UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark one)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2015

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number 000-51301

VESTIN FUND III, LLC

(Exact name of registrant as specified in its charter)

NEVADA		87-0693972
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

8880 WEST SUNSET ROAD, SUITE 200, LAS VEGAS, NEVADA 89148

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code 702-227-0965

Securities registered pursuant to Section 12(b) of the Act:

None		None
(Title of each class)		(Name of each exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act:

None

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes [ ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Sec. 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes [ ] No [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]	Accelerated filer [ ]

Non-accelerated filer [ ]	Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [ ] No [X]

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. Not applicable.

As of March 30, 2016, the Company had 2,024,424 units outstanding.

TABLE OF CONTENTS

			Page
PART I
	ITEM 1.	BUSINESS	1
	ITEM 1B.	UNRESOLVED STAFF COMMENTS	3
	ITEM 2.	PROPERTIES	3
	ITEM 3.	LEGAL PROCEEDINGS	3
	ITEM 4.	MINE SAFETY DISCLOSURE	3

PART II
	ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	4
	ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	5
	ITEM 8.	FINANCIAL STATEMENTS	10
	ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	23
	ITEM 9A.	CONTROLS AND PROCEDURES	23
	ITEM 9B.	OTHER INFORMATION	24

PART III
	ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	24
	ITEM 11.	EXECUTIVE COMPENSATION	26
	ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	26
	ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	27
	ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	27

PART IV
	ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	28
		SIGNATURES	29

PART I

Special Note Regarding Forward-Looking Statements

This report includes certain statements that may be deemed forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such forward-looking statements may be identified by the use of such words as “expects,” “plans,” “estimates,” “intend,” “might,” “may,” “could,” “will,” “feel,” “forecasts,” “projects,” “anticipates,” “believes” and words of similar expression. Forward-looking statements may relate to, without limitation, our ability and the timing required to execute and carry out our plan of liquidation and dissolution, the timing and anticipated proceeds available for distribution, pending litigation involving us and future economic conditions and other developments and trends in the commercial real estate industry. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors, which could cause actual results, performance or achievements to differ materially from future results, performance or achievements. These forward-looking statements are based on our current beliefs, intentions and expectations. These statements are not guarantees or indicative of future performance. Important assumptions and other important factors that could cause actual results to differ materially from those forward-looking statements include, but are not limited to, those factors, risks and uncertainties discussed in this Annual Report on Form 10-K and in our other securities filings with the Securities and Exchange Commission (“SEC”). Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and involve inherent risks and uncertainties. The forward-looking statements contained in this report are made only as of the date hereof. We undertake no obligation to update or revise information contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

ITEM 1.

BUSINESS

General

Vestin Fund III, LLC was organized in April 2003 as a Nevada limited liability company for the purpose of investing in commercial real estate loans (hereafter referred to as “real estate loans”) and income-producing real property. In this report, we refer to Vestin Fund III, LLC as “the Company,” “our Company,” the “Fund,” “we,” “us,” or “our”.

We commenced operations in February 2004. Prior to March 2007, we invested in revenue-generating commercial real estate and loans secured by real estate through deeds of trust or mortgages (hereafter referred to collectively as “deeds of trust” and as defined in our Operating Agreement as “Mortgage Assets”). On March 5, 2007, a majority of our members approved the Third Amended and Restated Operating Agreement, which limited the Company’s investment objectives to investments in real estate loans.

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As of December 31, 2015, our remaining non-cash assets consist of (i) a receivable in the amount of $581,000 relating to Vestin Group’s indemnity obligations as described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Related Party Transactions” and (ii) shares of MVP REIT, Inc. common stock. We had anticipated that the liquidation would be substantially completed by the second half of 2014. However, it will take longer to collect our remaining assets and convert non-cash assets into cash than we had anticipated. As a result, we are now targeting completion of the liquidation by the end of 2016. [NOTE: Confirm/update targeted timing for completion.] The exact timing for completion of the liquidation will be impacted by the payment of Vestin Group’s indemnity obligation and other matters beyond our control. In addition, other events and conditions may arise that may impact our ability and timing to complete the liquidation. Thus, no assurances can be given that we will be able to complete the liquidation within a particular date or by the anticipated time frame.

Because the liquidation of the Fund was not imminent, as of December 31, 2015, the financial statements are presented assuming the Fund will continue as a going concern. Pursuant to the Plan, we will make liquidating distributions to members as funds become available, subject to a reasonable reserve established to provide for payment of the Company’s ongoing expenses and contingent liabilities. Our members no longer have the right to have their units redeemed by us and we no longer honor any outstanding redemption requests effective as of July 2, 2009.

On May 13, 2015 and December 18, 2015, we made liquidation distributions to all Fund members in the aggregate amount of approximately $0.4 million and $0.3 million, respectively, in accordance with the Plan. These distributions follow liquidation distributions we made on January 26, 2010, April 8, 2010, September 17, 2010, May 25, 2011, June 15, 2012, January 14, 2014, June 30, 2014, and September 15, 2014 in the aggregate amount of approximately $1.0 million, $0.9 million, $0.3 million, $0.3 million, $0.4 million, $0.3 million, $0.3 million and $1.1 million, respectively, in accordance with the Plan. The amounts distributed to each member of the Fund were calculated based upon the percentage ownership interest of such member in the Fund. See Note E – Members’ Equity of the Notes to the Financial Statements included in Part II, Item 8 Financial Statements of this Annual Report on Form 10-K.

We are not a mutual fund or an investment company within the meaning of the Investment Company Act of 1940, nor are we subject to any regulation thereunder.

Michael Shustek owns a significant majority of Vestin Mortgage, LLC, a Nevada limited liability company, which is our manager (the “manager” or “Vestin Mortgage”). The business of brokerage and placement of real estate loans has been performed by affiliated or non-affiliated mortgage brokers, including Advant Mortgage, LLC (“MVP Mortgage”), a licensed Nevada mortgage broker, which is indirectly wholly owned by Michael V. Shustek.

Pursuant to our Operating Agreement and the Plan of Complete Liquidation and Dissolution approved by a majority of our members on July 2, 2009, our manager will continue to manage our operations during the liquidation process. Consequently, the orderly liquidation of our assets and our operating results are dependent upon our manager’s ability and performance in managing our liquidation.

Vestin Mortgage is also the manager of Vestin Realty Mortgage I, Inc. (“VRM I”), as the successor by merger to Vestin Fund I, LLC, (“Fund I”) and Vestin Realty Mortgage II, Inc. (“VRM II”), as the successor by merger to Vestin Fund II, LLC, (“Fund II”). These entities have been formed to invest in real estate loans and direct investments in real estate.

Business Objectives

As a result of our members’ decision to liquidate the Company, we will not make any new loans and are in the process of winding up our affairs by pursuing remedies with respect to defaulted loans and preparing for sale/selling of our real estate held for sale. Since May 2012, we no longer have investments in real estate loans. A brief description of our prior business activities is included under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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Employees

We have no employees. Our manager has provided, and will continue to provide, most of the employees necessary to carry out our plan of liquidation and dissolution, except as described below regarding Strategix Solutions, LLC. As of December 31, 2015, the Vestin entities had a total of three full-time and no part-time employees. Except as hereinafter noted, all employees are at-will employees, and none are covered by collective bargaining agreements. John Alderfer, our former CFO, is a party to an employment, non-competition, confidentiality and consulting contract with Vestin Group, Inc., the parent company of our manager, through December 31, 2016.

