Sound Enhanced Fixed Income ETF

Ticker: SDEF

Sound Equity Income ETF

Ticker: SDEI

Annual Report

November 30, 2022

This report is not authorized for distribution to prospective investors in the Funds unless preceded or accompanied by an effective prospectus.

TABLE OF CONTENTS

A Message to Our Shareholders

1

Performance Summaries

8

Portfolio Allocations

10

Schedules of Investments

11

Statements of Assets and Liabilities

14

Statements of Operations

15

Statements of Changes in Net Assets

16

Financial Highlights

18

Notes to Financial Statements

20

Report of Independent Registered Public Accounting Firm

30

Expense Examples

31

Statement Regarding Liquidity Risk Management Program

32

Trustees and Executive Officers

33

Additional Information

35

Sound Income Strategies ETFs

Sound Income Strategies ETFs

1

The Sound Enhanced Fixed Income ETF (“SDEF” or the “Fund”)

Dear Shareholders,

Forecasting and managing securities is never an easy task, especially when moving to cash is not an option. After a bull market that lasted for more than a decade since the 2008-2009 crisis, this past year has been painful. We saw the most rapid increase in the Fed Funds rate since June 1980 - December 1980, when rates moved from 9.5% to 18%.

Higher rates, inflation, a broken supply chain, the Russian/Ukraine war, and China’s Covid lockdowns have all pushed us into, or soon to be, a domestic/global recession. There have only been five years out of the last 100 where U.S. Treasuries and the S&P 500 Index both finished in the red, and that is why pundits have started talking about the negatives of the famed 60/40 portfolio. The last bull market, from 2009-2021, was driven primarily by large revenue gains in information technology and the communication services sector, which itself was fueled by low inflation and a very low cost of capital. This, in turn, pushed equity analysts to apply high multiples to any firm that could show high growth rates in revenues or gross margins. The Covid-19 virus not only caused massive human casualties but turned out to be the death of the bull market, given the pandemic caused a global supply chain disruption, a rapid shift in demand from a service-based to a goods-based economy, and migration from large blue state cities to single-family homes in the burbs. So Covid-19 was the spark to ignite inflation which had been relatively dormant since the 1980s. This past year we have seen a rapid shift in demand back to services from goods.

For those of you that are new to the Fund, SDEF is an actively-managed portfolio of fixed-income and higher-yielding income-based securities. The primary goal of the Fund is to generate higher levels of current income with capital appreciation as a secondary focus. As with most value-focused investments, we have the burden of differentiating high-yielding securities between being a value investment versus a value trap. Investing only in traditional fixed-income securities such as government, agency, corporate, or municipal bonds would leave out many value or “valuable” asset classes such as business development companies (“BDCs”), real estate investment trusts (“REITs”), and preferred securities. Therefore, we have included these non-traditional, income-based asset classes in the Fund’s portfolio. Traditional or “core bond” portfolios are important, however, given the previous low-inflation environment over the past 20 years, until 2021, has forced income-based investors to look towards alternatives to increase yields over and above US Treasuries, Agency bonds, Mortgage Backed Securities, Municipal bonds, and even Investment Grade Corporate bonds.

This year has been the worst on record going back 40 years for bonds and the absolute worst ever for U.S. Treasuries. The Bloomberg U.S. Aggregate Bond Index suffered a -12.57% loss, the Bloomberg U.S. Universal Bond Index declined – 12.75%, the Bloomberg U.S. Treasury Index was down -12.45%, and SDEF was down -10.10% (NAV) (-10.24% Market) for the fiscal year ended November 30, 2022. There was no place to hide during 2022 and since The Fund’s mandate is to generate income, we could not have high cash balances, nor do we employ interest rate swaps or short securities. Given these constraints, our best option is to purchase quality companies, with strong management and collect our interest and dividends over time.

During the year, we picked up two new REITs: Alpine Income Properties Trust (PINE), which is a single-tenant commercial property trust, and Gaming & Leisure Properties Trust (GLPI), which owns and leases casinos and other entertainment facilities across the country. We did sell part of our position in the Plymouth Industrial REIT (PLYM), which focuses on managing single and multi-tenant distribution centers and warehouse properties in locations around the U.S., but still hold part of our position in the name. We also had a few securities called away from us: Commercial Metals & Mining was a high-yield bond that was called, and we replaced it with a Hilton Hotels bond, another high-yield name. United Rentals, Inc., an equipment rental company operating out of North America, was another bond we purchased for the Fund at a 6.69% yield. In the preferred security sector, our UMH-Properties preferred was called and we replaced it with Morgan Stanley preferred stocks. Overall, we continue to have a low turnover in the Fund, roughly 10%, and we do not expect the turnover to be much higher in 2023.

The Fed will likely continue to increase rates during Q1 of 2023, but there is a strong belief that we are at the tail end of this increasing cycle, and this presents a great opportunity to move the capital from our Sovereign Debt ETFs into domestic corporate bond names. However, we must keep in mind that we are facing two possible bear scenarios for next year. First, stagflation will continue if this supply-driven inflation cannot be corrected by domestic and global policymakers, and second, overly punitive Fed monetary policy can push us into a deep and prolonged recession, which can further negatively affect valuations in the Fund.

