Get inside Wall Street with StreetInsider Premium. Claim your 1-week free trial here.


  

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 811-21726

 

360 Funds 

(Exact name of registrant as specified in charter)

 

 4300 Shawnee Mission Parkway, Suite 100         Fairway, KS 66205
(Address of principal executive offices) (Zip code)

 

The Corporation Trust Company 

Corporation Trust Center

1209 Orange St. 

Wilmington, DE 19801

 

 (Name and address of agent for service)

 

With Copies To: 

John H. Lively 

Practus, LLP

11300 Tomahawk Creek Parkway, Suite 310 

Leawood, KS 66211

 

 

Registrant's telephone number, including area code: 877-244-6235

 

Date of fiscal year end: 11/30/2020

 

Date of reporting period: 05/31/2020

 

 

 

ITEM 1. REPORTS TO SHAREHOLDERS

 

The Semi-Annual report to Shareholders of the FinTrust Income and Opportunity Fund (the “Fund”), a series of the 360 Funds (the “registrant”), for the period ended May 31, 2020 pursuant to Rule 30e-1 under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30e-1) is filed herewith.

 

 

  

 

FinTrust Income and Opportunity Fund

 

Class A Shares (Ticker Symbol: HROAX)

Institutional Class Shares (Ticker Symbol: HIOIX)

 

A Series of the

360 Funds

 

SEMI-ANNUAL REPORT

 

May 31, 2020

 

Investment Adviser:

 

FinTrust Capital Advisors, LLC

124 Verdae Boulevard, Suite 504

Greenville, SC 29607

 

IMPORTANT NOTE: Beginning on January 1, 2021, as permitted by regulations adopted by the SEC, paper copies of the FinTrust Funds’ shareholder reports will no longer be sent by mail unless you specifically request paper copies of the reports from a FinTrust Fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report. If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive all future reports in paper free of charge. You can inform a FinTrust Fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an e-mail request. Your election to receive reports in paper will apply to all funds held with the FinTrust Fund complex/your financial intermediary.

 

 

TABLE OF CONTENTS

 

 

 

FinTrust Income and Opportunity Fund SEMI-ANNUAL REPORT
INVESTMENT HIGHLIGHTS (Unaudited)  
May 31, 2020  

 

The investment objective of the FinTrust Income and Opportunity Fund (the “Fund”) is total return comprised of income and capital appreciation. To meet its investment objective, the Fund will invest primarily in domestic equity securities that in the opinion of FinTrust Capital Advisors, LLC (the “Adviser”) have above average intellectual property portfolios and other characteristics, like strong earnings and dividend growth that are members of the S&P 1500 Composite, relative to their sector competitors.

 

The Fund will typically invest in issuers that have established markets and operations and generate excess cash flow. The Fund looks for stocks with attributes which suggest they will thrive in good markets and survive potential economic setbacks. The Fund employs detailed quantitative assessments to construct its equity portfolio. Portfolio parameters include, but are not limited to, a quantitative valuation of the strength of the company’s intellectual property portfolio, steady growing earnings, dividend yield with a tendency to raise such yield and availability at reasonable price-earnings ratios. The Fund seeks to invest in stocks that are undervalued by the market, but with strong business models, which may provide for lower levels of market volatility or non-correlated volatility, The Fund also prefers to invest in equity stocks that have options traded on them.

 

The Fund may also invest in companies that are experiencing a “special situation” that makes them undervalued relative to their long-term potential. Developments creating special situations may include new intellectual property developments, intellectual property licensing deals, mergers, spin-offs, litigation resolutions, new products or management changes. The Fund may also invest in convertible securities. The Fund also seeks to generate income for shareholders by selling options against the risk taken by owning common stocks. For example, the Fund intends to sell covered call options on a portion of its stock holdings. This income is designed to, over time, add to portfolio stability and improve returns. The Fund uses an options strategy to limit market exposure and volatility. The extent of option selling will depend upon market conditions and the Adviser’s judgment of the advantages of selling call options on the Fund’s equity investments. Additionally, the Fund will enter into call spreads. A spread is an options position established by purchasing one option and selling another option of the same class, but of a different series.

 

The Fund may be appropriate for investors with long-term time horizons who are not sensitive to short-term losses and want to participate in the long-term growth of the financial markets. The Fund seeks to avoid or minimize the effects of inflation on the portfolio.

 

 

 

The percentages in the above graph are based on the portfolio holdings of the Fund as of May 31, 2020 and are subject to change. For a detailed break-out of holdings by industry and investment type, please refer to the Schedule of Investments and Schedule of Written Options.

 

 

FINTRUST INCOME AND OPPORTUNITY FUND  
SCHEDULE OF INVESTMENTS  
May 31, 2020 (Unaudited)  SEMI-ANNUAL REPORT

 

COMMON STOCK - 83.95% Shares     Value  
       
Beverages - 1.00%              
Ambev SA - ADR   60,000     $ 138,600  
               
Biotechnology - 4.38%              
CRISPR Therapeutics AG (a) (d)   5,000       322,900  
Emergent BioSolutions, Inc. (a)   2,000       166,980  
Gilead Sciences, Inc.   1,500       116,745  
            606,625  
Building Materials - 1.20%              
Builders FirstSource, Inc. (a)   8,000       166,480  
               
Commercial Services - 1.60%              
Quanta Services, Inc.   6,000       221,580  
               
Computers - 2.80%              
Lumentum Holdings, Inc. (a) (d)   5,300       388,596  
               
Diversified Financial Services - 2.16%              
Intercontinential Exchange, Inc.   1,500       145,875  
Nasdaq, Inc.   1,300       153,998  
            299,873  
Energy - Alternate Sources - 2.42%              
First Solar, Inc. (a) (d)   7,200       335,664  
               
Engineering & Construction - 1.28%              
Construction Partners, Inc. (a)   10,000       177,000  
               
Healthcare - Products - 9.17%              
Abbott Laboratories (d)   2,800       265,776  
Inspire Medical Systems, Inc. (a) (d)   3,000       244,620  
Luminex Corp.   4,000       124,640  
Medtronics PLC   3,500       345,030  
Tandem Diabetics Care, Inc. (a) (d)   3,500       291,025  
            1,271,091  
Healthcare - Services - 2.96%              
Centene Corp. (a) (d)   6,200       410,750  
               
Home Builders - 0.60%              
DR Horton, Inc.   1,500       82,950  
               
Internet - 22.89%              
Alibaba Group Holding Ltd. - ADR (a) (d)   3,000       622,170  
Alphabet, Inc. - Class C (a)   300       428,676  
Amazon.com, Inc. (a) (d)   100       244,237  
eBay, Inc. (d)   9,250       421,245  
Facebook, Inc. - Class A (a)   2,700       607,743  
Jumia Technologies AG (a)   20,000       89,800  
NortonLifeLock, Inc.   10,000       227,800  
Snap, Inc. (a)   18,000       340,920  
Vipshop Holdings Ltd. (a)   11,000       190,740  
            3,173,331  

 

 

FINTRUST INCOME AND OPPORTUNITY FUND  
SCHEDULE OF INVESTMENTS  
May 31, 2020 (Unaudited)  SEMI-ANNUAL REPORT

 

COMMON STOCK - 83.95% (continued) Shares     Value  
       
Mining - 4.42%      
Newmont Corp. (d)   4,000     $ 233,880  
Pan American Silver Corp.   5,000       146,500  
Wheaton Precious Metals Corp.   5,400       232,200  
            612,580  
Pharmaceuticals - 4.03%              
Bristol-Myers Squibb Co. (d)   5,000       298,600  
Coherus Biosciences, Inc. (a)   10,000       186,400  
Tilray, Inc. (a) (d)   7,500       73,875  
            558,875  
Retail - 1.08%              
Home Depot, Inc. (d)   600       149,088  
               
Semiconductors - 5.26%              
Inphi Corp. (a)   500       62,835  
NVIDIA Corp.   300       106,506  
NXP Semiconductors NV (d)   2,500       240,250  
Skyworks Solutions, Inc.   2,700       320,058  
            729,649  
Software - 11.44%              
Activision Blizzard, Inc.   2,000       143,960  
Akamai Technologies, Inc. (a) (d)   2,500       264,500  
Domo, Inc. (a)   6,000       151,920  
Dropbox, Inc. (a)   13,000       293,410  
Electronic Arts, Inc. (a) (d)   1,500       184,320  
Slack Technologies, Inc. (a)   5,000       175,250  
Splunk, Inc. (a)   2,000       371,680  
            1,585,040  
Telecommunications - 3.79%              
Ciena Corp. (a) (d)   9,500       524,970  
               
Toys, Games & Hobbies - 1.47%              
Nintendo Co. Ltd. - ADR   4,000       203,360  
               
TOTAL COMMON STOCK (Cost $10,804,371)           11,636,102  
               
EXCHANGE-TRADED FUND - 1.69%              
Equity Fund - 1.69%              
Financial Select Sector SPDR Fund   10,000       234,100  
               
