Northern Lights Fund Trust Iii N-CSR Certified annual shareholder report (management investment company)

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

form n-csr

certified shareholder report of registered management
investment companies

Investment Company Act file number    811-22655

Northern Lights Fund Trust III

(Exact name of registrant as specified in charter)

225 Pictoria Drive, Suite 450, Cincinnati, Ohio	45246
(Address of principal executive offices)	(Zip code)

The Corporation Trust Company

1209 Orange Street, Wilmington, DE 19801

(Name and address of agent for service)

Registrant’s telephone number, including area code:   631-490-4300

Date of fiscal year end:   6/30

Date of reporting period:   6/30/2024

Item 1. Reports to Stockholders.

(a)        

Boyd Watterson Limited Duration Enhanced Income Fund - Class I2 (BWDTX)

Class I2 (BWDTX)

Annual Shareholder Report - June 30, 2024

Fund Overview

This annual shareholder report contains important information about Boyd Watterson Limited Duration Enhanced Income Fund for the period of July 1, 2023 to June 30, 2024. You can find additional information about the Fund at https://boydwattersonfunds.com/. You can also request this information by contacting us at (216)-771-3450. 

What were the Fund’s costs for the last year?

(based on a hypothetical $10,000 investment)

Class Name	Costs of a $10,000 investment	Costs paid as a percentage of a $10,000 investment
Class I2	$41	0.41%

How did the Fund perform during the reporting period?

The Boyd Watterson Limited Duration Enhanced Income Fund (the “Fund”) generated a total return of 8.89% for the year ended June 30, 2024.  The Fund’s benchmark, the Bloomberg 1-3 Year Govt Credit Index(1) returned 4.87% for the same period.  Longer duration assets were negatively impacted by higher rates with the Bloomberg Aggregate Index returning only 2.63%.  Credit returns were mixed as the ICE BofA US Corp Index, an investment grade corporate bond index with a duration of almost seven years, returned 5.04% while the ICE BofA US High Yield Index returned 10.45%.  Across the credit spectrum lower quality generally outperformed higher quality.  Highlighting Boyd Watterson’s cautious macroeconomic view, the Fund’s average credit quality is BBB+, with a duration of about 2.0 years.  As we cross the midpoint of 2024, we reiterate our view that economic growth will likely remain resilient in 2024 and stickier-than-expected inflation will persist.  We do acknowledge some pockets of the economy could offer underwhelming results in the near term.  We believe the Federal Reserve will exercise patience, which supports a “higher for longer” view on the Federal Funds rate and a relatively rangebound interest rate environment.  Within the “higher for longer” context, we think one rate cut by the Federal Reserve is quite likely this year, but we also think it is unlikely inflation will slow enough or economic fundamentals will deteriorate enough to justify interest rate cuts at consecutive meetings.  Thematically, with our expectation of higher interest rates for longer we continued to focus on maintaining floating rate exposure, mostly through CLOs.  Our macro views support consumer resiliency, so we increased our consumer-related ABS holdings to about 20% of the Fund.  Over the course of the last year, we began taking positions in Treasury securities which are now up to 5% of the Fund, the highest level in many years.  The Fund seeks income generation as a principal objective and capital preservation and total return as secondary objectives.  From a credit perspective, the Fund continues to experience more credit agency upgrades than downgrades and does not have any individual holdings trading at distressed levels.  We meticulously apply our credit process to every security before we purchase it, recognizing that we may likely hold the security during future, tumultuous times, and want to feel comfortable with every security as a long-term holder. 

How has the Fund performed over the last ten years? 

Total Return Based on $10,000 Investment

	Boyd Watterson Limited Duration Enhanced Income Fund	Bloomberg 1-3 Year US Government/Credit Index	Bloomberg U.S. 1-5 Year Government/Credit Index	Bloomberg U.S. Aggregate Bond Index
06/30/14	$10,000	$10,000	$10,000	$10,000
06/30/15	$10,161	$10,093	$10,131	$10,186
06/30/16	$10,579	$10,253	$10,398	$10,797
06/30/17	$11,082	$10,289	$10,409	$10,763
06/30/18	$11,291	$10,310	$10,388	$10,720
06/30/19	$11,870	$10,750	$10,943	$11,564
06/30/20	$12,199	$11,202	$11,537	$12,575
06/30/21	$12,865	$11,251	$11,583	$12,533
06/30/22	$12,153	$10,850	$10,981	$11,243
06/30/23	$13,094	$10,907	$11,002	$11,137
06/30/24	$14,257	$11,438	$11,515	$11,430

Average Annual Total Returns 

	1 Year	5 Years	10 Years
Boyd Watterson Limited Duration Enhanced Income Fund	8.89%	3.73%	3.61%
Bloomberg 1-3 Year US Government/Credit Index	4.87%	1.25%	1.35%
Bloomberg U.S. 1-5 Year Government/Credit Index	4.66%	1.02%	1.42%
Bloomberg U.S. Aggregate Bond Index	2.63%	-0.23%	1.35%

The Fund's past performance is not a good predictor of how the Fund will perform in the future. The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares.

Fund Statistics 

• Net Assets$446,781,609
• Number of Portfolio Holdings157
• Advisory Fee (net of waivers)$928,461
• Portfolio Turnover28%

Asset Weighting (% of total investments)

Value	Value
Asset Backed Securities	48.4%
Corporate Bonds	33.0%
Money Market Funds	6.0%
Preferred Stocks	1.5%
Term Loans	5.5%
U.S. Treasury Bonds & Notes	5.6%

What did the Fund invest in? 

Sector Weighting (% of net assets)

Value	Value
Liabilities in Excess of Other Assets	-0.8%
Health Care	0.8%
Real Estate	1.1%
Consumer Staples	1.7%
Communications	1.9%
Technology	2.6%
Financials	5.3%
U.S. Treasury Obligations	5.6%
Industrials	5.7%
Money Market Funds	6.1%
Consumer Discretionary	6.6%
Energy	6.9%
Materials	7.0%
Abs	19.8%
Clo	29.0%
Other Sectors	0.7%

Top 10 Holdings (% of net assets)

Holding Name	% of Net Assets
First American Government Obligations Fund, Class X	6.1%
United States Treasury Note	5.6%
Exeter Automobile Receivables Trust 2021-4, E	2.3%
First Investors Auto Owner Trust 2023-1, D	2.0%
Neuberger Berman CLO XVII Ltd., CR3	1.7%
Ares XLIX CLO Ltd., B	1.6%
MasTec, Inc.	1.4%
Morgan Stanley	1.4%
OHA Credit Partners XIV Ltd., D1R	1.2%
Elmwood CLO 21 Ltd., AR	1.2%

Material Fund Changes

No material changes occurred during the year ended June 30, 2024. 

Boyd Watterson Limited Duration Enhanced Income Fund - Class I2 (BWDTX)

Annual Shareholder Report - June 30, 2024

Where can I find additional information about the Fund? 

Additional information is available on the Fund's website ( https://boydwattersonfunds.com/ ), including its:

• Prospectus

• Financial information

• Holdings

• Proxy voting information

TSR-AR 063024-BWDTX

Boyd Watterson Limited Duration Enhanced Income Fund - Class I (BWDIX )

Class I (BWDIX )

Annual Shareholder Report - June 30, 2024

Fund Overview

This annual shareholder report contains important information about Boyd Watterson Limited Duration Enhanced Income Fund for the period of July 1, 2023 to June 30, 2024. You can find additional information about the Fund at https://boydwattersonfunds.com/. You can also request this information by contacting us at (216)-771-3450. 

What were the Fund’s costs for the last year?

(based on a hypothetical $10,000 investment)

Class Name	Costs of a $10,000 investment	Costs paid as a percentage of a $10,000 investment
Class I	$60	0.60%

How did the Fund perform during the reporting period?

The Boyd Watterson Limited Duration Enhanced Income Fund (the “Fund”) generated a total return of 8.57% for the year ended June 30, 2024. The Fund’s benchmark, the Bloomberg 1-3 Year Govt Credit Index(1) returned 4.87% for the same period. Longer duration assets were negatively impacted by higher rates with the Bloomberg Aggregate Index returning only 2.63%. Credit returns were mixed as the ICE BofA US Corp Index, an investment grade corporate bond index with a duration of almost seven years, returned 5.04% while the ICE BofA US High Yield Index returned 10.45%. Across the credit spectrum lower quality generally outperformed higher quality. Highlighting Boyd Watterson’s cautious macroeconomic view, the Fund’s average credit quality is BBB+, with a duration of about 2.0 years. As we cross the midpoint of 2024, we reiterate our view that economic growth will likely remain resilient in 2024 and stickier-than-expected inflation will persist. We do acknowledge some pockets of the economy could offer underwhelming results in the near term. We believe the Federal Reserve will exercise patience, which supports a “higher for longer” view on the Federal Funds rate and a relatively rangebound interest rate environment. Within the “higher for longer” context, we think one rate cut by the Federal Reserve is quite likely this year, but we also think it is unlikely inflation will slow enough or economic fundamentals will deteriorate enough to justify interest rate cuts at consecutive meetings. Thematically, with our expectation of higher interest rates for longer we continued to focus on maintaining floating rate exposure, mostly through CLOs. Our macro views support consumer resiliency, so we increased our consumer-related ABS holdings to about 20% of the Fund. Over the course of the last year, we began taking positions in Treasury securities which are now up to 5% of the Fund, the highest level in many years. The Fund seeks income generation as a principal objective and capital preservation and total return as secondary objectives. From a credit perspective, the Fund continues to experience more credit agency upgrades than downgrades and does not have any individual holdings trading at distressed levels. We meticulously apply our credit process to every security before we purchase it, recognizing that we may likely hold the security during future, tumultuous times, and want to feel comfortable with every security as a long-term holder. 

How has the Fund performed since inception? 

