N-CSRS 1 acmncsrs.htm N-CSRS

united states
securities and exchange commission
washington, d.c. 20549

form n-csr

certified shareholder report of registered management
investment companies

Investment Company Act file number 811-22655

 

Northern Lights Fund Trust III

(Exact name of registrant as specified in charter)

 

225 Pictoria Drive, Suite 450, Cincinnati, OH 45246

(Address of principal executive offices) (Zip code)

 

 

The Corporation Trust Company

1209 Orange Street Wilmington, DE 19801

(Name and address of agent for service)

 

 

Registrant's telephone number, including area code: 631-470-2688

 

Date of fiscal year end: 12/31

 

Date of reporting period: 6/30/22

 

Item 1. Reports to Stockholders.

(a)

 

 

 

ACM Dynamic Opportunity Fund

 

Class A Shares – ADOAX 

Class I Shares – ADOIX

 

 

ACM Tactical Income Fund

 

Class A Shares – TINAX 

Class I Shares – TINIX

 

 

 

 

 

 

 

 

 

 

 

 

Semi-Annual Report 

June 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-844-798-3833

 

www.acm-funds.com

 

 

 

Distributed by Northern Lights Distributors, LLC 

Member FINRA

 

 

ACM Dynamic Opportunity Fund 

Portfolio Review (Unaudited) 

June 30, 2022

 

Average Annual Total Return through June 30, 2022*, as compared to its benchmarks:

 

          Since
  Six Months 1 Year 3 Year 5 Year Inception*****
ACM Dynamic Opportunity Fund - Class A -7.78% -13.37% 3.91% 4.30% 4.15%
ACM Dynamic Opportunity Fund - Class A with load -13.08% -18.35% 1.89% 3.08% 3.32%
ACM Dynamic Opportunity Fund - Class I -7.66% -13.11% 4.09% 4.52% 4.36%
S&P 500 Total Return Index ** -19.96% -10.62% 10.60% 11.31% 10.88%
S&P 500 Price Index *** -20.58% -11.92% 8.77% 9.33% 8.79%
HFRX Equity Hedge Index **** -4.72% -0.93% 5.30% 3.51% 2.64%

 

*The performance data quoted is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemptions of Fund shares. The Fund’s advisor has contractually agreed to waive its fees and reimburse expenses of the Fund, at least until April 30, 2023, to ensure that Total Annual Fund Operating Expenses After Fee Waiver and Reimbursement (exclusive of any front-end or contingent deferred loads; brokerage fees and commissions, acquired fund fees and expenses; borrowing costs (such as interest and dividend expense on securities sold short); taxes; and extraordinary expenses, such as litigation expenses (which may include indemnification of Fund officers and Trustees, contractual indemnification of Fund service providers (other than advisor))) will not exceed 2.40% and 2.15% of average daily net assets attributable to Class A and Class I shares, respectively. The Fund’s total gross operating expenses per the most recent prospectus is 1.94% and 1.69% for Class A and Class I shares, respectively. Class A shares are subject to a maximum sales charge of 5.75%. Redemptions made within 30 days of purchase may be assessed a redemption fee of 1.00%. For performance information current to the most recent month-end, please call 1-844-798-3833.

 

**The S&P 500 Total Return Index, is a market capitalization-weighted index of 500 widely held common stocks. Investors cannot invest directly in an index.

 

***The S&P 500 Price Index, is a stock market index that measures the stock performance of 500 large companies listed on the stock exchange. Investors cannot invest directly in an index.

 

****The HFRX Equity Hedge Index is an index managed by Hedge Fund Research, Inc. (“HFR”). HFR is the established global leader in the indexation, analysis and research of the hedge fund industry. With over 150 indices ranging from broad composites down to specific, niche areas of sub-strategy and regional investment focus, the HFRX Indices are considered the industry standard benchmarks of hedge fund performance. The HFRX branded indices are daily indices utilizing a rigorous quantitative selection process to represent the larger hedge fund universe. Investors cannot invest directly in an index.

 

*****Inception date is January 20, 2015.

 

Portfolio Composition as of June 30, 2022     % of Net Assets 
Exchange Traded Fund - Equity   2.5%
U.S. Treasury Bills   2.4%
Common Stocks:     
Biotech & Pharma   2.6%
Internet Media & Services   2.4%
Technology Services   2.4%
E-Commerce Discretionary   2.0%
Health Care Facilities & Services   1.9%
Semiconductors   1.7%
Software   1.5%
Technology Hardware   1.5%
Wholesale & Consumer Staples   1.2%
Other assets in excess of liabilities - net   77.9%
    100.0%

 

Please refer to the Schedule of Investments in this semi-annual report for a detailed listing of the Fund’s holdings.

1

 

ACM Tactical Income Fund 

Portfolio Review (Unaudited) 

June 30, 2022

 

Average Annual Total Return through June 30, 2022*, as compared to its benchmark:

 

  Six Months 1 Year 3 Year Since Inception***
ACM Tactical Income Fund - Class A -5.90% -8.61% 0.38% 1.47%
ACM Tactical Income Fund - Class A with load -11.33% -13.88% -1.60% -0.24%
ACM Tactical Income Fund - Class I -5.69% -8.29% 0.65% 1.73%
Bloomberg U.S. Aggregate Bond Index ** -10.35% -10.29% -0.93% 0.90%

 

*The performance data quoted is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemptions of Fund shares. The Fund’s advisor has contractually agreed to waive its fees and reimburse expenses of the Fund, at least until April 30, 2023, to ensure that Total Annual Fund Operating Expenses After Fee Waiver and Reimbursement (exclusive of any front-end or contingent deferred loads; brokerage fees and commissions, acquired fund fees and expenses; borrowing costs (such as interest and dividend expense on securities sold short); taxes; and extraordinary expenses, such as litigation expenses (which may include indemnification of Fund officers and Trustees, contractual indemnification of Fund service providers (other than the advisor))) will not exceed 2.25% and 2.00% of average daily net assets attributable to Class A and Class I shares, respectively. The Fund’s total gross operating expenses per the most recent prospectus is 3.03% and 2.78% for Class A and Class I shares, respectively. Class A shares are subject to a maximum sales charge of 5.75%. Redemptions made within 30 days of purchase may be assessed a redemption fee of 1.00%. For performance information current to the most recent month-end, please call 1-844-798-3833.

 

**The Bloomberg U.S. Aggregate Bond Index is an unmanaged index comprised of U.S. investment grade, fixed rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and ten years. Investors cannot invest directly in an index.

 

***Inception date is December 31, 2018.

  

Portfolio Composition as of June 30, 2022     % of Net Assets 
Exchange-Traded Funds - Fixed Income   18.9%
Exchange-Traded Funds - Equity   2.4%
Common Stocks - Business Development Companies   1.0%
Short-Term Investments - Money Market Funds   57.6%
Other assets in excess of liabilities - net   20.1%
    100.0%

 

Please refer to the Schedule of Investments in this semi-annual report for a detailed listing of the Fund’s holdings.

2

 

ACM DYNAMIC OPPORTUNITY FUND
SCHEDULE OF INVESTMENTS (Unaudited)
June 30, 2022

 

Shares      Fair Value 
     COMMON STOCKS — 23.8%     
     ADVERTISING & MARKETING - 0.6%     
 12,000   Trade Desk, Inc. (The), Class A(a)  $502,680 
           
     BIOTECH & PHARMA - 2.6%     
 4,200   Eli Lilly & Company   1,361,766 
 3,000   Vertex Pharmaceuticals, Inc.(a)   845,370 
         2,207,136 
     CHEMICALS - 0.5%     
 9,000   Mosaic Company (The)   425,070 
           
     COMMERCIAL SUPPORT SERVICES - 1.1%     
 5,000   FTI Consulting, Inc.(a)(e)   904,250 
           
     E-COMMERCE DISCRETIONARY - 2.0%     
 16,000   Amazon.com, Inc.(a)   1,699,360 
           
     ENGINEERING & CONSTRUCTION - 1.0%     
 6,500   Quanta Services, Inc.   814,710 
           
     HEALTH CARE FACILITIES & SERVICES - 1.9%     
 3,000   UnitedHealth Group, Inc. (e)   1,540,890 
           
     INTERNET MEDIA & SERVICES - 2.4%     
 900   Alphabet, Inc., Class A(a)   1,961,334 
           
     MEDICAL EQUIPMENT & DEVICES - 1.0%     
 12,700   Lantheus Holdings, Inc.(a)   838,581 
           
     OIL & GAS PRODUCERS - 0.9%     
 6,500   EOG Resources, Inc.   717,860 
           
     OIL & GAS SERVICES & EQUIPMENT - 0.5%     
 12,000   Schlumberger N.V.   429,120 

 

See accompanying notes to financial statements.