During April 2009, we entered into an accounting services agreement with Strategix Solutions, LLC (“Strategix Solutions”), a Nevada limited liability company, for the provision of accounting and financial reporting services. Strategix Solutions also provides accounting and financial reporting services to VRM I and VRM II. The CFO of our manager and other members of our accounting staff are employees of Strategix Solutions. Strategix Solutions is owned by our CFO, Ms. Gress. As of December 31, 2015, Strategix Solutions dedicates to us, and other Vestin affiliates, a total of three full time employees.

Available Information

Our Internet website address is http://www.vestinmortgage.com/Products/Product_FundIII.aspx. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports are available through the SEC’s Electronic Data Gathering, Analysis and Retrieval website (“EDGAR”) at http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001230634&owner=include, after such material is electronically filed with or furnished, pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, to the SEC. Further, a copy of this annual report on Form 10-K is located at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. Information on the operations of the Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330. The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding our filings at www.sec.gov. Information contained on our website does not constitute a part of this Annual Report on Form 10-K.

ITEM 1B.

UNRESOLVED STAFF COMMENTS

None.

ITEM 2.

PROPERTIES

Our manager shares office facilities in Las Vegas, Nevada through a sublease with its affiliate, Vestin Mortgage. In March, 2010, Vestin Mortgage entered into a ten-year lease agreement for office facilities in Las Vegas, Nevada.

ITEM 3.

LEGAL PROCEEDINGS

Please refer to Note H - Legal Matters Involving The Manager and Note I - Legal Matters Involving The Company in Part II, Item 8 Financial Statements of this Annual Report on Form 10-K for information regarding legal proceedings, which discussion is incorporated herein by reference.

ITEM 4.

MINE SAFETY DISCLOSURE

Not applicable.

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PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

There is no established public trading market for the trading of units.

Holders

As of March 30, 2016, approximately 512 unit holders held 2,024,424 units in the Company.

Liquidation Distribution Policy

We intend to make liquidating distributions in accordance with the Plan as set forth in Annex A of the Fund’s proxy statement filed with the SEC on May 11, 2009. We will distribute to our members the net proceeds we receive from the sale of our real estate held for sale, less a reasonable reserve established to provide for payment of the Company’s ongoing expenses and contingent liabilities. A final liquidating distribution will be made after we have completed the winding up of our business operations and made appropriate provision for any remaining obligations.

We are now targeting completion of the liquidation by the end of 2016. There are a number of factors that could delay our anticipated timetable, including the following:

•

Delays in the disposition of our shares of MVP REIT common stock and other non-cash assets;

•

Payment of Vestin Group’s indemnity obligations as described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Related Party Transactions.”

•

Lawsuits or other claims asserted by or against us;

•

Unanticipated legal, regulatory or administrative requirements; and

•

Delays in settling our remaining obligations.

In addition, real estate market conditions and other matters beyond our control, and other events and conditions that may arise, may impact our ability and timing to complete the liquidation. Thus, no assurances can be given that we will be able complete the liquidation within a particular date or by the anticipated time frame. Because the liquidation of the Fund was not imminent, as of December 31, 2015, the financial statements are presented assuming the Fund will continue as a going concern.

Recent Sales of Unregistered Securities

None.

Equity Compensation Plan Information

None.

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Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a financial review and analysis of our financial condition and results of operations for the years ended December 31, 2015, and 2014. This discussion should be read in conjunction with our financial statements and accompanying notes and other detailed information regarding us appearing elsewhere in this Annual Report on Form 10-K. In light of the decision in July 2009 to liquidate the Company, our historical operating results should not be viewed as indicative of future operating results. The following information contains forward-looking statements, which are subject to risks and uncertainties. Should one or more of these risks or uncertainties materialize, actual results may differ materially from those expressed or implied by the forward-looking statements. Please see “Special Note Regarding Forward-Looking Statements” above for a description of these risks and uncertainties.

RESULTS OF OPERATIONS

OVERVIEW

As a result, we have commenced an orderly liquidation and we no longer invest in new real estate loans. As of December 31, 2015, our remaining non-cash assets consist of (i) a receivable in the amount of $581,000 relating to Vestin Group’s indemnity obligations as described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Related Party Transactions” and (ii) shares of MVP REIT, Inc. common stock. We had anticipated that the liquidation would be substantially completed by the second half of 2014. However, it will take longer to collect our remaining assets and convert non-cash assets into cash than we had anticipated. As a result, we are now targeting completion of the liquidation by the end of 2016. The exact timing for completion of the liquidation will be impacted by the payment of Vestin Group’s indemnity obligation and other matters beyond our control. In addition, other events and conditions may arise that may impact our ability and timing to complete the liquidation. Thus, no assurances can be given that we will be able to complete the liquidation within a particular date or by the anticipated time frame.

Because the liquidation of the Fund was not imminent, as of December 31, 2015, the financial statements are presented assuming the Fund will continue as a going concern.

Pursuant to the Plan, we will make liquidating distributions to members as funds become available, subject to a reasonable reserve established to provide for payment of the Company’s ongoing expenses and contract liabilities. Our manager has established a reserve to cover our ongoing expenses and future obligations. As of December 31, 2015, our cash was approximately $0.2 million.

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Under the terms of the Plan adopted by a majority of our members, our members no longer have the right to have their units redeemed by us and we no longer honor any outstanding redemption requests effective as of July 2, 2009.

Prior to the approval of the Plan, our primary business objective was to generate income while preserving principal by investing in loans secured by real estate. The loan underwriting standards utilized by our manager and MVP Mortgage or affiliates were less strict than those used by many institutional real estate lenders. In addition, one of our competitive advantages was our ability to approve loan applications more quickly than many institutional lenders. As a result, in certain cases, we made real estate loans that were riskier than real estate loans made by many institutional lenders such as commercial banks. However, in return, we sought a higher interest rate and our manager took steps to mitigate the lending risks such as imposing a lower loan-to-value ratio. While we may have assumed more risk than many institutional real estate lenders, in return, we sought to generate higher yields from our real estate loans.

SUMMARY OF FINANCIAL RESULTS

Comparison of Operating Results for the year ended December 31, 2015, to the year ended December 31, 2014.