TOTAL EXCHANGE-TRADE FUNDS (Cost $232,276)           234,100  
    Principal          
GOVERNMENT BONDS - 15.00%              
U.S. Treasury Note, 1.375%, due 01/31/2022   500,000       509,961  
U.S. Treasury Note, 2.25%, due 03/31/2021 (e)   250,000       254,248  
U.S. Treasury Note, 2.875%, due 10/31/2020 (e) $ 1,300,000       1,314,372  
               
TOTAL GOVERNMENT BONDS (Cost $2,053,962)           2,078,581  

 

 

FINTRUST INCOME AND OPPORTUNITY FUND  
SCHEDULE OF INVESTMENTS  
May 31, 2020 (Unaudited)  SEMI-ANNUAL REPORT
   

 

OPTIONS PURCHASED - 1.72%                    
          Notional     Exercise          
CALL OPTIONS PURCHASED - 1.16% Contracts 1     Amount     Price     Expiration     Value  
                   
Baxter International, Inc.   20     $ 180,000     $ 90.00       1/15/2021     $ 15,300  
Emergent BioSolutions, Inc.   5       40,000       80.00       6/19/2020       2,250  
Gilead Sciences, Inc.   30       172,500       57.50       1/15/2021       63,225  
Home Depot, Inc.   2       44,000       220.00       6/19/2020       5,580  
J M Smucker Co.   15       150,000       100.00       1/15/2021       26,250  
PepsiCo, Inc.   15       150,000       100.00       1/15/2021       48,112  
TOTAL CALL OPTIONS PURCHASED (Cost $162,466)                                   160,717  
                                       
PUT OPTIONS PURCHASED - 0.56%                                      
                                       
SPDR S&P 500 ETF Trust   50       1,250,000       250.00       9/30/2020       26,750  
SPDR S&P 500 ETF Trust   15       496,500       331.00       9/30/2020       50,850  
TOTAL PUT OPTIONS PURCHASED (Cost $286,123)                                   77,600  
                                       
TOTAL OPTIONS PURCHASED (Cost $448,589)                                   238,317  
                                       
  Shares    
SHORT-TERM INVESTMENTS - 11.60%            
Federated Government Obligations Fund - Institutional Shares, 0.09% (b)   1,607,453     1,607,453  
             
TOTAL SHORT-TERM INVESTMENTS (Cost $1,607,453)         1,607,453  
             
TOTAL INVESTMENTS, AT VALUE (Cost $15,146,651) –  113.96%       $ 15,794,553  
             
OPTIONS WRITTEN, AT VALUE (Premiums $249,253) - (1.82%) (c)         (252,543 )
             
LIABILITIES IN EXCESS OF OTHER ASSETS, NET - (12.14)%         (1,681,966 )
             
NET ASSETS - 100%       $ 13,860,044  

 

(a) Non-income producing security.
(b) Rate shown represents the 7-day effective yield at May 31, 2020, is subject to change and resets daily.
(c) Please refer to the Schedule of Options Written for details of options written.
(d) Subject to call options written by the Fund.
(e) All or a portion of the security is segregated as collateral for options written.

 
 
 
 
 
 
 
 
 
 
 
 

1 Each option contract is equivalent to 100 shares of the underlying common stock or exchange-traded fund. All options are non-income producing.

 
 
 
 
 
 
 
 
 
 
 
 

ADR - American Depositary Receipt
 
 
 
 
 
 
 
 
 
 

Ltd. - Limited
 
 
 
 
 
 
 
 
 
 

NV - Naamloze Vennootschap (Dutch Public Company)
 
 
 
 
 
 
 
 
 

PLC - Public Limited Company
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 

The accompanying notes are an integral part of these financial statements.

 

 

FINTRUST INCOME AND OPPORTUNITY FUND  
SCHEDULE OF OPTIONS WRITTEN  

May 31, 2020 (Unaudited)

 SEMI-ANNUAL REPORT

 

OPTIONS WRITTEN - (1.82)%                    
        Notional     Exercise          
CALL OPTIONS WRITTEN - (1.05)%   Contracts 1     Amount     Price     Expiration     Value  
                     
Abbott Laboratories     10     $ 90,000     $ 90.00       6/19/2020     $ 5,930  
Akamai Technologies, Inc.     10       105,000       105.00       6/19/2020       3,620  
Akamai Technologies, Inc.     5       50,000       100.00       7/17/2020       4,175  
Alibaba Group Holding Ltd.     15       322,500       215.00       6/19/2020       5,325  
Amazon.com, Inc.     1       250,000       2,500.00       7/17/2020       6,770  
Bristol-Myers Squibb Co.     15       93,750       62.50       6/19/2020       690  
Centene Corp.     20       140,000       70.00       6/19/2020       1,800  
Centene Corp.     20       150,000       75.00       9/18/2020       5,000  
Ciena Corp.     15       67,500       45.00       7/17/2020       16,125  
CRISPR Therapeutics AG     20       110,000       55.00       7/17/2020       24,400  
eBay, Inc.     35       140,000       40.00       6/19/2020       18,200  
Electronic Arts, Inc.     8       92,000       115.00       6/19/2020       7,008  
Electronic Arts, Inc.     7       84,000       120.00       6/19/2020       3,934  
First Solar, Inc.     17       85,000       50.00       6/19/2020       1,190  
First Solar, Inc.     15       67,500       45.00       7/17/2020       5,625  
Home Depot, Inc.     5       120,000       240.00       7/17/2020       7,300  
Inspire Medical Systems, Inc.     15       120,000       80.00       6/19/2020       7,500  
Lumentum Holdings, Inc.     10       82,500       82.50       7/17/2020       1,900  
Newmont Corp.     20       130,000       65.00       6/19/2020       1,000  
NXP Semiconductors NV     10       95,000       95.00       6/19/2020       7,800  
Tandem Diabetes Care, Inc.     5       42,500       85.00       6/19/2020       1,510  
Tandem Diabetes Care, Inc.     10       90,000       90.00       6/19/2020       1,500  
Tandem Diabetes Care, Inc.     5       45,000       90.00       7/17/2020       1,650  
Tilray, Inc. - Class 2     50       45,000       9.00       6/19/2020       6,100  
TOTAL CALL OPTIONS WRITTEN (Premiums $90,917)                                     146,052  
                                         
PUT OPTIONS WRITTEN - (0.77)%                                        
                                         
Activision Blizzard, Inc.     10       70,000       70.00       6/19/2020       1,590  
Akamai Technologies, Inc.     10       95,000       95.00       6/19/2020       1,050  
Alibaba Group Holding Ltd. - ADR     10       215,000       215.00       7/17/2020       13,970  
Alphabet, Inc. - Class C     3       391,500       1,305.00       6/19/2020       2,316  
Alphabet, Inc. - Class C     2       270,000       1,350.00       6/19/2020       2,140  
Alphabet, Inc. - Class C     2       280,000       1,400.00       7/17/2020       8,620  
American Express Co.     10       100,000       100.00       6/19/2020       6,590  
Beyond Meat, Inc.     5       60,000       120.00       7/17/2020       5,436  
Builders FirstSource, Inc.     20       40,000       20.00       7/17/2020       2,700  
Builders FirstSource, Inc.     20       42,000       21.00       7/17/2020       3,600  
Builders FirstSource, Inc.     20       36,000       18.00       8/21/2020       2,400  
Builders FirstSource, Inc.     40       80,000       20.00       8/21/2020       8,100  
CRISPR Therapeutics AG     14       84,000       60.00       7/17/2020       6,944  
Facebook, Inc. - Class A     5       105,000       210.00       6/19/2020       1,220  
Gilead Sciences, Inc.     10       75,000       75.00       6/19/2020       1,800  
Home Depot, Inc.     5       110,000       220.00       7/17/2020       1,330  
JPMorgan Chase & Co.     10       100,000       100.00       6/19/2020       5,150  
Lowe's Cos, Inc.     20       250,000       125.00       7/17/2020       8,440  
Medtronic PLC     10       100,000       100.00       7/17/2020       4,975  
Medtronic PLC     10       92,500       92.50       7/17/2020       2,720  
NVIDIA Corp.     4       120,000       300.00       7/17/2020       2,300  
NXP Semiconductors NV     5       50,000       100.00       7/17/2020       4,225  
Quanta Services, Inc.     30       99,000       33.00       8/21/2020       3,750  
Skyworks Solutions, Inc.     10       110,000       110.00       7/17/2020       4,000  
Tilray, Inc. - Class 2     25       18,750       7.50       6/19/2020       1,125  
TOTAL PUT OPTIONS WRITTEN (Premiums $158,336)                                     106,491  
                                         
TOTAL OPTIONS WRITTEN (Premiums $249,253)                                   $ 252,543  

 

1 Each option contract is equivalent to 100 shares of common stock or exchange-traded fund. All options are non-income producing.

 

ADR - American Depositary Receipt

Ltd. - Limited

PLC - Public Limited Company

NV - Naamloze Vennootschap (Dutch Public Company)

 

The accompanying notes are an integral part of these financial statements.

