# MATRIX 360 DISTRIBUTORS, LLC X-17A-5 (2022-03-31) — Broker-dealer annual report - Company: MATRIX 360 DISTRIBUTORS, LLC - Form: X-17A-5 - Filed: 2022-03-31 - Period: 2021-12-31 - Accession: 0001534874-22-000005 - CIK: 1534874 - File #: 8-69013 - Type: Broker-dealer - Material weakness: No - Auditor: BBD, LLP - Auditor location: PHILADELPHIA, PA - Contact: MILLICENT WALKER - Phone: 404-428-0580 - Email: millicent.walker@m3sixty.net - Website: m3sixty.net - Signed by: MILLICENT E. WALKER (CFO) Original filing: https://www.sec.gov/Archives/edgar/data/1534874/000153487422000005/SECAUDIT2021.pdf --- {0}------------------------------------------------ **Matrix 360 Distributors, LLC Financial Statements and Supplemental Schedules Pursuant to SEC Rule 17a-5** **December 31, 2021** This report is deemed CONFIDENTIAL in accordance with Rule 17a-5(e)(3) under the Securities and Exchange Act of 1934. A statement of financial condition, bound separately, has been filed with t h e Securities and Exchange Commission simultaneously herewith as a Public Document. {1}------------------------------------------------ ## **Table of Contents** | December 31, 2021 | | | |-------------------|--|--| |-------------------|--|--| | ANNUAL
AUDITED
FOCUS
REPORT
FACING
PAGE1-2 | | |-----------------------------------------------------------|--| | | | ## REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON THE FINANCIAL STATEMENTS.............................................................................................................. 3 ## FINANCIAL STATEMENTS | of
Financial
Statement
Condition 4 | | |-------------------------------------------------------------------------------------------------------------------|---| | 5
Statement
of
Operations | | | Member's
Statement
of
Changes
in
Equity
| 6 | | Statement
of
Changes
in
Liabilities
Subordinated
to
Claims
of
General
Creditors
| 7 | | Flows, 8
Statement
of
Cash | | | Statements9-10
Notes
to
Financial | | ### SUPPLEMENTARY INFORMATION | Schedule I-Computation
of
Net
Capital
Under
Rule
15c3-1
of
the
Securities
and
Exchange
Commission
| 12-13 | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------| | Schedule II-Computation
of the Reserve
Requirements
Under
for Determination
Commission14
Rule 15c3-3
of
the
Securities
and
Exchange | | | 15c3-314
-Information
Schedule
III
Relating
to
Possession
or
Control
Under | | | 15
of
Independent
Report
Registered
Public
Accounting
Firm
Exemption
Report
Review | | | 16
Exemption
Report | | | | | {2}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 | OMB APPROVAL | |---------------------------| | OMB Number: 3235-0123 | | Expires: Oct. 31, 2023 | | Estimated average burden | | hours ner response:
12 | ## ANNUAL REPORTS FORM X-17A-5 PART III | SEC FILE NUMBER | | |-----------------|--| | 8-69013 | | FACING PAGE Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 | FILING FOR THE PERIOD BEGINNING | 01/01/21
AND FNDING | | 12/31/21 | | |---------------------------------|------------------------|--|----------|--| | | MM/DD/YY | | MM/DD/YY | | A. REGISTRANT IDENTIFICATION # NAME OF FIRM: Matrix 360 Distributors, LLC TYPE OF REGISTRANT (check all applicable boxes): Broker-dealer □ Check here if respondent is also an OTC derivatives dealer ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) ## 4300 Shawnee Mission Parkway, Suite 100 | | (No. and Street) | | | | |---------------------------------------------------------------------------------------|--------------------------------|--------------------------------------------|------------------------------|--| | Fairway | KS | | 66205 | | | (City) | (State) | | (Zip Code) | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | Millicent Walker | 404-428-0580 | | Millicent.Walker@m3sixty.net | | | (Name) | (Area Code - Telephone Number) | (Email Address) | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
BBD, LLP | | | | | | (Name - if individual, state last, first, and middle name) | | | | | | 1835 Market Street, 3rd Floor | Philadelphia | PA | 19103 | | | (Address) | (City) | (State) | (Zip Code) | | | 10/14/2003 | | 552 | | | | (Date of Registration with PCAOB)(if applicable) | | (PCAOB Registration Number, if applicable) | | | | | FOR OFFICIAL USE ONLY | | | | \* Claims for exemption from the requirement that the annual reports of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-5(e)(1)(ii), if applicable. Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. {3}------------------------------------------------ #### OATH OR AFFIRMATION | Anthony V. DeMarino | | swear (or affirm) that, to the best of my knowledge and belief, the | |----------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------| | tinancial report pertaining to the firm of Matrix 360 Distributors, LLC
