# MATRIX 360 DISTRIBUTORS, LLC X-17A-5 (2024-02-29) — Broker-dealer annual report - Company: MATRIX 360 DISTRIBUTORS, LLC - Form: X-17A-5 - Filed: 2024-02-29 - Period: 2023-12-31 - Accession: 0001534874-24-000005 - CIK: 1534874 - File #: 8-69013 - Type: Broker-dealer - Material weakness: No - Auditor: Tait Weller & Baker, LLP - Auditor location: Philadelphia, PA - Contact: John Williams - Phone: 404-402-3193 - Signed by: John Williams (PEO/CCO) Original filing: https://www.sec.gov/Archives/edgar/data/1534874/000153487424000005/m3sixty17a5dec2023.pdf --- {0}------------------------------------------------ # **Matrix 360 Distributors, LLC** **Financial Statements and Supplemental Schedules Pursuant to SEC Rule 17a-5** **December 31, 2023** *This report is deemed in accordance with Rule 17a-5(e)(3) under the Securities and Exchange Act of 1934.* {1}------------------------------------------------ # **Matrix 360 Distributors, LLC** # **Table of Contents** | SEC FACING PAGE
3 | |---------------------------------------------------------------------------------------------| | REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
5 | | Financial Statements
6 | | Statement
of Financial Condition7 | | Statement
of
Operations
8 | | Statement of Changes in Member's Equity9 | | Statement of Changes
in Liabilities
Subordinated
to Claims of General Creditors10 | | Statement
of
Cash
Flows
11 | | Notes
to
Financial
Statements12 | | Supplemental
Information

14 | | Computation
of Net Capital Under Rule 15c3-115 | | Computation for Determination of Reserve
Requirements Under
Rule
15c3-3
17 | | Information Relating to Possession
or Control Requirements Under
Rule
15c3-3
17 | | REPORT
OF
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING
FIRM
18 | | Exemption Report
19 | {2}------------------------------------------------ {3}------------------------------------------------ | JOHN WILLIAMS | swear (or affirm) that, to the best of my knowledge and belief, the | |-------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------| | financial report pertaining to the firm of Matrix 360 Distributors, LLC | as of | | 12/31 | 2 023 | | | partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely | ![](_page_3_Picture_2.jpeg) - - - - - - - - - - - - - - - - - - - - - - - - - - - {4}------------------------------------------------ ![](_page_4_Picture_1.jpeg) #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** #### **To the Member and Manager Matrix 360 Distributors, LLC Fairway, Kansas** #### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of Matrix 360 Distributors, LLC as of December 31, 2023, 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 Matrix 360 Distributors, LLC as of December 31, 2023, 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 Matrix 360 Distributors, LLC's management. Our responsibility is to express an opinion on Matrix 360 Distributors, LLC'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 Matrix 360 Distributors, LLC 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 have served as Matrix 360 Distributors, LLC's auditor since 2023. 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 on pages 15, 16, and 17 has been subjected to audit procedures performed in conjunction with the audit of Matrix 360 Distributors, LLC's financial statements. The supplemental information is the responsibility of Matrix 360 Distributors, LLC'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 on pages 15, 16, and 17 is fairly stated, in all material respects, in relation to the financial statements as a whole. **TAIT, WELLER & BAKER LLP** **Philadelphia, Pennsylvania February 28, 2024** {5}------------------------------------------------ **Financial Statements** {6}------------------------------------------------ ## **Matrix 360 Distributors, LLC Statement of Financial Condition December 31, 2023** ### **Assets** | Cash | \$
76,183 | |--------------------|--------------| | Fees
receivable | 15,122 | | Due from Affiliate | 11,846 | | Other
assets | 17,980 | | | | | Total
assets | \$121,131 | ## **Liabilities and Member's Equity** ### **Liabilities** | Accrued expenses
Unearned Income | \$
4,465
19,440 | |---------------------------------------------------|-----------------------| | Total
liabilities | 23,905 | | Member's
Equity | 97,226 | | Total
liabilities
and
member's
equity | \$
121,131 | {7}------------------------------------------------ # **Matrix 360 Distributors, LLC Statement of Operations** **For the Year Ended December 31, 2023** #### **Revenue** | Distribution and service fees | \$