Total Return Based on $10,000 Investment

	Boyd Watterson Limited Duration Enhanced Income Fund	Bloomberg 1-3 Year US Government/Credit Index	Bloomberg U.S. 1-5 Year Government/Credit Index	Bloomberg U.S. Aggregate Bond Index
04/13/17	$10,000	$10,000	$10,000	$10,000
06/30/17	$10,114	$10,013	$10,017	$10,051
06/30/18	$10,295	$10,034	$9,997	$10,011
06/30/19	$10,791	$10,462	$10,531	$10,799
06/30/20	$11,081	$10,902	$11,103	$11,743
06/30/21	$11,656	$10,950	$11,147	$11,704
06/30/22	$10,993	$10,560	$10,568	$10,499
06/30/23	$11,817	$10,615	$10,588	$10,401
06/30/24	$12,831	$11,132	$11,081	$10,675

Average Annual Total Returns 

	1 Year	5 Years	Since Inception (4/13/2017)
Boyd Watterson Limited Duration Enhanced Income Fund	8.57%	3.52%	3.52%
Bloomberg 1-3 Year US Government/Credit Index	4.87%	1.25%	1.50%
Bloomberg U.S. 1-5 Year Government/Credit Index	4.66%	1.02%	1.43%
Bloomberg U.S. Aggregate Bond Index	2.63%	-0.23%	0.91%

The Fund's past performance is not a good predictor of how the Fund will perform in the future. The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemption of fund shares.

Fund Statistics 

• Net Assets$446,781,609
• Number of Portfolio Holdings157
• Advisory Fee (net of waivers)$928,461
• Portfolio Turnover28%

Asset Weighting (% of total investments)

Value	Value
Asset Backed Securities	48.4%
Corporate Bonds	33.0%
Money Market Funds	6.0%
Preferred Stocks	1.5%
Term Loans	5.5%
U.S. Treasury Bonds & Notes	5.6%

What did the Fund invest in? 

Sector Weighting (% of net assets)

Value	Value
Liabilities in Excess of Other Assets	-0.8%
Health Care	0.8%
Real Estate	1.1%
Consumer Staples	1.7%
Communications	1.9%
Technology	2.6%
Financials	5.3%
U.S. Treasury Obligations	5.6%
Industrials	5.7%
Money Market Funds	6.1%
Consumer Discretionary	6.6%
Energy	6.9%
Materials	7.0%
Abs	19.8%
Clo	29.0%
Other Sectors	0.7%

Top 10 Holdings (% of net assets)

Holding Name	% of Net Assets
First American Government Obligations Fund, Class X	6.1%
United States Treasury Note	5.6%
Exeter Automobile Receivables Trust 2021-4, E	2.3%
First Investors Auto Owner Trust 2023-1, D	2.0%
Neuberger Berman CLO XVII Ltd., CR3	1.7%
Ares XLIX CLO Ltd., B	1.6%
MasTec, Inc.	1.4%
Morgan Stanley	1.4%
OHA Credit Partners XIV Ltd., D1R	1.2%
Elmwood CLO 21 Ltd., AR	1.2%

Material Fund Changes

No material changes occurred during the year ended June 30, 2024. 

Boyd Watterson Limited Duration Enhanced Income Fund - Class I (BWDIX )

Annual Shareholder Report - June 30, 2024

Where can I find additional information about the Fund? 

Additional information is available on the Fund's website ( https://boydwattersonfunds.com/ ), including its:

• Prospectus

• Financial information

• Holdings

• Proxy voting information

TSR-AR 063024-BWDIX

Item 2. Code of Ethics.

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

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

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

Item 3. Audit Committee Financial Expert.

(a)(1) The Registrant’s board of trustees has determined that Mark H. Taylor is an audit committee financial expert, as defined in Item 3 of Form N-CSR. Mr. Taylor is independent for purposes of this Item 3.

(a)(2) Not applicable.

(a)(3) Not applicable.

Item 4. Principal Accountant Fees and Services.

(a) Audit Fees. The aggregate fees billed for each of the last two fiscal years for professional services rendered by the registrant’s principal accountant for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years are as follows:

2024 - $21,000

2023 - $21,000

(b) Audit-Related Fees. There were no fees billed in each of the last two fiscal years for assurances and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this item.

2024 - None

2023 - None

(c) Tax Fees. The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance are as follows:

2024 - $3,750

2023 - $3,750

(d) All Other Fees. The aggregate fees billed in each of the last two fiscal years for products and services provided by the registrant’s principal accountant, other than the services reported in paragraphs (a) through (c) of this item were $0 and $0 for the fiscal years ended June 30, 2024 and 2023 respectively.

(e)(1) The audit committee does not have pre-approval policies and procedures. Instead, the audit committee or audit committee chairman approves on a case-by-case basis each audit or non-audit service before the principal accountant is engaged by the registrant.

(e)(2) There were no services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f)       Not applicable. The percentage of hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was zero percent (0%).

(g) All non-audit fees billed by the registrant’s principal accountant for services rendered to the registrant for the fiscal years ended June 30, 2024 and 2023 respectively are disclosed in (b)-(d) above. There were no audit or non-audit services performed by the registrant’s principal accountant for the registrant’s adviser.

(h)        Not applicable.

(i)        Not applicable.

(j)        Not applicable.

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

Item 6. Investments. The Registrant’s schedule of investments in unaffiliated issuers is included in the Financial Statements under Item 7 of this form.

Item 7. Financial Statements and Financial Highlights for Open-End Management Investment Companies.

(a)

Boyd Watterson Limited Duration

Enhanced Income Fund

Class I Shares – BWDIX

Class I2 Shares – BWDTX

Annual Financial Statements 

June 30, 2024

1-877-345-9597

www.boydwattersonfunds.com

Boyd Watterson Asset Management, LLC

1301 East 9th Street, Suite 2900

Cleveland, Ohio 44114

Distributed by Northern Lights Distributors, LLC

Member FINRA

BOYD WATTERSON LIMITED DURATION ENHANCED INCOME FUND

SCHEDULE OF INVESTMENTS

June 30, 2024

				Coupon Rate
Shares				(%)	Maturity	Fair Value
		PREFERRED STOCKS — 1.5%
		ASSET MANAGEMENT — 0.5%
	1 20,000	Charles Schwab Corporation (The) - Series J		1.113	06/01/26	$	2,404,800
		BANKING — 1.0%
	1 17,000	Huntington Bancshares Inc - Series H		1.125			2,090,790
	1 22,135	US Bancorp, B - Series M		1.000	04/15/26		2,128,813
							4,219,603
		TOTAL PREFERRED STOCKS (Cost $9,080,956)					6,624,403
Principal				Coupon Rate
Amount ($)			Spread	(%)	Maturity	Fair Value
		ASSET BACKED SECURITIES — 48.6%
		AUTO LOAN — 19.5%
	5,000,000	American Credit Acceptance Receivables Trust Series 4 F(a)		4.2100	07/13/28		4,892,186
	737,729	AmeriCredit Automobile Receivables Trust 2020-2 Series 2 C		1.4800	02/18/26		732,482
	2,030,000	AmeriCredit Automobile Receivables Trust 2020-2 Series 2020-2 D		2.1300	03/18/26		2,005,836
	4,720,000	CarMax Auto Owner Trust 2023-1 Series 1 D		6.2700	11/15/29		4,769,549
	650,140	Exeter Automobile Receivables Trust 2021-3 Series 3A C		0.9600	10/15/26		643,879
	2,645,000	Exeter Automobile Receivables Trust 2021-3 Series 2021-3A D		1.5500	06/15/27		2,516,608
	10,597,000	Exeter Automobile Receivables Trust 2021-4 Series 4A E(a)		4.0200	01/17/28		10,127,358
	2,650,000	Exeter Automobile Receivables Trust 2022-1 Series 1A D		3.0200	06/15/28		2,550,407
	4,000,000	Exeter Automobile Receivables Trust 2022-1 Series 1A E(a)		5.0200	10/15/29		3,780,942
	3,653,000	Exeter Automobile Receivables Trust 2022-4 Series 4A D		5.9800	12/15/28		3,645,730
	2,000,000	First Investors Auto Owner Trust Series 2021-1A E(a)		3.3500	04/15/27		1,955,593
	689,380	First Investors Auto Owner Trust 2021-1 Series 1A C(a)		1.1700	03/15/27		678,658
	2,230,000	First Investors Auto Owner Trust 2021-2 Series 2021-2A D(a)		1.6600	12/15/27		2,098,034
	4,720,000	First Investors Auto Owner Trust 2022-1 Series 1A D(a)		3.7900	06/15/28		4,498,639
	2,000,000	First Investors Auto Owner Trust 2022-1 Series 1A E(a)		5.4100	06/15/29		1,882,997
	2,000,000	First Investors Auto Owner Trust 2022-2 Series 2A D(a)		8.7100	10/16/28		2,088,150
	8,400,000	First Investors Auto Owner Trust 2023-1 Series 1A D(a)		7.7400	01/15/31		8,722,023
	266,087	Flagship Credit Auto Trust 2019-3 Series 3 D(a)		2.8600	12/15/25		264,779
	1,000,000	PFS Financing Corporation Series C A(a),(b)	SOFR30A + 0.800%	6.1330	04/17/28		1,001,740
	356,770	Santander Drive Auto Receivables Trust 2020-3 Series 2020-3 D		1.6400	11/16/26		353,862
	3,701,200	Santander Drive Auto Receivables Trust 2021-3 Series 2021-3 D		1.3300	09/15/27		3,597,807

See accompanying notes to financial statements.