If, however, the Fed ends these rate increases in Q1 2023 and considers lowering rates again by the end of Q3 2023 we could see a nice tailwind in our income-based portfolio pushing values back up and helping to make up for the difficult 2022 period. Until then, we will look to add to our individual Investment Grade and High Yield Bond securities while rates stay high with the goal of increasing our income in the Fund.

SHAREHOLDER LETTER

Sound Income Strategies ETFs

2

Though the Fund is performing a little better than its given benchmark, we are disappointed with the Fund’s overall performance this past year. As we move through this late-stage business cycle and the Federal Reserve ends its inflation fight, we do believe the Fund will make up ground, performance-wise, this coming year and continue to produce solid income. We thank you for your patience and vote of confidence for being an investor in the Fund.

Regards,

Eric Lutton, CFA
Chief Investment Officer
Sound Income Strategies LLC

Investment advisory services offered through Sound Income Strategies, LLC, an SEC-registered investment advisory firm.

Must be preceded or accompanied by a prospectus.

SHAREHOLDER LETTER (Continued)

Sound Income Strategies ETFs

3

Investing involves risk, including the potential loss of principal. There is no guarantee that the Fund’s investment strategy will be successful. Shares may trade at a premium or discount to their NAV in the secondary market. The Fund is newer and has a limited operating history. The Fund has a limited number of financial institutions that are authorized to purchase and redeem shares directly from the Fund; and there may be a limited number of market makers or other liquidity providers in the marketplace. Since the Fund is actively-managed it does not seek to replicate the performance of a specified index. Securities rated below investment grade are often referred to as high yield securities or “junk bonds.” Investments in lower rated corporate debt securities typically entail greater price volatility and principal and income risk. High yield securities may be more susceptible to real or perceived adverse economic and competitive industry conditions than investment grade securities.

The Fund may, at times, hold illiquid securities. The Fund could lose money if it is unable to dispose of an illiquid investment at a time or price that is most beneficial to the Fund. The Fund’s investments in bonds and other debt securities will change in value based on changes in interest rates. If rates rise, the value of these investments generally declines. Securities with greater interest rate sensitivity and longer maturities generally are subject to greater fluctuations in value. The Fund is considered to be non-diversified, which means that it may invest more of its assets in the securities of a single issuer or a smaller number of issuers than if it were a diversified fund.

The S&P 500® Index is an index of 500 large-capitalization companies selected by Standard & Poor’s Financial Services LLC.

The Bloomberg U.S. Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market.

Bloomberg U.S. Universal Bond Index is an unmanaged index comprising U.S. dollar-denominated, taxable bonds that are rated investment grade or below investment grade.

Bloomberg U.S. Treasury Index measures U.S. dollar-denominated, fixed-rate, nominal debt issued by the U.S. Treasury.

One cannot invest directly in an index.

Fund holdings and sector allocations are subject to change. Please see the Schedule of Investments for complete holdings.

SHAREHOLDER LETTER (Continued)

Sound Income Strategies ETFs

4

The Sound Equity Income ETF (“SDEI” or the “Fund”)

Dear Shareholders,

Thank you for choosing to invest in the Sound Equity Income ETF.

As required by the SEC, we would like to take a moment to recapitulate the Fund’s strategy. Then, we will discuss the fundamental elements and some of the stocks that led to our relatively strong performance this fiscal year ended November 30, 2022 versus the S&P 500 Total Return Index (“S&P 500”) and the Russell 1000 Value Index (“Russell 1000 Value”). This is the second year in a row when SDEI out-performed both of these indices.

While we do not regard either index as a representative benchmark for the Fund, on account of the structural differences between SDEI and these much larger portfolios, we do think they provide useful bases for comparison, in terms of relative yields, returns, and sector performances, as all three portfolios focus on large-capitalization, U.S.-listed stocks. Also, the Russell 1000 Value reflects a similar value-oriented investment discipline, albeit without the high yield emphasis, which provides some contrast, as does the S&P 500 with its much heavier tech concentration and growth bias. By looking at the behaviors of the three portfolios, we can get a sense if the investment regime (value versus growth), strategy (high dividend/ short duration) or stock selection led to our relatively good or bad performance.

As described in our prior letters, SDEI is a diversified, mid- and large-cap, value-oriented, U.S.-listed, common stock portfolio, whose key characteristics are that every stock must pay a dividend. The targeted portfolio yield, on a gross basis, must be at least 2.0X that of the S&P 500. The Fund’s portfolio is concentrated, holding 30 to 35 names, with a maximum weight of 6% in any one company. Unlike many other high yielding equity funds, SDEI does not invest in master limited partnerships (“MLPs”), real estate investment trusts (“REITs”), tobacco companies, business development companies (“BDCs”), preferred stocks, or ETFs. It owns common stocks that pay qualified dividends, which are currently taxed at a lower rate than dividends or interest paid by MLPs, REITs, BDCs, preferred stocks or bonds.