3

 

ACM DYNAMIC OPPORTUNITY FUND
SCHEDULE OF INVESTMENTS (Unaudited) (Continued)
June 30, 2022

  

Shares      Fair Value 
     COMMON STOCKS — 23.8% (Continued)     
     RETAIL - DISCRETIONARY - 1.0%     
 2,900   Lululemon Athletica, Inc.(a)  $790,569 
           
     SEMICONDUCTORS - 1.7%     
 10,000   Advanced Micro Devices, Inc.(a)   764,700 
 4,500   NVIDIA Corporation   682,155 
         1,446,855 
     SOFTWARE - 1.5%     
 4,800   Microsoft Corporation   1,232,784 
           
     TECHNOLOGY HARDWARE - 1.5%     
 9,000   Apple, Inc.   1,230,480 
           
     TECHNOLOGY SERVICES - 2.4%     
 2,000   EPAM Systems, Inc.(a)   589,560 
 7,000   Visa, Inc., Class A   1,378,230 
         1,967,790 
     WHOLESALE - CONSUMER STAPLES - 1.2%     
 23,000   Grocery Outlet Holding Corporation(a)(e)   980,490 
           
     TOTAL COMMON STOCKS (Cost $13,202,066)   19,689,959 
           
     EXCHANGE-TRADED FUND — 2.5%     
     EQUITY - 2.5%     
 30,000   Utilities Select Sector SPDR Fund   2,103,900 
           
     TOTAL EXCHANGE-TRADED FUND (Cost $2,172,405)     

 

Principal      Coupon Rate       
Amount ($)      (%)  Maturity    
     U.S. GOVERNMENT & AGENCIES — 2.4%           
     U.S. TREASURY BILLS — 2.4%           
 1,000,000   United States Treasury Bill(b)  –  07/21/22   999,450 
 500,000   United States Treasury Bill(b)  –  07/28/22   499,640 
 500,000   United States Treasury Bill(b)  –  08/25/22   498,871 
               1,997,961 
     TOTAL U.S. GOVERNMENT & AGENCIES (Cost $1,998,738)        

  

See accompanying notes to financial statements.

4

 

ACM DYNAMIC OPPORTUNITY FUND
SCHEDULE OF INVESTMENTS (Unaudited) (Continued)
June 30, 2022

  

Shares                              Fair Value 
     SHORT-TERM INVESTMENTS — 49.5%         
     MONEY MARKET FUNDS - 49.5%         
 34,576,493   First American Government Obligations Fund, Class X, 1.29%(c)      $34,576,493 
 6,473,658   Goldman Sachs Financial Square Government Fund, Administration Class, 1.10%(c)       6,473,658 
     TOTAL MONEY MARKET FUNDS (Cost $41,050,151)       41,050,151 
                                   
     TOTAL SHORT-TERM INVESTMENTS (Cost $41,050,151)       41,050,151 
                                   
Contracts(d)      Broker/Counterparty  Expiration
Date		  Exercise
Price		   Notional
Value		     
     EQUITY OPTIONS PURCHASED - 1.5%                     
     PUT OPTIONS PURCHASED - 1.5%                     
 200   Advanced Micro Devices, Inc.  GOL  07/29/2022  $80   $1,529,400    139,200 
 9   Alphabet, Inc.  GOL  07/15/2022   2,160    1,961,334    56,340 
 320   Amazon.com, Inc.  GOL  07/29/2022   105    3,398,720    195,200 
 150   Invesco QQQ Trust Series 1  GOL  08/19/2022   280    4,204,200    201,750 
 200   Invesco QQQ Trust Series 1  GOL  08/19/2022   285    5,605,600    323,000 
 60   Lululemon Athletica, Inc.  GOL  07/15/2022   270    1,635,660    53,700 
 180   Mosaic Company (The)  GOL  07/15/2022   50    850,140    69,300 
 50   NVIDIA Corporation  GOL  07/29/2022   155    757,950    56,250 
 180   Trade Desk, Inc. (The)  GOL  08/19/2022   45    754,020    130,500 
 30   Vertex Pharmaceuticals, Inc.  GOL  08/19/2022   280    845,370    39,000 
     TOTAL PUT OPTIONS PURCHASED (Cost - $1,162,943)        1,264,240 
                           
                           
     TOTAL EQUITY OPTIONS PURCHASED (Cost - $1,162,943)        1,264,240 
                           
     TOTAL INVESTMENTS - 79.7% (Cost $59,586,303)       $66,106,211 
     CALL OPTIONS WRITTEN - (0.1)% (Proceeds - $57,123)             (90,750)
     OTHER ASSETS IN EXCESS OF LIABILITIES- 20.4%        16,965,146 
     NET ASSETS - 100.0%       $82,980,607 
                           
Contracts(d)      Counterparty  Expiration Date  Exercise Price   Notional Value   Fair Value 
     WRITTEN EQUITY OPTIONS - (0.1)%                  
     CALL OPTIONS WRITTEN- (0.1)%                  
 60   FTI Consulting, Inc.  GOL  07/15/2022  $180   $1,085,100   $24,300 
 300   Grocery Outlet Holding Corporation  GOL  07/15/2022   45    1,278,900    18,900 
 30   UnitedHealth Group, Inc.  GOL  07/01/2022   500    1,540,890    47,550 
     TOTAL CALL OPTIONS WRITTEN (Proceeds - $57,123)                90,750 

 

See accompanying notes to financial statements.

5

 

ACM DYNAMIC OPPORTUNITY FUND
SCHEDULE OF INVESTMENTS (Unaudited) (Continued)
June 30, 2022

  

Shares      Fair Value 
     SECURITIES SOLD SHORT — (6.2)%     
     EXCHANGE-TRADED FUNDS — (6.2)%     
     EQUITY - (6.2)%     
 (5,000)  Energy Select Sector SPDR Fund  $(357,550)
 (6,500)  SPDR S&P 500 ETF Trust   (2,452,125)
 (40,000)  SPDR S&P Retail ETF   (2,326,400)
     TOTAL SECURITIES SOLD SHORT - (Proceeds - $5,380,704)  $(5,136,075)

 

ETF- Exchange-Traded Fund

 

NV- Naamioze Vennootschap

 

SPDR- Standard & Poor’s Depositary Receipt

 

GOL- Goldman Sachs

 

(a)Non-income producing security.

 

(b)Zero coupon bond.

 

(c)Rate disclosed is the seven day effective yield as of June 30, 2022.

 

(d)Each option contract allows the holder of the option to purchase or sell 100 shares of the underlying security.

 

(e)All or part of these securities were held as collateral for call options written as of June 30, 2022.

 

See accompanying notes to financial statements.

6

 

ACM TACTICAL INCOME FUND
SCHEDULE OF INVESTMENTS (Unaudited)
June 30, 2022

 

 

Shares      Fair Value 
     COMMON STOCKS — 1.0%     
     BUSINESS DEVELOPMENT COMPANIES - 1.0%     
 14,000   Main Street Capital Corporation  $539,420 
           
     TOTAL COMMON STOCKS (Cost $545,121)     
           
     EXCHANGE-TRADED FUNDS — 21.3%     
     EQUITY - 2.4%     
 12,500   Alerian MLP ETF   430,625 
 55,000   VanEck Vectors BDC Income ETF   830,500 
         1,261,125 
     FIXED INCOME - 18.9%     
 25,000   Invesco Senior Loan ETF   506,750 
 15,000   iShares 1-3 Year Treasury Bond ETF   1,241,850 
 11,500   iShares 20+ Year Treasury Bond ETF   1,321,005 
 25,000   iShares 7-10 Year Treasury Bond ETF   2,557,500 
 10,000   iShares National Muni Bond ETF   1,063,600 
 16,000   iShares Preferred & Income Securities ETF   526,080 
 50,000   ProShares Short 20+ Year Treasury(a)   1,002,500 
 24,500   SPDR Blackstone Senior Loan ETF   1,020,180 
 23,000   Virtus InfraCap U.S. Preferred Stock ETF   485,185 
         9,724,650 
           
     TOTAL EXCHANGE-TRADED FUNDS (Cost $11,258,583)   10,985,775 
           
     SHORT-TERM INVESTMENTS — 57.6%     
     MONEY MARKET FUNDS - 57.6%     
 29,407,461   First American Government Obligations Fund Class X, Class X, 1.29%(b)   29,407,461 
 444,214   Goldman Sachs Financial Square Government Fund, , 1.10%(b)   444,214 
     TOTAL SHORT-TERM INVESTMENTS (Cost $29,851,675)   29,851,675 
           
     TOTAL INVESTMENTS - 79.9% (Cost $41,655,379)  $41,376,870 
     OTHER ASSETS IN EXCESS OF LIABILITIES- 20.1%   10,439,119 
     NET ASSETS - 100.0%  $51,815,989 

 

ETF- Exchange-Traded Fund

 

SPDR- Standard & Poor’s Depositary Receipt

 

(a)Non-income producing security.

 

(b)Rate disclosed is the seven day effective yield as of June 30, 2022.

 

See accompanying notes to financial statements.

7

 

ACM Funds
STATEMENTS OF ASSETS AND LIABILITIES (Unaudited)
June 30, 2022

 

   ACM Dynamic   ACM Tactical 
   Opportunity Fund      Income Fund 
ASSETS          
Investment securities, at value (Cost $59,586,303 and $41,655,379)  $66,106,211   $41,376,870 
Cash   16,444,519    12,704,159 
Deposits with broker   5,844,234    25,014 
Receivable for securities sold   271,344    478,733 
Receivable for fund shares sold   21,932    132,162 
Dividend and interest receivable   39,377    24,903 
Prepaid expenses   11,679    4,268 
TOTAL ASSETS   88,739,296    54,746,109 
           
LIABILITIES          
Written options, at value (Premium received $57,123 and $0)   90,750    — 
Payable for securities purchased   263,625    2,761,783 
Payable for fund shares repurchased   36,794    — 
Investment advisory fees payable   86,060    44,427 
Payable to related parties   80,317    77,672 
Dividends payable   15,575    — 
Distribution (12b-1) fees payable   1,125    1,519 
Securities sold short, at value (Proceeds $5,380,704)   5,136,075    — 
Accrued expenses and other liabilities   48,368    44,719 
TOTAL LIABILITIES   5,758,689    2,930,120 
NET ASSETS  $82,980,607   $51,815,989 
           
Composition of Net Assets:          
Paid in capital  $70,700,941   $57,228,713 
Accumulated Earnings (Losses)   12,279,666    (5,412,724)
NET ASSETS  $82,980,607   $51,815,989 
           
Net Asset Value Per Share:          
Class A Shares:          
Net Assets  $2,693,871   $3,620,584 
Shares of beneficial interest outstanding ($0 par value, unlimited shares authorized)   143,723    381,762 
Net asset value (Net Assets ÷ Shares Outstanding) and redemption price per share (a)  $18.74   $9.48 
Maximum offering price per share (net asset value plus maximum sales charge of 5.75%)  $19.88   $10.06 
Class I Shares:          
Net Assets  $80,286,736   $48,195,405 
Shares of beneficial interest outstanding ($0 par value, unlimited shares authorized)   4,216,535    5,079,966 
Net asset value (Net Assets ÷ Shares Outstanding), offering price and redemption price per share (a)  $19.04   $9.49 

 

 

(a)The Fund imposes a 1.00% redemption fee for any redemptions of Fund shares occurring within 30 days of purchase.