1

BOYD WATTERSON LIMITED DURATION ENHANCED INCOME FUND

SCHEDULE OF INVESTMENTS (Continued)

June 30, 2024

Principal				Coupon Rate
Amount ($)			Spread	(%)	Maturity	Fair Value
		ASSET BACKED SECURITIES — 48.6% (Continued)
		AUTO LOAN — 19.5% (Continued)
	3,000,000	Westlake Automobile Receivables Trust 2020-3 Series 2020-3A F(a)		5.1100	05/17/27	$	2,992,978
	3,675,000	Westlake Automobile Receivables Trust 2021-1 Series 2021-1A E(a)		2.3300	08/17/26		3,573,713
	2,000,000	Westlake Automobile Receivables Trust 2021-2 Series 2021-2A E(a)		2.3800	03/15/27		1,924,139
	3,000,000	Westlake Automobile Receivables Trust 2021-2 Series 2021-2A F(a)		3.6600	12/15/27		2,899,340
	1,114,891	Westlake Automobile Receivables Trust 2021-3 Series 2021-3A C(a)		1.5800	01/15/27		1,100,996
	3,660,000	Westlake Automobile Receivables Trust 2021-3 Series 2021-3A E(a)		3.4200	04/15/27		3,542,391
	4,750,000	Westlake Automobile Receivables Trust 2023-1 Series 1A D(a)		6.7900	11/15/28		4,829,137
	3,650,000	Westlake Automobile Receivables Trust 2024-2 Series 2A D(a)		5.9100	04/15/30		3,648,574
							87,318,527
		CLO — 29.0%
	3,000,000	AGL CLO 25 Ltd. Series 25A D(a),(b)	TSFR3M + 5.300%	10.6250	07/21/36		3,102,201
	289,000	Apidos Clo XL Ltd. Series 40A A1(a),(b)	TSFR3M + 1.800%	7.1290	07/15/35		289,041
	5,000,000	Apidos CLO XXIX Series 29A B(a),(b)	TSFR3M + 2.162%	7.4850	07/25/30		5,000,165
	2,650,000	Apidos CLO XXVII Series 27A CR(a),(b)	TSFR3M + 3.412%	8.7290	07/17/30		2,650,151
	3,500,000	Apidos CLO XXXV Series 2021-35A E(a),(b)	TSFR3M + 6.012%	11.3360	04/20/34		3,544,618
	530,476	Ares XL CLO Ltd. Series 2016-40A A1RR(a),(b)	TSFR3M + 1.132%	6.4600	01/15/29		530,926
	3,675,000	Ares XL CLO Ltd. Series 2016-40A BRR(a),(b)	TSFR3M + 2.062%	7.3900	01/15/29		3,680,744
	7,000,000	Ares XLIX CLO Ltd. Series 49A B(a),(b)	TSFR3M + 1.912%	7.2360	07/22/30		7,024,051
	2,700,000	Bain Capital Credit CLO 2022-1 Ltd. Series 1A A1(a),(b)	TSFR3M + 1.320%	6.6470	04/18/35		2,703,850
	2,250,000	CARLYLE US CLO 2019-2 LTD Series 2019-2A A2R(a),(b)	TSFR3M + 1.912%	7.2400	07/15/32		2,261,570
	637,707	CIFC Funding 2014-II-R Ltd. Series 2014-2RA A1(a),(b)	TSFR3M + 1.312%	6.6350	04/24/30		638,560
	2,200,000	CIFC Funding 2017-IV Ltd. Series 2017-4A A2R(a),(b)	TSFR3M + 1.812%	7.1350	10/24/30		2,203,648
	3,000,000	CIFC Funding 2017-IV Ltd. Series 2017-4A CR(a),(b)	TSFR3M + 3.412%	8.7350	10/24/30		3,025,542
	1,000,000	Dryden 30 Senior Loan Fund Series 2013-30A CR(a),(b)	TSFR3M + 1.962%	7.2840	11/15/28		999,929
	3,500,000	Dryden 30 Senior Loan Fund Series 2013-30A DR(a),(b)	TSFR3M + 2.862%	8.1840	11/15/28		3,472,367
	2,500,000	Dryden 70 CLO Ltd. Series 70A C(a),(b)	TSFR3M + 2.412%	7.7390	01/16/32		2,501,860
	85,391	Dryden Senior Loan Fund Series 2017-47A A1R(a),(b)	TSFR3M + 1.242%	6.5700	04/15/28		85,456
	39,059	Elevation CLO 2014-2 Ltd. Series 2014-2A A1R(a),(b)	TSFR3M + 1.492%	6.8200	10/15/29		39,063
	1,700,000	Elmwood CLO 20 Ltd. Series 7A BR(a),(b)	TSFR3M + 2.050%	7.3730	01/17/37		1,705,156
	5,500,000	Elmwood CLO 21 Ltd. Series 8A AR(a),(b)	TSFR3M + 1.650%	6.9750	10/20/36		5,539,627
	2,750,000	Goldentree Loan Management US CLO 1 Ltd. Series 2017-1A DR2(a),(b)	TSFR3M + 3.412%	8.7360	04/20/34		2,772,333
	4,500,000	Goldentree Loan Management US Clo 17 Ltd. Series 17A B(a),(b)	TSFR3M + 2.450%	7.7750	07/20/36		4,525,020

See accompanying notes to financial statements.

2

BOYD WATTERSON LIMITED DURATION ENHANCED INCOME FUND

SCHEDULE OF INVESTMENTS (Continued)

June 30, 2024

Principal				Coupon Rate
Amount ($)			Spread	(%)	Maturity	Fair Value
		ASSET BACKED SECURITIES — 48.6% (Continued)
		CLO — 29.0% (Continued)
	2,500,000	HalseyPoint CLO 4 Ltd. Series 4A E(a),(b)	TSFR3M + 6.972%	12.2960	04/20/34	$	2,493,808
	3,205,187	Halseypoint CLO II Ltd. Series 2A A1(a),(b)	TSFR3M + 1.362%	6.6860	07/20/31		3,205,187
	3,137,500	HPS Loan Management 6-2015 Ltd. Series 2015 CR(a),(b)	TSFR3M + 2.762%	8.0980	02/05/31		3,114,910
	2,200,000	HPS Loan Management 8-2016 Ltd. Series 2016 CR(a),(b)	TSFR3M + 2.212%	7.5360	07/20/30		2,203,676
	5,250,000	ICG US CLO 2014-3 Ltd. Series 3A A2RR(a),(b)	TSFR3M + 1.762%	7.0850	04/25/31		5,257,943
	1,250,000	ICG US CLO 2022-1i Ltd. Series 1A D1(a),(b)	TSFR3M + 4.060%	9.3850	07/20/35		1,243,322
	175,318	LCM XXII Ltd. Series 22A A1R(a),(b)	TSFR3M + 1.422%	6.7460	10/20/28		175,365
	2,000,000	Madison Park Funding XXIV Ltd. Series 24A BR2(a),(b)	TSFR3M + 1.550%	6.8790	10/20/29		1,999,948
	2,000,000	Neuberger Berman CLO XV Series 2013-15A CR2(a),(b)	TSFR3M + 2.112%	7.4400	10/15/29		2,000,068
	7,600,000	Neuberger Berman CLO XVII Ltd. Series 17A CR3(a),(b)	TSFR3M + 2.150%	7.4830	07/22/38		7,600,000
	2,000,000	Neuberger Berman Loan Advisers CLO 32 Ltd. Series 2019-32A DR(a),(b)	TSFR3M + 2.962%	8.2880	01/19/32		1,987,538
	3,165,000	OCP CLO 2014-7 Ltd. Series 2014-7A CRR(a),(b)	TSFR3M + 3.362%	8.6860	07/20/29		3,170,399
	1,750,000	OCP CLO 2014-7 Ltd. Series 7A DRR(a),(b)	TSFR3M + 6.092%	11.4160	07/20/29		1,753,743
	5,075,000	OHA Credit Partners XIV Ltd. Series 14A D(a),(b)	TSFR3M + 2.962%	8.2860	01/21/30		5,075,000
	5,575,000	OHA Credit Partners XIV Ltd. Series 14A D1R(a),(b),(f)	TSFR3M + 2.900%	—	07/21/37		5,575,000
	117,885	Race Point VIII CLO Ltd. Series 2013-8A AR2(a),(b)	TSFR3M + 1.302%	6.6270	02/20/30		117,942
	2,500,000	Regatta XIII Funding Ltd. Series 2A CR(a),(b)	TSFR3M + 2.700%	8.0462	07/15/31		2,500,000
	2,250,000	Regatta XIII Funding Ltd. Series 2018-2A C(a),(b)	TSFR3M + 3.362%	8.6900	07/15/31		2,252,448
	87,500	Riserva Clo Ltd. Series 2016-3A XRR(a),(b)	TSFR3M + 1.062%	6.3890	01/18/34		87,498
	2,075,000	Sound Point CLO IX Ltd. Series 2A ARRR(a),(b)	TSFR3M + 1.472%	6.7960	07/20/32		2,078,212
	3,000,000	Venture 41 Clo Ltd. Series 41A C(a),(b)	TSFR3M + 2.862%	8.1860	01/20/34		3,019,686
	2,000,000	Venture XVII CLO Ltd. Series 2014-17A DRR(a),(b)	TSFR3M + 3.082%	8.4100	04/15/27		2,008,754
	2,425,000	Voya CLO 2014-1 Ltd.(a),(b)	TSFR3M + 3.062%	8.3890	04/18/31		2,405,639
	1,390,000	Wellfleet CLO 2016-1 Ltd. Series 2016-1A DR(a),(b)	TSFR3M + 3.162%	8.4860	04/20/28		1,390,528
	4,435,000	Wellfleet CLO 2017-1 Ltd. Series 1A BR(a),(b)	TSFR3M + 2.262%	7.5860	04/20/29		4,435,803
	2,000,000	Wind River 2021-2 CLO Ltd. Series 2A C(a),(b)	TSFR3M + 2.212%	7.5360	07/20/34		2,000,050
	500,000	Wind River 2021-2 CLO Ltd. Series 2021-2A D(a),(b)	TSFR3M + 3.412%	8.7360	07/20/34		490,032
	1,500,000	Wind River CLO Ltd. Series 2021-1A C(a),(b)	TSFR3M + 2.212%	7.5360	04/20/34		1,500,038
							129,438,416
		RESIDENTIAL MORTGAGE — 0.1%
	70,376	Towd Point Mortgage Trust 2017-5 Series 2017-5 A1(a),(b)	TSFR1M + 0.714%	6.0600	02/25/57		71,971
	183,515	Towd Point Mortgage Trust 2017-6 Series 2017-6 A1(a),(c)		2.7500	10/25/57		177,172

See accompanying notes to financial statements.