Because high yielding stocks tend to be more mature, with less sales and earnings growth than the average stock in the market, they tend to trade at lower valuation multiples and appreciate less than the market cap weighted S&P 500 does. We seek to offset some, or all, of this performance drag by selecting companies that have a catalyst that could lead to above average income growth or stock price appreciation, such as a recovery from a temporary problem, a new product or management team, a recapitalization, or tightness in its end markets. Because such companies are hard to find, SDEI has a fairly concentrated portfolio. Also, because it generally takes a lot of time for companies to execute on their catalyst/transformations, the Fund should have a much lower turnover than most other funds.

In the fiscal year ended November 30, 2022, SDEI again recorded a positive return of 14.88% (NAV) (+14.51% Market) growth, after fees) that exceed the S&P 500 (-9.21%) and Russell 1000 Value (+2.40%) index returns. While SDEI’s relative performance was quite strong, its absolute performance was not as large as it might otherwise have been because there were six macro factors that greatly weighed on equity returns in 2022, as outlined below.

1)The shift in consumer behaviors away from goods and into more services due to the re-opening of the U.S. and global economies, following the Covid-19 pandemic policy shutdowns led to a decline in consumer goods sales year-over-year and surge in demand for services.

2)In 2020, the Covid shutdown policies bankrupted many production and distribution components in the global economy and delayed investments. These policies led to materials, component and finished goods shortages when the world reopened in 2021, which led to higher prices, and it displaced services workers to find other jobs, and elevated the cost to provide services, so services costs rose. The result was the hyper-inflation that pinched consumers real income and led workers to demand higher wages. It is unclear how long it will take before the “global supply chain” as these problems are collectively labeled, returns to normal.

3)With the election of more pro-Green and left-leaning officials in 2021, Governments in the U.S. and Europe intensified their wars on petrochemical-based energy sources on the belief that they are causing global warming. To discourage their use, the U.S. and others have raised the cost to produce and use fossil fuels via phase-out legislation and taxes which have led energy companies to reduce their investments, such that the world is not creating enough supply to meet demand. This condition is creating regional shortages, higher fuel, materials, general operating costs and enriching Russian and Middle Eastern suppliers. Thereby, these policies are contributing to global goods and services inflation, and empowering governments whose policies are generally anti-Western and anti-democratic in nature.

SHAREHOLDER LETTER (Continued)

Sound Income Strategies ETFs

5

4)In February 2022, Russia attacked and partially invaded its neighbor the Ukraine, which further exacerbated the global energy and inflation crises by cutting off significant parts of Europe’s natural gas supplies, and global mineral supplies and grain supplies. This war has not only added to global inflation, but reduced global travel and economic activities, while elevating the demand for munitions.

5)China’s position as a preferred, reliable, low-cost goods supplier to the U.S. and the Western world retreated in 2021 and 2022, and it is expected to continue to retreat as a result of Chinese Premier Xi Ping’s increasingly anti-Western, anti-business rhetoric and policies, and China’s production and supply issues, due to his draconian Zero Covid policies. Because China has become a less reliable business partner, which has exacerbated parts shortages, many Western companies have had to rebuild and resource their component supply chains, and re-domicile their production. These changes too will continue to raise the costs of goods and services in the West, which is pressuring company margins, and creating global tensions.

6)In response to the hyper-inflation that has resulted from all of the policies above, plus excessive government stimulus by the current and prior U.S. Administrations, the U.S. Federal Reserve began raising interest rates and pulling back on its quantitative easing polices in 2022. This war on inflation has led to the fastest short-term interest rate hikes in U.S. history. The effects of these policies have been a spike in home mortgage rates, which have temporarily collapsed the U.S. housing market, and reductions in most U.S. companies’ investment programs, which is reducing demand for materials and labor, and may result in global supply shortages lasting longer. Consequently, cyclical stocks and high growth stocks, which are valued large based on future income, have dropped materially.

These factors continue to weigh on the Fund’s portfolio , but there is light at the end of the tunnel because there is evidence that the rate of inflation is falling, and the U.S. Federal Reserve has lowered its tightening pace, even though more interest rate hikes are expected.

Using historical precedents of rate hikes, economic and business cycles as a guide, we expect the Federal Reserve to end its monetary tightening policies this year and the resulting economic contraction to be brief and shallow. If these macro forecasts play out as expected, U.S. economic growth will resume in the back half of 2023 and into 2024 and stock prices will likely rise six to nine months in advance of that progress, as they normally do. However, between now and when the all-clear, Fed is done, announcement is made, we expect more volatility, as company earnings estimates still need to come down and geo-political landscape remains uncertain at best.

Longer-term, we are concerned about the ballooning global budget deficits and the likelihood that income tax rates here and abroad will have to rise, while government expenditures retreat in order to prevent another global financial crisis. Since we cannot control or take advantage of this slowly developing risk, we are spending most of our time focused on trying to figure out if the Fund’s portfolio companies are doing the right things, and looking for better ideas, as best as we can.

As always, it is important to keep in mind that a portfolio of high yielding stocks has a significantly shorter mathematical duration than a portfolio of average or long duration growth stocks. In growth portfolios, where most of the value is based on an estimated discounted present value of cash flows projected to come in the future, changes in interest rates higher or lower, cause the value to change inversely, often in a dramatic fashion. Our lower duration portfolio is affected by changes in interest rates to a much lesser degree because more of its value is based on actual current cash flows being paid to investors today, in the form of dividends. Hence, in periods of rising interest rates, dividend paying value stocks like ours tend to outperform growth stocks and in periods of falling interest rates, long duration growth stocks tend to out-perform their value counterparts.