12/31 | | as of | | | | 2 021 , is true and correct. I further swear (or affirm) that nefther the company nor any | | | | partner, officer, director, or equivalent person, as the case may proprietary interest in any account classfied solely | | as that of a customer. | NOTARY PUBLIC - State of Kansas
Signature:
DANIELLE È. HUMBIRD
Wy Apple Expires -09-25
Title: | | | | President | | Notary Public #### This filing\*\* contains (check all applicable boxes): - (a) Statement of financial condition. - □ (b) Notes to consolidated statement of financial condition. - | {c} Statement of income (loss) or, if there is other comprehensive income in the period(s) presented, a statement of comprehensive income (as defined in § 210.1-02 of Regulation S-X). - (d) Statement of cash flows. - = (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - = (f) Statement of changes in liabilities subordinated to claims of creditors. - [ (g) Notes to consolidated financial statements. - = (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. - | (i) Computation of tangible net worth under 17 CFR 240.18a-2. - □ {}) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - [] (k) Computation for determination of security-based swap reserve requirement to Exhibit B to 17 CFR 240.15c3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable. - | (I) Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3. - | (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - □ (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable. - | worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17 CFR 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences exist. - □ (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - | (q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. - | (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - | (t) Independent public accountant's report based on an examination of the statement of financial condition. - (u) Independent public accountant's report based on an examination of the financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. - | (v) Independent public accountant s report based on an examination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - | (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - പ (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.17a-12, as applicable. - □ (y) Report describing any material inadequacies found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). - ロ (z) Other: \*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(d)(2), as applicable. {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** #### **To the Member of Matrix 360 Distributors, LLC** #### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of Matrix 360 Distributors, LLC (the *"Company"*) as of December 31, 2021, and the related statements of operations, changes in member's equity, changes in liabilities subordinated to claims of general creditors and cash flows for the year then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. #### **Auditor's Report on Supplemental Information** The supplemental information contained in Schedule I, Computation of Net Capital Under Rule 15c3-1 of the Securities and Exchange Commission, Schedule II, Computation for Determination of Reserve Requirements Under Rule 15c3-3 of the Securities and Exchange Commissions and Schedule III, Information Relating to Possession or Control Requirements Under Rule 15c3-3 of the Securities and Exchange Commission have been subjected to audit procedures performed in conjunction with the audit of the Company's financial statements. The supplemental information is the responsibility of the Company's management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with 17 C.F.R. §240.17a-5. In our opinion, the supplemental information contained in Schedule I, II, III is fairly stated, in all material respects, in relation to the financial statements as a whole. $$\mathsf{gSt}\_1\mathsf{BS}\_1$$ **BBD, LLP** *We have served as Matrix 360 Distributors, LLC's auditor since 2020.* **Philadelphia, Pennsylvania March 31, 2022** {5}------------------------------------------------ ## **Statement of Financial Condition** **December 31, 2021** ## **Assets** | Cash
