, JWH began trading JWH Global Analytics Program ("GAP");
Currency Strategic Allocation Program ("CSAP") and Worldwide Bond Program
("WBP") with a trading allocation of $27 million.

Net brokerage commissions are recorded in the statements of operations as a
reduction of trading income.

Effective November 2003, the General Partner charges the Partnership a monthly
management fee equal to 0.50% of the Partnership's Class A beginning-of-month
net asset value. From May 2002 through October 2003, the General Partner charged
the Partnership a monthly management fee of either 0.5104% or 0.5156%, depending
on the total amount which the Partnership had allocated to trading, including
notional funding. Prior to May 2002, the General Partner charged the Partnership
a monthly management fee equal to 0.5052% of the Partnership beginning-of-month
net asset value, as defined Effective June 2004, the General Partner charges the
Partnership a monthly management fee equal to 0.229% of the Partnership's Class
I beginning-of-month net asset value. From the monthly management fee the
General Partner deducts the round turn trading costs and related exchange fees
(between $5.80 to $10.70 per round turn trade on domestic exchanges, and higher
for foreign exchanges) and pays the selling agents and certain other parties, if
any, up to 50% of the fee retained by the General Partner.

As of December 31, 2005 and 2004, JWH's allocation was approximately $28.2
(including approximately 3.5 million of notional funding) and $36.3 million,
respectively. The General Partner may replace or add trading advisors at any
time.

BROKERAGE AGREEMENT

The Partnership, through August 31, 2005, cleared all of its futures trades
through Cargill Investor Services, Inc. ("CIS") and all of its foreign currency
trading activity through CIS Financial Services, Inc. ("CISFS"), an affiliate of
CIS. In September


                                                                              11

<PAGE>

                               EVEREST FUND, L.P.
                          (An Iowa Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)

NOTE 3 CONTRACTS AND AGREEMENTS (CONTINUED)

2005, Refco Group Ltd. acquired CIS and CISFS and the clearing and related
services previously performed by CIS were performed by REFCO, LLC and the
foreign currency trading previously performed by CISFS was provided by Refco
Capital Markets, Ltd. Beginning in mid-October 2005, the Partnership engaged
Calyon Financial, Inc. ("CFI") as the Partnership's futures and options on
futures broker, and engaged and Calyon Financial, SNC ("CFS") as the
Partnership's foreign currency or forwards currency broker, (collectively
referred to as the "Clearing Brokers"). The agreements provide that the Clearing
Brokers charge the Partnership brokerage commissions at the rate of between
$5.80 to 10.70 per round-turn trade, plus applicable exchange, give up fees and
NFA fees for futures contracts and options on futures contracts executed on
domestic exchanges and over the counter markets. For trades on certain foreign
exchanges, the rates may be higher.

The Partnership also reimburses the Clearing Brokers for all delivery,
insurance, storage or other charges incidental to trading and paid to third
parties.

The Partnership earns interest on 95% of the Partnership's average monthly cash
balance on deposit with its Brokers at a rate equal to the average 91-day
Treasury Bill rate for US Treasury Bills issued during that month.

Excluding amounts held at RCM, approximately 99% of cash and cash equivalents at
December 31, 2005 and 2004 are funds deposited with a commercial bank and
invested under the direction of Horizon Cash Management, Inc. (Horizon). Horizon
receives a monthly cash management fee equal to 1/12 of .25% (.25% annually) of
the average daily assets under management if the accrued monthly interest income
earned on the Partnership's assets managed by Horizon exceeds the 91-day U.S.
Treasury bill rate.

NOTE 4- FINANCIAL INSTRUMENTS, OFF-BALANCE SHEET RISKS AND CONTINGENCIES

The Partnership engages in the speculative trading of U.S. and foreign futures
contracts, options on U.S. and foreign futures contracts, and forward contracts
("collectively derivatives"). These derivatives include both financial and
non-financial contracts held as part of a diversified trading strategy. 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.