We have been fortunate in that we were able to outperform the broader index when rates fell and when they rose over the last two years, because we were able to find more stocks that were oversold than the effects of interest rates could account for alone.

In fiscal 2022, about two-thirds of the Fund’s positive NAV return was due to stock appreciation and one-third was due to the dividends, after fees. Clearly, not every stock was a winner, but there were a few large gainers, such as H&R Block, Valero Energy and Greif, Class B, that greatly boosted the Fund’s results, and a few real turkeys, like Hanesbrands, Newell Brands and Xerox that dragged on results. SDEI also benefited by a 1% goose, when First Horizon Bank got a takeover bid from Toronto Dominion at a 50% premium.

Thematically, the consumer stocks, like Hanesbrands and Newell were the biggest headwinds, as they were fundamentally affected by consumers pulling back on goods purchases and the stocks’ multiples contracted due to their relatively high balance sheet leverage, which will have to be refinanced down the road, now at higher rates. Xerox too got hit by debt refinance concerns, plus its CEO unexpectedly died, and the return to office demand catalyst that was expected has been slower in coming that we had hoped. In the case of HR Block, the stock was greatly over-sold coming into the period and the company exceeded expectations all year, which won it many followers and led to an 80% appreciation in the stock, at its peak. (Yes, we sold some.) Valero benefitted from a recovery in demand and margins, which led it to rise by ~50%, while Greif was able to not only exceed expectations, but it sold a long-time problematic business that lifted its fair value estimates by around 30%.

SHAREHOLDER LETTER (Continued)

Sound Income Strategies ETFs

6

Despite a few disappointments and happy surprises along the way, SDEI reported a very low portfolio turnover rate of 20% for the fiscal year ended November 30, 2022 and we expect this trend to continue. The low turnover is a result of our high yield, value with a catalyst strategy, which limits the number of suitable names, and also requires patience to see the benefits of those chosen. However, we do expect the turnover to gradually rise, as more names mature and need replacing.

Looking ahead, we expect growth stocks to get a boost in 2023, as investors look past peak interest rates and regain conviction in some of the secular growth companies, after expectations have reset. For our names, we expect the bunker areas, like healthcare, utilities and staples to outperform early in the year and the more cyclical names, such as financial services and consumer names to benefit later in the year. Consequently, we expect a lot of volatility and anticipate that there will be some portfolio changes as stocks that do not currently meet our high yield with a catalyst fall into range, and we reduce our safety net positions and take on a higher weight in more coiled springs. This is a shift in policy from last year, when we dialed down the Fund’s portfolio’s weighted average beta from 1.1 to 0.7.

With an internal yield of 4.5% versus 1.7% for the S&P 500 and a weighted average PE of 11.4 versus 17.5 for the S&P 500, the Fund’s portfolio remains attractively priced versus the broader market. So long as investors value high yield names and we can find companies that are fundamentally improving, we should continue to offer an attractive product to clients.

Thank you again for the trust that you have placed with us in choosing the Sound Equity Income ETF. We look forward to working with you again in 2023 and beyond.

Warm regards always,

Eric Beyrich, CFA, CFP
Portfolio Manager, Sound Equity Income ETF

Must be preceded or accompanied by a prospectus.

SHAREHOLDER LETTER (Continued)

Sound Income Strategies ETFs

7

Investing involves risk, including the potential loss of principal. There is no guarantee that the Fund’s investment strategy will be successful. Shares may trade at a premium or discount to their NAV in the secondary market. The Fund is newer and has a limited operating history. The Fund has a limited number of financial institutions that are authorized to purchase and redeem shares directly from the Fund; and there may be a limited number of market makers or other liquidity providers in the marketplace. Since the Fund is actively-managed it does not seek to replicate the performance of a specified index. Equity securities held in the Fund’s portfolio may experience sudden, unpredictable drops in value or long periods of decline in value.

The Fund is considered to be non-diversified, which means that it may invest more of its assets in the securities of a single issuer or a smaller number of issuers than if it were a diversified fund.

Earnings growth is a measure of the increase in a company’s income.

Cash flow, or free cash flow, represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.

Duration is a measure that helps approximate the degree of price sensitivity of a bond to changes in interest rates and is adjusted to account for the change in cash flows of the bond’s embedded option.

The weighted average beta is the beta of the stocks in a fund’s portfolio based on each stocks weighting in the portfolio. Beta is a measure of the volatility—or systematic risk—of a security or portfolio compared to the market as a whole.

The weighted average PE is the price/earnings ratios of the stocks in a fund’s portfolio based on each stocks weighting in the portfolio. The P/E ratio of a stock is calculated by dividing the current price of the stock by its trailing 12 months’ earnings per share.

The Russell 1000 Value Index is a widely-recognized, capitalization-weighted (companies with larger market capitalizations have more influence than those with smaller market capitalization) index of U.S. companies with lower forecasted growth rates and price-to-book ratios.

The S&P 500® Index is an index of 500 large-capitalization companies selected by Standard & Poor’s Financial Services LLC.