and
cash
equivalents
Fees
receivable
Other
assets | \$
91,401
9,505
16,815 | |-----------------------------------------------------------------------------|----------------------------------| | Total
assets | \$
_________
117,721 | | Liabilities and Member's Equity | | | Liabilities | | | Unearned Revenue
Accrued expenses
Due to Affiliate | \$
19,440
1,350
7,500 | | Total
liabilities | _________
28,290
_________ | | Member's Equity | 89,431
_________ | | Total liabilities and member's equity | \$
117,721 | The accompanying notes are an integral part of these f1nancial statements. ' ' ' {6}------------------------------------------------ ## **Matrix 360 Distributors, LLC Statement of Operations For the Year Ended December 31, 2021** #### **Revenue** | Distribution fees
Commissions | \$ | 97,670
80 | |-------------------------------------------|--------|--------------| | | | | | Total
revenue | | 97,750 | | | | | | Expenses | | | | Compensation and
benefits | | 20,400 | | Bad debt expense
–
affiliated party | | 79,577 | | fees
Professional | | 19,298 | | Regulatory
fees
and
expenses | | 10,908 | | Accounting fees | | 9,000 | | expense
Licenses | | 8,500 | | Miscellaneous expense | | 5,481 | | Total
expenses | 73,587 | 153,164 | | Net
loss | \$ | (55,414) | {7}------------------------------------------------ # **Matrix 360 Distributors, LLC Statement of Changes in Member's Equity** **For the Year Ended December 31, 2021** | Member's equity at
January 1, 2021 | \$
144,845 | |-----------------------------------------|---------------| | Net loss | (55,414) | | Member's equity at
December 31, 2021 | \$
89,431 | {8}------------------------------------------------ ## **Statement of Changes in Liabilities Subordinated to Claims of General Creditors For the Year Ended December 31, 2021** | Subordinated
borrowings
at
January
1,
2021 | \$
_ | |-----------------------------------------------------------|---------| | Increases: | _ | | Decreases: | _ | | | | | Subordinated
borrowings
at
December
31, 2021 | \$
_ | {9}------------------------------------------------ # **Matrix 360 Distributors, LLC Statement of Cash Flows For the Year Ended December 31, 2021** | Cash
flows
provided
by
operating
activities:
Net
loss
Adjustments
to
reconcile
net
income
to
net
cash | \$
( | 55,414) | |----------------------------------------------------------------------------------------------------------------------------------------------------|---------|---------| | used
for
operating
activities: | | | | Bad debt expense | | 79,577 | | Changes
in
assets
and
liabilities: | | | | Increase in fees
receivable | ( | 2,904) | | Increase
in due
from
affiliate | ( | 9,341) | | Increase in other
assets | ( | 16,476) | | Increase in unearned income | | 19,440 | | Increase in accrued
expenses | | 1,350 | | Increase in due
to
affiliate | | 7,500 | | Net
cash
provided
by
operating
activities | | 23,732 | | Net
increase
in
cash
and
cash
equivalents | | 23,732 | | Cash
and
cash
equivalents
beginning
of
year | | 67,669 | | Cash
and
cash
equivalents
end
of
year | \$ | 91,401 | {10}------------------------------------------------ #### 1. Organization Matrix 360 Distributors, LLC (the "Company") is a Delaware limited liability company that is a registered broker-dealer with the Securities and Exchange Commission ("SEC") and the Financial Industry Regulatory Authority ("FINRA"). The Company was approved by FINRA to operate as a registered broker-dealer in June 2013. The Company and an affiliate, M3Sixty Administration, LLC, are wholly owned by Matrix 360 Holdings, LLC. M3Sixty Administration, LLC provides personnel support services to the Company. The cost of these services is reimbursed by the Company under an expense sharing agreement between M3Sixty Administration, LLC and the Company. The Company has agreed to limit its business to the distribution of registered investment company shares. ### 2. Summary of Significant Accounting Policies *The following are the significant accounting policies followed by the Company:* *Revenue* -Mutual fund service fees and distribution fees are recognized when earned. Contracts with each client itemize underwriting, distribution and compliance