Total Revenue:	2015		2014		$ Change		% Change
Recovery of allowance for doubtful notes receivable	$	14,000	$	13,000	$	1,000		8	%
Total	$	14,000	$	13,000	$	1,000		8	%

Total Operating Expenses:	2015		2014		$ Change			% Change
Professional fees	$	84,000	$	87,000	$	(3,000	)		(3	%)
Consulting		21,000		25,000		(4,000	)		(16	%)
Other		10,000		10,000		--			--
Total	$	115,000	$	122,000	$	(7,000	)		(6	%)

Total Non-operating income:	2015		2014		$ Change			% Change
Recovery from settlement with loan guarantor	$	--	$	16,000	$	(16,000	)		(100	%)
Other income		116,000		--		116,000			100	%
Recognition of deferred revenue		104,000		250,000		(146,000	)		(58	%)
Gain from former loan defeasance		--		15,000		(15,000	)		(100	%)
Dividend income – related party		29,000		40,000		(11,000	)		(28	%)
Total	$	249,000	$	321,000	$	(72,000	)		(22	%)

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During the year ended December 31, 2015, we received approximately $0.1 million in interest and fees from Michael Shustek based on the extension agreement related to the letter of credit. During January 2011, we, VRM I and VRM II were awarded unsecured claims of up to $3.6 million from a bankruptcy settlement with a guarantor of certain loans. Pursuant to the terms of the settlement we received payment of approximately $16,000 during the year ended December 31, 2014. During the years ended December 31, 2015 and 2014 we received approximately $0.1 million and $0.3 million, respectively, from Mr. Shustek through liquidating distributions in satisfaction of the amounts associated with the due from related party balance reported on the accompanying balance sheet, which resulted in the recognition of deferred revenue of approximately $0.3 million as of December 31, 2015. During the years ended December 31, 2015 and 2014, we received dividend income of approximately $29,000 and $40,000, respectively, on our shares in MVP REIT. The decrease is due to the sale of some shares to JNL Parking during 2015. The principals of JNL Parking are officers of an affiliate of MVP REIT. There was no gain or loss recognized with this sale. The transaction was entered into in order to increase our holdings of cash, and the proceeds from the sale were included in the distribution made to Fund members in May 2015.

Total Discontinued Operations	2015			2014			$ Change			% Change
Net gain on sale of investment in equity method investee	$	--		$	300,000		$	(300,000	)		(100	%)
Income from equity method investee held for sale		--			39,000			(39,000	)		(100	%)
Net gain on sale of real estate held for sale		7,000			29,000			(22,000	)		(76	%)
Expenses related to real estate held for sale		(4,000	)		(22,000	)		18,000			82	%
Total	$	3,000		$	346,000		$	(343,000	)		(99	%)

On August 29, 2014, VRM I purchased our 25% interest in VREO XXV reported as an Investment in Equity Method Investee held for sale. This resulted in a gain of approximately $300,000. No such transaction occurred in 2015. Decrease in income from equity method investee is due to the sale of this investment in August 2014. During the years ended December 31, 2015 and 2014, we recorded net gains of $7,000 and $29,000, respectively, from the settlements received on the sale of real estate held for sale. During the years ended December 31, 2015 and 2014, we recorded expenses related to real estate held for sale of $4,000 and $22,000, respectively. The decrease in gain and expenses related to real estate held for sale is due to the stabilization of the markets where our real estate owned are located and a decrease in upkeep and litigation of the properties, along with the disposal of property in 2014.

For additional information see Note D – Related Party Transactions of the Notes to the Financial Statements included in Part II, Item 8 Financial Statements of this Annual Report on Form 10-K.

Stated Unit Value Adjustment. In accordance with Section 7.8 of our Operating Agreement, our manager reviewed the value of our assets during the year ended December 31, 2015. Based on this review, the value of members’ capital accounts was adjusted from $0.38 per unit to $0.28 per unit, as of January 1, 2016. The periodic review of the estimated net unit value includes an analysis of unrealized gains that our manager reasonably believes exist at the time of the review, but that cannot be added to net asset value under GAAP.

Redemptions: At a special meeting of our members held on July 2, 2009, a majority of the members voted to approve the dissolution and winding up of the Fund, in accordance with the Plan as set forth in Annex A of the Fund’s proxy statement filed with the SEC on May 11, 2009. The Plan became effective upon its approval by the members on July 2, 2009. Our members no longer have the right to have their units redeemed by us and we no longer honor any outstanding redemption requests effective as of July 2, 2009. As of July 2, 2009, the total redemptions made from inception were approximately $10.4 million. For additional information regarding members redemptions, see Note E – Members’ Equity of the Notes to the Financial Statements included in Part II, Item 8 Financial Statements of this Annual Report on Form 10-K.

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CAPITAL AND LIQUIDITY

Liquidity is a measure of a company’s ability to meet potential cash requirements, including ongoing commitments to fund lending activities and general operating purposes. As a result of the decision to liquidate the Company, we no longer invest in new loans. Hence, subject to retaining sufficient funds to meet our obligations and conduct wind down operations, all available funds will be paid out to our members. We do not anticipate the need for hiring any employees, acquiring fixed assets such as office equipment or furniture, or incurring material office expenses during the next twelve months because our manager will manage our affairs.

During the year ended December 31, 2015, net cash flows provided by operating activities totaled approximately $0.1 million. Cash flows provided by investing activities for the year ended December 31, 2015 totaled approximately $0.3 million and include proceeds from the partial sale of shares in MVP REIT. Cash flows used in financing activities totaled $0.7 million in liquidating distributions.

At December 31, 2015, we had approximately $0.2 million in unrestricted cash and approximately $1.1 million in total assets. We believe we have sufficient working capital to meet our operating needs during the next 12 months.

Investments in Real Estate Loans Secured by Real Estate Portfolio

As of December 31, 2015 and 2014, we had no investments in real estate loans. In accordance with the Plan, we will no longer invest in new loans.

RELATED PARTY TRANSACTIONS

In 2006, in connection with the sale of an office building located in Las Vegas, Nevada, we arranged for a $985,000 letter of credit in favor of the purchaser of the building (the “Purchaser”), an unrelated party, which could be drawn upon by the Purchaser should Vestin Group default on its lease obligations and was supported by our restricted cash. Vestin Group did not pay certain amounts allegedly due under its lease. In 2009, $285,000 of the letter of credit was drawn by the Purchaser. In November 2010, the Purchaser drew the final $700,000 from the letter of credit. In February 2015, Mr. Shustek and the Company entered into an Extension Agreement extending the due date of the obligation until August 31, 2016. Mr. Shustek paid to the Company an extension fee of $10,120, which is equal to one and one-half percent (1.50%) of the outstanding obligation. In addition, Mr. Shustek agreed to pay interest on the outstanding balance at the rate of one percent (1%) per month, retroactive to September 2014. As of December 2015, Mr. Shustek has paid interest in the amount of $116,000 in connection with the Extension Agreement. Mr. Shustek has assigned all future liquidating distributions for the 292,681 of our units that he holds directly and indirectly to the Company to commence paying such obligation. In December and May 2015, distributions payable directly and indirectly to Mr. Shustek in the amount of approximately $47,000 and $57,000, respectively, were applied to decrease the receivable discussed above. In January 2014, June 2014 and September 2014, distributions payable directly and indirectly to Mr. Shustek in the amounts of approximately $42,000, $42,000 and $157,000, respectively, were applied to decrease the receivable discussed above. As of December 31, 2015, the receivable’s remaining balance was approximately $0.6 million.

For additional information regarding this and other related party transactions, please see Note D – Related Party Transactions of the Notes to the Financial Statements included in Part I, Item I Financial Statements of this Annual Report on Form 10-K.