One cannot invest directly in an index.

Fund holdings and sector allocations are subject to change. Please see the Schedule of Investments for complete holdings.

SHAREHOLDER LETTER (Continued)

8

Sound Enhanced Fixed Income ETF

PERFORMANCE SUMMARY (Unaudited)

Total Returns for the periods ended November 30, 2022:

 

1 Year

 

Since Inception (12/30/2020)

 

Ending Values
(11/30/2022)

Sound Enhanced Fixed Income ETF - NAV

-10.10%

-2.04%

$9,613

Sound Enhanced Fixed Income ETF - Market

-10.24%

-2.07%

$9,607

Bloomberg U.S. Universal Bond Index

-12.75%

-7.33%

$8,642

This chart illustrates the performance of a hypothetical $10,000 investment made on December 30, 2020 (commencement of operations), and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The chart assumes reinvestment of capital gains, dividends, and return of capital, if applicable, for a fund and dividends for an index.

Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling (833) 916-9056. The Fund’s expense ratio as of the most recently filed prospectus is 1.89%.

9

Sound Equity Income ETF

9

PERFORMANCE SUMMARY (Unaudited)

Total Returns for the periods ended November 30, 2022:

 

1 Year

 

Since Inception (12/30/2020)

 

Ending Values
(11/30/2022)

Sound Equity Income ETF - NAV

14.88%

20.79%

$14,366

Sound Equity Income ETF - Market

14.51%

20.69%

$14,342

S&P 500® Total Return Index

-9.21%

6.37%

$11,257

This chart illustrates the performance of a hypothetical $10,000 investment made on December 30, 2020 (commencement of operations), and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The chart assumes reinvestment of capital gains, dividends, and return of capital, if applicable, for a fund and dividends for an index.

Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling (833) 916-9056. The Fund’s expense ratio as of the most recently filed prospectus is 0.45%.

Sound Enhanced Fixed Income ETF

10

Sector/Security Type

% of Net Assets

Financial

55.3

%

Exchange Traded Funds

10.0

Energy

8.4

Utilities

6.6

Communications

4.0

Consumer, Cyclical

3.9

Closed-End Funds

3.0

Industrial

2.2

Basic Materials

2.2

Consumer, Non-cyclical

2.0

Technology

1.8

Cash & Cash Equivalents(1) 

0.6

 

Total

100.0

%

(1)Represents cash, short-term investments and liabilites in excess of other assets.

Sound Equity Income ETF

PORTFOLIO ALLOCATION at November 30, 2022 (Unaudited)

Sector

% of Net Assets

Consumer, Non-cyclical

23.4

%

Financial

17.8

Energy

15.9

Communications

10.8

Consumer, Cyclical

10.4

Basic Materials

5.8

Technology

5.5

Industrial

4.7

Utilities

4.4

Cash & Cash Equivalents(2) 

1.3

 

Total

100.0

%

(2)Represents cash, short-term investments and other assets in excess of liabilities.

PORTFOLIO ALLOCATION at November 30, 2022 (Unaudited)

Sound Enhanced Fixed Income ETF

11

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

 

 

Shares

 

Value

 

Closed-End Funds - 3.0%

AllianceBernstein Global High Income Fund, Inc.

67,629

$687,111

Total Closed-End Funds

(Cost $798,120)

687,111

 

Common Stocks - 29.2%

 

Investment Companies - 14.9%

Ares Capital Corp. (1) 

39,751

781,107

Golub Capital BDC, Inc.

47,754

668,556

PennantPark Floating Rate Capital Ltd.

63,336

732,164

Sixth Street Specialty
Lending, Inc.

31,907

601,128

WhiteHorse Finance, Inc.

49,450

660,158

 

3,443,113

Private Equity - 2.8%

Hercules Capital, Inc. (1) 

46,270

655,183

 

Real Estate Investment Trusts (REITs) - 11.5%

Alpine Income Property
Trust, Inc.

14,372

273,355

Brandywine Realty Trust

22,737

157,113

Gaming and Leisure
Properties, Inc.

1,735

91,278

Global Medical REIT, Inc.

20,299

205,020

Global Net Lease, Inc.

15,530

210,121

Medical Properties Trust, Inc.

12,472

163,633

Omega Healthcare
Investors, Inc.

7,156

216,684

Plymouth Industrial REIT, Inc.

14,707

304,435

Simon Property Group, Inc.

3,128

373,608

Spirit Realty Capital, Inc.

6,572

272,212

VICI Properties, Inc. (1) 

11,511

393,676

 

2,661,135

Total Common Stocks

(Cost $7,648,613)

6,759,431

 

 

Principal
Amount

 

Value

 

Corporate Bonds - 26.6%

 

Auto Parts & Equipment - 1.8%

American Axle & Manufacturing, Inc.

5.000%, 10/01/2029 (1) 

$483,000

418,467

 

 

 

Principal
Amount

 

Value

 

Corporate Bonds - 26.6% (Continued)

 

Chemicals - 2.1%

Olin Corp.

5.125%, 09/15/2027

$529,000

$496,506

 

Commercial Services - 2.0%

United Rentals North
America, Inc.

4.875%, 01/15/2028

493,000

471,210

 

Computers - 1.8%

Dell, Inc.