3

BOYD WATTERSON LIMITED DURATION ENHANCED INCOME FUND

SCHEDULE OF INVESTMENTS (Continued)

June 30, 2024

Principal				Coupon Rate
Amount ($)			Spread	(%)	Maturity	Fair Value
		ASSET BACKED SECURITIES — 48.6% (Continued)
		RESIDENTIAL MORTGAGE — 0.1% (Continued)
						$	249,143
		TOTAL ASSET BACKED SECURITIES (Cost $214,758,166)					217,006,086
Principal				Coupon Rate
Amount ($)			Spread	(%)	Maturity	Fair Value
		CORPORATE BONDS — 33.2%
		AUTOMOTIVE — 1.1%
	975,000	Adient Global Holdings Ltd.(a)		4.8750	08/15/26		948,903
	250,000	Dana, Inc.		5.3750	11/15/27		244,620
	3,700,000	Volkswagen Group of America Finance, LLC(a)		5.9000	09/12/33		3,774,406
							4,967,929
		BANKING — 0.9%
	3,995,000	Bank of America Corporation Series FF(c)	TSFR3M + 3.193%	5.8750	Perpetual		3,979,163
		BIOTECH & PHARMA — 0.1%
	342,000	Prestige Brands, Inc.(a)		5.1250	01/15/28		332,871
		CABLE & SATELLITE — 0.9%
	3,000,000	CCO Holdings, LLC / CCO Holdings Capital(a)		5.1250	05/01/27		2,882,896
	1,000,000	CCO Holdings, LLC / CCO Holdings Capital(a)		5.0000	02/01/28		935,691
							3,818,587
		CHEMICALS — 0.7%
	770,000	HB Fuller Company		4.2500	10/15/28		729,833
	2,675,000	Ingevity Corporation(a)		3.8750	11/01/28		2,430,455
							3,160,288
		COMMERCIAL SUPPORT SERVICES — 1.1%
	2,000,000	AMN Healthcare, Inc.(a)		4.6250	10/01/27		1,907,609
	2,945,000	Korn Ferry(a)		4.6250	12/15/27		2,811,006
							4,718,615
		CONSTRUCTION MATERIALS — 1.2%
	3,592,000	Advanced Drainage Systems, Inc.(a)		5.0000	09/30/27		3,517,000
	2,000,000	Advanced Drainage Systems, Inc.(a)		6.3750	06/15/30		2,009,940
							5,526,940

See accompanying notes to financial statements.

4

BOYD WATTERSON LIMITED DURATION ENHANCED INCOME FUND

SCHEDULE OF INVESTMENTS (Continued)

June 30, 2024

Principal				Coupon Rate
Amount ($)			Spread	(%)	Maturity	Fair Value
		CORPORATE BONDS — 33.2% (Continued)
		CONSUMER SERVICES — 0.8%
	3,885,000	Service Corp International		5.1250	06/01/29	$	3,785,271
		CONTAINERS & PACKAGING — 1.2%
	2,420,000	Silgan Holdings, Inc.		4.1250	02/01/28		2,290,305
	3,350,000	TriMas Corporation(a)		4.1250	04/15/29		3,072,228
							5,362,533
		ELECTRIC UTILITIES — 0.7%
	2,940,000	National Rural Utilities Cooperative Finance(c)	H15T5Y + 3.533%	7.1250	09/15/53		3,028,923
		ENGINEERING & CONSTRUCTION — 1.8%
	2,035,000	Installed Building Products, Inc.(a)		5.7500	02/01/28		1,991,988
	6,500,000	MasTec, Inc.(a)		4.5000	08/15/28		6,204,930
							8,196,918
		FOOD — 0.9%
	4,009,000	Darling Ingredients, Inc.(a)		5.2500	04/15/27		3,931,715
		FORESTRY, PAPER & WOOD PRODUCTS — 0.7%
	3,472,000	Louisiana-Pacific Corporation(a)		3.6250	03/15/29		3,153,694
		HEALTH CARE FACILITIES & SERVICES — 0.5%
	2,500,000	Molina Healthcare, Inc.(a)		4.3750	06/15/28		2,355,311
		HOME CONSTRUCTION — 0.4%
	2,000,000	LGI Homes, Inc.(a)		4.0000	07/15/29		1,738,593
		HOUSEHOLD PRODUCTS — 0.9%
	3,907,000	Central Garden & Pet Company		5.1250	02/01/28		3,806,503
		INSTITUTIONAL FINANCIAL SERVICES — 2.3%
	4,185,000	Goldman Sachs Group, Inc. (The) Series P(c)	TSFR3M + 3.136%	8.4610	Perpetual		4,191,964
	6,045,000	Morgan Stanley(c)	SOFRRATE + 1.880%	5.4240	07/21/34		6,027,922
							10,219,886

See accompanying notes to financial statements.

5

BOYD WATTERSON LIMITED DURATION ENHANCED INCOME FUND

SCHEDULE OF INVESTMENTS (Continued)

June 30, 2024

Principal				Coupon Rate
Amount ($)			Spread	(%)	Maturity	Fair Value
		CORPORATE BONDS — 33.2% (Continued)
		LEISURE FACILITIES & SERVICES — 0.7%
	3,560,000	Boyne USA, Inc.(a)		4.7500	05/15/29	$	3,324,130
		MACHINERY — 0.8%
	4,000,000	ATS Corporation(a)		4.1250	12/15/28		3,656,338
		METALS & MINING — 1.4%
	3,603,000	Freeport-McMoRan, Inc.		5.0000	09/01/27		3,566,975
	2,767,000	Mineral Resources Ltd.(a)		8.1250	05/01/27		2,792,506
							6,359,481
		OIL & GAS PRODUCERS — 6.9%
	2,775,000	Cheniere Energy Partners, L.P.		4.5000	10/01/29		2,645,399
	2,000,000	Chord Energy Corporation(a)		6.3750	06/01/26		2,001,378
	2,000,000	Civitas Resources, Inc.(a)		8.6250	11/01/30		2,147,818
	3,000,000	EQT Corporation		5.7500	02/01/34		2,975,380
	3,250,000	Hess Midstream Operations, L.P. (a)		5.6250	02/15/26		3,227,683
	2,000,000	Matador Resources Company(a)		6.8750	04/15/28		2,032,236
	3,240,000	Murphy Oil USA, Inc.		5.6250	05/01/27		3,217,096
	750,000	Murphy Oil USA, Inc.		4.7500	09/15/29		711,548
	4,200,000	Plains All American Pipeline, L.P. Series B(c)	TSFR3M + 4.372%	9.6940	Perpetual		4,202,555
	2,000,000	Sunoco, L.P.(a)		7.2500	05/01/32		2,069,954
	2,825,000	Sunoco, L.P. / Sunoco Finance Corporation		6.0000	04/15/27		2,823,107
	2,909,000	Targa Resources Partners, L.P. / Targa Resources		5.0000	01/15/28		2,850,765
							30,904,919
		PUBLISHING & BROADCASTING — 0.7%
	1,500,000	Nexstar Media, Inc.(a)		5.6250	07/15/27		1,426,238
	2,000,000	TEGNA, Inc.		5.0000	09/15/29		1,767,991
							3,194,229
		REAL ESTATE INVESTMENT TRUSTS — 1.1%
	3,000,000	HAT Holdings I, LLC / HAT Holdings II, LLC(a)		6.0000	04/15/25		2,999,456
	2,000,000	Iron Mountain, Inc.(a)		5.2500	03/15/28		1,936,939
							4,936,395
		RETAIL - DISCRETIONARY— 1.2%
	1,400,000	Asbury Automotive Group, Inc.		4.5000	03/01/28		1,328,505
	945,000	Asbury Automotive Group, Inc.		4.7500	03/01/30		877,179

See accompanying notes to financial statements.

6

BOYD WATTERSON LIMITED DURATION ENHANCED INCOME FUND

SCHEDULE OF INVESTMENTS (Continued)

June 30, 2024

Principal				Coupon Rate
Amount ($)			Spread	(%)	Maturity	Fair Value
		CORPORATE BONDS — 33.2% (Continued)
		RETAIL - DISCRETIONARY — 1.2% (Continued)
	1,000,000	Builders FirstSource, Inc.(a)		6.3750	03/01/34	$	991,861
	2,120,000	Patrick Industries, Inc.(a)		7.5000	10/15/27		2,143,379
							5,340,924
		SEMICONDUCTORS — 1.4%
	2,180,000	Amkor Technology, Inc.(a)		6.6250	09/15/27		2,187,369
	2,075,000	ON Semiconductor Corporation(a)		3.8750	09/01/28		1,916,601
	2,200,000	Synaptics, Inc.(a)		4.0000	06/15/29		1,997,244
							6,101,214
		SOFTWARE — 0.1%
	500,000	Gen Digital, Inc.(a)		6.7500	09/30/27		506,807
		SPECIALTY FINANCE — 0.6%
	3,000,000	FirstCash, Inc.(a)		4.6250	09/01/28		2,822,746
		TECHNOLOGY SERVICES — 0.7%
	3,500,000	Booz Allen Hamilton, Inc.(a)		3.8750	09/01/28		3,297,505
		TRANSPORTATION & LOGISTICS — 0.5%
	2,000,000	Genesee & Wyoming, Inc.(a)		6.2500	04/15/32		1,996,508
		TRANSPORTATION EQUIPMENT — 0.9%
	2,000,000	Allison Transmission, Inc.(a)		4.7500	10/01/27		1,934,021
	2,000,000	Allison Transmission, Inc.(a)		5.8750	06/01/29		1,974,251
							3,908,272
		TOTAL CORPORATE BONDS (Cost $152,154,145)					148,433,208
Principal				Coupon Rate
Amount ($)			Spread	(%)	Maturity	Fair Value
		TERM LOANS — 5.6%
		BIOTECH & PHARMA — 0.0%(d)
	4,835	Prestige Brands, Inc.(b)	TSFR1M + 2.115%	7.4500	07/01/28		4,868
		CHEMICALS — 0.8%
	3,477,500	HB Fuller Company(b)	TSFR1M + 2.000%	7.3300	02/15/30		3,484,038

See accompanying notes to financial statements.