OFF-BALANCE SHEET ARRANGEMENTS

As of December 31, 2015, we do not have any interests in off-balance sheet special purpose entities nor do we have any interests in non-exchange traded commodity contracts.

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CRITICAL ACCOUNTING ESTIMATES

The carrying value of Due from Related Parties and Investment in Marketable Securities – related party are reported at their historical cost and fair market value, respectively, however actual results of these assets could differ from these values.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note G– Recent Accounting Pronouncements of the Notes to the Financial Statements included in Part II, Item 8 Financial Statements of this Annual Report on Form 10-K.

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ITEM 8.

FINANCIAL STATEMENTS

INDEX TO FINANCIAL STATEMENTS

	Page

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	11

FINANCIAL STATEMENTS
Balance Sheets	12
Statements of Operations	13
Statements of Members’ Equity and Other Comprehensive Income	14
Statements of Cash Flows	15
Notes to the Financial Statements	16

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Members of

Vestin Fund III, LLC

We have audited the accompanying balance sheets of Vestin Fund III, LLC (“the Company”) as of December 31, 2015 and 2014, and the related statements of operations, members’ equity and other comprehensive income, and cash flows for each of the two years in the period ended December 31, 2015. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Vestin Fund III, LLC as of December 31, 2015 and 2014, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2015, in conformity with U.S. generally accepted accounting principles.

/s/ RBSM LLP

New York, New York

March 30, 2016

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VESTIN FUND III, LLC

BALANCE SHEETS

	December 31, 2015		December 31, 2014
ASSETS
Assets
Cash and cash equivalents	$	198,000		$	485,000
Notes receivable, net of allowance of $291,000 and $308,000 at December 31, 2015 and 2014, respectively		--			--
Marketable securities – related party		301,000			588,000
Due from related parties		582,000			685,000

Total assets	$	1,081,000		$	1,758,000

LIABILITIES AND MEMBERS' EQUITY

Liabilities
Accounts payable and accrued liabilities	$	10,000		$	5,000
Due to related party		--			4,000
Deferred gain		581,000			685,000
Total liabilities		591,000			694,000

Commitments and contingencies		--			--

Members' equity
Members' units - authorized 10,000,000 units, 2,024,424 units issued and outstanding at December 31, 2015 and 2014		490,000			1,064,000

Total members' equity		490,000			1,064,000

Total liabilities and members' equity	$	1,081,000		$	1,758,000

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VESTIN FUND III, LLC

STATEMENTS OF OPERATIONS

	For the years Ended December 31,
Revenues	2015			2014
Gain related to pay off of notes receivable, including recovery of allowance for notes receivable	$	14,000		$	13,000
Total revenues		14,000			13,000

Operating expenses
Professional fees		84,000			87,000
Consulting		21,000			25,000
Other		10,000			10,000
Total operating expenses		115,000			122,000

Loss from operations		(101,000	)		(109,000	)

Non-operating income
Recovery from settlement with loan guarantor		--			16,000
Other income		116,000			--
Recognition of deferred gain		104,000			250,000
Gain from former loan defeasance		--			15,000
Dividend income – related party		29,000			40,000
Total non-operating income, net		249,000			321,000

Discontinued Operations
Net gain on sale of investment in equity method investee		--			300,000
Income from equity method investee held for sale		--			39,000
Net gain on sale of real estate held for sale		7,000			29,000
Expenses related to real estate held for sale		(4,000	)		(22,000	)
Total income from discontinued operations		3,000			346,000

NET INCOME	$	151,000		$	558,000

Net income allocated to members
	$	151,000		$	558,000


Basic and diluted income per weighted average membership unit
Continuing operations	$	0.07	$	0.10
Discontinued operations	$	0.00	$	0.18
Total basic and diluted income per weighted average membership unit	$	0.07	$	0.28
Dividends declared per membership unit	$	--	$	--
Weighted average membership units		2,024,424		2,024,424

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VESTIN FUND III, LLC
STATEMENTS OF MEMBERS' EQUITY AND OTHER COMPREHENSIVE INCOME


	Units		Amount
Members' equity at December 31, 2013		2,024,424	$	2,206,000

Comprehensive income:

Net income				558,000

Total comprehensive income				558,000

Distributions				(1,700,000	)

Members' equity at December 31, 2014		2,024,424	$	1,064,000

Comprehensive income:

Net income				151,000

Total comprehensive income				151,000

Distributions				(725,000	)

Members' equity at December 31, 2015		2,024,424	$	490,000

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VESTIN FUND III, LLC

STATEMENTS OF CASH FLOWS
	For the Year Ended December 31,
	2015			2014
Cash flows from operating activities:
Net income	$	151,000		$	558,000
Adjustments to reconcile net income to net cash provided by) operating activities:
Gain from sale of investment in equity method investee		--			(300,000	)
Gain from former loan defeasance		--			(15,000	)
Gain related to sale of real estate held for sale		(7,000	)		(29,000	)
Gain from recovery of allowance for doubtful notes receivable		(14,000	)		(13,000	)
Distribution income – related party		(29,000	)		(40,000	)
Recognition of deferred gain		(104,000	)		(250,000	)
Gain related to recovery of allowance from settlement with loan guarantor		--			(16,000	)
Income from equity method investee held for sale		--			(39,000	)
Change in operating assets and liabilities:
Accounts payable and accrued liabilities		5,000			(1,000	)
Due to/from related parties		99,000			280,000
Other assets		--			5,000
Net cash provided by operating activities	$	101,000		$	140,000
Cash flows from investing activities:
Proceeds from former loan defeasance		--			15,000
Proceeds related to distribution income		29,000			3,000
Proceeds from settlement from loan guarantor		--			16,000
Proceeds from sale of investment in equity method investee		--			1,287,000
Proceeds from notes receivable		14,000			13,000
Proceeds related to real estate held for sale		7,000			265,000
Proceeds from distribution from investment in equity method investee		--			37,000
Proceeds from sale of marketable securities		287,000			--
Net cash provided by investing activities	$	337,000		$	1,636,000
Cash flows from financing activities:
Liquidating distributions		(725,000	)		(1,700,000	)
Net cash used by financing activities	$	(725,000	)	$	(1,700,000	)
NET CHANGE IN CASH		(287,000	)		76,000
Cash, beginning of period		485,000			409,000
Cash, end of period	$	198,000		$	485,000
Non-cash investing and financing activities:
Adjustment to note receivable and related allowance	$	14,000		$	13,000

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VESTIN FUND III, LLC

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2015

NOTE A — ORGANIZATION

At a special meeting of our members held on July 2, 2009, a majority of the members voted to approve the dissolution and winding up of the Fund, in accordance with the Plan of Complete Liquidation and Dissolution (the “Plan”) as set forth in Annex A of the Fund’s proxy statement filed with the Securities and Exchange Commission (the “SEC”) on May 11, 2009. The Plan became effective upon its approval by the members on July 2, 2009. As a result, we have commenced an orderly liquidation and we no longer invest in new real estate loans. We had anticipated that the liquidation would be substantially completed by the second half of 2014. However, the orderly sale of each of our remaining assets will take longer to complete than we had anticipated. As a result, we will not complete the liquidation before the end of this year, and are now targeting completion by the end of 2016. The exact timing for completion of the liquidation will be impacted by the payment of Vestin Group’s indemnity obligation and other matters beyond our control. In addition, other events and conditions may arise that may impact our ability and timing to complete the liquidation. Thus, no assurances can be given that we will be able to complete the liquidation within a particular date or by the anticipated time frame.