6.500%, 04/15/2038

408,000

404,850

 

Diversified Financial Services - 2.1%

Radian Group, Inc.

4.875%, 03/15/2027

529,000

480,587

 

Gas - 2.1%

National Fuel Gas Co.

4.750%, 09/01/2028

529,000

494,137

 

Lodging - 2.1%

Hilton Domestic Operating Co., Inc.

4.875%, 01/15/2030

522,000

483,779

 

Media - 2.0%

AMC Networks, Inc.

4.750%, 08/01/2025

530,000

470,357

 

Miscellaneous Manufacturers - 2.2%

Trinity Industries, Inc.

4.550%, 10/01/2024

529,000

509,797

 

Oil & Gas - 4.3%

Apache Corp.

5.100%, 09/01/2040

529,000

435,811

Murphy Oil Corp.

5.875%, 12/01/2027

582,000

562,714

 

998,525

Pipelines - 4.1%

EQM Midstream Partners L.P.

5.500%, 07/15/2028

477,000

442,561

Targa Resources Partners LP / Targa Resources Partners Finance Corp.

5.000%, 01/15/2028

529,000

501,748

 

944,309

Total Corporate Bonds

(Cost $6,869,955)

6,172,524


SCHEDULE OF INVESTMENTS at November 30, 2022

Sound Enhanced Fixed Income ETF

12

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

SCHEDULE OF INVESTMENTS at November 30, 2022 (Continued)

 

 

Shares

 

Value

 

Exchange Traded Funds - 10.0%

Invesco Emerging Markets Sovereign Debt ETF

27,613

$527,684

iShares 0-5 Year High Yield Corporate Bond ETF (1) 

17,490

731,432

iShares J.P. Morgan EM High Yield Bond ETF (1) 

17,119

604,472

VanEck Emerging Markets High Yield Bond ETF (1) 

25,640

461,264

Total Exchange Traded Funds

(Cost $2,792,017)

2,324,852

 

Preferred Stocks - 30.6%

 

Banks - 15.6%

Associated Banc-Corp

5.625%, 09/15/2025 (2) 

23,055

497,527

Bank of America Corp.

5.375%, 06/25/2024 (2) 

24,274

545,194

JPMorgan Chase & Co.

6.000%, 03/01/2024 (2) 

23,267

588,655

Morgan Stanley

4.875%, 01/15/2025 (2) 

24,964

537,225

4.250%, 01/15/2027 (2) 

24,212

436,785

Truist Financial Corp.

5.250%, 06/01/2025 (2) 

23,851

528,299

Wells Fargo & Co.

4.700%, 12/15/2025 (2) 

25,388

472,471

 

3,606,156

Diversified Financial Services - 2.0%

Capital One Financial Corp.

4.800%, 06/01/2025 (2) 

25,547

468,021

 

Electric - 4.5%

CMS Energy Corp.

5.875%, 03/01/2079

23,692

550,602

The Southern Co.

4.950%, 01/30/2080

24,169

492,806

 

1,043,408

Insurance - 6.5%

AEGON Funding Co., LLC

5.100%, 12/15/2049

24,433

495,013

The Allstate Corp.

5.100%, 10/15/2024 (2) 

23,744

516,194

MetLife, Inc.

4.750%, 03/15/2025 (2) 

24,327

496,271

 

1,507,478

 

 

Shares

 

Value

 

Preferred Stocks - 30.6% (Continued)

 

Telecommunications - 2.0%

AT&T, Inc.

4.750%, 02/18/2025 (2) 

24,646

$453,733

 

Total Preferred Stocks

(Cost $8,674,632)

7,078,796

 

Investments Purchased with Collateral from Securities Lending - 14.1%

Mount Vernon Liquid Assets Portfolio, LLC, 4.010% (3) 

3,266,209

3,266,209

Total Investments Purchased with
Collateral from Securities Lending

(Cost $3,266,209)

3,266,209

 

Total Investments in Securities - 113.5%

(Cost $30,049,546)

26,288,923

Liabilities In Excess Other Assets - (13.5)%

(3,119,040

)

Total Net Assets - 100.0%

$23,169,883

(1)This security or a portion of this security was out on loan as of November 30, 2022. Total loaned had a value of $3,225,473 or 13.9% of net assets as of November 30, 2022. The remaining contractual maturity of all of the securities lending transactions is overnight and continuous. Due to settlement of open trades, some of the positions on loan are not listed in the portfolio as of November 30, 2022.

(2)Perpetual call date security. Date shown is next call date.

(3)The rate shown is the annualized seven day effective yield as of November 30, 2022.


Sound Equity Income ETF

13

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

 

 

Shares

 

Value

 

Common Stocks - 98.6%

 

Advertising - 4.6%

Omnicom Group, Inc.

13,192

$1,052,194

 

Apparel - 3.6%

Carter’s, Inc.

6,089

444,741

Hanesbrands, Inc.

56,243

377,953

 

822,694

Banks - 6.2%

First Horizon Corp.

28,186

700,422

M&T Bank Corp.

4,187

711,874

 

1,412,296

Chemicals - 5.8%

Dow, Inc.