7

BOYD WATTERSON LIMITED DURATION ENHANCED INCOME FUND

SCHEDULE OF INVESTMENTS (Continued)

June 30, 2024

Principal				Coupon Rate
Amount ($)			Spread	(%)	Maturity	Fair Value
		TERM LOANS — 5.6% (Continued)
		CONSTRUCTION MATERIALS — 0.9%
	3,908,861	Quikrete Holdings, Inc.(b)	TSFR1M + 2.500%	7.8150	03/25/31	$	3,919,864
		LEISURE FACILITIES & SERVICES — 0.7%
	2,924,812	Hilton Grand Vacations Borrower, LLC(b)	TSFR1M + 2.500%	8.1900	08/02/28		2,928,205
		LEISURE PRODUCTS — 0.9%
	3,917,500	Hayward Industries, Inc.(b)	TSFR1M + 2.865%	8.1900	05/28/28		3,918,323
		MEDICAL EQUIPMENT & DEVICES — 0.2%
	1,102,591	Avantor Funding, Inc.(b)	TSFR1M + 2.100%	7.4300	11/08/27		1,109,024
		PUBLISHING & BROADCASTING — 0.3%
	1,549,070	Nexstar Broadcasting, Inc.(b)	TSFR1M + 2.615%	7.9400	09/19/26		1,554,607
		RETAIL - DISCRETIONARY — 0.7%
	3,000,000	Johnstone Supply, LLC(b)	TSFR1M + 3.000%	8.3210	05/16/31		3,007,500
		TECHNOLOGY HARDWARE — 0.4%
	1,990,000	Ciena Corporation(b)	TSFR1M + 2.100%	7.3300	10/24/30		2,000,368
		TRANSPORTATION & LOGISTICS — 0.7%
	3,000,000	Genesee & Wyoming, Inc.(b)	TSFR1M + 2.000%	7.3010	04/07/31		3,000,285
		TOTAL TERM LOANS (Cost $24,863,493)					24,927,082
Principal				Coupon Rate
Amount ($)				(%)	Maturity	Fair Value
		U.S. TREASURY BONDS & NOTES — 5.6%
	26,650,000	United States Treasury Note (Cost $24,708,106)		3.5000	02/15/33	$	25,027,057

See accompanying notes to financial statements.

8

BOYD WATTERSON LIMITED DURATION ENHANCED INCOME FUND

SCHEDULE OF INVESTMENTS (Continued)

June 30, 2024

Shares			Fair Value
		SHORT-TERM INVESTMENTS — 6.7%
		MONEY MARKET FUNDS - 6.7%
	29,956,200	First American Government Obligations Fund, Class X, 5.23% (Cost $29,956,200)(e)	$	29,956,200
		TOTAL INVESTMENTS – 101.2% (Cost $455,521,066)	$	451,974,036
		LIABILITIES IN EXCESS OF OTHER ASSETS - (1.2)%		(5,192,427	)
		NET ASSETS - 100.0%	$	446,781,609

CLO	- Collateralized Loan Obligation
LLC	- Limited Liability Company
LP	- Limited Partnership
LTD	- Limited Company
H15T5Y	US Treasury Yield Curve Rate T Note Constant Maturity 5 Year
SOFR30A	United States 30 Day Average SOFR Secured Overnight Financing Rate
SOFRRATE	United States SOFR Secured Overnight Financing Rate
TSFR1M	TSFR1M Term CME (Secured Overnight Financing Rate) 1 Month
TSFR3M	TSFR3M Term CME (Secured Overnight Financing Rate) 3 month

(a) Security exempt from registration under Rule 144A or Section 4(2) of the Securities Act of 1933. The security may be resold in transactions exempt from registration, normally to qualified institutional buyers. As of June 30, 2024 the total market value of 144A securities is $289,572,130 or 65.0% of net assets.

(b) Floating rate security, the interest rate of which adjusts periodically based on changes in current interest rates and prepayments on the underlying pool of assets.

(c) Variable rate security; the rate shown represents the rate on June 30, 2024.

(d) Percentage rounds to less than 0.1%.

(e) Rate disclosed is the seven day effective yield as of June 30, 2024.

(f) Zero coupon bond.

See accompanying notes to financial statements.

9

Boyd Watterson Limited Duration Enhanced Income Fund

STATEMENT OF ASSETS AND LIABILITIES

June 30, 2024

ASSETS
Investment securities:
At cost	$	455,521,066
At fair value	$	451,974,036
Dividends and interest receivable		4,805,370
Receivable for fund shares sold		268,511
Prepaid expenses		21,002
TOTAL ASSETS		457,068,919
LIABILITIES
Payable for securities purchased		10,082,500
Payable for fund shares redeemed		2,629
Investment advisory fees payable		75,195
Payable to related parties		74,707
Accrued expenses and other liabilities		52,279
TOTAL LIABILITIES		10,287,310
NET ASSETS	$	446,781,609
Net Assets Consist Of:
Paid in capital ($0 par value, unlimited shares authorized)	$	455,700,259
Accumulated losses		(8,918,650	)
NET ASSETS	$	446,781,609
Net Asset Value Per Share:
Class I Shares:
Net Assets	$	98,503,116
Shares of beneficial interest outstanding *		10,200,218
Net asset value (Net Assets ÷ Shares Outstanding), offering price and redemption price per share	$	9.66
Class I2 Shares:
Net Assets	$	348,278,493
Shares of beneficial interest outstanding *		35,472,057
Net asset value (Net Assets ÷ Shares Outstanding), offering price and redemption price per share	$	9.82

* Unlimited number of shares of beneficial interest authorized, no par value.

See accompanying notes to financial statements.

10

Boyd Watterson Limited Duration Enhanced Income Fund

STATEMENT OF OPERATIONS

For the Year Ended June 30, 2024

INVESTMENT INCOME
Dividends	$	366,498
Interest, net of amortization and accretion		23,353,592
TOTAL INVESTMENT INCOME		23,720,090
EXPENSES
Investment advisory fees		1,522,255
Distribution (12b-1) fees
Class A*		3,732
Class C*		12,380
Administrative services fees		381,675
Third party administration servicing fees		90,092
Transfer agent fees		77,722
Registration fees		51,825
Custodian fees		48,454
Compliance officer fees		31,062
Audit fees		24,814
Legal Fees		21,256
Printing and postage expenses		19,957
Trustees’ fees and expenses		17,570
Insurance expense		7,320
Other expenses		8,043
TOTAL EXPENSES		2,318,157
Less: Fees waived by the advisor		(593,794	)
NET EXPENSES		1,724,363
NET INVESTMENT INCOME		21,995,727
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS
Net realized loss from investments		(1,554,840	)
Net change in unrealized appreciation on investments		11,448,821
NET REALIZED AND UNREALIZED GAIN FROM INVESTMENTS		9,893,981
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	31,889,708

* As of the close of business on March 28, 2024, sales and operations of Classes A and C were suspended. Classes A and C were coverted to Class I shares.

See accompanying notes to financial statements.

11

Boyd Watterson Limited Duration Enhanced Income Fund

STATEMENTS OF CHANGES IN NET ASSETS

	For the			For the
	Year Ended			Year Ended
	June 30, 2024			June 30, 2023
FROM OPERATIONS
Net investment income	$	21,995,727		$	17,471,632
Net realized loss from investments		(1,554,840	)		(1,576,329	)
Net change in unrealized appreciation on investments		11,448,821			11,562,739
Net increase in net assets resulting from operations		31,889,708			27,458,042
DISTRIBUTIONS TO SHAREHOLDERS
Total distribution paid
Class A*		(83,182	)		(100,605	)
Class C*		(59,644	)		(62,934	)
Class I		(4,536,095	)		(3,203,757	)
Class I2		(17,185,743	)		(14,400,992	)
Net decrease in net assets from distributions to shareholders		(21,864,664	)		(17,768,288	)
FROM SHARES OF BENEFICIAL INTEREST
Proceeds from shares sold:
Class A*		84,402			133,855
Class C*		39,994			—
Class I		45,466,186			7,076,118
Class I2		62,944,520			35,903,661
Reinvestment of distributions to shareholders:
Class A*		83,181			100,541
Class C*		59,644			62,934
Class I		4,480,780			3,171,926
Class I2		14,999,447			12,219,313
Payments for shares redeemed:
Class A*		(2,251,408	)		(377,099	)
Class C*		(1,787,746	)		(126,967	)
Class I		(17,282,337	)		(13,763,130	)
Class I2		(49,470,097	)		(31,524,089	)
Net increase in net assets from shares of beneficial interest		57,366,566			12,877,063
TOTAL INCREASE IN NET ASSETS		67,391,610			22,566,817
NET ASSETS
Beginning of Year		379,389,999			356,823,182
End of Year	$	446,781,609		$	379,389,999

* As of the close of business on March 28, 2024, sales and operations of Classes A and C were suspended. Classes A and C were coverted to Class I shares.

See accompanying notes to financial statements.

12

Boyd Watterson Limited Duration Enhanced Income Fund

STATEMENTS OF CHANGES IN NET ASSETS (Continued)

	For the			For the
	Year Ended			Year Ended
	June 30, 2024			June 30, 2023
SHARE ACTIVITY
Class A:*
Shares Sold		8,816			14,244
Shares Reinvested		8,738			10,790
Shares Redeemed		(233,132	)		(40,171	)
Net decrease in shares of beneficial interest outstanding		(215,578	)		(15,137	)
Class C:*
Shares Sold		4,170			—
Shares Reinvested		6,252			6,740
Shares Redeemed		(184,585	)		(13,620	)
Net decrease in shares of beneficial interest outstanding		(174,163	)		(6,880	)
Class I:
Shares Sold		4,703,128			751,307
Shares Reinvested		468,637			341,035
Shares Redeemed		(1,795,879	)		(1,459,809	)
Net increase (decrease) in shares of beneficial interest outstanding		3,375,886			(367,467	)
Class I2:
Shares Sold		6,432,372			3,749,670
Shares Reinvested		1,546,460			1,295,925
Shares Redeemed		(5,101,086	)		(3,304,822	)
Net increase in shares of beneficial interest outstanding		2,877,746			1,740,773

* As of the close of business on March 28, 2024, sales and operations of Classes A and C were suspended. Classes A and C were coverted to Class I shares.