On December 18, 2015 and May 13, 2015, we made liquidation distributions to all Fund members in the aggregate amount of approximately $0.3 million and $0.4 million, respectively, in accordance with the Plan. These distributions follow liquidation distributions we made on January 26, 2010, April 8, 2010, September 17, 2010, May 25, 2011, June 15, 2012, January 14, 2014, June 30, 2014, and September 15, 2014 in the aggregate amount of approximately $1.0 million, $0.9 million, $0.3 million, $0.3 million, $0.4 million, $0.3 million, $0.3 million and $1.1 million, respectively, in accordance with the Plan. The amounts distributed to each member of the Fund were calculated based upon the percentage ownership interest of such member in the Fund. See Note E – Members’ Equity.

We are not a mutual fund or an investment company within the meaning of the Investment Company Act of 1940, nor are we subject to any regulation thereunder.

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Pursuant to our Operating Agreement and the Plan approved by a majority of our members on July 2, 2009, our manager will continue to manage our operations during the liquidation process. Consequently, the orderly liquidation of our assets and our operating results are dependent upon our manager’s ability and performance in managing our liquidation.

NOTE B — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The financial statements of the Company have been prepared in accordance with the accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, all normal recurring adjustments considered necessary to give a fair presentation of operating results for the periods presented have been included.

Management Estimates

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

Cash and Cash Equivalents

Cash and cash equivalents include interest-bearing and non-interest-bearing bank deposits, money market accounts, short-term certificates of deposit with original maturities of three months or less, and short-term instruments with a liquidation provision of one month or less.

Revenue Recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, services have been provided, the sales price charged is fixed or determinable, and collectability is reasonably assured. This generally means that revenue is recognized when services have been provided to the customers. Interest is fully allowed for on impaired loans and is recognized on a cash basis method. The receipt of previous loan or note receivable allowances or impairments are recognized as revenue.

Deferred Revenue Recognition

Deferred income supports the amount of sales proceeds withheld on a sale of our building during November 2006, with which we were required to establish an irrevocable stand by letter of credit in favor of the purchaser of the building. See Note D – Related Party Transactions.

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Classification of Operating Results from Real Estate Held for Sale

Generally, operating results and cash flows from long-lived assets held for sale are to be classified as discontinued operations as a separately stated component of net income. Our operations related to real estate held for sale are separately identified in the accompanying statements of operations.

Fair Value Disclosures

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e. “the exit price”) in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches, including quoted market prices and discounted cash flows. The established hierarchy for inputs used, in measuring fair value, maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from independent sources. Unobservable inputs are inputs that reflect a company’s judgment concerning the assumptions that market participants would use in pricing the asset or liability developed based on the best information available under the circumstances. The fair value hierarchy is broken down into three levels based on the reliability of inputs as follows:

Level 1 – Valuations based on quoted prices in active markets for identical instruments that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.

Level 2 – Valuations based on quoted prices in active markets for instruments that are similar, or quoted prices in markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement, which utilize the Company’s estimates and assumptions.

If the volume and level of activity for an asset or liability have significantly decreased, we will still evaluate our fair value estimate as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. In addition, since we are a public reporting company, we are required to make our fair value disclosures for interim reporting periods.

Net Income (Loss) Allocated to Members Per Weighted Average Membership Unit

Net income (loss) allocated to members per weighted average membership unit is computed by dividing net income (loss) calculated in accordance with GAAP by the weighted average number of membership units outstanding for the period.

Segments

We operate as one business segment.

Income Taxes

Limited liability companies (“LLCs”) are not liable for federal or state income taxes and, therefore, no provision for income taxes is made in the accompanying financial statements. Rather, a proportionate share of the LLC’s income, deductions, credits and tax preference items are reported to the individual members for inclusion in their tax returns.

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NOTE C — FINANCIAL INSTRUMENTS AND CONCENTRATIONS OF CREDIT RISK

Financial instruments consist of cash, notes receivable, accounts payable and accrued liabilities, and due to/from related parties. The carrying value of these instruments approximates their fair values due to their short-term nature.

Financial instruments with concentration of credit and market risk include cash, notes receivable, accounts payable and accrued liabilities, and due to/from related parties.

We maintain cash deposit accounts and certificates of deposit, which, at times, may exceed federally insured limits. To date, we have not experienced any losses. As of December 31, 2015 we had no funds in excess of the federally insured limits. As of December 31, 2014, we had approximately $0.2 million in excess of the federally insured limits.

NOTE D — RELATED PARTY TRANSACTIONS

Transactions with the Manager

Our manager is entitled to receive from us a management (acquisition and advisory) fee up to 2.5% of the gross offering proceeds and up to 3% of our rental income. No management fees were recorded during the years ended December 31, 2015 and 2014.

In 2006, in connection with the sale of an office building located in Las Vegas, Nevada, we arranged for a $985,000 letter of credit in favor of the purchaser of the building (the “Purchaser”), an unrelated party, which could be drawn upon by the Purchaser should Vestin Group default on its lease obligations and was supported by our restricted cash. Vestin Group did not pay certain amounts allegedly due under its lease. In 2009, $285,000 of the letter of credit was drawn by the Purchaser. In November 2010, the Purchaser drew the final $700,000 from the letter of credit. As of December 31, 2015, we have a receivable from Vestin Group and deferred gain of approximately $581,000. In February 2015, Mr. Shustek and the Company entered into an Extension Agreement extending the due date of the obligation until August 31, 2016. Mr. Shustek paid to the Company an extension fee of $10,120, which is equal to one and one-half percent (1.50%) of the outstanding obligation. In addition, Mr. Shustek agreed to pay interest on the outstanding balance at the rate of one percent (1%) per month, retroactive to September 2014. As of December 31, 2015, Mr. Shustek has paid interest in the amount of $116,000 in connection with the Extension Agreement. Mr. Shustek has assigned all future liquidating distributions for the 292,681 of our units that he holds directly and indirectly to the Company to commence paying such obligation. In May 2015 and December distributions payable directly and indirectly to Mr. Shustek in the amount of approximately $57,000 and $47,000, respectively, were applied to decrease the receivable discussed above. In January 2014, June 2014 and September 2014, distributions payable directly and indirectly to Mr. Shustek in the amounts of approximately $42,000, $42,000 and $157,000, respectively, were applied to decrease the receivable discussed above. See also “Transactions with Other Related Parties” below.

As of December 31, 2015 and 2014, our manager owned 54,863 of our units. During the years ended December 31, 2015 and 2014, we made liquidating distributions to our manager of approximately $20,000 and $46,000, respectively. These distributions were returned to the Company as partial repayment of the letter of credit mentioned above.

As of December 31, 2015 and 2014, we had receivables from our manager totaling approximately $0.6 million and $0.7 million, respectively, primarily related to the withdrawal of the letter of credit referred to above.