8,333

424,733

LyondellBasell Industries NV

10,542

896,176

 

1,320,909

Commercial Services - 3.5%

H&R Block, Inc.

18,177

794,517

 

Computers - 3.5%

International Business Machines Corp.

5,460

812,994

 

Cosmetics & Personal Care - 2.2%

Unilever PLC - ADR

9,877

497,603

 

Diversified Financial Services - 3.0%

Franklin Resources, Inc.

25,673

688,293

 

Electric - 4.4%

Edison International

4,574

304,903

Entergy Corp.

3,129

363,809

NorthWestern Corp.

5,714

333,754

 

1,002,466

Healthcare - Products - 3.9%

Patterson Companies, Inc.

31,698

901,491

 

Housewares - 1.1%

Newell Brands, Inc.

19,432

252,033

 

Insurance - 5.4%

Principal Financial Group, Inc.

13,812

1,238,660

 

Office & Business Equipment - 1.9%

Xerox Holdings Corp.

27,384

446,633

 

 

Principal
Amount

 

Value

 

Common Stocks - 98.6% (Continued)

 

Oil & Gas - 8.5%

TotalEnergies SE - ADR

12,720

$793,983

Valero Energy Corp.

8,678

1,159,554

 

1,953,537

Packaging & Containers - 4.7%

Greif, Inc. - Class B

14,351

1,078,334

 

Pharmaceuticals - 13.8%

AbbVie, Inc.

7,469

1,203,853

GSK PLC - ADR

18,871

652,748

Johnson & Johnson

2,890

514,420

Pfizer, Inc.

15,889

796,516

 

3,167,537

Pipelines - 7.3%

Enbridge, Inc.

23,154

956,029

ONEOK, Inc.

10,907

729,896

 

1,685,925

Retail - 5.7%

MSC Industrial Direct Co., Inc. - Class A

4,420

379,369

Walgreens Boots Alliance, Inc.

22,546

935,659

 

1,315,028

Savings & Loans - 3.3%

New York Community Bancorp, Inc.

80,418

751,908

 

Telecommunications - 6.2%

AT&T, Inc.

33,814

651,934

Cisco Systems, Inc.

15,471

769,218

 

1,421,152

Total Common Stocks

(Cost $21,129,422)

22,616,204

 

Short-Term Investments - 0.9%

Money Market Funds - 0.9%

First American Government Obligations Fund, Class X, 3.668% (1) 

200,853

200,853

Total Short-Term Investments

(Cost $200,853)

200,853

 

Total Investments in Securities - 99.5%

(Cost $21,330,275)

22,817,057

Other Assets in Excess of Liabilities - 0.5%

105,030

Net Assets - 100.0%

$22,922,087

ADRAmerican Depositary Receipt.

(1)The rate quoted is the annualized seven-day effective yield as of November 30, 2022.

SCHEDULE OF INVESTMENTS at November 30, 2022

Sound Income Strategies ETFs

14

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

 

 

Sound
Enhanced
Fixed Income ETF

 

Sound
Equity Income ETF

 

 

Assets:

Investments in securities, at value (Note 2)(1)

$26,288,923

$22,817,057

Receivables:

Investment securities sold

24,941

Securities lending income, net (Note 8)

5,107

Dividends and interest

179,136

113,226

Total assets

26,498,107

22,930,283

 

Liabilities:

Collateral received for securities loaned (Note 8)

3,266,209

Payables:

Distributions

53,000

Management fees (Note 4)

9,015

8,196

Total liabilities

3,328,224

8,196

Net Assets

$23,169,883

$22,922,087

 

Components of Net Assets:

Paid-in capital

$26,962,613

$21,111,905

Total distributable (accumulated) earnings (losses)

(3,792,730

)

1,810,182

Net assets

$23,169,883

$22,922,087

 

Net Asset Value (unlimited shares authorized):

Net assets

$23,169,883

$22,922,087

Shares of beneficial interest issued and outstanding

1,325,000

850,000

Net asset value

$17.49

$26.97

 

Cost of investments

$30,049,546

$21,330,275

(1)Includes loaned securities with a value of $3,225,473 and $-, respectively.

STATEMENTS OF ASSETS AND LIABILITIES at November 30, 2022

Sound Income Strategies ETFs

15

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

 

 

Sound
Enhanced
Fixed Income ETF

 

Sound
Equity Income ETF

 

 

Investment Income:

Dividend income (net of foreign withholding tax of $- and $23,541, respectively)

$1,006,618

$784,151

Interest income

230,047

2,338

Securities lending income

11,626

Total investment income, net

1,248,291

786,489

 

Expenses:

Management fees (Note 4)

104,720

80,681

Total expenses

104,720

80,681

Net investment income (loss)

1,143,571

705,808

 

Realized and Unrealized Gain (Loss) on Investments

Net realized gain (loss) on investments and foreign currencies

(14,146

)

196,840

Change in net unrealized appreciation/depreciation on investments and foreign currencies

(3,591,423

)

1,549,514

Net realized and unrealized gain (loss) on investments

(3,605,569

)

1,746,354

Net increase (decrease) in net assets resulting from operations

$(2,461,998

)

$2,452,162

STATEMENTS OF OPERATIONS For the Year Ended November 30, 2022

Sound Enhanced Fixed Income ETF

16

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

 