 

 

FINTRUST INCOME AND OPPORTUNITY FUND  
STATEMENT OF ASSETS AND LIABILITIES  
   
May 31, 2020 (Unaudited) SEMI-ANNUAL REPORT

 

Assets:  
Total Investments, at cost $ 15,146,651  
Investments, at  value $ 15,794,553  
Receivables:      
Interest   6,090  
Dividends   3,637  
Investment securities sold   177,254  
Prepaid expenses   3,964  
Total assets   15,985,498  
       
Liabilities:      
Premiums from options written $ 249,253  
Options written, at value $ 252,543  
Cash due to broker   572,265  
Payables:      
Investment securities purchased   1,293,220  
Due to adviser   2,051  
Accrued distribution (12b-1) fees   18  
Due to administrator   4,020  
Accrued expenses   1,337  
Total liabilities   2,125,454  
Net Assets $ 13,860,044  
       
Sources of Net Assets:      
Paid-in capital $ 14,485,919  
Total accumulated deficit   (625,875 )
Total Net Assets $ 13,860,044  
       
       
Class A Shares:      
Net Assets $ 87,715  
Shares Outstanding (Unlimited shares of $0 par value beneficial interest authorized)   9,058  
Net Asset Value Per Share $ 9.68  
       
Maximum Offering Price Per Share (a) $ 10.24  
       
Minimum Redemption Price Per Share (b) $ 9.58  
       
Institutional Class Shares:      
Net Assets $ 13,772,329  
Shares Outstanding (Unlimited shares of $0 par value beneficial interest authorized)   1,405,529  
Net Asset Value, Offering and Redemption Price Per Share $ 9.80  

 

(a) A maximum sales charge of 5.50% is imposed on Class A shares.
(b) Investments in Class A shares made at or above the $1 million breakpoint are not subject to an initial sales charge and may be subject to a 1.00% contingent deferred sales charge (“CDSC”) on shares redeemed within one year from the date of purchase.

 

The accompanying notes are an integral part of these financial statements.

 

 

FINTRUST INCOME AND OPPORTUNITY FUND  
STATEMENT OF OPERATIONS  
   
May 31, 2020 (Unaudited) SEMI-ANNUAL REPORT

 

  For the Six Month  
  Period Ended  
  May 31, 2020  
  (Unaudited)
Investment income:  
        Dividends (net of foreign withholding taxes of $287) $ 32,322  
        Interest   23,178  
               Total investment income   55,500  
       
Expenses:      
Management fees (Note 6)   71,244  
Distribution (12b-1) fees - Class A (Note 6)   113  
Accounting and transfer agent fees and expenses   39,201  
Trustee fees and expenses   12,003  
Interest expense   11,860  
Legal fees   11,507  
Miscellaneous   8,017  
Custodian fees   7,466  
Reports to shareholders   7,420  
Audit fees   7,248  
Pricing fees   6,491  
Liquidity Rule fees   3,590  
Insurance   531  
Registration and filing fees   514  
Total expenses   187,205  
Less: fees waived and expenses absorbed (Note 6)   (64,091 )
Net expenses   123,114  
       
Net investment loss   (67,614 )
       
Realized and unrealized gain (loss):      
Net realized gain (loss) on:      
Investments   (871,589 )
Options written   (315,302 )
Securities sold short   4,691  
Net realized loss on investments, options written and securities sold short   (1,182,200 )
       
Net change in unrealized appreciation on:      
Investments   756,292  
Options written   50,915  
Securities sold short   31  
Net change in unrealized appreciation on investments, options written and securities sold short   807,238  
       
       
Net realized and unrealized loss on investments, options written and securities sold short   (374,962 )
       
Net decrease in net assets resulting from operations $ (442,576 )

 

The accompanying notes are an integral part of these financial statements.

 

 

FINTRUST INCOME AND OPPORTUNITY FUND  
STATEMENTS OF CHANGES IN NET ASSETS  
   
May 31, 2020 (Unaudited) SEMI-ANNUAL REPORT

 

  For the Six Month

Period Ended

May 31, 2020
    For the

Year Ended

November 30, 2019
 
  (Unaudited)      
Increase (decrease) in net assets from:      
Operations:      
Net investment loss $ (67,614 )   $ (33,947 )
Net realized gain (loss) on investments, options written and securities sold short   (1,182,200 )     433,939  
Net change in unrealized appreciation on investments, options written and securities sold short   807,238       114,602  
Net increase (decrease) in net assets resulting from operations   (442,576 )     514,594  
               
Distributions to shareholders from:              
Total distributable earnings - Class A   (3,800 )     (4,448 )
Total distributable earnings - Institutional Class   (401,040 )     (309,072 )
Total distributions   (404,840 )     (313,520 )
               
Capital share transactions (Note 4):              
Increase in net assets from capital share transactions   4,325,729       4,408,857  
               
Increase in net assets   3,478,313       4,609,931  
               
Net Assets:              
Beginning of year/period   10,381,731       5,771,800  
               
End of year/period $ 13,860,044     $ 10,381,731  

 

The accompanying notes are an integral part of these financial statements.

 

 

FINTRUST INCOME AND OPPORTUNITY FUND  
FINANCIAL HIGHLIGHTS  
   
May 31, 2020 (Unaudited) SEMI-ANNUAL REPORT

 

The following tables set forth the per share operating performance data for a share of beneficial interest outstanding, total return, ratios to average net assets and other supplemental data for the years or period indicated.

 

    Class A
    For the Six Month

Period Ended

May 31, 2020
    For the

Year Ended

November 30, 2019
    For the

Year Ended

November 30, 2018
    For the

Year Ended

November 30, 2017
    For the
Period Ended
November 30, 2016 (a)
 
    (Unaudited)                  
Net Asset Value, Beginning of Year/Period   $ 10.71     $ 10.73     $ 11.97     $ 11.03     $ 10.00  
                                         
Investment Operations:                                        
Net investment loss (b)     (0.07 )     (0.06 )     (0.05 )     (0.08 )     (0.11 )
Net realized and unrealized gain (loss) on investments, options written and securities sold short     (0.54 )     0.56       0.04       1.03       1.14  
     Total from investment operations     (0.61 )     0.50       (0.01 )     0.95       1.03  
                                         
Distributions:                                        
From net realized capital gains     (0.42 )     (0.52 )     (1.23 )     (0.01 )      
     Total distributions     (0.42 )     (0.52 )     (1.23 )     (0.01 )      
                                         
Net Asset Value, End of Year/Period   $ 9.68     $ 10.71     $ 10.73     $ 11.97     $ 11.03  
                                         
Total Return (c)     (5.99 )%(d)     5.32 %     (0.31 )%     8.61 %     10.30 %(d)
                                         
Ratios/Supplemental Data                                        
Net assets, end of year/period

(in 000's)
  $ 88     $ 97     $ 92     $ 398     $ 370  
                                         
Ratios of expenses to average net assets:                                        
Before fees waived and expenses absorbed     3.53 %(e)(f)     3.66 %(f)     4.57 %     4.52 %(f)     7.31 %(e)(f)
After fees waived and expenses absorbed     2.41 %(e)(f)     2.22 %(f)     2.20 %     2.26 %(f)     2.30 %(e)(f)
                                         
Ratios of net investment loss:                                        
Before fees waived and expenses absorbed     (2.56 )%(e)(f)     (2.06 )%(f)     (2.84 )%     (2.99 )%(f)     (6.26 )%(e)(f)
After fees waived and expenses absorbed     (1.44 )%(e)(f)     (0.63 )%(f)     (0.47 )%     (0.73 )%(f)     (1.24 )%(e)(f)
                                         
Portfolio turnover rate     159.78 %(d)     192.88 %     280.78 %     94.23 %     29.55 %(d)

 

(a) The FinTrust Income and Opportunity Fund commenced operations on January 21, 2016.
(b) Net investment loss per share is based on average shares outstanding.
(c) Total Return represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends and does not reflect the impact of sales charges.
(f) The ratios include 0.21% of interest expense during the six month period ended May 31, 2020, 0.02% of interest expense during the year ended November 30, 2019, 0.06% of interest expense during the year ended November 30, 2017 and 0.10% of interest expense during the period ended November 30, 2016.

 

The accompanying notes are an integral part of these financial statements.

 

 

FINTRUST INCOME AND OPPORTUNITY FUND  
FINANCIAL HIGHLIGHTS  
   
May 31, 2020 (Unaudited) SEMI-ANNUAL REPORT

 

The following tables set forth the per share operating performance data for a share of beneficial interest outstanding, total return, ratios to average net assets and other supplemental data for the years or period indicated.