 

See accompanying notes to financial statements.

8

 

ACM Funds
STATEMENTS OF OPERATIONS (Unaudited)
For the Six Months Ended June 30, 2022

 

   ACM Dynamic   ACM Tactical 
   Opportunity Fund      Income Fund 
INVESTMENT INCOME          
Dividend Income (Foreign withholding tax $59,500, $0)  $337,173   $705,536 
Interest   73,352    53,116 
TOTAL INVESTMENT INCOME   410,525    758,652 
           
EXPENSES          
Advisory fees   574,757    287,801 
Distribution (12b-1) fees:          
Class A   3,575    4,607 
Administrative services fees   65,472    57,384 
Third party administrative services fees   57,791    35,421 
Dividend expense on securities sold short   48,162    — 
Registration fees   43,050    39,100 
Accounting services fees   29,382    22,766 
Transfer agent fees   25,713    26,835 
Interest expense   18,825    — 
Printing and postage expenses   9,392    5,944 
Legal fees   8,288    7,443 
Compliance officer fees   8,258    6,150 
Audit fees   8,182    9,181 
Trustees fees and expenses   7,436    7,362 
Custodian fees   5,941    4,503 
Insurance expense   1,627    1,442 
Other expenses   5,470    5,489 
TOTAL EXPENSES   921,321    521,428 
NET EXPENSES   921,321    521,428 
           
NET INVESTMENT INCOME (LOSS)   (510,796)   237,224 
           
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS          
Net realized gain (loss) from:          
Investments and foreign currency transactions   7,086,273    (2,136,383)
Options written   (170,977)   24,177 
Securities sold short   1,037,957    — 
Net realized gain (loss)   7,953,253    (2,112,206)
Net change in unrealized appreciation (depreciation) on:          
Investments and foreign currency translations   (15,274,559)   (1,618,465)
Options written   (10,011)   — 
Securities sold short   244,629    — 
Net change in unrealized depreciation on investments   (15,039,941)   (1,618,465)
           
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS   (7,086,688)   (3,730,671)
           
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS  $(7,597,484)  $(3,493,447)

 

See accompanying notes to financial statements.

9

 

ACM Funds
STATEMENTS OF CHANGES IN NET ASSETS

 

   ACM Dynamic Opportunity Fund 
   For the Six Months Ended   For the Year Ended 
   June 30, 2022   December 31, 2021 
   (Unaudited)     
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS          
Net investment loss  $(510,796)  $(973,029)
Net realized gain on investments, foreign currency transactions, options written and securities sold short   7,953,253    2,084,012 
Net change in unrealized depreciation on investments, foreign currency translations and options written   (15,039,941)   (860,436)
Net increase (decrease) in net assets resulting from operations   (7,597,484)   250,547 
           
DISTRIBUTIONS TO SHAREHOLDERS          
From distributable earnings          
Class A   —    (77,251)
Class I   —    (2,386,723)
From return of capital          
Class A   —    (486)
Class I   —    (15,024)
Total distributions to shareholders   —    (2,479,484)
           
SHARES OF BENEFICIAL INTEREST          
Proceeds from shares sold:          
Class A   82,450    1,329,614 
Class I   4,640,182    29,792,109 
Net asset value of shares issued in reinvestment of distributions:          
Class A   —    72,312 
Class I   —    2,368,692 
Redemption fee proceeds:          
Class A   113    68 
Class I   —    2,246 
Payments for shares redeemed:          
Class A   (347,192)   (728,117)
Class I   (18,974,781)   (11,912,988)
Net increase (decrease) from shares of beneficial interest transactions   (14,599,228)   20,923,936 
           
NET INCREASE (DECREASE) IN NET ASSETS   (22,196,712)   18,694,999 
           
NET ASSETS          
Beginning of Period   105,177,319    86,482,320 
End of Period  $82,980,607   $105,177,319 
           
SHARE ACTIVITY          
Class A:          
Shares Sold   4,328    61,433 
Shares Reinvested   —    3,566 
Shares Redeemed   (18,065)   (33,728)
Net increase (decrease) in shares of beneficial interest outstanding   (13,737)   31,271 
           
Class I:          
Shares Sold   236,076    1,365,909 
Shares Reinvested   —    115,152 
Shares Redeemed   (964,980)   (545,839)
Net increase (decrease) in shares of beneficial interest outstanding   (728,904)   935,222 

 

See accompanying notes to financial statements.

10

 

ACM Funds
STATEMENTS OF CHANGES IN NET ASSETS

 

   ACM Tactical Income Fund 
   For the Six Months Ended   For the Year Ended 
   June 30, 2022   December 31, 2021 
    (Unaudited)      
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS          
Net investment income  $237,224   $2,365,959 
Net realized loss on investments, options written and securities sold short   (2,112,206)   (1,969,452)
Distributions of realized gains by underlying investment companies   —    3,224 
Net change in unrealized depreciation on investments and options written   (1,618,465)   (950,771)
Net decrease in net assets resulting from operations   (3,493,447)   (551,040)
           
DISTRIBUTIONS TO SHAREHOLDERS          
From distributable earnings          
Class A   (16,641)   (138,097)
Class I   (311,987)   (2,078,162)
From return of capital          
Class A   —    (895)
Class I   —    (14,013)
Total distributions to shareholders   (328,628)   (2,231,167)
           
SHARES OF BENEFICIAL INTEREST          
Proceeds from shares sold:          
Class A   630,573    1,680,712 
Class I   5,785,667    31,617,017 
Net asset value of shares issued in reinvestment of distributions:          
Class A   10,451    76,597 
Class I   302,022    2,032,469 
Redemption fee proceeds:          
Class A   6    148 
Class I   99    2,290 
Payments for shares redeemed:          
Class A   (735,562)   (1,517,836)
Class I   (16,459,117)   (12,311,867)
Net increase (decrease) from shares of beneficial interest transactions   (10,465,861)   21,579,530 
           
NET INCREASE (DECREASE) IN NET ASSETS   (14,287,936)   18,797,323 
           
NET ASSETS          
Beginning of Period   66,103,925    47,306,602 
End of Period  $51,815,989   $66,103,925 
           
SHARE ACTIVITY          
Class A:          
Shares Sold   64,822    159,245 
Shares Reinvested   1,073    7,334 
Shares Redeemed   (75,216)   (144,457)
Net increase (decrease) in shares of beneficial interest outstanding   (9,321)   22,122 
           
Class I:          
Shares Sold   594,018    2,997,985 
Shares Reinvested   30,962    194,569 
Shares Redeemed   (1,682,925)   (1,175,222)
Net increase (decrease) in shares of beneficial interest outstanding   (1,057,945)   2,017,332 

 

See accompanying notes to financial statements.

11

 

ACM Dynamic Opportunity Fund
FINANCIAL HIGHLIGHTS

 

Per Share Data and Ratios for a Share of Beneficial Interest Outstanding Throughout each Period Presented

  

   Class A 
   For the                     
   Six Months Ended   For the Year Ended   For the Year Ended   For Year Ended   For Year Ended   For the Year Ended 
   June 30, 2022   December 31, 2021   December 31, 2020   December 31, 2019   December 31, 2018   December 31, 2017 
   (Unaudited)                     
Net asset value, beginning of period  $20.32   $20.67   $17.63   $17.33   $17.71   $15.07 
Increase (decrease) from investment operations:                              
Net investment loss (1)   (0.13)   (0.25)   (0.30)   (0.20)   (0.25)   (0.25)
Net realized and unrealized gain on investments   (1.45)   0.39    4.25    0.56    0.04 (5)   2.89 
Total from investment operations   (1.58)   0.14    3.95    0.36    (0.21)   2.64 
Less distributions from:                              
Net realized gains   —    (0.49)   (0.89)   (0.06)   (0.17)   — 
Return of capital   —    (0.00) (4)   (0.02)   —    —    — 
Total distributions   —    (0.49)   (0.91)   (0.06)   (0.17)   — 
Redemption fees collected (1)   0.00   0.00  (4)   0.00 (4)   —    0.00 (4)   0.00 (4)
Net asset value, end of period  $18.74   $20.32   $20.67   $17.63   $17.33   $17.71 
Total return (2)   (7.78)% (6)   0.70%   22.37%   2.09%   (1.15)%   17.52%
Net assets, at end of period (000s)  $2,694   $3,200   $2,609   $3,686   $8,961   $4,121 
Ratios/Supplemental Data:                              
Ratio of expenses to average net assets including dividends from securities sold short and interest expense (3)   2.21% (7)   1.94%   2.07%   1.95%   2.04%   2.10%
Ratio of expenses to average net assets excluding dividends from securities sold short and interest expense (3)   2.09% (7)   1.88%   1.97%   1.93%   1.92%   1.98%
Ratio of net investment loss to average net assets (3)   (1.18)% (7)   (1.18)%   (1.61)%   (1.10)%   (1.37)%   (1.54)%
Portfolio Turnover Rate   408% (6)   330%   437%   325%   271%   224%

 

 

(1)Per share amounts calculated using the average shares method, which more appropriately presents the per share data for the year.