See accompanying notes to financial statements.

13

Boyd Watterson Limited Duration Enhanced Income Fund

FINANCIAL HIGHLIGHTS

Per Share Data and Ratios for a Share of Beneficial Interest Outstanding Throughout the Years Presented

	Class I
	For the			For the			For the			For the			For the
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	June 30, 2024			June 30, 2023			June 30, 2022			June 30, 2021			June 30, 2020
Net asset value, beginning of year	$	9.42		$	9.20		$	10.08		$	9.89		$	9.97
Activity from investment operations:
Net investment income (1)		0.54			0.42			0.27			0.29			0.30
Net realized and unrealized gain (loss) on investments		0.26			0.25			(0.83	)		0.22			(0.05	)
Total from investment operations		0.80			0.67			(0.56	)		0.51			0.25
Less distributions from:
Net investment income		(0.56	)		(0.45	)		(0.30	)		(0.32	)		(0.33	)
Net realized gains		—			(0.00	) (2)		(0.02	)		—			—
Total distributions		(0.56	)		(0.45	)		(0.32	)		(0.32	)		(0.33	)
Net asset value, end of year	$	9.66		$	9.42		$	9.20		$	10.08		$	9.89
Total return (3)		8.69	% (6)		7.50	%		(5.69	)%		5.19	%		2.58	%
Net assets, end of year (000s)	$	98,503		$	64,313		$	66,146		$	86,471		$	33,653
Ratio of gross expenses to average net assets (4,5)		0.60	%		0.60	%		0.60	%		0.60	%		0.63	%
Ratio of net expenses to average net assets (5)		0.60	%		0.60	%		0.60	%		0.60	%		0.60	%
Ratio of net investment income to average net assets		5.58	%		4.57	%		2.67	%		2.89	%		3.07	%
Portfolio Turnover Rate		28	%		35	%		47	%		73	%		70	%

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

(2) Amount is less than $0.005 per share.

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

(4) Represents the ratio of expenses to average net assets absent fee waivers and/or expense reimbursements by the advisor.

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

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

See accompanying notes to financial statements.

14

Boyd Watterson Limited Duration Enhanced Income Fund

FINANCIAL HIGHLIGHTS

Per Share Data and Ratios for a Share of Beneficial Interest Outstanding Throughout the Years Presented

	Class I2
	For the			For the			For the			For the			For the
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	June 30, 2024			June 30, 2023			June 30, 2022			June 30, 2021			June 30, 2020
Net asset value, beginning of year	$	9.55		$	9.30		$	10.17		$	9.95		$	10.01
Activity from investment operations:
Net investment income (1)		0.56			0.45			0.29			0.32			0.33
Net realized and unrealized gain (loss) on investments		0.27			0.25			(0.84	)		0.22			(0.06	)
Total from investment operations		0.83			0.70			(0.55	)		0.54			0.27
Less distributions from:
Net investment income		(0.56	)		(0.45	)		(0.30	)		(0.32	)		(0.33	)
Net realized gains		—			(0.00	) (2)		(0.02	)		—			—
Total distributions		(0.56	)		(0.45	)		(0.32	)		(0.32	)		(0.33	)
Net asset value, end of year	$	9.82		$	9.55		$	9.30		$	10.17		$	9.95
Total return (3)		8.89	%		7.74	%		(5.54	)%		5.46	%		2.77	%
Net assets, end of year (000s)	$	348,278		$	311,396		$	286,882		$	259,922		$	227,338
Ratio of gross expenses to average net assets (4,5)		0.60	%		0.60	%		0.60	%		0.60	%		0.63	%
Ratio of net expenses to average net assets (5)		0.41	%		0.40	%		0.40	%		0.40	%		0.40	%
Ratio of net investment income to average net assets		5.77	%		4.78	%		2.88	%		3.10	%		3.27	%
Portfolio Turnover Rate		28	%		35	%		47	%		73	%		70	%

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

(2) Amount is less than $0.005 per share.

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

(4) Represents the ratio of expenses to average net assets absent fee waivers and/or expense reimbursements by the advisor.

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

See accompanying notes to financial statements.

15

Boyd Watterson Limited Duration Enhanced Income Fund

NOTES TO FINANCIAL STATEMENTS 

June 30, 2024

1. ORGANIZATION

Boyd Watterson Limited Duration Enhanced Income Fund (the ’‘Fund’’) is a diversified series of shares of beneficial interest of Northern Lights Fund Trust III, a Delaware statutory trust organized on December 5, 2011 (the “Trust”). The Trust is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the ’’1940 Act’’). The Fund currently consists of two classes of shares. The Fund’s Class I2 is the successor to the Boyd Watterson Limited Duration Mid-Grade Fund, LLC, (the “Predecessor Fund”). The Predecessor Fund was organized under the laws of the State of Delaware as a limited liability company effective July 19, 2012 and commenced operations on July 15, 2013. Class I commenced operations on April 13, 2017. The Predecessor Fund’s investment objective was to generate current income consistent with a strategy that focuses on capital preservation, without taking significant duration risk. The Fund seeks (i) income generation as a principal objective and (ii) capital preservation and total return as secondary objectives.

Each share class represents an interest in the same assets of the Fund, has the same rights and is identical in all material respects except that (i) each class of shares may bear different distribution fees; (ii) each class of shares may be subject to different (or no) sales charges; (iii) certain other class specific expenses will be borne solely by the class to which such expenses are attributable; and (iv) each class has exclusive voting rights with respect to matters relating to its own distribution arrangements. The Fund’s income, expenses (other than class specific distribution fees) and realized and unrealized gains and losses are allocated proportionately each day based upon the relative net assets of each class.

Effective as of the close of business on March 28, 2024, sales and operations of Class A and C shares of the Fund’s were suspended. Classes A and C shares were converted to Class I shares. Class A transferred 201,874 shares and $1,954,364, and Class C transferred 169,333 shares and $1,642,359

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (’‘GAAP”), which require 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 increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946 “Financial Services – Investment Companies” including Accounting Standards Update (“ASU”) 2013-08.

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

The Fund may hold securities, such as private investments, interests in commodity pools, other non-traded securities or temporarily illiquid securities, for which market quotations are not readily available or are determined to be unreliable. These securities will be valued using the “fair value” procedures approved by the Board. The Board has delegated execution of these procedures to the advisor as its valuation designee (the “Valuation Designee”). The Board may also enlist third party consultants such a valuation specialist at a public accounting firm, valuation consultant or financial officer of a security issuer on an as-needed basis to assist the Valuation Designee in determining a security-specific fair value. The Board is responsible for reviewing and approving fair value methodologies utilized by the Valuation Designee, which approval shall be based upon whether the Valuation Designee followed the valuation procedures established by the Board.

16

Boyd Watterson Limited Duration Enhanced Income Fund 

NOTES TO FINANCIAL STATEMENTS (Continued) 

June 30, 2024

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

Valuation of Fund of Funds - The Fund may invest in portfolios of open-end or closed-end investment companies (the “Underlying Funds”). Underlying open-end investment companies are valued at their respective net asset values as reported by such investment companies. The Underlying Funds value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the board of directors of the Underlying Funds. The shares of many closed-end investment companies, after their initial public offering, frequently trade at a price per share, which is different than the net asset value per share. The difference represents a market premium or market discount of such shares. There can be no assurances that the market discount or market premium on shares of any closed-end investment company purchased by the Fund will not change.

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

Level 1 – Unadjusted quoted prices in active markets for identical assets and 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 relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.

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

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

17

Boyd Watterson Limited Duration Enhanced Income Fund 

NOTES TO FINANCIAL STATEMENTS (Continued) 

June 30, 2024

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following table summarizes the inputs used as of June 30, 2024 for the Fund’s investments measured at fair value:

Assets*	Level 1		Level 2		Level 3		Total
Preferred Stocks	$	6,624,403	$	—	$	—	$	6,624,403
Asset Backed Securities		—		217,006,086		—		217,006,086
Corporate Bonds		—		148,433,208		—		148,433,208
Term Loans		—		24,927,082		—		24,927,082
U.S. Treasury Bonds & Notes		—		25,027,057		—		25,027,057
Short-Term Investments		29,956,200		—		—		29,956,200
Total	$	36,580,603	$	415,393,433	$	—	$	451,974,036

The Fund did not hold any Level 3 securities during the year.

* Refer to the Schedule of Investments for industry classifications.

Security Transactions and Related Income – Security transactions are accounted for on the trade date. Interest income is recognized on an accrual basis. Discounts are accreted and premiums are amortized on securities purchased over the lives of the respective securities using the effective interest method, except certain securities that are held at premium and will be amortized to the earliest call date. Dividend income is recorded on the ex-dividend date. Realized gains or losses from sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds. Gains and losses realized on principal payments of asset-backed securities and bank loans (paydown gains and losses) are classified as part of investment income.

Dividends and Distributions to Shareholders – Dividends from net investment income are declared and paid quarterly. Distributions from net realized capital gains, if any, are declared and paid annually. Dividends and distributions to shareholders are recorded on the ex -dividend date and are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either temporary (e.g., deferred losses, capital loss carryforwards) or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the composition of net assets based on their federal tax -basis treatment; temporary differences do not require reclassification. These reclassifications have no effect on net assets, results from operations or net asset values per share of the Fund.