 

    Institutional Class
    For theSix Month

Period Ended

May 31, 2020
    For the

Year Ended

November 30, 2019
    For the

Year Ended

November 30, 2018
    For the

Year Ended

November 30, 2017
    For the
Period Ended
November 30, 2016 (a)
 
    (Unaudited)                  
Net Asset Value, Beginning of Year/Period   $ 10.82     $ 10.81     $ 12.02     $ 11.05     $ 10.00  
                                         
Investment Operations:                                        
Net investment loss (b)     (0.06 )     (0.04 )     (0.02 )     (0.05 )     (0.09 )
Net realized and unrealized gain (loss) on investments, options written and securities sold short     (0.54 )     0.57       0.04       1.03       1.14  
     Total from investment operations     (0.60 )     0.53       0.02       0.98       1.05  
                                         
Distributions:                                        
From net realized capital gains     (0.42 )     (0.52 )     (1.23 )     (0.01 )      
     Total distributions     (0.42 )     (0.52 )     (1.23 )     (0.01 )      
                                         
Net Asset Value, End of Year/Period   $ 9.80     $ 10.82     $ 10.81     $ 12.02     $ 11.05  
                                         
Total Return (c)     (5.83 )%(d)     5.57 %     (0.03 )%(g)     8.86 %     10.50 %(d)
                                         
Ratios/Supplemental Data                                        
Net assets, end of year/period (in 000's)   $ 13,772     $ 10,285     $ 5,680     $ 5,578     $ 3,741  
                                         
Ratios of expenses to average net assets:                                        
Before fees waived and expenses absorbed     3.28 %(e)(f)     3.41 %(f)     4.32 %     4.27 %(f)     7.06 %(e)(f)
After fees waived and expenses absorbed     2.16 %(e)(f)     1.97 %(f)     1.95 %     2.01 %(f)     2.05 %(e)(f)
                                         
Ratios of net investment loss:                                        
Before fees waived and expenses absorbed     (2.31 )%(e)(f)     (1.81 )%(f)     (2.59 )%     (2.74 )%(f)     (6.01 )%(e)(f)
After fees waived and expenses absorbed     (1.19 )%(e)(f)     (0.38 )%(f)     (0.22 )%     (0.48 )%(f)     (0.99 )%(e)(f)
                                         
Portfolio turnover rate     159.78 %(d)     192.88 %     280.78 %     94.23 %     29.55 %(d)

  

(a) The FinTrust Income and Opportunity Fund commenced operations on January 21, 2016.
(b) Net investment loss per share is based on average shares outstanding.
(c) Total Return represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends.
(f) The ratios include 0.21% of interest expense during the six month period ended May 31, 2020, 0.02% of interest expense during the year ended November 30, 2019, 0.06% of interest expense during the year ended November 30, 2017 and 0.10% of interest expense during the period ended November 30, 2016.
(g) Total return does not correlate to the total from investment operations due to the timing of certain subscriptions and redemptions in the Fund.

 

The accompanying notes are an integral part of these financial statements.

 

 

FinTrust Income and Opportunity Fund SEMI-ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS 

May 31, 2020 (Unaudited)

 

1.             ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

 

The FinTrust Income and Opportunity Fund (the “Fund”), is a series of 360 Funds (the “Trust”). The Trust was organized on February 24, 2005 as a Delaware statutory trust. The Trust is registered as an open-end management investment company under the Investment Company Act of 1940 (the “1940 Act”). The Fund is a non-diversified Fund. As a non-diversified Fund, it may invest a significant portion of its assets in a small number of companies. The Fund’s investment objective is total return comprised of income and capital appreciation. The Fund’s investment adviser is FinTrust Capital Advisors, LLC (the “Adviser”). The Fund offers two classes of shares, Class A and Institutional Class shares. Each class of shares commenced operations on January 21, 2016. Each class differs as to sales and redemption charges and ongoing fees. Income and expenses (other than class specific), and realized/unrealized gains or losses are allocated to each class based on their relative net asset values.

 

The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements. The Fund is an investment company that follows the accounting and reporting guidance of Accounting Standards Codification Topic 946 applicable to investment companies.

 

a)             Security Valuation – All investments in securities are recorded at their estimated fair value, as described in Note 2.

 

b)            Options – The Fund uses an option strategy in an effort to limit market exposure and volatility. The extent of option selling will depend upon market conditions and the Adviser’s judgment of the advantages of selling call options on the Fund’s equity investments. The sale of put options generates income for the Fund, but exposes it to the risk of declines in the value of the underlying assets. The risk in purchasing options is limited to the premium paid by the Fund for the options. The sale of call options generates income for the Fund, but may limit the Fund's participation in equity market gains. The Fund’s investment adviser seeks to reduce the overall volatility of returns for the Fund by managing a portfolio of options. When the Fund writes or purchases an option, an amount equal to the premium received or paid by the Fund is recorded as a liability or an asset and is subsequently adjusted to the current market value of the option written or purchased. Premiums received or paid from writing or purchasing options which expire unexercised are treated by the Fund on the expiration date as realized gains or losses. The difference between the premium and the amount paid or received on effecting a closing purchase or sale transaction, including brokerage commissions, is also treated as a realized gain or loss. If an option is exercised, the premium paid or received is added to the cost of the purchase or proceeds from the sale in determining whether the Fund has realized a gain or a loss on investment transactions.

 

Purchasing and writing put and call options are highly specialized activities and entail greater than ordinary investment risks. The successful use of options depends in part on the ability of the Adviser to manage future price fluctuations and the degree of correlation between the options and securities markets. By writing put options on equity securities, the Fund gives up the opportunity to benefit from potential increases in the value of the underlying securities above the strike prices of the written put options, but continues to bear the risk of declines in the value of underlying securities held by the Fund. The Fund will receive a premium from writing a covered call option that it retains whether or not the option is exercised. The premium received from the written options may not be sufficient to offset any losses sustained from the volatility of the underlying equity securities over time.

 

c)            Exchange-Traded Funds (“ETFs”) – The Fund may invest in ETFs. An ETF is a fund that holds a portfolio of common stocks or bonds designed to track the performance of a securities index or sector of an index. ETFs are traded on a securities exchange based on their market value. An ETF portfolio holds the same stocks or bonds as the index it tracks, so its market price reflects the value of the index at any given time. ETFs are registered investment companies and incur fees and expenses such as operating expenses, licensing fees, registration fees, trustees’ fees, and marketing expenses, and ETF shareholders, such as the Fund, pay their proportionate share of these expenses. Your cost of investing in the Fund will generally be higher than the cost of investing directly in ETFs. By investing in the Fund, you will indirectly bear fees and expenses charged by the underlying ETFs in which the Fund invests in addition to the Fund’s direct fees and expenses.

 

d)            Federal Income Taxes – The Fund has qualified and intends to continue to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). It is the policy of the Fund to comply with the requirements of the Code applicable to regulated investment companies and to distribute substantially all of its net investment company taxable income and net capital gains. The Fund also intends to distribute sufficient net investment income and net capital gains, if any, so that it will not be subject to excise tax on undistributed income and gains. Therefore, no federal income tax or excise provision is required.

 

 

FinTrust Income and Opportunity Fund SEMI-ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS 

May 31, 2020 (Unaudited)

 

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

 

As of and for the six month period ended May 31, 2020, the Fund did not have a liability for any unrecognized tax expenses. The Fund recognizes interest and penalties, if any, related to unrecognized tax liability as income tax expense in the Statement of Operations. For the six month period ended May 31, 2020, the Fund did not incur any interest or penalties. The Fund identifies its major tax jurisdiction as U.S. Federal.

 

In addition, accounting principles generally accepted in the United States of America (“GAAP”) requires management of the Fund to analyze all open tax years, as defined by the Internal Revenue Service statute of limitations for all major jurisdictions, including federal tax authorities and certain state tax authorities. As of the six month period ended May 31, 2020 and for the year ended November 30, 2019, and for all other open tax years and period (years ended November 30, 2018 and 2017 and the period from January 26, 2016, commencement of operations, through November 30, 2016), the Fund did not have a liability for any unrecognized tax benefits. The Fund has no examinations in progress and is not aware of any tax positions for which it is reasonably possible that the total tax amounts of unrecognized tax benefits will significantly change in the next twelve months.

 

e)            Distributions to Shareholders – Dividends from net investment income and distributions of net realized capital gains, if any, will be declared and paid at least annually. Income and capital gain distributions, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. GAAP requires that permanent financial reporting differences relating to shareholder distributions be reclassified to paid-in capital.

 

f)             Use of Estimates – The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

g)            Non-Diversified Fund – The Fund is a non-diversified fund. In general, a non-diversified fund may invest a greater percentage of its assets in a particular issue and may own fewer securities than other mutual funds. Accordingly, a non-diversified fund is generally subject to the risk that a large loss in an individual issue will cause a greater loss for the fund than it would if the fund was required to hold a larger number of securities or smaller positions.

 

h)           Sales Charges – A maximum sales charge of 5.50% is imposed on certain purchases of Class A shares. A contingent deferred sales charge (“CDSC”) is imposed upon certain redemptions of Class A shares purchased at net asset value in amounts totaling $1 million if the dealer’s commission was paid by the underwriter and the shares are redeemed within one year from the date of purchase. The CDSC will be paid to the Distributor and will be equal to 1.00% of the lesser of (1) the net asset value at the time of purchase of the Class A shares being redeemed; or (2) the net asset value of such shares at the time of redemption. There were no CDSC Fees paid to the Distributor for the six month period ended May 31, 2020.

 

i)             Expenses – Expenses incurred by the Trust that do not relate to a specific fund of the Trust are allocated to the individual funds based on each fund's relative net assets or another appropriate basis as determined by the Board.

 

j)             Other – Investment and shareholder transactions are recorded on trade date. The Fund determines the gain or loss realized from the investment transactions by comparing the original cost of the security lot sold with the net sales proceeds. Dividend income is recognized on the ex-dividend date or as soon as information is available to the Fund and interest income is recognized on an accrual basis. Withholding taxes on foreign dividends have been provided for in accordance with the Fund’s understanding of the applicable country’s tax rules and rates.