 

(2)Total returns shown exclude the effect of applicable sales charges and redemption fees and assumes reinvestment of all distributions.

 

(3)Does not include the expenses of other investment companies in which the Fund invests.

 

(4)Represents less than $0.01 per share.

 

(5)Net realized and unrealized gain on investments does not accord with the net amount reported in the Statements of Operations due to timing of shareholder subscriptions and redemptions relative to fluctuating net asset values during the year.

 

(6)Not annualized.

 

(7)Annualized for periods less than one full year.

 

See accompanying notes to financial statements.

12

 

ACM Dynamic Opportunity Fund
FINANCIAL HIGHLIGHTS

 

Per Share Data and Ratios for a Share of Beneficial Interest Outstanding Throughout each Period Presented

 

   Class I 
   For the                     
   Six Months Ended   For the Year Ended   For the Year Ended   For Year Ended   For Year Ended   For the Year Ended 
   June 30, 2022   December 31, 2021   December 31, 2020   December 31, 2019   December 31, 2018   December 31, 2017 
   (Unaudited)                     
Net asset value, beginning of period  $20.62   $20.92   $17.82   $17.48   $17.82   $15.12 
Increase (decrease) from investment operations:                              
Net investment loss (1)   (0.11)   (0.20)   (0.26)   (0.15)   (0.20)   (0.21)
Net realized and unrealized gain on investments   (1.47)   0.39    4.27    0.55    0.03 (5)   2.91 
Total from investment operations   (1.58)   0.19    4.01    0.40    (0.17)   2.70 
Less distributions from:                              
Net realized gains   —    (0.49)   (0.89)   (0.06)   (0.17)   — 
Return of capital   —    (0.00) (4)   (0.02)   —    —    — 
Total distributions   —    (0.49)   (0.91)   (0.06)   (0.17)   — 
Redemption fees collected (1)   —    0.00 (4)   0.00 (4)    0.00 (4)    0.00 (4)   0.00 (4)
Net asset value, end of period  $19.04   $20.62   $20.92   $17.82   $17.48   $17.82 
Total return (2)   (7.66)% (6)   0.93%    22.47%    2.30% (6)   (0.92)% (6)   17.86%
Net assets, at end of period (000s)  $80,287   $101,977   $83,874   $70,270   $77,999   $61,152 
Ratios/Supplemental Data:                              
Ratio of expenses to average net assets including dividends from securities sold short and interest expense (3)   1.96% (7)   1.69%   1.82%   1.70%   1.79%   1.85%
Ratio of expenses to average net assets excluding dividends from securities sold short and interest expense (3)   1.84% (7)   1.63%   1.72%   1.68%   1.67%   1.73%
Ratio of net investment loss to average net assets (3)   (1.08)% (7)   (0.93)%   (1.36)%   (0.85)%   (1.12)%   (1.24)%
Portfolio Turnover Rate   408% (6)   330%   437%   325%   271%   224%

 

 

(1)Per share amounts calculated using the average shares method, which more appropriately presents the per share data for the year.

 

(2)Total returns shown exclude the effect of redemption fees and assumes reinvestment of all distributions.

 

(3)Does not include the expenses of other investment companies in which the Fund invests.

 

(4)Represents less than $0.01 per share.

 

(5)Net realized and unrealized gain on investments does not accord with the net amount reported in the Statements of Operations due to timing of shareholder subscriptions and redemptions relative to fluctuating net asset values during the year.

 

(6)Includes adjustments in accordance with accounting principles generally accepted in the United States and, consequently, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset values and returns for shareholder transactions.

 

(6)Not annualized.

 

(7)Annualized for periods less than one full year.

 

See accompanying notes to financial statements.

13

 

ACM Tactical Income Fund
FINANCIAL HIGHLIGHTS

 

Per Share Data and Ratios for a Share of Beneficial Interest Outstanding Throughout each Period Presented

  

   Class A 
   For the             
   Six Months Ended   For Year Ended   For Year Ended   For the Period Ended 
   June 30, 2022   December 31, 2021   December 31, 2020   December 31, 2019 (1) 
   (Unaudited)             
Net asset value, beginning of period  $10.12   $10.54   $10.13   $10.00 
Increase (decrease) from investment operations:                    
Net investment income (2)   0.02    0.38    0.34    0.48 
Net realized and unrealized gain (loss) on investments   (0.62)    (0.44)   0.34    0.03 (5) 
Total from investment operations   (0.60)   (0.06)   0.68    0.51 
Less distributions from:                    
Net investment income   (0.04)   (0.36)   (0.28)   (0.37)
Return of capital   —    (0.00) (6)    (0.01)   (0.01)
Total distributions   (0.04)   (0.36)   (0.29)   (0.38)
Redemption fees collected (2)   0.00 (6)   0.00 (6)   0.02    0.00 (6) 
Net asset value, end of period  $9.48   $10.12   $10.54   $10.13 
Total return (3)   (5.90)% (7)    (0.61)%   7.01%   5.13% (7) 
Net assets, at end of period (000s)  $3,621   $3,958   $3,887   $1,272 
Ratios/Supplemental Data:                    
Ratio of gross expenses to average net assets before waiver/recapture (4)   2.01% (10)   1.76%   1.82%   2.35% (9)(10) 
Ratio of net expenses to average net assets after waiver/recapture (4)   2.01% (10)   1.76%   1.86% (8)   2.25% (9)(10) 
Ratio of net investment income to average net assets (4)   0.60% (10)   3.65%   3.31%   5.08% (10) 
Portfolio Turnover Rate   287% (7)    555%   478%   645% (7)

 

 
(1)The Fund commenced operations on January 2, 2019.

 

(2)Per share amounts calculated using the average shares method, which more appropriately presents the per share data for the year/period.

 

(3)Total returns shown exclude the effect of applicable sales charges and redemption fees and assumes reinvestment of all distributions.

 

(4)Does not include the expenses of other investment companies in which the Fund invests.

 

(5)The amount of net realized and unrealized gain on investment per share for the period ended December 31, 2019 does not accord with the amounts in the Statement of Operations due to the timing of purchases and sales of Fund shares in relation to fluctuating market values.

 

(6)Represents less than $0.01 per share.

 

(7)Not annualized.

 

(8)Includes recapture of 0.04% during the year.

 

(9)Includes less than 0.01% of interest expense.

 

(10)Annualized for periods less than one full year.

 

See accompanying notes to financial statements.

14

 

ACM Tactical Income Fund
FINANCIAL HIGHLIGHTS

 

Per Share Data and Ratios for a Share of Beneficial Interest Outstanding Throughout each Period Presented

 

   Class I 
   For the             
   Six Months Ended   For Year Ended   For Year Ended   For the Period Ended 
   June 30, 2022   December 31, 2021   December 31, 2020   December 31, 2019 (1) 
   (Unaudited)             
Net asset value, beginning of period  $10.12   $10.54   $10.13   $10.00 
Increase (decrease) from investment operations:                    
Net investment income (2)   0.04    0.42    0.37    0.48 
Net realized and unrealized gain (loss) on investments   (0.61)   (0.45)   0.33    0.05 (5)
Total from investment operations   (0.57)   (0.03)   0.70    0.53 
Less distributions from:                    
Net investment income   (0.06)   (0.39)   (0.30)   (0.39)
Return of capital   —    (0.00) (6)   (0.01)   (0.01)
Total distributions   (0.06)   (0.39)   (0.31)   (0.40)
Redemption fees collected (2)   0.00 (6)   0.00 (6)   0.02    0.00 (6)
Net asset value, end of period  $9.49   $10.12   $10.54   $10.13 
Total return (3)   (5.69)% (7)   (0.36)%   7.26%   5.35% (7)
Net assets, at end of period (000s)  $48,195   $62,146   $43,420   $19,215 
Ratios/Supplemental Data:                    
Ratio of gross expenses to average net assets before waiver/recapture (4)   1.76% (10)   1.51%   1.57%   2.10% (9)(10)
Ratio of net expenses to average net assets after waiver/recapture (4)   1.76% (10)   1.51%   1.61% (8)   2.00% (9)(10)
Ratio of net investment income to average net assets (4)   0.82% (10)   4.04%   3.56%   4.83% (10)
Portfolio Turnover Rate   287% (7)   555%   478%   645% (7)

  

 
(1)The Fund commenced operations on January 2, 2019.

 

(2)Per share amounts calculated using the average shares method, which more appropriately presents the per share data for the year/period.

 

(3)Total returns shown exclude the effect of redemption fees and assumes reinvestment of all distributions.

 

(4)Does not include the expenses of other investment companies in which the Fund invests.

 

(5)The amount of net realized and unrealized gain on investment per share for the period ended December 31, 2019 does not accord with the amounts in the Statement of Operations timing of purchases and sales of Fund shares in relation to fluctuating market values.