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Transactions with Other Related Parties

As of December 31, 2015 and 2014, there were approximately $1,000 due from and $4,000 due to VRM II, respectively.

The net changes in the amounts due to/from related parties have been classified as operating activities on the accompanying statements of cash flows. These activities are primarily related to expenses being incurred from operations and maintenance of investments that are co-owned by related parties. These balances are satisfied in subsequent periods under terms consistent with the underlying vendor terms.

As of December 31, 2015 and 2014, inVestin Nevada Inc., a company wholly owned by our manager’s CEO, (“inVestin”), owned 34,856 of our membership units representing approximately 1.7% of our total membership units. During the years ended December 31, 2015 and 2014, we made liquidating distributions to inVestin of approximately $12,000 and $19,000, respectively. These distributions were returned to the Company as partial repayment of the letter of credit mentioned above.

As of December 31, 2015 and 2014, Shustek Investments, Inc., a company wholly owned by our manager’s CEO, owned 200,000 of our membership units representing approximately 9.9% of our total membership units. During the years ended December 31, 2015 and 2014, we made liquidating distributions to Mr. Shustek of approximately $72,000 and $109,000, respectively. These distributions were returned to the Company as partial repayment of letter of credit mentioned above.

As of December 31, 2015 and 2014, Mr. Shustek’s spouse owned 2,963 of our membership units, representing less than 1.0% of our total membership units. During the years ended December 31, 2015 and 2014, we made liquidating distributions to Mr. Shustek’s spouse of approximately $1,000.

As of December 31, 2015, we sold 32,604 shares of our investment in MVP REIT, Inc. (“MVP REIT”), a non-traded REIT, to JNL Parking for $287,000. The principals of JNL Parking are officers of an affiliate of MVP REIT. There was no gain or loss recognized with this sale. The transaction was entered into in order to increase our holdings of cash, and the proceeds from the sale were included in the distribution made to Fund Members in May 2015.

Accounting services

During the years ended December 31, 2015 and 2014, Accounting Solutions, an entity owned by Ms. Gress, the Company’s Chief Financial Officer, received fees of approximately $11,000 and $10,000, respectively.

During the year ended December 31, 2015, Strategix Solutions, an entity owned by Ms. Gress, the Company’s Chief Financial Officer, received fees of approximately $22,000, for accounting services. There were no fees earned during the year ended December 31, 2014.

NOTE E — MEMBERS’ EQUITY

Allocations and Distributions

In accordance with our Operating Agreement, profits, gains and losses are to be credited to and charged against each member’s capital account in proportion to their respective capital accounts as of the close of business on the last day of each calendar month.

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Contingency Reserve

In accordance with the Plan, we attempt to maintain a contingency reserve of approximately $300,000 for the payment of ongoing expenses, any contingent liabilities or to account for loan or other investment losses: however, the amount of the reserve may fluctuate based on cash expenditure requirements. Our manager has the discretion to increase or decrease the amount of the reserve, but will endeavor to ensure that the reserve is adequate to pay our outstanding obligations. The amount of the contingency reserve is based upon estimates and opinions of our manager or through consultation with an outside expert, if our manager determines that it is advisable to retain such expert. In determining the size of the reserve, our manager reviewed among other things, the value of our non-performing assets and the likelihood of repayment, our estimated contingent liabilities and our estimated expenses, including without limitation, estimated professional, legal and accounting fees, rent, payroll and other taxes, miscellaneous office expenses, facilities costs and expenses accrued in our financial statements.

Value of Members’ Capital Accounts

In accordance with Section 7.8 of our Operating Agreement, our manager reviewed the value of our assets during the three months ended December 31, 2015. Based on this review, the value of members’ capital accounts was adjusted from $0.38 per unit to $0.28 per unit, as of as of January 1, 2016.

Liquidating Distributions

Redemption Limitation

In accordance with the Plan, our members no longer have the right to have their units redeemed by us and we no longer honor any outstanding redemption requests effective as of July 2, 2009.

NOTE F — INVESTMENT IN MARKETABLE SECURITIES – RELATED PARTY

As of December 31, 2015 and 2014, we owned 34,297 and 66,902 shares of common stock, respectively, of MVP REIT. The shares were assigned to us by SERE Holdings, LLC in consideration of the cancellation of certain unsecured notes. During the years ended December 31, 2015 and 2014 we received approximately $29,000 and $40,000, respectively, in distribution income from distribution.

As of December 31, 2015 we sold 32,604 shares of our investment in MVP REIT to JNL Parking for $287,000. The principals of JNL Parking are officers of an affiliate of MVP REIT. There was no gain or loss recognized with this sale. The transaction was entered into in order to increase our holdings of cash, and the proceeds from the sale were included in the distribution made to Fund Members in May 2015.

NOTE G — RECENT ACCOUNTING PRONOUNCEMENTS

No new accounting pronouncements have been defined that would materially impact our financial statements.

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NOTE H— LEGAL MATTERS INVOLVING THE MANAGER

The United States Securities and Exchange Commission (the “Commission”), conducted an investigation of certain matters related to us, our manager, Vestin Capital, VRM I, and VRM II. We fully cooperated during the course of the investigation. On September 27, 2006, the investigation was resolved through the entry of an Administrative Order by the Commission (the “Order”). Our manager, Vestin Mortgage and its Chief Executive Officer, Michael Shustek, as well as Vestin Capital (collectively, the “Respondents”), consented to the entry of the Order without admitting or denying the findings therein.

In the Order, the Commission found that the Respondents violated Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933 through the use of certain slide presentations in connection with the sale of our units and units in Fund II, the predecessor to VRM II. The Respondents consented to the entry of a cease and desist order, the payment by Mr. Shustek of a fine of $100,000 and Mr. Shustek’s suspension from association with any broker or dealer for a period of six months, which expired in March 2007. In addition, the Respondents agreed to implement certain undertakings with respect to future sales of securities. We are not a party to the Order.

Our manager believes that it is not a party to any other pending legal or arbitration proceedings that would have a material adverse effect on our manager’s financial condition or results of operations or cash flows, although it is possible that the outcome of any such proceedings could have a material impact on the manager’s net income in any particular period.

NOTE I — LEGAL MATTERS INVOLVING THE COMPANY

From time to time, we may become involved in litigation in the ordinary course of business. We do not believe that any pending legal proceedings are likely to have a material adverse effect on our financial condition or results of operations or cash flows. It is not possible to predict the outcome of any such proceedings.

NOTE J — SUBSEQUENT EVENTS

The following subsequent events have been evaluated through the date of this filing with the SEC.

On February 25, 2016, the Company, sold 27,718 shares of our investment in MVP REIT to JNL Parking for approximately $243,000. The principals of JNL Parking are officers of an affiliate of MVP REIT. There was no gain or loss recognized with this sale. The transaction was entered into in order to increase our holdings of cash.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our manager, including our manager’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required financial disclosure. In connection with the preparation of this Report on Form 10-K, our manager carried out an evaluation, under the supervision and with the participation of our manager’s CEO and CFO, as of December 31, 2015, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) under the Exchange Act. Based upon our manager’s evaluation, our manager’s CEO and CFO concluded that, as of December 31, 2015, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our manager’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues within our company have been or will be detected. Even effective internal control over financial reporting can only provide reasonable assurance with respect to financial statement preparation. Furthermore, because of changes in conditions, the effectiveness of internal control over financial reporting may vary over time. Our manager, including our manager’s CEO and CFO, does not expect that our controls and procedures will prevent all errors.