The purchase and sale of futures and options on futures contracts requires
margin deposits with a Futures Commission Merchant ("FCM"). Additional deposits
may be necessary for any loss on contract value. The Commodity Exchange Act
("The CEAct") requires an FCM to segregate all customer transactions and assets
from the FCM's proprietary activities.

A customer's cash and other property such as U.S. Treasury Bills, deposited with
an FCM are considered commingled with all other customer funds subject to the
FCM's segregation requirements. In the event of an FCM'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 the total of cash and other
property deposited.

The Partnership has cash and open positions on deposit in the amount of
$1,753,536 as of December 31, 2005 with an interbank market maker in connection
with its trading of forward contracts. In the event of the interbank market
maker's insolvency, recovery of the Partnership assets on deposit may be subject
to forfeiture. In the normal course of business, the Partnership does not
require collateral from such interbank market maker. Because forward contracts
are traded in unregulated markets between principals, the Partnership assumes
credit risk on its entire amount on deposit from counter party non-performance.

For derivatives, risks arise from changes in the market value of the contracts.
Theoretically, the Partnership is exposed to a market risk equal to the value of
futures and forward 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.

The Partnership's policy is to continuously monitor its exposure to market and
counterparty risk through the use of a variety of financial, position and credit
exposure reporting and control procedures. In addition, the Partnership has a
policy of reviewing the credit standing of each clearing broker or counter party
with which it conducts business.


                                                                              12

<PAGE>

                               EVEREST FUND, L.P.
                          (An Iowa Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)

NOTE 4- FINANCIAL INSTRUMENTS, OFF-BALANCE SHEET RISKS AND CONTINGENCIES
     (CONTINUED)

The limited partners bear the risk of loss only to the extent of the net asset
value of their Partnership units.

The Partnership receivable from RCM of approximately $7.5 million represents the
Partnership's receivable from RCM, who is currently in bankruptcy. These funds
are unavailable to the Partnership until the bankruptcy proceedings are
finalized.

NOTE 5- TRADING DISCREPANCY

Effective August 1, 2000, Trilogy Capital Management, LLC ("Trilogy") was added
as a trading advisor. Trilogy was terminated effective June 30, 2001. Trilogy
received a monthly management fee of 0.075% (0.9% annually) of the Partnership's
month-end allocated assets as defined and did not receive an incentive fee.

In October 2000, there was a discrepancy between the performance of the Barclay
Futures Index Program ("BFIP") as traded for the Partnership and the Barclay
Futures Index (BFI). Certain transactions executed by Trilogy on behalf of the
Partnership resulted in a loss of approximately $520,000 that was recorded in
the statement of operations. The General Partner believes that these
transactions were not executed in accordance with the provisions of BFIP and has
demanded that Trilogy reimburse the Partnership for the loss. The parties are
currently attempting to resolve the issue.

Until a final resolution is reached, the parties have agreed that the management
fees otherwise payable to Trilogy under its advisory contract would be applied
as a credit to offset the losses. The offset is not in settlement, partial
settlement, or indemnification of any kind and is without prejudice to any
rights or claims by either side. Beginning in November 2000, and until
approximately July 1, 2001, at which time Trilogy was terminated, all of the
management fees that would otherwise be paid to Trilogy were deposited into a
separate account for the benefit of those limited partners that were limited
partners on November 1, 2000 and to cover the expenses associated with the
collection of the losses. The separate account is not included in the financial
statements of the Partnership. After its termination, Trilogy demanded that such
fees be returned to it. The General Partner rejected Trilogy's demand and is
assessing its options for collection.

A demand for arbitration was filed with the NFA on October 3, 2002. Trilogy has
responded to the demand for arbitration and has counterclaimed for the amount of
$130,210, together with attorney's fees, interest and costs of suit. That figure
represents the amount of management fees, otherwise payable to Trilogy under its
advisory contract, that both parties agreed would be held as a credit to the
Partnership to offset the losses. The General Partner has a letter to that
effect which was signed by the president of Trilogy on January 29, 2001.