 

(6)Represents less than $0.01 per share.

 

(7)Not annualized.

 

(8)Includes recapture of 0.04% during the year.

 

(9)Includes less than 0.01% of interest expense.

 

(10)Annualized for periods less than one full year.

 

See accompanying notes to financial statements.

15

 

ACM Funds
NOTES TO FINANCIAL STATEMENTS (Unaudited)
June 30, 2022

 

1.ORGANIZATION

 

The ACM Dynamic Opportunity Fund (“Dynamic Opportunity Fund”) and ACM Tactical Income Fund (“Tactical Income Fund”) (each a “Fund” and collectively, the “Funds”) are diversified series of shares of beneficial interest of Northern Lights Fund Trust III (the “Trust”), a statutory trust organized under the laws of the State of Delaware on December 5, 2011, and registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Dynamic Opportunity Fund commenced operations on January 20, 2015. The Dynamic Opportunity Fund seeks long-term capital appreciation with a short -term focus on capital preservation. The Tactical Income Fund commenced operations on January 2, 2019. The Tactical Income Fund seeks to generate income, with capital preservation as a secondary objective.

 

Each Fund offers Class A and Class I shares. Class A shares are offered at net asset value plus a maximum sales charge of 5.75%. Class I shares of the Fund are sold at NAV without an initial sales charge and are not subject to 12b-1 distribution fees, but have a higher minimum initial investment than Class A shares. All classes are subject to a 1.00% redemption fee on redemptions made within 30 days of the original purchase. Each share class represents an interest in the same assets of the Fund and classes are identical except for differences in their sales charge structures and ongoing service and distribution charges. All classes of shares have equal voting privileges except that each class has exclusive voting rights with respect to its service and/or distribution plans. The Funds’ income, expenses (other than class specific distribution fees) and realized and unrealized gains and losses are allocated proportionately each day based upon the relative net assets of each class.

 

2.SIGNIFICANT ACCOUNTING POLICIES

 

The following is a summary of significant accounting policies followed by the Funds in preparation of their financial statements. The policies are in conformity with U.S. generally accepted accounting principles (“GAAP”). The preparation of the financial statements 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 income and expenses for the year then ended. Actual results could differ from those estimates. Each Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946 “Financial Services Investment Companies” including FASB Accounting Standards Update (“ASU”) 2013-08.

 

Securities Valuation – Securities are valued at the last sale price on the exchange in which such securities are primarily traded, as of the close of business on the day the securities are being valued. In the absence of a sale on the primary exchange, such securities shall be valued at the mean between the current bid and ask prices on the day of valuation. NASDAQ traded securities are valued using the NASDAQ Official Closing Price (“NOCP”). Options contracts listed on a securities exchange or board of trade (not including Index Options contracts) for which market quotations are readily available shall be valued at the last quoted sales price or, in the absence of a sale, at the mean between the current bid and ask prices on the valuation date. Index Options listed on a securities exchange or board of trade for which market quotations are readily available shall be valued at the mean between the current bid and ask prices on the valuation date. Investments in open -end investment companies are valued at net asset value. Debt securities (other than short-term obligations) are valued each day by an independent pricing service approved by the Trust’s Board of Trustees (the “Board”) using methods which include current market quotations from a major market maker in the securities and based on methods which include the consideration of yields or prices of securities of comparable quality, coupon, maturity and type. The independent pricing service does not distinguish between smaller-sized bond positions known as “odd lots” and larger institutional-sized bond positions known as “round lots”. A Fund may fair value a particular bond if the advisor does not believe that the round lot value provided by the independent pricing service reflects fair value of the Fund’s holding. Short-term debt obligations having 60 days or less remaining until maturity, at time of purchase, may be valued at amortized cost.

16

 

ACM Funds
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued)
June 30, 2022

 

The Funds may hold securities, such as private investments, interests in commodity pools, other non-traded securities or temporarily illiquid securities, for which market quotations are not readily available or are determined to be unreliable. These securities will be valued using the “fair value” procedures approved by the Board. The Board has delegated execution of these procedures to a fair value committee composed of one or more representatives from each of the (i) Trust, (ii) administrator, and (iii) advisor. The committee may also enlist third party consultants such as a valuation specialist at a public accounting firm, valuation consultant or financial officer of a security issuer on an as-needed basis to assist in determining a security-specific fair value. The Board reviews and ratifies the execution of this process and the resultant fair value prices at least quarterly to assure the process produces reliable results.

 

Fair Valuation Process – As noted above, the fair value committee is composed of one or more representatives from each of the (i) Trust, (ii) administrator, and (iii) advisor. The applicable investments are valued collectively via inputs from each of these groups. For example, fair value determinations are required for the following securities: (i) securities for which market quotations are insufficient or not readily available on a particular business day (including securities for which there is a short and temporary lapse in the provision of a price by the regular pricing source); (ii) securities for which, in the judgment of the advisor, the prices or values available do not represent the fair value of the instrument. Factors which may cause the advisor to make such a judgment include, but are not limited to, the following: only a bid price or an ask price is available; the spread between bid and asked prices is substantial; the frequency of sales; the thinness of the market; the size of reported trades; and actions of the securities markets, such as the suspension or limitation of trading; (iii) securities determined to be illiquid; (iv) securities with respect to which an event that will affect the value thereof has occurred (a “significant event”) since the closing prices were established on the principal exchange on which they are traded, but prior to a Fund’s calculation of its net asset value. Specifically, interests in commodity pools or managed futures pools are valued on a daily basis by reference to the closing market prices of each futures contract or other asset held by a pool, as adjusted for pool expenses. Restricted or illiquid securities, such as private investments or non-traded securities are valued via inputs from the advisor based upon the current bid for the security from two or more independent dealers or other parties reasonably familiar with the facts and circumstances of the security (who should take into consideration all relevant factors as may be appropriate under the circumstances). If the advisor is unable to obtain a current bid from such independent dealers or other independent parties, the fair value committee shall determine the fair value of such security using the following factors: (i) the type of security; (ii) the cost at date of purchase; (iii) the size and nature of a Fund’s holdings; (iv) the discount from market value of unrestricted securities of the same class at the time of purchase and subsequent thereto; (v) information as to any transactions or offers with respect to the security; (vi) the nature and duration of restrictions on disposition of the security and the existence of any registration rights; (vii) how the yield of the security compares to similar securities of companies of similar or equal creditworthiness; (viii) the level of recent trades of similar or comparable securities; (ix) the liquidity characteristics of the security; (x) current market conditions; and (xi) the market value of any securities into which the security is convertible or exchangeable.

 

Valuation of Fund of Funds – The Funds may invest in portfolios of open-end or closed-end investment companies (the “Underlying Funds”). The Underlying Funds value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value to the methods established by the board of directors of the Underlying Funds.

 

Open-end investment companies are valued at their respective net asset values as reported by such investment companies. The shares of many closed -end investment companies, after their initial public offering, frequently trade at a price per share, which is different than the net asset value per share. The difference represents a market premium or market discount of such shares. There can be no assurances that the market discount or market premium on shares of any closed-end investment company purchased by the Funds will not change.

 

The Funds utilize various methods to measure the fair value of all of their investments on a recurring basis. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of input are:

 

Level 1 – Unadjusted quoted prices in active markets for identical assets and liabilities that a Fund has the ability to access.

 

Level 2 – Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument in an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.

17

 

ACM Funds
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued)
June 30, 2022

 

Level 3 – Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available; representing a Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.

 

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.

 

The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

 

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following tables summarize the inputs used as of June 30, 2022 for the Funds’ assets and liabilities measured at fair value:

 

ACM Dynamic Opportunity Fund 
                 
Assets  Level 1   Level 2   Level 3   Total 
Investments *                
Common Stocks  $19,689,959   $—   $—   $19,689,959 
Exchange Traded Fund   2,103,900    —    —    2,103,900 
U.S. Government & Agencies   —    1,997,961    —    1,997,961 
Short-Term Investments   41,050,151    —    —    41,050,151 
Put Options Purchased   1,264,240    —    —    1,264,240 
Total Investments  $64,108,250   $1,997,961   $—   $66,106,211 
                     
Liabilities *                    
Call Options Written  $90,750   $—   $—   $90,750 
Securities Sold Short   5,136,075    —    —    5,136,075 
Total Liabilities  $5,226,825   $—   $—   $5,226,825 
                     
ACM Tactical Income Fund 
                     
Investments *                    
Common Stocks  $539,420   $—   $—   $539,420 
Exchange-Traded Funds   10,985,775    —    —    10,985,775 
Short-Term Investments   29,851,675    —    —    29,851,675 
Total Investments  $41,376,870   $—   $—   $41,376,870 

 

*Refer to the Schedule of Investments for industry classification.

 

The Funds did not hold any Level 3 securities at the six months ended June 30, 2022.

 

Exchange Traded Funds – The Funds may invest in exchange traded funds (“ETFs”). ETFs are a type of fund bought and sold on a securities exchange. An ETF trades like common stock and represents a fixed portfolio of securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity on an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.

 

Security Transactions and Related Income – Security transactions are accounted for on a trade date basis. Interest income is recognized on an accrual basis. Discounts are accreted and premiums are amortized on securities purchased over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Realized gains or losses from sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.

18

 

ACM Funds
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued)
June 30, 2022

 

Short Sales – A “short sale” is a transaction in which a Fund sells a security it does not own but has borrowed in anticipation that the market price of the security will decline. A Fund is obligated to replace the security borrowed by purchasing it on the open market at a later date. If the price of the security sold short increases between the time of the short sale and the time a Fund replaces the borrowed security, the Fund will incur a loss, potentially unlimited in size. Conversely, if the price declines, the Fund will realize a gain, limited to the price at which the Fund sold the security short.