The certifications of our manager’s CEO and CFO required under Section 302 of the Sarbanes-Oxley Act have been filed as Exhibits 31.1 and 31.2 to this report.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting for our Company, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States. Internal control over financial reporting includes those policies and procedures that: pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our Company; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States, and that receipts and expenditures of our Company are being made only in accordance with authorizations of management and directors of our Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our Company's assets that could have a material effect on our financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

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Management has conducted an assessment, including testing, of the effectiveness of our internal control over financial reporting as of December 31, 2015. In making its assessment of internal control over financial reporting, management used the criteria in Internal Control -- Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this assessment, management, with the participation of the Chief Executive and Chief Financial Officers of the Manager, believes that, as of December 31, 2015, the Company’s internal control over financial reporting is effective based on those criteria.

Auditor Attestation

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

Changes in Internal Control Over Financial Reporting

As required by Rule 13a-15(d) under the Exchange Act, our management, including our manager’s CEO and CFO, has evaluated our internal control over financial reporting to determine whether any changes occurred during the fourth fiscal quarter of 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, there has been no such change during the fourth fiscal quarter of 2015.

ITEM 9B.

OTHER INFORMATION

None.

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

We do not have a Board of Directors or any corporate officers. We are managed by Vestin Mortgage, a privately held company which is majority owned by Mike Shustek. The powers, responsibilities and obligations of our manager are set forth in our Operating Agreement. The CEO and CFO of Vestin Mortgage function as the equivalent of our CEO and CFO.

Michael Shustek is the principal executive of our manager. Accordingly, we do not have an audit committee or anybody that functions as the equivalent of an audit committee. Our units are not listed on any exchange and we are not required to have an audit committee which consists of independent directors and meets the other requirements of Section 10A(m) of the Securities Exchange Act of 1934 and the rules promulgated thereunder.

Our manager is responsible for overseeing management of the Company’s risks.

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The following table sets forth the names, ages as of March 31, 2016 and positions of the individuals who serve as directors, executive officers and certain significant employees of Vestin Mortgage (our manager) or our affiliates:

Name	Age	Title
Michael V. Shustek	57	President, Chief Executive Officer and Chairman
Tracee Gress (1)	45	Chief Financial Officer
Michael J. Whiteaker	66	Vice President of Regulatory Affairs

(1) During April 2009, we entered into an accounting services agreement with Strategix Solutions, LLC (“Strategix Solutions”), a Nevada limited liability company, for the provision of accounting and financial reporting services. Strategix Solutions also provides accounting and financial reporting services to VRM I and VRM II. Our CFO and other members of our accounting staff are employees of Strategix Solutions. Strategix Solutions is owned by our CFO, Ms. Gress. As of December 31, 2015, Strategix Solutions dedicates to us a total of three full time employees.

Directors, Executive Officers and certain significant employees of Vestin Mortgage (our manager), Vestin Group, Vestin Originations or our affiliates

Michael V. Shustek has been a director of our manager and Chairman of the board of directors, Chief Executive Officer and a director of Vestin Group since April 1999. In addition, Mr. Shustek has been a Director and the CEO of VRM I and VRM II since January 2006. In February 2004, Mr. Shustek became the President of Vestin Group. Mr. Shustek also serves on the loan committee of our manager and its affiliates. In 2003, Mr. Shustek became the Chief Executive Officer of our manager. In 1995, Mr. Shustek founded Del Mar Mortgage, and has been involved in various aspects of the real estate industry in Nevada since 1990. In 1993, he founded Foreclosures of Nevada, Inc., a company specializing in non-judicial foreclosures. In 1993, Mr. Shustek also started Shustek Investments, a company that originally specialized in property valuations for third-party lenders or investors. In 2012, Mr. Shustek became a Director and the CEO of MVP REIT, Inc.

In 1997, Mr. Shustek was involved in the initial founding of Nevada First Bank, with the largest initial capital base of any new state charter in Nevada’s history. Mr. Shustek has co-authored two books, entitled “Trust Deed Investments,” on the topic of private mortgage lending, and “If I Can Do It, So Can You.” Mr. Shustek is a guest lecturer at the University of Nevada, Las Vegas, where he also has taught a course in Real Estate Law and Ethics. Mr. Shustek received a Bachelor of Science degree in Finance at the University of Nevada, Las Vegas. See Note I Legal Matters Involving The Manager in Part II, Item 8 Financial Statements of this Annual Report on Form 10-K for information regarding legal matters involving our manager and Mr. Shustek.

Tracee Gress was appointed as our Chief Financial Officer (CFO) on February 27, 2015. In addition, Ms. Gress was appointed as the Chief Financial Officer of VRM I, VRM II and the equivalent of our Chief Financial Officer of Fund III. Ms. Gress is currently an employee of MVP Realty Advisors as of March 1, 2016. Prior to that date, her services were furnished to us pursuant to an accounting services agreement entered into by our manager and Strategix Solutions since January 2013. Prior to January 2013, Ms. Gress was an accountant with L.L. Bradford & Company, LLC from August 2008 to January 2013. Ms. Gress is a Certified Public Accountant and has audited various public and private companies. Additionally, she has also acted as Chief Financial Officer for various private companies. She received a Bachelor of Business Administration degree in Accounting from the University of Nevada, Las Vegas.

Michael J. Whiteaker has been Vice President of Regulatory Affairs since May 1999. Mr. Whiteaker is experienced in the banking and finance regulatory fields, having served with the State of Nevada, Financial Institution Division from 1982 to 1999 as its Supervisory Examiner, responsible for the financial and regulatory compliance audits of all financial institutions in Nevada. Mr. Whiteaker has worked extensively on matters pertaining to both state and federal statutes, examination procedures, policy determination and credit administration for commercial and real estate loans. From 1973 to 1982, Mr. Whiteaker was Assistant Vice President of Nevada National Bank, responsible for a variety of matters including loan review. Mr. Whiteaker has previously served on the Nevada Association of Mortgage Brokers, Legislative Committee and is a past member of the State of Nevada, Mortgage Advisory Council.

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Code of Ethics

As we do not have any executive officers, we have not adopted a Code of Ethics. However, our manager has adopted a Code of Ethics.

ITEM 11.

EXECUTIVE COMPENSATION

We do not compensate any executive officers. We are required to pay our manager a management (acquisition and advisory) fee and certain other fees in accordance with the terms of our Operating Agreement. For the years ended December 31, 2015 and 2014, no such fees were paid. In addition, we may pay our manager or its affiliates for services rendered in selling properties acquired through foreclosure. We also pay a fee to Strategix Solutions which is based upon the wages of the employees providing the services.