 

2.            SECURITIES VALUATIONS

 

Processes and Structure

 

The Fund’s Board of Trustees (the “Board”) has adopted guidelines for valuing securities and other derivative instruments including in circumstances in which market quotes are not readily available, and has delegated authority to the Adviser to apply those guidelines in determining fair value prices, subject to review by the Board.

 

  

FinTrust Income and Opportunity Fund SEMI-ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS 

May 31, 2020 (Unaudited)

 

2.            SECURITIES VALUATIONS (continued)

 

Hierarchy of Fair Value Inputs

 

The Fund utilizes various methods to measure the fair value of most of its investments on a recurring basis. GAAP establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. The three levels of inputs are as follows:

 

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that the 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 on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates, and similar data.

 

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

 

Fair Value Measurements

 

A description of the valuation techniques applied to the Trust's major categories of assets and liabilities measured at fair value on a recurring basis are as follows:

 

Equity securities (common stock) – Securities traded on a national securities exchange (or reported on the NASDAQ national market) are stated at the last reported sales price on the day of valuation. To the extent these securities are actively traded, and valuation adjustments are not applied, they are categorized in Level 1 of the fair value hierarchy. Certain foreign securities may be fair valued using a pricing service that considers the correlation of the trading patterns of the foreign security to the intraday trading in the U.S. markets for investments such as American Depositary Receipts, financial futures, Exchange-Traded Funds, and the movement of the certain indexes of securities based on a statistical analysis of the historical relationship and are categorized in Level 2. Preferred stock and other equities traded on inactive markets or valued by reference to similar instruments are also categorized in Level 2.

 

Money market funds – Money market funds are valued at their net asset value and are categorized as Level 1.

 

Derivative instruments – Listed derivatives, including options, that are actively traded, are valued based on quoted prices from the exchange and categorized in Level 1 of the fair value hierarchy. Options held by the Fund for which no current quotations are readily available and which are not traded on the valuation date are valued at the mean price and are categorized within Level 2 of the fair value hierarchy. Over-the-counter (OTC) derivative contracts include forward, swap, and option contracts related to interest rates; foreign currencies; credit standing of reference entities; equity prices; or commodity prices, and warrants on exchange-traded securities. Depending on the product and terms of the transaction, the fair value of the OTC derivative products can be modeled taking into account the counterparties' creditworthiness and using a series of techniques, including simulation models. Many pricing models do not entail material subjectivity because the methodologies employed do not necessitate significant judgments, and the pricing inputs are observed from actively quoted markets, as is the case of interest rate swap and option contracts. OTC derivative products valued using pricing models are categorized within Level 2 of the fair value hierarchy.

 

 

FinTrust Income and Opportunity Fund SEMI-ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS

May 31, 2020 (Unaudited)

 

2.            SECURITIES VALUATIONS (continued)

 

If the Adviser decides that a price provided by the pricing service does not accurately reflect the fair value of the securities, when prices are not readily available from a pricing service, or when certain restricted or illiquid securities are being valued, securities are valued at fair value as determined in good faith by the Adviser, in conformity with guidelines adopted by and subject to review of the Board and the Fair Valuation Committee. These securities will be categorized as Level 3 securities.

 

The following tables summarize the inputs used to value the Fund’s assets and liabilities measured at fair value as of May 31, 2020.

 

Financial Instruments – Assets                        
                         
Security Classification (1)   Level 1     Level 2     Level 3     Totals  
Common Stock (2)   $ 11,636,102     $     $     $ 11,636,102  
Exchange-Traded Fund (2)     234,100                   234,100  
Government Bonds           2,078,580             2,078,580  
Call Options Purchased     160,718                   160,718  
Put Options Purchased     77,600                   77,600  
Short-Term Investments     1,607,453                   1,607,453  
Total Assets   $ 13,715,973     $ 2,078,580     $     $ 15,794,553  

 

Derivative and Financial Instruments – Liabilities                        
                         
Security Classification (1)   Level 1     Level 2     Level 3     Totals  
Call Options Written   $ 146,052     $     $     $ 146,052  
Put Options Written     106,491                   106,491  
Total Liabilities   $ 252,543     $     $     $ 252,543  
                                 

 

(1) As of and for the six months ended May 31, 2020, the Fund held no securities that were considered to be “Level 3” securities (those valued using significant unobservable inputs). Therefore, a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value is not applicable.

 

(2) All common stock held in the Fund are Level 1 securities. For a detailed break-out of common stock by industry, please refer to the Schedule of Investments.

 

There were no transfers into and out of any level for the six month period ended May 31, 2020. It is the Fund’s policy to recognize transfers between levels at the end of the reporting period.

 

3.            DERIVATIVE TRANSACTIONS

 

As of May 31, 2020, the location on the Statement of Assets and Liabilities for financial derivative instrument fair values is as follows:

 

Assets   Location   Equity Contracts  
Call options purchased   Investments, at value   $ 160,717  
Put options purchased   Investments, at value     77,600  
Total Assets       $ 238,317  

 

 

  

FinTrust Income and Opportunity Fund SEMI-ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS 

May 31, 2020 (Unaudited)

 

3.            DERIVATIVES TRANSACTIONS (continued) 

 

Liabilities   Location   Equity Contracts  
Call options written   Options written, at value   $ 146,052  
Put options written   Options written, at value     106,491  
Total Liabilities       $ 252,543  

 

Realized and unrealized gains and losses on derivatives contracts entered into by the Fund for the six month period ended May 31, 2020, are recorded in the following locations in the Statement of Operations:

 

Net change in unrealized appreciation (depreciation) on:   Location   Equity Contracts  
Call options purchased   Investments   $ 146,038  
Put options purchased   Investments     (148,012 )
Call options written   Options written     (991 )
Put option written   Options written     51,906  
        $ 48,941  

 

Net realized gain on:   Location   Equity Contracts  
Call options purchased   Investments   $ (254,656 )
Put options purchased   Investments     145,246  
Call options written   Options written     (473,369 )
Put option written   Options written     158,067  
        $ (424,712 )

 

For the six month period ended May 31, 2020, the total amount of all options, as presented in the Schedule of Investments and Schedule of Options Written, is representative of the volume of activity for these derivative types. For the six month period ended May 31, 2020, the average month-end notional value of purchased and written option contracts for the Fund was $4,444,471 and ($5,438,071), respectively. The primary risk category for all open options positions during the fiscal year was equity risk.

 

4.            CAPITAL SHARE TRANSACTIONS

 

Transactions in shares of capital stock for the six month period ended May 31, 2020 were as follows:

 

    Sold     Redeemed     Reinvested     Net Increase  
Class A                                
Shares     11       (346 )     363       28  
Value   $ 100     $ (3,200 )   $ 3,800     $ 700  
Institutional Class                                
Shares     532,879       (115,933 )     37,870       454,816  
Value   $ 5,046,140     $ (1,122,151 )   $ 401,040     $ 4,325,029  

 

 

FinTrust Income and Opportunity Fund SEMI-ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS 

May 31, 2020 (Unaudited)

 

4.            CAPITAL SHARE TRANSACTIONS (continued)

 

Transactions in shares of capital stock for the year ended November 30, 2019 were as follows:

 

   

Sold 

   

Redeemed 

   

Reinvested 

   

Net Increase 

(Decrease) 

 
Class A                                
Shares     24       (13 )     472       483  
Value   $ 250     $ (138 )   $ 4,448     $ 4,560  
Institutional Class                                
Shares     473,668       (81,069 )     32,534       425,133  
Value   $ 4,935,547     $ (840,322 )   $ 309,072     $ 4,404,297  

 

5.            INVESTMENT TRANSACTIONS

 

For the six month period ended May 31, 2020, aggregate purchases and sales of investment securities (excluding short-term investments and U.S. Government securities) for the Fund were as follows:

 

Purchases     Sales  
$ 19,568,271     $ 14,127,677  

 

The cost of purchases and proceeds from sales of U.S. government securities during the six month period ended May 31, 2020 were $502,151 and $0, respectively.

 

6.           ADVISORY FEES AND OTHER RELATED PARTY TRANSACTIONS

 

The Fund has entered into an Investment Advisory Agreement (the “Advisory Agreement”) with the Adviser. Pursuant to the Advisory Agreement, the Adviser manages the operations of the Fund and manages the Fund’s investments in accordance with the stated policies of the Fund. As compensation for the investment advisory services provided to the Fund, the Adviser will receive a monthly management fee equal to an annual rate of 1.25% of the Fund’s net assets. For the six month period ended May 31, 2020, the Adviser earned $71,244 of management fees.

 

The Adviser has entered into an Expense Limitation Agreement with the Fund under which it has agreed to waive or reduce its fees and to assume other expenses of the Fund, if necessary, in an amount that limits the Fund’s annual operating expenses (excluding interest, distribution fees pursuant to Rule 12b-1 Plans, taxes, acquired fund fees and expenses, brokerage commissions, dividend expenses on short sales, and other expenditures which are capitalized in accordance with generally accepted accounting principles and other extraordinary expenses not incurred in the ordinary course of such Fund’s business) to not more than 1.95%. The current contractual agreement cannot be terminated prior to at least one year after the effective date without the Board of Trustees’ approval. For the six month period ended May 31, 2020, the Adviser waived advisory fees of $64,091.