 

Option Transactions – The Funds are subject to equity price risk in the normal course of pursuing their investment objectives and may purchase or sell options to help hedge against risk. When a Fund writes put and call options, an amount equal to the premium received is included in the Statement of Assets and Liabilities as a liability. The amount of the liability is subsequently marked-to-market to reflect the current market value of the option. If an option expires on its stipulated expiration date or if a Fund enters into a closing purchase transaction, a gain or loss is realized. If a written call option is exercised, a gain or loss is realized for the sale of the underlying security and the proceeds from the sale are increased by the premium originally received. As writer of an option, the Funds have no control over whether the option will be exercised and, as a result, retain the market risk of an unfavorable change in the price of the security underlying the written option.

 

Put options are purchased to hedge against a decline in the value of securities held in the Funds’ portfolios. If such a decline occurs, the put options will permit a Fund to sell the securities underlying such options at the exercise price, or to close out the options at a profit. The premium paid for a put or call option plus any transaction costs will reduce the benefit, if any, realized by a Fund upon exercise of the option, and, unless the price of the underlying security rises or declines sufficiently, the option may expire worthless to the Fund. In addition, in the event that the price of the security in connection with which an option was purchased moves in a direction favorable to a Fund, the benefits realized by the Fund as a result of such favorable movement will be reduced by the amount of the premium paid for the option and related transaction costs. Written and purchased options are non-income producing securities. With purchased options, there is minimal counterparty risk to the Fund since these options are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded options, guarantees against a possible default.

 

The notional value of the derivative instruments outstanding as of June 30, 2022, as disclosed in the Schedule of Investments and the amounts realized and changes in unrealized gains and losses on derivative instruments during the period, as disclosed and within the Statements of Operations, serve as indicators of the volume of derivative activity for the Funds.

 

Impact of Derivatives on the Statements of Assets and Liabilities and Statements of Operations

 

The locations on the Statements of Assets and Liabilities of derivative instruments by type of exposure, all of which are not accounted for as hedging instruments under GAAP, are as follows:

 

Dynamic Opportunity Fund

 

Assets:          
      Location of Derivatives on    
Derivative Investment  Primary Risk  Statements of Assets and  Fair Value of Asset 
Type  Exposure  Liabilities  Derivatives 
Put options purchased  Equity Risk  Investment securities, at value  $1,264,240 
Total        $1,264,240 
            
Liabilities:          
      Location of Derivatives on    
Derivative Investment  Primary Risk  Statements of Assets and  Fair Value of Liability 
Type  Exposure  Liabilities  Derivatives 
Call options written  Equity Risk  Written Options, at value  $90,750 
Total        $90,750 

19

 

ACM Funds
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued)
June 30, 2022

 

The following is a summary of the location of derivative investments on the Funds’ Statements of Operations for the six months ended June 30, 2022:

 

Derivative Investment Type  Location of Gain/Loss on Derivative  
Options purchased  Net realized (loss) from investments and foreign currency transactions
Options written  Net realized gain (loss) from options written
Options purchased  Net change in unrealized appreciation (depreciation) on investments and foreign currency translations
Options written  Net change in unrealized appreciation (depreciation) on options written

 

The following is a summary of the Funds realized gain (loss) on derivative investments recognized in the Statements of Operations categorized by primary risk exposure for the six months ended June 30, 2022:

 

Realized gain (loss) on derivatives recognized in the Statements of Operations 
         
   Total for the 
   Six Months Ended 
   June 30, 2022 
   Dynamic Opportunity     
Derivative Investment Type  Fund   Tactical Income Fund 
Options purchased - Equity Risk  $6,307,967   $— 
Options written - Equity Risk   (170,977)   24,177 
Total  $6,136,990   $24,177 
           
Changes in unrealized appreciation (depreciation) on derivatives recognized in the Statements of Operations 
    
   Total for the 
   Six Months Ended 
   June 30, 2022 
   Dynamic Opportunity     
Derivative Investment Type  Fund   Tactical Income Fund 
Options purchased - Equity Risk  $(506,558)  $— 
Option written - Equity Risk   (10,011)   — 
Total  $(516,569)  $— 

 

Offsetting of Financial Assets and Derivative Liabilities –

 

The following table presents the Funds’ liability derivatives available for offset under a master netting arrangement net of collateral pledged for options written as of June 30, 2022.

 

               Gross Amounts Not Offset in the     
Liabilities:              Statements of Assets & Liabilities     
       Gross Amounts                 
       Offset in the   Net Amounts of             
   Gross Amounts of   Statements of   Liabilities Presented             
   Recognized   Assets &   in the Statements of   Financial   Cash Collateral     
Funds  Assets/Liabilities(1)   Liabilities   Assets & Liabilities   Instruments (2)   Received   Net Amount 
Dynamic Opportunity Fund  $90,750   $—   $90,750   $90,750   $—   $— 

 

(1)Written options at value as presented in the Schedule of Investments.

 

(2)The amount is limited to the derivative liability balance and, accordingly, does not include excess collateral pledged.

 

Dividends and Distributions to Shareholders – Dividends from net investment income are declared and distributed annually for the Dynamic Opportunity Fund and declared and paid monthly for the Tactical Income Fund. Distributable net realized capital gains are declared and distributed annually. Dividends from net investment income and distributions from net realized gains are recorded on the ex-dividend date and determined in accordance with federal income tax regulations, which

20

 

ACM Funds
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued)
June 30, 2022

 

may differ from GAAP. These “book/tax” differences are considered either temporary (i.e., deferred losses, capital loss carry forwards) or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the composition of net assets based on their federal tax-basis treatment. Temporary differences do not require reclassification.

 

Federal Income Taxes – The Funds intend to continue to qualify as regulated investment companies by complying with the provisions of the Internal Revenue Code that are applicable to regulated investment companies and to distribute substantially all of their taxable income and net realized gains to shareholders. Therefore, no federal income tax provision has been recorded.

 

The Funds recognize the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. Management has analyzed the Funds’ tax positions and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on returns filed for open tax years ended December 31, 2019 through December 31, 2021, or expected to be taken in the Funds’ December 31, 2022 year-end tax returns. The Funds identify their major tax jurisdictions as U.S. federal, Ohio (Nebraska in prior years), and foreign jurisdictions where the Funds make significant investments. The Funds are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.

 

Expenses – Expenses of the Trust that are directly identifiable to a specific fund are charged to that fund. Expenses, which are not readily identifiable to a specific fund, are allocated in such a manner as deemed equitable, taking into consideration the nature and type of expense and the relative sizes of the funds in the Trust.

 

Indemnification – The Trust indemnifies its officers and the Board for certain liabilities that may arise from the performance of their duties to the Trust. Additionally, in the normal course of business, the Funds enter into contracts that contain a variety of representations and warranties and which provide general indemnities. The Funds’ maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds that have not yet occurred. However, based on experience, the risk of loss due to these warranties and indemnities appears to be remote.

 

Cash and cash equivalents – Cash and cash equivalents are held with a financial institution. The assets of the Funds may be placed in deposit accounts at U.S. banks and such deposits generally exceed Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The FDIC insures deposit accounts up to $250,000 for each accountholder. The Funds maintain cash balances, which, at times, may exceed federally insured limits. The counterparty is generally a single bank rather than a group of financial institutions; thus, there may be a greater counterparty credit risk. The Funds place deposits only with those counterparties which are believed to be creditworthy and there has been no history of loss.

 

3.INVESTMENT TRANSACTIONS

 

For the six months ended June 30, 2022, cost of purchases and proceeds from sales of portfolio securities, other than short-term investments, amounted to $145,460,571 and $114,270,923, respectively, for the Dynamic Opportunity Fund and $164,620,428 and $160,356,445, respectively, for the Tactical Income Fund.

 

4.INVESTMENT ADVISORY AGREEMENT AND TRANSACTIONS WITH RELATED PARTIES

 

Ascendant Capital Management, LLC (the “Advisor”) serves as the Funds’ investment advisor. Pursuant to an advisory agreement with the Trust, on behalf of the Funds, the Advisor, under the oversight of the Board, directs the daily operations of the Funds and supervises the performance of administrative and professional services provided by others. As compensation for its services and the related expenses borne by the Advisor, each Fund pays the Advisor a fee computed and accrued daily and paid monthly, based on the Fund’s average daily net assets and is computed at the annual rate of 1.25% for the Dynamic Opportunity Fund and 1.00% for the Tactical Income Fund. For the six months ended June 30, 2022, the Advisor earned advisory fees of $574,757 and $287,801 for the Dynamic Opportunity Fund and Tactical Income Fund, respectively.