The General Partner anticipates a hearing in front of an NFA arbitration panel
in the coming months, but no date has been set for the hearing. At the present
time, the General Partner is unable to determine whether any of the losses will
be recovered.


                                                                              13
<PAGE>

                               EVEREST FUND, L.P.
                          (An Iowa Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)

NOTE 6- FINANCIAL HIGHLIGHTS

The following financial highlights show the Partnership's financial performance
for the years ended December 31, 2005, 2004, and 2003. This information has been
derived from information presented in the financial statements.

<TABLE>
<CAPTION>
                                            I SHARES     A SHARES    II SHARES    AA SHARES     I SHARES     A SHARES     A SHARES
                                              2005         2005         2005         2005         2004         2004         2003
                                           ---------    ---------    ---------    ---------    ---------    ---------    ---------
<S>                                        <C>          <C>          <C>          <C>          <C>          <C>          <C>
PER UNIT OPERATING PERFORMANCE (1)
   Total income                            $  (66.82)   $ (142.31)   $      --    $      --    $  407.73    $  240.93    $  245.03
   Total expenses                             (55.56)      (51.64)       (8.08)       (7.77)      (42.63)      (65.33)      (61.02)
                                           ---------    ---------    ---------    ---------    ---------    ---------    ---------
      Net increase in net asset value        (122.38)     (193.95)       (8.08)       (7.77)      365.10       175.60       184.01
      Net asset value, beginning of year
         (inception for I shares)           2,463.97     2,432.05     2,448.46     2,354.05     2,098.87     2,265.45     2,072.44
                                           ---------    ---------    ---------    ---------    ---------    ---------    ---------
      Net asset value, end of year         $2,341.59    $2,238.10    $2,440.38    $2,346.28    $2,463.97    $2,432.05    $2,256.45
                                           =========    =========    =========    =========    =========    =========    =========
SELECTED FINANCIAL STATISTICS AND RATIOS:
Total return (2) (4)                           (4.97%)      (7.97%)      (0.33%)      (0.33%)      10.05%        7.78%        8.88%
                                           =========    =========    =========    =========    =========    =========    =========
Ratio to average net assets:
Trading Income                                 (2.15%)      (4.84%)       0.00%        0.00%        2.16%       10.64%       18.45%
Expenses, not including incentive fees         (2.37%)      (2.28%)      (0.33%)      (0.33%)      (1.40%)      (2.24%)      (2.55%)
Incentive fees (3)                              0.00%        0.00%        0.00%        0.00%        0.44%       (0.75%)      (2.04%)
Total expenses                                 (2.37%)      (2.28%)      (0.33%)      (0.33%)      (0.96%)      (2.99%)      (4.59%)
Net income                                     (4.52%)      (7.13%)      (0.33%)      (0.33%)       1.20%        7.64%       13.86%
</TABLE>

(1)  Selected data for a unit of beneficial interest outstanding throughout the
     year, or since inception for I shares.

(2)  An individual partner's total returns and ratios may vary from the above
     returns based on the timing of contributions and withdrawals.

(3)  Incentive fees accrued on units held as A shares were reversed due to
     losses after those units were transferred to I shares, resulting in a
     negative incentive fee for I shares.

(4)  I Shares have been annualized for the period ending December 31, 2004.


                                                                              14

<PAGE>

                               EVEREST FUND, L.P.
                          (An Iowa Limited Partnership)

                                 ACKNOWLEDGEMENT
                  YEARS ENDED DECEMBER 31, 2005, 2003, AND 2004

Acknowledgement

To the best of my knowledge and belief, the information contained here is
accurate and complete.


/s/ Peter Lamoureux
-------------------------------------
President
Everest Asset Management, Inc.
General Partner of Everest Fund, L.P.


                                                                              15