 

Year Ended
November 30,
2022

 

Period Ended
November 30,
2021
(1) 

 

 

Increase (Decrease) in Net Assets From:

 

Operations:

Net investment income (loss)

$1,143,571

$213,500

Net realized gain (loss) on investments

(14,146

)

(17,961

)

Change in net unrealized appreciation/depreciation on investments

(3,591,423

)

(169,200

)

Net increase (decrease) in net assets resulting from operations

(2,461,998

)

26,339

 

Distributions to Shareholders:

Distributable earnings

(1,143,571

)

(213,500

)

Return of capital

(12,429

)

(12,882

)

Net distributions to shareholders

(1,156,000

)

(226,382

)

 

Capital Share Transactions:

Net increase (decrease) in net assets derived from net changes in outstanding shares(2)

13,440,822

13,547,102

Total increase (decrease) in net assets

9,822,824

13,347,059

 

Net Assets:

Beginning of year/period

13,347,059

End of year/period

$23,169,883

$13,347,059

(1)The Fund commenced operations on December 30, 2020. The information presented is from December 30, 2020 to November 30, 2021.

(2)Summary of share transactions is as follows:

Year Ended
November 30, 2022

 

Period Ended
November 30, 2021
(1) 

Shares

Value

Shares

Value

Shares sold

675,000

$13,439,548

650,000

$13,544,572

Shares redeemed

Variable fees

1,274

2,530

Net increase (decrease)

675,000

$13,440,822

650,000

$13,547,102

STATEMENT OF CHANGES IN NET ASSETS

Sound Equity Income ETF

17

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

STATEMENT OF CHANGES IN NET ASSETS

 

 

Year Ended
November 30, 2022

 

Period Ended
November 30, 2021
(1) 

 

 

Increase (Decrease) in Net Assets From:

 

Operations:

Net investment income (loss)

$705,808

$240,214

Net realized gain (loss) on investments and foreign currencies

196,840

17,040

Change in net unrealized appreciation/depreciation on investments and foreign currencies

1,549,514

(63,006

)

Net increase (decrease) in net assets resulting from operations

2,452,162

194,248

 

Distributions to Shareholders:

Net distributions to shareholders

(613,850

)

(222,378

)

 

Capital Share Transactions:

Net increase (decrease) in net assets derived from net changes in outstanding shares(2)

8,933,370

12,178,535

Total increase (decrease) in net assets

10,771,682

12,150,405

 

Net Assets:

Beginning of year/period

12,150,405

End of year/period

$22,922,087

$12,150,405

(1)The Fund commenced operations on December 30, 2020. The information presented is from December 30, 2020 to November 30, 2021.

(2)Summary of share transactions is as follows:

Year Ended
November 30, 2022

 

Period Ended
November 30, 2021
(1) 

Shares

Value

Shares

Value

Shares sold

350,000

$8,933,370

500,000

$12,178,535

Shares redeemed

Net increase (decrease)

350,000

$8,933,370

500,000

$12,178,535

Sound Enhanced Fixed Income ETF

18

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

 

 

Year Ended
November 30, 2022

 

Period Ended
November 30, 2021
(1) 

 

 

Net asset value, beginning of year/period

$20.53

$20.00

 

Income from Investment Operations:

Net investment income (loss)(2)

0.98

0.85

Net realized and unrealized gain (loss) on investments

(3.02

)

0.53

Total from investment operations

(2.04

)

1.38

 

Less Distributions:

From net investment income

(0.99

)

(0.80

)

From return of capital

(0.01

)

(0.05

)

Total distributions

(1.00

)

(0.85

)

 

Net asset value, end of year/period

$17.49

$20.53

Total return(3)(4)

(10.10

)%

6.94

%

 

Ratios / Supplemental Data:

Net assets, end of year/period (millions)

$23.2

$13.3

Portfolio turnover rate(3)

6

%

6

%

Ratio of expenses to average net assets(5)

0.49

%

0.49

%

Ratio of net investment income (loss) to average net assets(5)

5.35

%

4.46

%

(1)The Fund commenced operations on December 30, 2020. The information presented is from December 30, 2020 to November 30, 2021.

(2)Calculated using average shares outstanding method.

(3)Not annualized.

(4)The total return is based on the Fund’s net asset value. Additional performance information is presented in the Performance Summary.

(5)Annualized.

FINANCIAL HIGHLIGHTS For a capital share outstanding throughout each year/period

Sound Equity Income ETF

19

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

FINANCIAL HIGHLIGHTS For a capital share outstanding throughout each year/period

 

 

Year Ended
November 30, 2022

 

Period Ended
November 30, 2021
(1) 

 

 

Net asset value, beginning of year/period

$24.30

$20.00

 

Income from Investment Operations:

Net investment income (loss)(2)

1.01

0.86

Net realized and unrealized gain (loss) on investments

2.55

4.15

Total from investment operations

3.56

5.01

 

Less Distributions:

From net investment income

(0.89

)

(0.71

)

Total distributions

(0.89

)

(0.71

)

 

Net asset value, end of year/period

$26.97

$24.30

Total return(3)(4)

14.88

%

25.05