21

 

ACM Funds
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued)
June 30, 2022

 

The Advisor has contractually agreed to reduce its fees and/or absorb expenses of the Dynamic Opportunity Fund and Tactical Income Fund (“Waiver Agreement”) until at least April 30, 2023, to ensure that Total Annual Fund Operating Expenses After Fee Waiver and/or Reimbursement (exclusive of any front-end or contingent deferred loads; brokerage fees and commissions, acquired fund fees and expenses; borrowing costs (such as interest and dividend expense on securities sold short); taxes; and extraordinary expenses, such as litigation expenses (which may include indemnification of Fund officers and Trustees, contractual indemnification of Fund service providers (other than the Advisor))), will not exceed 2.40% and 2.15% of the daily average net assets attributable to Dynamic Opportunity Fund’s Class A and Class I shares, respectively, and 2.25% and 2.00% of the daily average net assets attributable to Tactical Income Fund’s Class A and Class I shares, respectively. The Advisor may seek reimbursement for expenses waived or paid by it during the prior three years; provided, however, that such expenses may only be reimbursed to the extent they were waived or paid after the date of the Waiver Agreement (or any similar agreement) and if recoupment can be achieved within the aforementioned expense limits and expense limits at the time of waiver. The Board may terminate this expense reimbursement arrangement at any time. During the six months ended June 30, 2022, each of the Dynamic Opportunity Fund and the Tactical Income Fund waived $0 in advisory fees pursuant to the Waiver Agreement. There are no recapture balances for either Fund to recoup.

 

Northern Lights Distributors, LLC (the “Distributor”) acts as the Funds’ principal underwriter in a continuous public offering of Fund shares. During the six months ended June 30, 2022, the Distributor received $2,279 and $1,268 in underwriting commissions for sales of Class A shares of Dynamic Opportunity Fund and Tactical Income Fund, respectively, of which $298 and $161 was retained by the principal underwriter or other affiliated broker-dealers.

 

The Trust has adopted, with respect to the Funds, the Trust’s Master Distribution and Shareholder Servicing Plan for the Funds’ Class A shares (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act, to pay for certain distribution activities and shareholder services. The Plan provides a monthly service and/or distribution fee that will be calculated at an annual rate of 0.25% per year of the average daily net assets of each Fund’s Class A shares and paid to the Distributor to be used to pay for distribution and shareholder servicing activities. For the six months ended June 30, 2022, pursuant to the Plan, Class A shares of Dynamic Opportunity Fund and Tactical Income Fund incurred costs of $8,373 and $9,974, respectively.

 

In addition, certain affiliates of the Distributor provide services to the Funds as follows:

 

Ultimus Fund Solutions, LLC (“UFS”)

 

UFS, an affiliate of the Distributor, provides administration, fund accounting, and transfer agent services to the Trust. Pursuant to a separate servicing agreement with UFS, the Funds pay UFS customary fees for providing administration, fund accounting and transfer agency services to the Funds. Certain officers of the Trust are also officers of UFS, and are not paid any fees directly by the Funds for serving in such capacities.

 

Northern Lights Compliance Services, LLC (“NLCS”)

 

NLCS, an affiliate of UFS and the Distributor, provides a Chief Compliance Officer to the Trust, as well as related compliance services, pursuant to a consulting agreement between NLCS and the Trust. Under the terms of such agreement, NLCS receives customary fees from the Funds.

 

BluGiant, LLC (“BluGiant”)

 

BluGiant, an affiliate of UFS and the Distributor, management services for the Funds on an ad-hoc basis. from the Funds. provides EDGAR conversion and filing services as well as print For the provision of these services, BluGiant receives customary fees

 

5.REDEMPTION FEES

 

The Funds may assess a short-term redemption fee of 1.00% of the total redemption amount if shareholders sell their shares after holding them for less than thirty days. The redemption fee is paid directly to the Funds. Please refer to the Statements of Changes in Net Assets for the collected redemption fees.

22

 

ACM Funds
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued)
June 30, 2022

 

6.DISTRIBUTIONS AND TAX COMPONENTS OF CAPITAL

 

The Statements of Assets and Liabilities represents cost for financial reporting purposes. Aggregate cost of investments for federal tax purposes including options purchased and options written is $60,017,088 and $43,046,062, for the Dynamic Opportunity Fund and Tactical Income Fund, respectively, and differs from market value by net unrealized appreciation/ depreciation.

 

   Dynamic Opportunity Fund   Tactical Income Fund 
Gross unrealized appreciation:  $6,095,466   $62,357 
Gross unrealized depreciation:   (97,093)   (1,731,549)
Net unrealized appreciation (depreciation)  $5,998,373   $(1,669,192)

 

The tax character of distributions paid for the fiscal year ended December 31, 2021 and fiscal year ended December 31, 2020 was as follows:

 

   For the year ended December 31, 2021: 
   Ordinary   Long-Term   Exempt   Return     
Portfolio  Income   Capital Gains   Income   of Capital   Total 
Dynamic Opportunity  $—   $2,463,974   $—   $15,510   $2,479,484 
Tactical Income   2,043,660    —    172,599    14,908    2,231,167 
                          
   For the year ended December 31, 2020: 
   Ordinary   Long-Term   Exempt   Return     
Portfolio  Income   Capital Gains   Income   of Capital   Total 
Dynamic Opportunity  $781,718   $2,736,806   $—   $79,803   $3,598,327 
Tactical Income   1,020,700    —    —    58,224    1,078,924 

 

As of December 31, 2021, the components of accumulated earnings/ (deficit) on a tax basis were as follows:

 

   Undistributed   Undistributed   Post October Loss   Capital Loss   Other   Unrealized   Total 
   Ordinary   Long-Term   and   Carry   Book/Tax   Appreciation/   Accumulated 
Portfolio  Income   Gains   Late Year Loss   Forwards   Differences   (Depreciation)   Earnings/(Losses) 
Dynamic Opportunity  $—   $—   $(656,645)  $—   $(697,712)  $21,231,507   $19,877,150 
Tactical Income   —    —    (1,330,467)   (185,477)   (23,978)   (50,727)   (1,590,649)

 

The difference between book basis and tax basis accumulated net realized gain (loss), and unrealized appreciation from investments is primarily attributable to the tax deferral of losses on wash sales and C-Corporation return of capital distributions. In addition, the amount listed under other book/tax differences is primarily attributable to the tax deferral of losses on straddles.

 

Capital losses incurred after October 31 within the fiscal year are deemed to arise on the first business day of the following fiscal year for tax purposes were as follows:

 

   Post October 
   Losses 
Dynamic Opportunity Fund  $656,645 
Tactical Income Fund   1,330,467 

23

 

ACM Funds
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued)
June 30, 2022

 

At December 31, 2021, utilized remaining capital loss carry forwards for federal income tax purposes were as follows:

 

   Non-Expiring         
Portfolio  Short-Term   Long-Term   Total   CLCF Utilized 
Dynamic Opportunity  $—   $—   $—   $— 
Tactical Income   185,477    —    185,477    — 

 

Permanent book and tax differences, primarily attributable to the book/tax basis treatment of net operating losses and distributions in excess, resulted in reclassification for the year ended December 31, 2021 as follows:

 

   Paid     
   In   Accumulated 
   Capital   Earnings (Losses) 
Dynamic Opportunity Fund  $(901,907)  $901,907 
Tactical Income Fund   —    — 

 

7.BENEFICIAL OWNERSHIP

 

The beneficial ownership, either directly or indirectly, of more than 25% of voting securities of a fund creates a presumption of control of the Fund, under Section 2(a)(9) of the 1940 Act. As of June 30, 2022, Charles Schwab held 61.88% and 61.62% of the voting securities for the sole benefit of customers and may be deemed to control the Dynamic Opportunity Fund and Tactical Income Fund, respectively. Persons controlling the Funds can determine the outcome of any proposal submitted to the shareholders for approval, including changes to the Funds’ fundamental policies or the terms of the advisory agreement with the Advisor.

 

8.MARKET AND GEOPOLITICAL RISK

 

The increasing interconnectivity between global economies and financial markets increases the likelihood that events or conditions in one region or financial market may adversely impact issuers in a different country, region or financial market. Securities in the Funds may underperform due to inflation (or expectations for inflation), interest rates, global demand for particular products or resources, natural disasters, climate-change and climate- related events, pandemics, epidemics, terrorism, regulatory events and governmental or quasi-governmental actions. The occurrence of global events similar to those in recent years, such as terrorist attacks around the world, natural disasters, social and political discord or debt crises and downgrades, among others, may result in market volatility and may have long term effects on both the U.S. and global financial markets. It is difficult to predict when similar events affecting the U.S. or global financial markets may occur, the effects that such events may have and the duration of those effects. Any such event(s) could have a significant adverse impact on the value and risk profile of the Funds. The current novel coronavirus (COVID-19) global pandemic and the aggressive responses taken by many governments, including closing borders, restricting international and domestic travel, and the imposition of prolonged quarantines or similar restrictions, as well as the forced or voluntary closure of, or operational changes to, many retail and other businesses, has had negative impacts, and in many cases severe negative impacts, on markets worldwide. It is not known how long such impacts, or any future impacts of other significant events described above, will or would last, but there could be a prolonged period of global economic slowdown, which may impact your investment. Therefore, the Funds could lose money over short periods due to short-term market movements and over longer periods during more prolonged market downturns. During a general market downturn, multiple asset classes may be negatively affected. Changes in market conditions and interest rates can have the same impact on all types of securities and instruments. In times of severe market disruptions, you could lose your entire investment.

 

Please refer to the Funds’ prospectus and statement of additional information for a full listing of risks associated with the Funds’ investment strategies.

24

 

ACM Funds
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued)
June 30, 2022

 

9.NEW ACCOUNTING PRONOUNCEMENTS

 

In October 2020, the Securities and Exchange Commission (the “SEC”) adopted new regulations governing the use of derivatives by registered investment companies (“Rule 18f-4”). The Funds will be required to comply with Rule 18f-4 by August 19, 2022. Once implemented, Rule 18f-4 will impose limits on the amount of derivatives a fund can enter into, eliminate the asset segregation framework currently used by funds to comply with Section 18 of the 1940 Act, treat derivatives as senior securities and require funds whose use of derivatives is more than a limited specified exposure amount to establish and maintain a comprehensive derivatives risk management program and appoint a derivatives risk manager. The Funds are currently evaluating the impact, if any, of this provision.