 

Subject to approval by the Fund’s Board, any waiver under the Expense Limitation Agreement is subject to repayment by the Fund within the three fiscal years following the year in which such waiver occurred, if the Fund is able to make the payment without exceeding the 1.95% expense limitation. The cumulative unreimbursed amount paid and/or waived by the Adviser on behalf of the Fund is $256,314, of which $63,687, $128,536 and $64,091 can be recouped no later than November 30, 2021, November 30, 2022 and November 30, 2023, respectively.

 

The Fund has entered into an Investment Company Services Agreement (“ICSA”) with M3Sixty Administration, LLC (“M3Sixty”). Pursuant to the ICSA, M3Sixty will provide day-to-day operational services to the Fund including, but not limited to: (a) Fund accounting services; (b) financial statement preparation; (c) valuation of the Fund's portfolio securities; (d) pricing the Fund's shares; (e) assistance in preparing tax returns; (f) preparation and filing of required regulatory reports; (g) communications with shareholders; (h) coordination of Board and shareholder meetings; (i) monitoring the Fund's legal compliance; (j) maintaining shareholder account records.

 

For the six month period ended May 31, 2020 M3Sixty earned $39,201, including out of pocket expenses.

 

  

FinTrust Income and Opportunity Fund SEMI-ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS 

May 31, 2020 (Unaudited)

 

6.            ADVISORY FEES AND OTHER RELATED PARTY TRANSACTIONS (continued)

 

Certain officers and an interested Trustee of the Trust are also employees and/or officers of M3Sixty.

 

The Fund has entered into a Distribution Agreement with Matrix 360 Distributors, LLC (“M3SixtyD” or the “Distributor”). Pursuant to the Distribution Agreement, the Distributor provides distribution services to the Fund. The Distributor served as underwriter/distributor of the Fund. M3SixtyD may receive commissions from the sale of Class A shares. During the six month period ended May 31, 2020, no commissions were paid to the Distributor. M3SixtyD is an affiliate of M3Sixty.

 

The Fund has adopted a Distribution Plan (“Plan”) pursuant to Rule 12b-1 under the Investment Company Act of 1940 for its Class A shares. The Fund may expend up to 0.25% for Class A shares of the Fund’s average daily net assets annually to pay for any activity primarily intended to result in the sale of shares of the Fund and the servicing of shareholder accounts, provided that the Trustees have approved the category of expenses for which payment is being made.

 

The distribution plan for the Class A shares of the Fund took effect January 21, 2016. For the six month period ended May 31, 2020, the Fund accrued $113 in 12b-1 expenses attributable to Class A shares.

 

7.            TAX MATTERS

 

For U.S. Federal income tax purposes, the cost of securities owned, gross appreciation, gross depreciation, and net unrealized appreciation/(depreciation) of investments, excluding written options and securities sold short, at May 31, 2020 were as follows:

 

Cost     Gross Appreciation     Gross Depreciation     Net Depreciation  
$ 15,308,940     $ 1,116,023     $ (630,410 )   $ 485,613  

 

The difference between book basis and tax basis unrealized appreciation (depreciation) is primarily attributable to the tax deferral of losses on wash sales.

 

The Fund’s tax basis distributable earnings are determined at the end of each fiscal year. The tax character of distributable earnings (deficit) at November 30, 2019, the Fund’s most recent fiscal year end, is as follows:  
 

 

Unrealized Depreciation 

   

Undistributed 

Ordinary

Income

   

Undistributed

Long-Term 

Capital Gains

   

Capital Loss

Carry

Forwards 

   

Post-October

Loss and

Late Year Loss 

   

Total

Distributable 

Earnings 

 
$ (183,299 )   $ 362,575     $ 42,265     $     $     $ 221,541  

 

Under current tax law, net capital losses realized after October 31st and net ordinary losses incurred after December 31st may be deferred and treated as occurring on the first day of the following fiscal year. As of November 30, 2019, the Fund did not elect to defer any losses.

 

In accordance with accounting pronouncements, the Fund may record reclassifications in the capital accounts. These reclassifications have no impact on the net asset value of the Fund and are designed generally to present distributable earnings on a tax basis which is considered to be more informative to the shareholder. As of November 30, 2019, the Fund did not record any reclassifications to capital accounts.

 

Under the Regulated Investment Company Modernization Act of 2010 (the “Act”), net capital losses recognized after December 31, 2010, may be carried forward indefinitely, and their character is retained as short-term and/or long-term. As of November 30, 2019, the Fund had no capital loss carryforwards for federal income tax purposes.

 

For the six month period ended May 31, 2020, the Fund distributed, on a tax basis, $362,575 of ordinary income and $42,265 of long-term capital gains.

 

For the year ended November 30, 2019, the Fund distributed, on a tax basis, $313,520 of ordinary income.

 

  

FinTrust Income and Opportunity Fund SEMI-ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS 

May 31, 2020 (Unaudited)

 

8.            BENEFICIAL OWNERSHIP

 

The beneficial ownership, either directly or indirectly, of more than 25% of the voting securities of a fund creates a presumption of control of the fund, under Section 2(a)(9) of the Investment Company Act of 1940. As of May 31, 2020 Charles Schwab and Co., Inc. held 58.09% and National Financial Services, LLC held 41.85% of the Fund’s shares in omnibus accounts for the sole benefit of their customers. The Trust does not know whether any of the underlying beneficial shareholders of the omnibus accounts held by Charles Schwab and Co., Inc. or National Financial Services, LLC own more than 25% of the voting securities of the Fund.

 

9.           COMMITMENTS AND CONTINGENCIES

 

In the normal course of business, the Trust may enter into contracts that may contain a variety of representations and warranties and provide general indemnifications. The Trust’s maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated; however, management considers the risk of loss from such claims to be remote.

 

10.         RECENT MARKET EVENTS

 

An outbreak of an infectious respiratory illness caused by a novel coronavirus known as COVID-19 was first detected in China in December 2019 and has now been detected globally. This coronavirus has resulted in travel and border restrictions, quarantines, curfews and restrictions on large gatherings, enhanced health screenings at ports of entry and elsewhere, disruption of and delays in healthcare service preparation and delivery, prolonged quarantines, cancellations and supply chain disruptions, which have caused lower consumer demand of a wide range of products and services and disruptions in manufacturing and supply chains, as well as general concern and uncertainty. While governments have already taken unprecedented action to limit disruption to the financial system, global financial markets have experienced and may continue to experience significant volatility resulting from the spread of and subsequent intervening measures intended to limit the spread of COVID-19. The spread of COVID-19 has adversely affected the economies of many nations and the entire global economy, in general. The full extent of the impact of COVID-19 on the Fund's performance cannot be determined at this time and will depend on future developments, including the duration and the continued spread of the outbreak.

 

11.         SUBSEQUENT EVENTS

 

In accordance with GAAP, Management has evaluated the impact of all subsequent events on the Fund through the date the financial statements were issued, and has determined that there were no subsequent events requiring recognition or disclosure in the financial statements. 

 

 

FinTrust Income and Opportunity Fund SEMI-ANNUAL REPORT


ADDITIONAL INFORMATION 

May 31, 2020 (Unaudited)

 

The Fund files its complete schedules of portfolio holdings with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-PORT. The Fund’s Forms N-PORT are available on the Commission’s website at www.sec.gov. The Fund’s Forms N-PORT may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC. Information on the operation of the Commission’s Public Reference Room may be obtained by calling 1-800-SEC-0330.

 

Prior to March 31, 2020, the Fund filed its complete schedules of portfolio holdings with the Commission for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at www.sec.gov.

 

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-877-244-6235; and on the Commission’s website at www.sec.gov.

 

Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30th is available without charge, upon request, by calling 1-877-244-6235; and on the Commission’s website at www.sec.gov.

 

Shareholder Tax Information - The Fund is required to advise you within 60 days of the Fund’s fiscal year end regarding the federal tax status of distributions received by shareholders during the fiscal year. The Fund paid $362,575 of ordinary income and $42,265 of long-term capital gain distributions for the six month period ended May 31, 2020.

 

Tax information is reported from the Fund’s fiscal year and not calendar year, therefore, shareholders should refer to their Form 1099-DIV or other tax information which will be mailed in 2021 to determine the calendar year amounts to be included on their 2020 tax returns. Shareholders should consult their own tax advisors.