161,033 | |---------------------------------------|-----------------------| | Total
revenue | 161,033 | | Expenses | | | Professional fees | 67,895 | | Shared expenses | 60,000 | | Regulatory
fees
and
expenses | 33,558 | | Miscellaneous | 15,051 | | Licenses
expense | 13,612
___________ | | Total expenses | 190,116 | | Net
loss | \$
(29,083) | {8}------------------------------------------------ ## **Matrix 360 Distributors, LLC Statement of Changes in Member's Equity For the Year Ended December 31, 2023** | Member's
equity
at
January
1,
2023 | \$
68,309 | |-----------------------------------------------------|--------------| | Capital Contributions | 58,000 | | Net
Loss | (29,083) | | Member's
equity
at
December
31,
2023 | \$
97,226 | {9}------------------------------------------------ ## **Matrix 360 Distributors, LLC Statement of Changes in Liabilities Subordinated to Claims of General Creditors For the Year Ended December 31, 2023** | Subordinated
borrowings
at
January
1,
2023 | \$
_ | |-------------------------------------------------------------|---------| | Increases: | _ | | Decreases: | _ | | | | | Subordinated
borrowings
at
December
31,
2023 | \$
_ | {10}------------------------------------------------ # **Matrix 360 Distributors, LLC Statement of Cash Flows** #### **For the Year Ended December 31, 2023** | Cash flows used in
operating activities:
Net
loss
Adjustments
to
reconcile
net
loss
to
net
cash
used in
operating
activities: | \$ (29,083) | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------| | Changes
in
assets
and
liabilities:
Increase in
fees
receivable
Increase
in
due
from
affiliate
Decrease
in
unearned income
Decrease
in
other assets
Decrease
in
accrued
expenses | (5,699)
(11,846)
(1,525)
776
(11,211) | | Net cash used
in
operating activities | (58,588) | | Cash flows provided by
financing activities | | | Capital contributions | 58,000 | | Net cash provided by
financing activities | 58,000 | | Net
decrease in cash and cash equivalents | (588) | | Cash
and
cash
equivalents
beginning
of
year | 76,771 | | Cash
and
cash
equivalents
end
of
year | \$ 76,183 | {11}------------------------------------------------ ### 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 and related services. ### 2. Summary of Significant Accounting Policies #### *The following are the significant accounting policies followed by the Company:* *Revenue* - Mutual fund service fees, marketing, underwriting 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 can be assessed an annual base fee along with a basis point based on the net assets of the mutual funds, 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 and as such revenue is recognized at a point in time. *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, 2023, the Company did not have liability for unrecognized tax positions. *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 the date the financial statements were issued and has determined that there were no subsequent events requiring disclosure in these financial statements. *Fair Value –* All amounts on the financial statements are presented at fair value. 3. Concentration of Credit Risk The Company is engaged in brokerage and distribution activities in which counterparties are primarily {12}------------------------------------------------ # **Matrix 360 Distributors, LLC Notes to Financial Statements (continued) December 31, 2023** 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 financial product. ### 4. Related Parties The Company has an expense sharing agreement where the parties agree to pay a reasonable fee to the parent Company which are subject to review at any time. These amounts are subject to be waived by the managing member of the parent. The Company received capital contributions of \$58,000 from the Member for the year ended December 31, 2023. The Company paid \$60,000 for the year to M3Sixty Administration, LLC for personnel support services and is recorded as Shared Expenses on the Statement of Operations. At year end, due from affiliate was \$11,846. Also included in fees receivable is \$858 due from a mutual fund sponsored by M3Sixty Administration, LLC. #### 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, 2023 the Company had net capital of \$71,718 which was \$66,718 in excess of its required net capital of \$5,000. The Company's aggregate indebtedness net capital ratio was 0.33 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, variable annuities and related services. 