 

10.SUBSEQUENT EVENTS

 

Subsequent events after the date of the Statements of Assets and Liabilities have been evaluated through the date the financial statements were issued. Management has determined that no events or transactions occurred requiring adjustment or disclosure in the financial statements.

25

 

ACM Funds
EXPENSE EXAMPLES (Unaudited)
June 30, 2022

 

As a shareholder of the Funds, you incur two types of costs: (1) transaction costs, such as sales charges (loads) on purchases and redemption fees; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.

 

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period beginning January 1, 2022 and ending June 30, 2022.

 

Actual Expenses

 

The “Actual Expenses” lines in the table below provide information about actual account values and actual expenses. You may use the information below; together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number provided under the heading “Expenses Paid During Period”.

 

Hypothetical Example for Comparison Purposes

 

The “Hypothetical” lines in the table below provide information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balances or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), or redemption fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

    Beginning Account Ending Account Expenses Paid During
Actual Annualized Value Value Period *
Expenses Expense Ratio 1/1/22 6/30/2022 1/1/2022 - 6/30/2022
Dynamic Opportunity Class A 2.21% $1,000.00 $922.20 $10.54
Dynamic Opportunity Class I 1.96% $1,000.00 $923.40 $9.35
Tactical Income Class A 2.01% $1,000.00 $941.00 $9.67
Tactical Income Class I 1.76% $1,000.00 $943.10 $8.48
         
    Beginning Account Ending Account Expenses Paid During
Hypothetical Annualized Value Value Period *
(5% return before expenses) Expense Ratio 1/1/22 6/30/2022 1/1/2022 - 6/30/2022
Dynamic Opportunity Class A 2.21% $1,000.00 $1,013.83 $11.04
Dynamic Opportunity Class I 1.96% $1,000.00 $1,015.07 $9.79
Tactical Income Class A 2.01% $1,000.00 $1,014.83 $10.04
Tactical Income Class I 1.76% $1,000.00 $1,016.07 $8.79

 

*Expenses are equal to each Fund’s annualized expense ratio, multiplied by the number of days in the period (181) divided by the number of days in the fiscal year (365).

26

 

ACM Funds
Additional Information (Unaudited)
June 30, 2022

 

LIQUIDITY RISK MANAGEMENT PROGRAM

 

The Funds have adopted and implemented a written liquidity risk management program as required by Rule 22e-4 (the “Liquidity Rule”) under the Investment Company Act of 1940, as amended. The program is reasonably designed to assess and manage the Funds’ liquidity risk, taking into consideration, among other factors, the Funds’ investment strategies and the liquidity of their portfolio investments during normal and reasonably foreseeable stressed conditions; their short and long-term cash flow projections; and their cash holdings and access to other funding sources.

 

During the six months ended June 30, 2022, the Trust’s Liquidity Risk Management Program Committee (the “Committee”) reviewed the Funds’ investments and determined that the Funds held adequate levels of cash and highly liquid investments to meet shareholder redemption activities in accordance with applicable requirements. Accordingly, the Committee concluded that (i) the Funds’ liquidity risk management program is reasonably designed to prevent violations of the Liquidity Rule and (ii) the Funds’ liquidity risk management program has been effectively implemented.

27

 

PRIVACY NOTICE

  

NORTHERN LIGHTS FUND TRUST III

 

Rev. February 2014

 

FACTS WHAT DOES NORTHERN LIGHTS FUND TRUST III DO WITH YOUR PERSONAL INFORMATION?

 

Why? Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.

 

What?

The types of personal information we collect and share depend on the product or service you have with us. This information can include:

 

■         Social Security number and income

 

■         assets, account transfers and transaction history

 

■         investment experience and risk tolerance

 

When you are no longer our customer, we continue to share your information as described in this notice.

 

How? All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons Northern Lights Fund Trust III chooses to share and whether you can limit this sharing.

 

Reasons we can share your personal information Does Northern Lights
Fund Trust III share?		 Can you limit this sharing?
For our everyday business purposes–
such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus		 YES NO
For our marketing purposes–
to offer our products and services to you		 NO We do not share
For joint marketing with other financial companies NO We do not share
For our affiliates’ everyday business purposes–information about your transactions and experiences NO We do not share
For our affiliates’ everyday business purposes–information about your creditworthiness NO We do not share
For our affiliates to market to you NO We do not share
For nonaffiliates to market to you NO We do not share

 

Questions?   Call 1-888-339-4230

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What we do

How does Northern Lights Fund Trust III protect my personal information?

To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings.

 

Our service providers are held accountable for adhering to strict policies and procedures to prevent any misuse of your nonpublic personal information.

 

How does Northern Lights Fund Trust III collect my personal information?

We collect your personal information, for example, when you

 

■        open an account or give us contact information

 

■        provide account information or give us your income information

 

■        make deposits or withdrawals from your account

 

We also collect your personal information from other companies.

 

Why can’t I limit all sharing?

Federal law gives you the right to limit only

 

■         sharing for affiliates’ everyday business purposes—information about your creditworthiness

 

■         affiliates from using your information to market to you

 

■         sharing for nonaffiliates to market to you

 

State laws and individual companies may give you additional rights to limit sharing

 

 

Definitions
Affiliates

Companies related by common ownership or control. They can be financial and nonfinancial companies.

 

■        Northern Lights Fund Trust III does not share with our affiliates.

 

Nonaffiliates

Companies not related by common ownership or control. They can be financial and nonfinancial companies.

 

■        Northern Lights Fund Trust III does not share with nonaffiliates so they can market to you.

 

Joint marketing

A formal agreement between nonaffiliated financial companies that together market financial products or services to you.

 

■       Northern Lights Fund Trust III does not jointly market.

 

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PROXY VOTING POLICY

 

Information regarding how the Funds voted proxies relating to portfolio securities for the most recent twelve month period ended June 30 as well as a description of the policies and procedures that the Funds use to determine how to vote proxies is available without charge, upon request, by calling 1-844-798-3833 or by referring to the Securities and Exchange Commission’s (“SEC”) website at http://www.sec.gov.

 

PORTFOLIO HOLDINGS

 

Each Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT, within sixty days after the end of the period. Form N-PORT reports are available at the SEC’s website at www.sec.gov. The information on Form N-PORT is available without charge, upon request, by calling 1-844-798-3833.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INVESTMENT ADVISOR
Ascendant Capital Management, LLC
10866 Wilshire Blvd., Suite 1600
Los Angeles, CA 90024
 
ADMINISTRATOR
Ultimus Fund Solutions, LLC
225 Pictoria Drive, Suite 450
Cincinnati, OH 45246
 
 
 
 
 
ACM-SA22

 

 

(b)Not Applicable

 

Item 2. Code of Ethics.

 

(a) The registrant has, as of the end of the period covered by this report, adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, and principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party.

 

(c) During the period covered by this report, there were no amendments to any provision of the code of ethics.

 

(d) During the period covered by this report, there were no waivers or implicit waivers of a provision of the code of ethics.

 

Item 3. Audit Committee Financial Expert. Not applicable.

 

Item 4. Principal Accountant Fees and Services. Not applicable.

 

Item 5. Audit Committee of Listed Companies. Not applicable to open-end investment companies.

 

Item 6. Schedule of Investments. Schedule of investments in securities of unaffiliated issuers is included under Item 1.

 

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Funds. Not applicable to open-end investment companies.

 

Item 8. Portfolio Managers of Closed-End Management Investment Companies. Not applicable to open-end investment companies.

 

Item 9. Purchases of Equity Securities by Closed-End Funds. Not applicable to open-end investment companies.

 

Item 10. Submission of Matters to a Vote of Security Holders. None

 

Item 11. Controls and Procedures.

 

(a)       Based on an evaluation of the Registrant’s disclosure controls and procedures as of a date within 90 days of filing date of this Form N-CSR, the principal executive officer and principal financial officer of the Registrant have concluded that the disclosure controls and procedures of the Registrant are reasonably designed to ensure that the information required in filings on Form N-CSR is recorded, processed, summarized, and reported by the filing date, including that information required to be disclosed is accumulated and communicated to the Registrant’s management, including the Registrant’s principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

 

(b)       There were no significant changes in the Registrant’s internal control over financial reporting that occurred during the Registrant’s last fiscal half-year that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

 

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies. Not applicable to open-end investment companies.

 

Item 13. Exhibits.

 

(a)(1) Not applicable.

 

(a)(2) Certifications required by Section 302 of the Sarbanes-Oxley Act of 2002 (and Item 11(a)(2) of Form N-CSR) are filed herewith.

 

(a)(3) Not applicable for open-end investment companies.

 

(b)       Certifications required by Section 906 of the Sarbanes-Oxley Act of 2002 (and Item 11(b) of Form N-CSR) are filed herewith.

 

 

 

 

 

 

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

(Registrant) Northern Lights Fund Trust III

 

By (Signature and Title)

/s/ Eric Kane

Eric Kane, Principal Executive Officer/President

 

Date 9/7/22

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By (Signature and Title)

/s/ Eric Kane

Eric Kane, Principal Executive Officer/President

 

Date 9/7/22

 

 

By (Signature and Title)

/s/ Brian Curley

Brian Curley, Principal Financial Officer/Treasurer

 

Date 9/7/22