 

  

FinTrust Income and Opportunity Fund SEMI-ANNUAL REPORT

ADDITIONAL INFORMATION 

May 31, 2020 (Unaudited)

 

BOARD OF TRUSTEES, OFFICERS AND PRINCIPAL SHAREHOLDERS - (Unaudited)

 

The Trustees are responsible for the management and supervision of the Fund. The Trustees approve all significant agreements between the Trust, on behalf of the Fund, and those companies that furnish services to the Fund; review performance of the Fund; and oversee activities of the Fund. The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling (877) 244-6235

 

Trustees and Officers.  Following are the Trustees and Officers of the Trust, their age and address, their present position with the Trust or the Fund, and their principal occupation during the past five years. Each of the Trustees of the Trust will generally hold office indefinitely. The Officers of the Trust will hold office indefinitely, except that: (1) any Officer may resign or retire and (2) any Officer may be removed any time by written instrument signed by at least two-thirds of the number of Trustees prior to such removal. In case a vacancy or an anticipated vacancy on the Board of Trustees shall for any reason exist, the vacancy shall be filled by the affirmative vote of a majority of the remaining Trustees, subject to certain restrictions under the 1940 Act. Those Trustees who are “interested persons” (as defined in the 1940 Act) by virtue of their affiliation with either the Trust or the Adviser, are indicated in the table. The address of each trustee and officer is 4300 Shawnee Mission Parkway, Suite 100, Fairway, KS 66205.

 

Name, Address and Year of Birth (“YOB”) Position(s) Held with Trust Length of Service

Principal Occupation(s)

During Past 5 Years

Number of  Series Overseen

Other Directorships During Past

5 Years

Independent Trustees

Arthur Q. Falk

YOB : 1937

Trustee Since 2011 Retired. Eight None

Tom M. Wirtshafter

YOB : 1954

Trustee Since  2011 Senior Vice President, American Portfolios Financial Services, (broker-dealer), American Portfolios Advisors (investment adviser) (2009-Present). Eight None

Gary W. DiCenzo 

YOB: 1962

Trustee

and

Independent

Chairman

Since 2014

 

Since 2019

Partner, Cognios Capital (investment management firm) (2015-2020) Chief Executive officer 2015-2019; President and CEO, IMC Group, LLC (asset management firm consultant) (2010-2015). Eight FNEX Ventures (2018-present)

Steven D. Poppen

YOB : 1968

Trustee

Since 2018

Executive Vice President and Chief Financial Officer, Minnesota Vikings (professional sports organization) (1999-present). Eight M3Sixty Funds Trust (3 portfolios) (2015 – present); FNEX Ventures (2018- present)

Thomas J. Schmidt

YOB: 1963

Trustee Since 2018 Principal, Tom Schmidt & Associates Consulting, LLC (2015-Present) Eight FNEX Ventures (2018-present)
Interested Trustee*          

Randall K. Linscott

YOB: 1971

President Since 2013 Chief Executive Officer, M3Sixty Administration, LLC (2013 – present) Eight M3Sixty Funds Trust (3 portfolios) (2015 – present)

* The Interested Trustee is an Interested Trustee because he is Chief Executive Officer and principal owner of M3Sixty Administration, LLC, the Fund's administrator and transfer agent.

 

 

FinTrust Income and Opportunity Fund SEMI-ANNUAL REPORT

ADDITIONAL INFORMATION 

May 31, 2020 (Unaudited)

 

BOARD OF TRUSTEES, OFFICERS AND PRINCIPAL SHAREHOLDERS - (Unaudited) (continued)

 

Name, Address and Year of Birth (“YOB”) Position(s) Held with Trust Length of Service

Principal Occupation(s)

During Past 5 Years

Number of  Series Overseen

Other Directorships During Past

5 Years

Officers

         

Andras P. Teleki

YOB: 1971

Chief Compliance Officer

and Secretary

Since 2015 Chief Legal Officer, M3Sixty Administration, LLC, M3Sixty Holdings, LLC, Matrix 360 Distributors, LLC and M3Sixty Advisors, LLC (2015-present); Chief Compliance Officer and Secretary, M3Sixty Funds Trust (2016-present); Chief Compliance Officer and Secretary, WP Trust (2016-present); Secretary and Assistant Treasurer, Capital Management Investment Trust (2015); Partner, K&L Gates (2009-2015). N/A N/A

Brandon J. Byrd

YOB: 1981

Assistant Secretary and Anti-Money Laundering Officer

 

Vice President

Since 2013

 

 

 

 

 

 

Since 2018

Chief Operating Officer, M3Sixty Administration, LLC (2013-present) N/A N/A

Larry E. Beaver, Jr.**

YOB: 1969

Assistant Treasurer Since 2017 Fund Accounting, Administration and Tax Officer, M3Sixty Administration, LLC (2017-Present); Director of Fund Accounting & Administration, M3Sixty Administration, LLC (2005-2017); Chief Accounting Officer, Amidex Funds, Inc. (2003-Present); Assistant Treasurer, Capital Management Investment Trust (July 2017-July 2018); Assistant Treasurer, M3Sixty Funds Trust (July 2017-Present; Assistant Treasurer, WP Funds Trust (July 2017-Present); Treasurer and Assistant Secretary, Capital Management Investment Trust (2008-July 2017); Treasurer, 360 Funds Trust (2007-2017); Treasurer, M3Sixty Funds Trust (2015-July 2017); Treasurer, WP Trust (2015-July 2017); Treasurer and Chief Financial Officer, Monteagle Funds (2008-2016). N/A N/A

John H. Lively

YOB: 1969

Assistant Secretary Since 2017 Attorney, Practus, LLP (law firm) (2010-present). N/A N/A

Ted L. Akins

YOB: 1974

Assistant Secretary Since 2018 Vice President of Operations, M3Sixty Administration, LLC (2012-present). N/A N/A

** Effective December 28, 2018, Larry E. Beaver, Jr. was assigned as Interim Treasurer until a new Treasurer is appointed by the Board.

 

 

FinTrust Income and Opportunity Fund SEMI-ANNUAL REPORT

ADDITIONAL INFORMATION 

May 31, 2020 (Unaudited)

 

BOARD OF TRUSTEES, OFFICERS AND PRINCIPAL SHAREHOLDERS - (Unaudited) (continued)

 

Remuneration Paid to Trustees and Officers - Officers of the Trust and Trustees who are “interested persons” of the Trust or the Adviser will receive no salary or fees from the Trust. Officers of the Trust and interested Trustees do receive compensation directly from certain service providers to the Trust, including Matrix 360 Distributors, LLC and M3Sixty Administration, LLC. Each Trustee who is not an “interested person” (an “Independent Trustee”) receives a $5,000 annual retainer (paid quarterly). In addition, each Independent Trustee receives, on a per fund basis: (i) a fee of $1,500 per fund each year (paid quarterly); (ii) a fee of $200 per Board meeting attended; and (iii) a fee of $200 per committee meeting attended. The Trust will also reimburse each Trustee for travel and other expenses incurred in connection with, and/or related to, the performance of their obligations as a Trustee. Officers of the Trust will also be reimbursed for travel and other expenses relating to their attendance at Board meetings.

 

Name of Trustee1  

Aggregate Compensation 

From each Fund2 

    Pension or Retirement Benefits Accrued As Part of Portfolio Expenses   Estimated Annual Benefits Upon Retirement  

Total Compensation  

From the Fund 

Paid to Trustees2 

 
Independent Trustees
Arthur Q. Falk   $ 1,614     None   None   $ 1,614  
Tom M. Wirtshafter   $ 1,614     None   None   $ 1,614  
Gary W. DiCenzo   $ 1,614     None   None   $ 1,614  
Steven D. Poppen   $ 1,614     None   None   $ 1,614  
Thomas J. Schmidt   $ 1,614     None   None   $ 1,614  
Interested Trustees and Officers
Randall K. Linscott     None     Not Applicable   Not Applicable     None  

 

1 Each of the Trustees serves as a Trustee to each Series of the Trust. The Trust currently offers eight (8) series of shares. 

2 Figures are for the six month period ended May 31, 2020.

 

 

 

FinTrust Income and Opportunity Fund SEMI-ANNUAL REPORT

 

Information About Your Fund’s Expenses – (Unaudited)

 

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, such as the sales charge (load) imposed on certain subscriptions and the contingent deferred sales charge (“CDSC”) imposed on certain short-term redemptions; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees; and other Fund expenses. The example below is intended to help you understand your ongoing costs (in dollars) of investing in the Fund 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 as indicated below.

 

Actual Expenses – The first section of the table provides information about actual account values and actual expenses (relating to the example $1,000 investment made at the beginning of the period). You may use the information in this section, 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 in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

 

Hypothetical Example for Comparison Purposes – The second section of the table provides information about the hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund to other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), CDSC fees, or exchange fees. Therefore, the second section of 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. For more information on transactional costs, please refer to the Fund’s prospectus.

 

Expenses and Value of a $1,000 Investment for the period from 11/30/19 through 05/31/20
 
    Beginning Account

Value (11/30/2019)
    Annualized Expense

 Ratio for the Period
    Ending Account

Value (05/31/20)
    Expenses Paid

 During Period (a)
 
Actual Fund Return (in parentheses)                  
Class A (-5.99%)   $ 1,000.00       2.41 %   $ 940.10     $ 11.69  
Institutional Class (-5.83%)   $ 1,000.00       2.16 %   $ 941.70     $ 10.49  
Hypothetical 5% Return                                
Class A   $ 1,000.00       2.41 %   $ 1,013.00     $ 12.13  
Institutional Class   $ 1,000.00       2.16 %   $ 1,014.20     $ 10.88  

 

(a) Expenses are equal to the Fund’s annualized expense ratios, multiplied by the average account value over the period, multiplied by 183/366 to reflect the one-half year period.