services and fee schedules that are provided to mutual funds. Clients are assessed an annual base fee along with a bps structure, along with an advertising review fee. The annual base fee is amortized over a one year period based on the contract renewal date. Payments received in advance of the contract renewal date are recorded as unearned revenue on the Statement of Financial Condition. The basis point fee is calculated based on the prior month's average net assets and billed in arrears. Management has determined that the performance obligation has been met at the end of each month. *Income taxes-* As a single member limited liability company, the Company does not incur any liability for federal or state income taxes because all income, deductions and credits are reportable by its member. The Company recognizes and discloses uncertain tax positions in accordance with accounting principles generally accepted in the United States of America (GAAP). As of, and during, the year ended December 31, 2021 the Company did not have liability for unrecognized tax benefits. *Use of estimates-* The preparation of financial statements in conformity with U. S. generally accepted accounting principles 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 may differ from those estimates and assumptions. *Subsequent events* - Management has evaluated the impact of all subsequent events through March 26, 2022 the date the financial statements were available to be issued and has determined that there were no subsequent eventsrequiring disclosure in these financial statements. #### 3. Concentration of Credit Risk The Company is engaged in brokerage and distribution activities in which counterparties are primarily mutual fund companies. In the event counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the counterparty or issuer of the {11}------------------------------------------------ **Notes to Financial Statements (Continued) December 31, 2021** financial product. 4. Related Parties The Company paid \$1,700 a month to M3Sixty Administration, LLC for personnel support services and is recorded as Compensation and benefits on the Statement of Operations. 5. Net Capital Requirements The Company is a member of FINRA and is subject to the SEC Uniform Net Capital Rule 15c3-l. This Rule requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. Net capital and the related net capital ratio may fluctuate on a daily basis. At December 31, 2021 the Company had net capital of \$63,111 which was \$58,111 in excess of its required net capital of \$5,000. The Company's aggregate indebtedness net capital ratio was 0.45 to 1. 6. Computation for Determination of Reserve Requirements The Company operates in accordance with the exemptive provisions of paragraph (k)(1) of SEC Rule 15c3-3. No customer accounts are maintained and transactions, if any, are limited to sales and redemption of shares of registered investment companies and/or variable annuities. 7. Recently Issued Accounting Pronouncements There were no applicable recently issued accounting pronouncements applicable to the business. {12}------------------------------------------------ Supplementary Information {13}------------------------------------------------ **Computation of Net Capital Under Rule 15c3-1** ## **of the Securities and Exchange Commission** **December 31, 2021 Schedule I** | COMPUTATION OF
NET
CAPITAL | | |---------------------------------------------------------------------------------------------------------------------|--------------| | Total
member's
equity | \$
89,431 | | Deduct
member's
equity
not
allowable
for
Net
Capital: | | | Total
member's
equity
qualified
for
Net
Capital | 89,431 | | Deductions
and/or
charges:
Non-allowable
assets: | | | Fees
receivable | 9,505 | | Other
assets | 16.815 | | Total
non-allowable
assets | 26,320 | | Net
Capital
before
haircuts
on
securities
positions | 63,111 | | Trading
and
investment
securities: | | | | | | Net
Capital | \$
63,111 | | COMPUTATION
OF
AGGREGATE
INDEBTEDNESS | | | | | | Total
aggregate
indebtedness
liabilities
from
Statement
of
Financial
Condition | | | Total
liabilities | \$
28,290 | | Total
aggregate
indebtedness | \$
28,290 | | Percentage
of
aggregate
indebtedness
to
Net
Capital | 45% | | 15c3-1(d)
Percentage
of
debt
to
debt-equity
total
computed
in
accordance
with