Federal Income Taxes – It is the Fund’s policy to qualify as a regulated investment company by complying with the provisions of the Internal Revenue Code of 1986, as amended that are applicable to regulated investment companies and to distribute substantially all of its taxable income and net realized gains to shareholders. Therefore, no federal income tax provision has been recorded. The Fund recognizes the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. Management has analyzed the Fund’s tax positions and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on returns filed for open tax years ended June 30, 2021, through June 30, 2023 or expected to be taken in the Fund’s June 30, 2024 tax returns. The Fund identifies its major tax jurisdictions as U.S. federal, Ohio and foreign jurisdictions where the Fund makes significant investments. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months. The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense of the Statement of Operations. During the year ended June 30, 2024, the Fund did not incur any interest or penalties.

Fixed Income Risk - When the Fund invests in fixed income securities, the value of your investment in the Fund will fluctuate with changes in interest rates. Typically, a rise in interest rates causes a decline in the value of fixed income securities owned by the Fund. In general, the market price of fixed income securities with longer maturities will increase or decrease more in response to changes in interest rates than shorter- term securities. Other risk factors include credit risk (the debtor may default) and prepayment risk (the debtor may pay its obligation early, reducing the amount of interest payments). These risks could affect the value of a particular investment by the Fund, possibly causing the Fund’s share price and total return to be reduced and fluctuate more than other types of investments.

18

Boyd Watterson Limited Duration Enhanced Income Fund 

NOTES TO FINANCIAL STATEMENTS (Continued) 

June 30, 2024

Counterparty Credit Risk - The stability and liquidity of many security transactions depends in large part on the creditworthiness of the parties to the transactions. If a counterparty to such a transaction defaults, exercising contractual rights may involve delays or costs for the Fund. Furthermore, there is a risk that a counterparty could become the subject of insolvency proceedings, and that the recovery of securities and other assets from such counterparty will be delayed or be of a value less than the value of the securities or assets originally entrusted to such counterparty.

Bank Loans Risk - The market for bank loans may not be highly liquid and the Fund may have difficulty selling them. These investments expose the Fund to the credit risk of both the financial institution and the underlying borrower. Bank loans settle on a delayed basis, potentially leading to the sale proceeds of such loans not being available to meet redemptions for a substantial period of time after the sale of the bank loans. The Fund may need a line of credit in order to meet redemptions during these periods, which may increase the Fund’s expenses. Certain bank loans may not be considered “securities,” and purchasers, such as the Fund, therefore may not be entitled to rely on the protections of federal securities laws, including anti-fraud provisions.

Market and Geopolitical Risk - The increasing interconnectivity between global economies and financial markets increases the likelihood that events or conditions in one region or financial market may adversely impact issuers in a different country, region or financial market. Securities in the Fund’s portfolio may underperform due to inflation (or expectations for inflation), interest rates, global demand for particular products or resources, natural disasters, climate-change and climate-related events, pandemics, epidemics, terrorism, regulatory events and governmental or quasi-governmental actions. The occurrence of global events similar to those in recent years, such as terrorist attacks around the world, natural disasters, social and political discord or debt crises and downgrades, among others, may result in market volatility and may have long term effects on both the U.S. and global financial markets. It is difficult to predict when similar events affecting the U.S. or global financial markets may occur, the effects that such events may have and the duration of those effects. Any such event(s) could have a significant adverse impact on the value and risk profile of the Fund’s portfolio. It is not known how long such impacts, or any future impacts of other significant events described above, will or would last, but there could be a prolonged period of global economic slowdown, which may impact your Fund investment. Therefore, the Fund could lose money over short periods due to short-term market movements and over longer periods during more prolonged market downturns. During a general market downturn, multiple asset classes may be negatively affected. Changes in market conditions and interest rates can have the same impact on all types of securities and instruments. In times of severe market disruptions, you could lose your entire investment.

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

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

3. INVESTMENT TRANSACTIONS

For the year ended June 30, 2024, cost of purchases and proceeds from sales of portfolio securities, excluding short-term investments and U.S. government securities, amounted to $177,159,920 and $40,270,914 respectively. Cost of purchases and proceeds from sales of U.S. government securities, amounted to $69,207,121 and $63,180,375, respectively.

4. INVESTMENT ADVISORY AGREEMENT AND TRANSACTIONS WITH RELATED PARTIES

Boyd Watterson Asset Management, LLC serves as the Fund’s investment advisor (the “Advisor”). Pursuant to an advisory agreement with the Trust on behalf of the Fund, the Advisor, under the oversight of the Board, directs the daily operations of the Fund and supervises the performance of administrative and professional services provided by others. As compensation for its services and the related expenses borne by the Advisor, the Fund pays the Advisor a fee computed and accrued daily and paid monthly, based on the Fund’s average daily net assets and is computed at the annual rate of 0.40%. Pursuant to the advisory

19

Boyd Watterson Limited Duration Enhanced Income Fund 

NOTES TO FINANCIAL STATEMENTS (Continued) 

June 30, 2024

agreement, the Fund accrued $1,522,255 in advisory fees for the year ended June 30, 2024.

The Advisor has contractually agreed to reduce its fees and/or absorb expenses of the Fund (“Waiver Agreement”) until at least November 1, 2024, to ensure that Total Annual Fund Operating Expenses After Fee Waiver and/or Reimbursement (exclusive of any front-end or contingent deferred loads; brokerage fees and commissions, acquired fund fees and expenses; borrowing costs (such as interest and dividend expense on securities sold short); taxes; and extraordinary expenses, such as litigation expenses (which may include indemnification of Fund officers and the Board, contractual indemnification of Fund service providers (other than the Advisor)), will not exceed 0.60%, and 0.41%, of the daily average net assets attributable to Class I and Class I2 shares, respectively. These fee waivers and expense reimbursements are subject to possible recoupment from the Fund within the three years after the fees have been waived or reimbursed, if such recoupment can be achieved within the foregoing expense limits or within the expense limits in place at the time of the recoupment, whichever is lower. For the year ended June 30, 2024, the Advisor waived fees in the amount of $593,794 pursuant to the Waiver Agreement.

The Board may terminate this expense reimbursement arrangement on 60 days’ notice to the Advisor. For the year ended June 30, 2022, the Advisor waived fees in the amount of $576,426, which is subject to recapture through June 30, 2025, pursuant to the Waiver Agreement. For the year ended June 30, 2023, the Advisor waived fees in the amount of $597,100, which is subject to recapture through June 30, 2026, pursuant to the Waiver Agreement. For the year ended June 30, 2024, the Advisor waived fees in the amount of $593,794, which is subject to recapture through June 30, 2027, pursuant to the Waiver Agreement.

Northern Lights Distributors, LLC (the “Distributor”) acts as the Fund’s principal underwriter in a continuous public offering of the Fund shares. During the year ended June 30, 2024, the Distributor received $0 in underwriting commissions.

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

Ultimus Fund Solutions, LLC (“UFS”) an affiliate of the Distributor, provides administration, fund accounting, and transfer agent services to the Trust. Pursuant to an administrative servicing agreement with UFS, the Fund pays UFS customary fees based on aggregate net assets of the Fund as described in the servicing agreement for providing administration, fund accounting, and transfer agency services to the Fund. Certain officers of the Trust are also officers of UFS and are not paid any fees directly by the Fund for serving in such capacities.

Northern Lights Compliance Services, LLC (“NLCS”) an affiliate of UFS and the Distributor, provides a chief compliance officer to the Trust, as well as related compliance services, pursuant to a consulting agreement between NLCS and the Trust. Under the terms of such agreement, NLCS receives customary fees from the Fund.

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

5. DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF CAPITAL

The Statement of Assets and Liabilities represents cost for financial reporting purposes. Aggregate cost for federal tax purposes is $455,881,344 for the Fund, and differs from fair value by net unrealized appreciation (depreciation) of securities as follows:

Unrealized appreciation	$	4,334,354
Unrealized depreciation		(8,241,662	)
Net unrealized depreciation	$	(3,907,308	)

20

Boyd Watterson Limited Duration Enhanced Income Fund 

NOTES TO FINANCIAL STATEMENTS (Continued) 

June 30, 2024

The tax character of distributions paid for the years ended June 30, 2024 and June 30, 2023 was as follows:

	Fiscal Year Ended June		Fiscal Year Ended June
	30, 2024		30, 2023
Ordinary Income	$	21,864,664	$	17,685,281
Long-Term Capital Gain		—		83,007
Return of Capital		—		—
	$	21,864,664	$	17,768,288

As of June 30, 2024 the components of accumulated earnings on a tax basis were as follows:

												Unrealized			Total
Undistributed		Undistributed		Post October Loss			Capital Loss Carry			Other Book/Tax		Appreciation/			Accumulated
Ordinary Income		Long-Term Gains		and Late Year Loss			Forwards			Differences		(Deprecation)			Earnings/(Deficits)
$	390,118	$	—	$	(654,734	)	$	(4,746,726	)	$	—	$	(3,907,308	)	$	(8,918,650	)

The difference between book basis and tax basis undistributed net investment income/(loss), accumulated net realized gain/(loss), and unrealized appreciation/(depreciation) from investments is primarily attributable to the tax deferral of losses on wash sales and adjustments for perpetual bonds.

Capital losses incurred after October 31 within the fiscal year are deemed to arise on the first business day of the following fiscal year for tax purposes. The Fund incurred and elected to defer such capital losses of $654,734.

At June 30, 2024, the Fund had capital loss carry forwards for federal income tax purposes available to offset future capital gains, as follows: 

Short-Term		Long-Term		Total		CLCF Utilized
$	527,858	$	4,218,868	$	4,746,726	$	—

6. LINE OF CREDIT

The Fund has a committed revolving line of credit agreement with PNC Bank for investment purposes and to help maintain the Fund’s liquidity, subject to the limitations of the 1940 Act for borrowings. The maximum amount of borrowing allowed under the agreement is $7,000,000. Borrowings are secured by assets held by the Fund at the custodian. The Fund has granted PNC Bank a first priority perfected security interest in the collateral pledged by the Fund. Borrowings under the PNC Bank agreement bear interest at a rate equal to the Daily Bloomberg Short-Term Bank Yield Index plus applicable margin of 2.50%, per annum, on the outstanding principal balance. The PNC Bank agreement matures on October 31, 2024. For the year ended June 30, 2024, there were no borrowings for the Fund and no balance outstanding as of period-end. 