 

For more information on Fund expenses, please refer to the Fund’s prospectus, which can be obtained from your investment representative or by calling 1-877-244-6235. Please read it carefully before you invest or send money.

 

  

FinTrust Income and Opportunity Fund SEMI-ANNUAL REPORT

 

Information About Your Fund’s Expenses – (Unaudited) (continued) 

 

Total Fund operating expense ratios as stated in the current Fund prospectus dated March 29, 2020 for the Fund were as follows:

 

FinTrust Income and Opportunity Fund Class A, gross of fee waivers or expense reimbursements     3.67 %
FinTrust Income and Opportunity Fund Class A, after waiver and reimbursement*     2.23 %
FinTrust Income and Opportunity Fund Institutional Class, gross of fee waivers or expense reimbursements     3.42 %
FinTrust Income and Opportunity Fund Institutional Class, after waiver and reimbursement*     1.98 %

 

* FinTrust Capital Advisors, LLC (the “Adviser”) has entered into an Expense Limitation Agreement with the Fund under which it has agreed to waive or reduce its fees and to assume other expenses of the Fund, if necessary, in an amount that limits the Fund’s annual operating expenses (excluding interest, distribution fees pursuant to Rule 12b-1 Plans, taxes, acquired fund fees and expenses, brokerage commissions, dividend expenses on short sales, and other expenditures which are capitalized in accordance with generally accepted accounting principles and other extraordinary expenses not incurred in the ordinary course of such Fund’s business) to not more than 1.95%. The Expense Limitation Agreement covers the period during which the Interim Investment Advisory Agreement was in place and the period following shareholder approval of the new Investment Advisory Agreement through at least March 31, 2021. Subject to approval by the Fund’s Board, any waiver under the Expense Limitation Agreement is subject to repayment by the Fund within the three fiscal years following the year in which such waiver occurred, if the Fund is able to make the payment without exceeding the 1.95% expense limitation. The current contractual agreement cannot be terminated prior to at least one year after the effective date without the Board of Trustees’ approval. Total Gross Operating Expenses for the six month period ended May 31, 2020 were 3.53% and 3.28% for the FinTrust Income and Opportunity Fund Class A shares and FinTrust Income and Opportunity Fund Institutional Class shares, respectively. Please see the Information About Your Fund’s Expenses, the Financial Highlights and Notes to Financial Statements (Note 6) sections of this report for expense related disclosures for the six month period ended May 31, 2020.

 

 

 

360 FUNDS

4300 Shawnee Mission Pkwy 

Suite 100

Fairway, KS 66205

 

INVESTMENT ADVISER 

FinTrust Capital Advisors, LLC

124 Verdae Boulevard 

Suite 504

Greenville, SC 29607

 

ADMINISTRATOR & TRANSFER AGENT

M3Sixty Administration, LLC 

4300 Shawnee Mission Parkway

Suite 100 

Fairway, KS 66205

 

DISTRIBUTOR

Matrix 360 Distributors, LLC 

4300 Shawnee Mission Parkway

Suite 100 

Fairway, KS 66205

 

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

BBD, LLP 

1835 Market Street

3rd Floor 

Philadelphia, PA 19103

 

LEGAL COUNSEL

Practus, LLP 

11300 Tomahawk Creek Parkway

Suite 310 

Leawood, KS 66211

 

CUSTODIAN BANK

Fifth Third Bank 

Fifth Third Center

38 Fountain Square Plaza

Cincinnati, OH 45263

 

 

 

Not applicable at this time.

 

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

 

Not applicable at this time.

 

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

 

Not applicable at this time.

 

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

 

Not applicable

 

ITEM 6. SCHEDULE OF INVESTMENTS.

 

Included in Semi-Annual Report to shareholders filed under Item 1 of this Form.

 

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

 

Not applicable as the Fund is an open-end management investment company.

 

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

 

Not applicable as the Fund is an open-end management investment company.

 

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

 

Not applicable as the Fund is an open-end management investment company.

 

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

 

Not applicable at this time.

 

ITEM 11. CONTROLS AND PROCEDURES.

 

(a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the 1940 Act, are effective, as of a date within 90 days of the filing date of this report, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 15d-15(b) under the Securities Exchange Act of 1934, as amended.

 

(b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the period covered by this report 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 as the Fund is an open-end management investment company.

 

 

 

 

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.

 

360 Funds

 

/s/ Randy Linscott 

By Randy Linscott  
Principal Executive Officer  
Date:  August 3, 2020  

 

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 person on behalf of the registrant and in the capacities and on the date indicated.

 

/s/ Randy Linscott 

By Randy Linscott  
Principal Executive Officer
Date:  August 3, 2020  

 

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 person on behalf of the registrant and in the capacities and on the date indicated.

 

/s/ Larry E. Beaver, Jr. 

By Larry E. Beaver, Jr.    
Assistant Treasurer and Acting Principal Financial Officer
Date: August 3, 2020  

 

FinTrust Income and Opportunity Fund N-CSRS

 

Exhibit 99.CERT

 

Certification Pursuant to Section 302
of the Sarbanes-Oxley Act

 

I, Randy Linscott, certify that:

 

1. I have reviewed this report on Form N-CSR for the FinTrust Income and Opportunity Fund, a series
of the 360 Funds (the “registrant”);

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this
report fairly present in all material respects the investments of the registrant as of the end of the fiscal period for which the
report is filed;

 

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control
over financial reporting (as defined in Rule 30a-3 (d) under the Investment Company Act of 1940) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being
prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles:

 

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented
in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior
to the filing date of this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant's internal control over financial reporting
that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect,
the registrant's internal control over financial reporting; and

 

5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors
and the audit committee of the registrant's Board of Trustees (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize,
and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant's internal control over financial reporting.

 

Date: August 3, 2020    /s/ Randy Linscott
  Randy Linscott
  Principal Executive Officer

 

 

Certification Pursuant to Section 302
of the Sarbanes-Oxley Act

 

I, Larry E. Beaver, Jr., certify that:

 

1. I have reviewed this report on Form N-CSR for the FinTrust Income and Opportunity Fund, a series
of the 360 Funds (the “registrant”);

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this
report fairly present in all material respects the investments of the registrant as of the end of the fiscal period for which the
report is filed;

 

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control
over financial reporting (as defined in Rule 30a-3 (d) under the Investment Company Act of 1940) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being
prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles:

 

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented
in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior
to the filing date of this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant's internal control over financial reporting
that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect,
the registrant's internal control over financial reporting; and

 

5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors
and the audit committee of the registrant's Board of Trustees (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize,
and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant's internal control over financial reporting.

 

Date: August 3, 2020 

/s/ Larry E. Beaver, Jr. 

  Larry E. Beaver, Jr.
  Assistant Treasurer and Acting Principal Financial Officer

 

FinTrust Income and Opportunity Fund N-CSRS

 

Exhibit 99.906CERT

 

CERTIFICATION PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT

 

I, Randy Linscott, Principal Executive Officer of the 360 Funds
(the “registrant"), certify that:

 

1. The N-CSR of the registrant for the period ended May 31, 2020 (the "Report") fully complies
with the requirements of Section 15(d) of the Securities Exchange Act of 1934; and

 

2. The information contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the registrant.

 

By:   /s/ Randy
Linscott
  Randy Linscott
  Principal Executive Officer
   
Date:   August 3, 2020

  

A SIGNED ORIGINAL OF THIS WRITTEN STATEMENT
REQUIRED BY SECTION 906, OR OTHER DOCUMENT AUTHENTICATING, ACKNOWLEDGING, OR OTHERWISE ADOPTING THE SIGNATURE THAT APPEARS IN TYPED
FORM WITHIN THE ELECTRONIC VERSION OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906, HAS BEEN PROVIDED TO M3SIXTY ADMINISTRATION,
LLC. AND WILL BE RETAINED BY M3SIXTY ADMINSITRATION, LLC AND FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION OR ITS STAFF UPON
REQUEST.

 

CERTIFICATION PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT

 

I, Larry E. Beaver, Jr., Assistant Treasurer and Acting Principal
Financial Officer of the 360 Funds (the “registrant"), certify that:

 

1. The N-CSR of the registrant for the period ended May 31, 2020 (the "Report") fully complies
with the requirements of Section 15(d) of the Securities Exchange Act of 1934; and

 

2. The information contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the registrant.

 

By:   /s/ Larry E. Beaver, Jr.
   Larry E. Beaver, Jr.
   Assistant Treasurer and Acting Principal Financial Officer
   
Date:   August 3, 2020

 

A SIGNED ORIGINAL OF THIS WRITTEN STATEMENT
REQUIRED BY SECTION 906, OR OTHER DOCUMENT AUTHENTICATING, ACKNOWLEDGING, OR OTHERWISE ADOPTING THE SIGNATURE THAT APPEARS IN TYPED
FORM WITHIN THE ELECTRONIC VERSION OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906, HAS BEEN PROVIDED TO M3SIXTY ADMINISTRATION,
LLC AND WILL BE RETAINED BY M3SIXTY ADMINISTRATION, LLC AND FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION OR ITS STAFF UPON
REQUEST.

 



Source link