7. Recently Issued Accounting Pronouncements There were no applicable recently issued accounting pronouncements applicable to the business. 8. Commitments and Contingencies The Company may enter into contracts or agreements that contain indemnifications or warranties. Future events could occur that lead to the execution of these provisions against the Company. Based on its history and experience, management considers the likelihood of such an event to be remote; however, the maximum potential exposure is unknown. #### 9. Disaggregation of Revenue The Company's revenues disaggregated by type are: Distribution of \$140,068 and Services \$20,965. {13}------------------------------------------------ **Supplemental Information** {14}------------------------------------------------ # **Matrix 360 Distributors, LLC Computation of Net Capital Under Rule 15c3-1 Of The Securities and Exchange Commission December 31, 2023** *Schedule I* | COMPUTATION OF NET CAPITAL | | |-------------------------------------------------------------------------------------------------------|----------------------| | Total member's equity | \$
97,226 | | Deduct member's equity not allowable for Net Capital: | –––– | | Total member's equity qualified for Net Capital | 97,226 | | Deductions and/or charges:
Non-allowable assets:
Fees receivable | (15,122) | | Due from affiliate
Other assets | (11.846)
(17,980) | | Total
non-allowable
assets | (44,948) | | Other additions | 19,440 | | Net Capital
before haircuts on securities
positions
Trading
and investment
securities: | 71,718 | | Net
Capital | \$
71,718 | | COMPUTATION OF AGGREGATE INDEBTEDNESS | | | Total aggregate indebtedness liabilities from Statement of Financial Condition
Total liabilities | \$
23,905 | | Total aggregate indebtedness | \$
23,905 | | Percentage of aggregate indebtedness to Net Capital | 33.3% | | Percentage of debt to debt-equity total computed in accordance with Rule 15c3-1(d) | 0% | {15}------------------------------------------------ | COMPUTATION OF BASIC NET CAPITAL REQUIREMENT | | |---------------------------------------------------------------------------------------------------|--------------| | Minimum Net Capital (6 2/3% of \$23,905) | \$
1,594 | | 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 | \$
66,718 | | Net Capital less
greater
of 10% of aggregate indebtedness or 120%
of minimum net capital | \$
65,718 | No material differences exist between the computation of net capital presented above and the computation of net capital reported in the Company's unaudited Form X-17A-5, Part IIA filing of December 31, 2023. {16}------------------------------------------------ ## **Matrix 360 Distributors, LLC Computation for Determination of Reserve Requirements Under Rule 15c3-3 Of The Securities and Exchange Commission December 31, 2023** *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, 2023** , *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. {17}------------------------------------------------ ![](_page_17_Picture_1.jpeg) ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** **To the Member and Manager Matrix 360 Distributors, LLC Fairway, Kansas** We have reviewed management's statements, included in the accompanying Matrix 360 Distributors, LLC's Exemption Report, in which (1) Matrix 360 Distributors, LLC identified the following provision of 17 C.F.R. §15c3-3(k) under which Matrix 360 Distributors, LLC claimed an exemption from 17 C.F.R. §240.15c3-3:(k)(1) (the "exemption provisions") and (2) Matrix 360 Distributors, LLC stated that Matrix 360 Distributors, LLC met the identified exemption provision throughout the most recent fiscal year without exception. Matrix 360 Distributors, LLC 's management is responsible for compliance with the exemption provision and its statements. 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 Matrix 360 Distributors, LLC'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 statements. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modificationsthatshould be made to management's statements referred to above for them to be fairly stated, in all material respects, based on the provision set forth in paragraph (k)(1) of Rule 15c3-3 under the Securities Exchange Act of 1934. **TAIT, WELLER & BAKER LLP** **Philadelphia, Pennsylvania February 28, 2024** {18}------------------------------------------------ - - Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.