7. SUBSEQUENT EVENTS

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

21

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders of Boyd Watterson Limited Duration Enhanced Income Fund and

Board of Trustees of Northern Lights Fund Trust III

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Boyd Watterson Limited Duration Enhanced Income Fund (the “Fund”), a series of Northern Lights Fund Trust III, as of June 30, 2024, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of June 30, 2024, the results of its operations for the year then ended, the changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits 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 audits 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 procedures included confirmation of securities owned as of June 30, 2024, by correspondence with the custodian, brokers and agent banks; when replies were not received from brokers, we performed other auditing procedures. Our audits 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 audits provide a reasonable basis for our opinion.

We have served as the Fund’s auditor since 2016.

 

COHEN & COMPANY, LTD. 

Philadelphia, Pennsylvania

August 29, 2024

COHEN & COMPANY, LTD. 

800.229.1099 | 866.818.4538 fax | cohencpa.com

Registered with the Public Company Accounting Oversight Board

22

Boyd Watterson Limited Duration Enhanced Income Fund 

SUPPLEMENTAL INFORMATION (Unaudited) 

June 30, 2024

Renewal of Advisory Agreement – Boyd Watterson Limited Duration Enhanced Income Fund*

In connection with a meeting held on May 29 and 31, 2024, the Board, including a majority of the Trustees who are not “interested persons,” as that term is defined in the Investment Company Act of 1940, as amended, discussed the renewal of the investment advisory agreement (the “Advisory Agreement”) between Boyd Watterson Asset Management, LLC (the “Adviser”) and the Trust, with respect to the Boyd Watterson Limited Duration Enhanced Income Fund (“BWLD”). In considering the renewal of the Advisory Agreement, the Board received materials specifically relating to BWLD and the Advisory Agreement.

The Board relied upon the advice of independent legal counsel and its own business judgment in determining the material factors to be considered in evaluating the Advisory Agreement and the weight to be given to each such factor. The Board’s conclusions were based on an evaluation of all of the information provided and were not the result of any one factor. Moreover, each Trustee may have afforded different weight to the various factors in reaching conclusions with respect to the Advisory Agreement.

Nature, Extent and Quality of Services. The Board recognized that the Adviser was founded in 1928, managed over $18 billion in assets, and offered an array of fixed income, real estate, and equity investment solutions to its clients. The Board reviewed the backgrounds of the Adviser’s key investment personnel, noting their education, financial industry experience, and long history with the firm. The Board acknowledged that the Adviser continued to perform ongoing macroeconomic research that analyzed interest rates, economic growth, inflation, monetary policy, and the credit cycle. The Board noted that the Adviser maintained a comprehensive risk management program that utilized qualitative, quantitative, fundamental and valuation measures to ensure the BWLD invested within its investment objectives. The Board discussed that the Adviser’s credit team monitored and discussed security ratings upgrades and downgrades. The Board commented that the Adviser selected its broker-dealers on the basis of best execution standards. The Board noted that the Adviser maintained a cybersecurity program, which included quarterly phishing tests and annual cybersecurity training. The Board concluded that the Adviser could be expected to continue providing high quality service to BWLD and its shareholders.

Performance. The Board noted that BWLD earned a five-star Morningstar rating and outperformed its peer group, Morningstar category, and benchmark across all periods. The Board discussed that the Adviser had positioned BWLD in short duration floating rate investments to capitalize on interest rate decisions by the Federal Reserve and generated strong returns. The Board concluded that it expected the Adviser to continue to meet BWLD’s investment objectives of income, capital preservation, and total return.

Fees and Expenses. The Board observed that the Adviser’s advisory fee for BWLD and BWLD’s net expense ratio were both lower than the averages and medians of its peer group and Morningstar category. The Board considered that the Adviser had an expense limitation agreement in place. The Board concluded that the Adviser’s advisory fee for BWLD was not unreasonable.

23

Boyd Watterson Limited Duration Enhanced Income Fund 

SUPPLEMENTAL INFORMATION (Unaudited) (Continued) 

June 30, 2024

Economies of Scale. The Board considered whether the Adviser had achieved economies of scale with respect to its management of BWLD. The Board noted that the Adviser had indicated its willingness to discuss the matter of breakpoints with the Board as BWLD reached a specified asset level. The Board agreed that, in light of the expense limitation agreement, which effectively provided shareholders with some benefits of scale, and the Adviser’s willingness to consider breakpoints as BWLD grew, the absence of breakpoints at this time was acceptable.

Profitability. The Board reviewed the profitability analysis provided by the Adviser for its services to BWLD. The Board recalled the Adviser’s belief that the profits were reasonable given the services provided by the Adviser and the regulatory and litigation risks related to managing a mutual fund. They considered that the Adviser continued to waive a significant portion of its advisory fee as a result of the expense cap. The Board concluded that the Adviser’s profitability with respect to BWLD was not excessive.

Conclusion. Having requested and reviewed such information from the Adviser as the Board believed to be reasonably necessary to evaluate the terms of the Advisory Agreement, and as assisted by the advice of independent counsel, the Board concluded that renewal of the Advisory Agreement was in the best interests of BWLD and its shareholders.

* Due to timing of the contract renewal schedule, these deliberations may or may not relate to the current performance results of BWLD.

24

PRIVACY NOTICE
Rev. June 2021
FACTS	WHAT DOES NORTHERN LIGHTS FUND TRUST III DO WITH YOUR PERSONAL INFORMATION?
Why?	Financial companies choose how they share your personal information.  Federal law gives consumers the right to limit some but not all sharing.  Federal law also requires us to tell you how we collect, share, and protect your personal information.  Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share depend on the product or service you have with us.  This information can include:
	■    Social Security number ■    Assets ■    Retirement Assets ■    Transaction History ■    Checking Account Information	■    Purchase History ■    Account Balances ■    Account Transactions ■    Wire Transfer Instructions
	When you are no longer our customer, we continue to share your information as described in this notice.
How?	All financial companies need to share customers’ personal information to run their everyday business.  In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons Northern Lights Fund Trust III chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information		Does Northern Lights Fund Trust III share?	Can you limit this sharing?
For our everyday business purposes – such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus		Yes	No
For our marketing purposes – to offer our products and services to you		No	We don’t share
For joint marketing with other financial companies		No	We don’t share
For our affiliates’ everyday business purposes – information about your transactions and experiences		No	We don’t share
For our affiliates’ everyday business purposes – information about your creditworthiness		No	We don’t share
For nonaffiliates to market to you		No	We don’t share
Questions?	Call (631) 490-4300

25

Who we are
Who is providing this notice?	Northern Lights Fund Trust III
What we do
How does Northern Lights Fund Trust III protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. Our service providers are held accountable for adhering to strict policies and procedures to prevent any misuse of your nonpublic personal information.
How does Northern Lights Fund Trust III collect my personal information?	We collect your personal information, for example, when you ■    Open an account ■    Provide account information ■    Give us your contact information ■    Make deposits or withdrawals from your account ■    Make a wire transfer ■    Tell us where to send the money ■    Tells us who receives the money ■    Show your government-issued ID ■    Show your driver’s license We also collect your personal information from other companies.
Why can’t I limit all sharing?	Federal law gives you the right to limit only ■    Sharing for affiliates’ everyday business purposes – information about your creditworthiness ■    Affiliates from using your information to market to you ■    Sharing for nonaffiliates to market to you State laws and individual companies may give you additional rights to limit sharing.
Definitions
Affiliates	Companies related by common ownership or control. They can be financial and nonfinancial companies. ■     Northern Lights Fund Trust III does not share with our affiliates.
Nonaffiliates	Companies not related by common ownership or control. They can be financial and nonfinancial companies ■    Northern Lights Fund Trust III does not share with nonaffiliates so they can market to you.
Joint marketing	A formal agreement between nonaffiliated financial companies that together market financial products or services to you. ■    Northern Lights Fund Trust III doesn’t jointly market.

26

INVESTMENT ADVISOR

Boyd Watterson Asset Management, LLC

1301 East 9^th Street, Suite 2900

Cleveland, OH 44114

ADMINISTRATOR

Ultimus Fund Solutions, LLC

225 Pictoria Drive, Suite 450

Cincinnati, OH 45246

BWD-AR24

Item 8. Changes in and Disagreements with Accountants for Open-End Management Investment Companies. Not applicable

Item 9. Proxy Disclosures for Open-End Management Investment Companies. Not applicable

Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies. Included under Item 7

Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract. Included under Item 7

Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable to open-end investment companies.

Item 13. Portfolio Managers of Closed-End Management Investment Companies. Not applicable to open-end investment companies.

Item 14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. Not applicable to open-end investment companies.

Item 15. Submission of Matters to a Vote of Security Holders. None

Item 16. Controls and Procedures

(a) The registrant’s Principal Executive Officer and Principal Financial Officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Act) are effective in design and operation and are sufficient to form the basis of the certifications required by Rule 30a-(2) under the Act, based on their evaluation of these disclosure controls and procedures as of a date within 90 days of this report on Form N-CSR.

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) 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 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies. Not applicable

Item 18. Recovery of Erroneously Awarded Compensation.

(a)       Not applicable

(b)       Not applicable

Item 19. Exhibits.

(a)(1) Code of Ethics for Principal Executive and Senior Financial Officers is attached hereto.

(a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)): Attached hereto.

(a)(3) Not applicable

(a)(4) Not applicable

(b) Certifications required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)): Attached hereto

SIGNATURES

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

(Registrant)   Northern Lights Fund Trust III

By (Signature and Title)

/s/ Brian Curley

Brian Curley, Principal Executive Officer/President

Date 8/30/2024

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

By (Signature and Title)

/s/ Brian Curley

Brian Curley, Principal Executive Officer/President

Date 8/30/2024

By (Signature and Title)

/s/ Rich Gleason

Rich Gleason, Principal Financial Officer/Treasurer

Date 8/30/2024