Rule | 0% | {14}------------------------------------------------ ## **Computation of Net Capital Under Rule 15c3-1** ## **of the Securities and Exchange Commission** ## **December 31, 2021 Schedule I (continued)** | COMPUTATION OF
BASIC
NET
CAPITAL
REQUIREMENT | | | |----------------------------------------------------------------------------------------------------------------------------------------------------|--------------|--------| | Minimum
Net
Capital
(6
2/3%
of \$28,290) | \$ | 1,886 | | Minimum
dollar
Net
Capital
requirement
of
reporting
broker
or
dealer
and
minimum
Net
Capital
requirement | \$ | 5,000 | | Net
Capital
requirement | \$ | 5,000 | | Excess
Net
Capital | \$ | 58,111 | | 120%
Net
Capital
less
greater
of
10%
of
aggregate
indebtedness or
of
minimum
net
capital | \$ | 57,111 | | RECONCILIATION
BETWEEN COMPUTATION OF
ANNUAL
AUDIT
REPORT
AND
COMPUTATION IN
COMPANY'S
UNAUDITED
FOCUS
REPORT | | | | Net capital as reported on the unaudited Form X-17A-5 as of December 31, 2021 | \$
63,111 | | | Audit adjustment to bad debt expense | 79,577 | | | Audit adjustment to non-allowable assets | (79,577) | | | Net capital
as reported above | \$
63,111 | | {15}------------------------------------------------ # **Matrix 360 Distributors, LLC Computation for Determination of Reserve Requirements Under Rule 15c3-3 of the Securities and Exchange Commission December 31, 2021** Schedule II The Company is exempt from the provisions of Rule 15c3-3 in accordance with Section (k)(1). The company does not hold funds or securities for, or owe money or securities to, customers. ## **Matrix 360 Distributors, LLC** ## **Information Relating to Possession or Control Requirements Under Rule 15c3-3 of the Securities and Exchange Commission December 31, 2021** , Schedule III The Company is exempt from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934 pursuant to paragraph (k)(1) of the rule. The Company did not maintain possession or control of any customer funds or securities. {16}------------------------------------------------ ![](_page_16_Picture_0.jpeg) ### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** #### **To the Member of Matrix 360 Distributors, LLC** We have reviewed management's statement, included in the accompanying Schedule III, Information Relating to Possession or Control Requirements under Rule 15c3-3 of the Securities and Exchange Commission as of December 31, 2021 in which (1) Matrix 360 Distributors, LLC (the "*Company*") identified the following provisions of 17 C.F.R. §15c3-3(k) under which the Company claimed an exemption from 17 C.F.R. §240.15c3-3: (paragraph (k)(1)) (the "exemption provisions") and (2) the Company stated that it met the identified exemption provision throughout the most recent fiscal year without exception. The Company's management is responsible for compliance with the exemption provision and its statement. Our review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included inquiries and other required procedures to obtain evidence about the Company's compliance with the exemption provision. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statement. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to management's statement referred to above for it to be fairly stated, in all material respects, based on the provisions set forth in paragraph (k)(1) of Rule 15c3-3 under the Securities Exchange Act of 1934. **BBD, LLP** **Philadelphia, Pennsylvania March 31, 2022** {17}------------------------------------------------ ## Matrix 360 Distributors, LLC Exemption Report December 31, 2021 Matrix 360 Distributors, LLC (the "Company") is a registered broker-dealer subject to Rule 17a-5 promulgated by the Securities and Exchange Commission (17 C.F.R. 240.17a-5, "Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by 17 C.F.R. 240.17a-5(d)(1) and (4). To the best of its knowledge and belief, the Company states the following: - (1) The Company claimed an exemption from 17 C.F.R. 240.15c3-3 under the provisions of 17 C.F.R 240.15c3-3(k)(1) - (2) The Company met the identified exemption provisions in 17 C.F.R. 240.15c3-3(k)(1) throughout the most recent fiscal year without exception Matrix 360 Distributors, LLC I, Anthony V. DeMarino, affirm that, to my best knowledge and belief, this Exemption Report is true and correct By: Title: President Date: March 15, 2022 ![](_page_17_Picture_9.jpeg) Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.