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Shown below is certain information as of March 30, 2016, with respect to beneficial ownership, as that term is defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of number of membership units by the only persons or entities known to us to be a beneficial owner of more than 5% of the outstanding membership units. Unless otherwise noted, the percentage ownership is calculated based on 2,024,424 membership units as of March 30, 2016.

Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership	Percent of Class

Michael V. Shustek 8880 West Sunset Rd, Ste 200 Las Vegas, NV 89148	Sole voting and investment power of 289,719 units & shared voting and investment power of 2,963 units held by his spouse	14.5%

The following table sets forth the total number and percentage of our membership units beneficially owned as of March 30, 2016 by:

our manager’s chief executive officer and other executive officers; and

all of our manager’s executive officers as a group.

Unless otherwise noted, the percentage ownership is calculated based on 2,024,424 units of our total outstanding membership units as of March 31, 2016.

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		Units Beneficially Owned
Beneficial Owner	Address	Number		Percent

Michael V. Shustek (1)	8880 West Sunset Rd, Ste 200 Las Vegas, NV 89148		292,682		14.5	%
All directors and executive officers of our manager as a group			292,682		14.5	%

(1)

Includes 54,863 units held by our manager and 200,000 units held by Shustek Investments, 34,856 units held by inVestin and 2,963 units held by his spouse. Mr. Shustek is the Principal Executive Officer. Mr. Shustek is the sole owner, Chairman, President and Chief Executive Officer of Shustek Investments, Inc. Mr. Shustek is the sole owner, Chairman, President and Chief Executive Officer of inVestin Nevada, Inc. Mr. Shustek has sole voting and investment power in all these units, except for the units held by his spouse.

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

In 2006, in connection with the sale of an office building located in Las Vegas, Nevada, we arranged for a $985,000 letter of credit in favor of the Purchaser, which could be drawn upon by the Purchaser should Vestin Group default on its lease obligations and was supported by our restricted cash. Vestin Group did not pay certain amounts allegedly due under its lease. In 2009, $285,000 of the letter of credit was drawn by the Purchaser. In November 2010, the Purchaser drew the final $700,000 from the letter of credit. In February 2015, Mr. Shustek and the Company entered into an Extension Agreement extending the due date of the obligation until August 31, 2016. Mr. Shustek paid to the Company an extension fee of $10,120 which is equal to one and one-half percent (1.50%) of the outstanding obligation. In addition, Mr. Shustek agreed to pay interest on the outstanding balance at the rate of one percent (1%) per month, retroactive to October, 2014. As of March, 2016, Mr. Shustek has paid interest in the amount of $116,000 in connection with the Extension Agreement. Mr. Shustek has assigned all future liquidating distributions for the 292,681 of our units that he holds directly and indirectly to the Company to commence paying such obligation. In May 2015 and December 18, 2015, distributions payable directly and indirectly to Mr. Shustek in the amount of approximately $57,000 and $47,000, respectively, were applied to decrease the receivable discussed above. In January 2014, June, 2014 and September 2014, we made distributions of approximately $42,000, $42,000 and $157,000, directly and indirectly to Mr. Shustek, with which we have decreased the receivable discussed above.

Please refer to Note D – Related Party Transactions in Part II, Item 8 Financial Statements of this Annual Report on Form 10-K, for information regarding our related party transactions, which are incorporated herein by reference.

ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES

During the years ended December 31, 2015 and 2014, RBSM LLP (“RBSM”) provided services to us as follows:

	December 31, 2015		December 31, 2014
Audit Fees	$	11,000	$	--
Audit Related Fees	$	--	$	--
Tax Fees	$	--	$	--
All Other Fees	$	--	$	--

RBSM did not perform any non-audit services for us in the years ended December 31, 2015 and 2014.

During the years ended December 31, 2015 and 2014, RBSM billed the Company for $11,000 and $0, respectively.

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Audit fees. Consists of fees billed for the audit of our annual financial statements, review of our Form 10-K, review of our interim financial statements included in our Form 10-Q and services that are normally provided by the accountant in connection with year-end statutory and regulatory filings or engagements.

Audit-related fees. Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees”, review of our Forms 8-K filings and services that are normally provided by the accountant in connection with non-year-end statutory and regulatory filings or engagements.

Tax fees. Consists of professional services rendered by a company aligned with our principal accountant for tax compliance, tax advice and tax planning.

Other fees. The services provided by our accountants within this category consisted of advice and other services relating to SEC matters, registration statement review, accounting issues and client conferences.

Our manager has direct responsibility to review and approve the engagement of the independent auditors to perform audit services or any permissible non-audit services. All audit and non-audit services to be provided by the independent auditors must be approved in advance by our manager. Our manager may not engage the independent auditors to perform specific non-audit services proscribed by law or regulation. All services performed by independent auditors under engagements entered into on or after January 21, 2005, were approved by our manager pursuant to their pre-approval policy, and none was approved pursuant to the de minimis exception to the rules and regulations of the Securities Exchange Act of 1934, Section 10A(i)(1)(B), on pre-approval.

PART IV

ITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

The following are filed as part of this Report:

(a) 1. Financial Statements

The list of the financial statements contained herein are contained in Part II, Item 8 Financial Statements on this Annual Report on Form 10-K, which is hereby incorporated by reference.

(a) 3. Exhibits

Reference is made to the Exhibit Index appearing immediately after the signature page to this report for a list of exhibits filed as part of this report.

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SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Vestin Fund III, LLC
By:		Vestin Mortgage, LLC., its sole Manager

By:		/s/ Michael V. Shustek
		Michael V. Shustek
		Chief Executive Officer and Sole Director of the Manager
		(Principal Executive Officer of Manager)

By:		/s/ Tracee Gress
		Tracee Gress
		Chief Financial Officer of the Manager
		(Principal Financial and Accounting Officer of the Manager)

Date: March 30, 2016

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EXHIBIT INDEX

Exhibit No.		Description of Exhibits
2.1(1)		Plan of Complete Liquidation and Dissolution
3.1(2)		Articles of Organization
3.2(3)		Certificate of Amendment to Articles of Organization
3.3(4)		Amended and Restated Operating Agreement (included as Exhibit A to the prospectus)
4.4(5)		Distribution Reinvestment Plan
10.9(6)		Office lease agreement dated March 31, 2003 by and between Luke Properties, LLC and Vestin Group, Inc.
10.10(7)		Indemnification agreement dated March 25, 2009 by and between Vestin Group, Inc. and Vestin Fund III, LLC
10.11 (8)		Agreement between Strategix Solutions, LLC and Vestin Fund III, LLC for accounting services.
10.12 (9)		Plan of Complete Liquidation and Dissolution
10.13 (10)		Deed in Lieu Agreement, dated February 7, 2012
31.1*		Section 302 Certification of Michael V. Shustek
31.2*		Section 302 Certification of Tracee Gress
32*		Certification Pursuant to 18 U.S.C. Sec. 1350
101**		The following material from the Company's annual report on Form 10-K for the year ended December 31, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Balance Sheets as of December 31, 2015 and 2014, (ii) Statements of Operations for the years ended December 31, 2015 and 2014 (iii) Statement of Equity for the years ended December 31, 2015 and 2014 (iv) Statements of Cash Flows for the years ended December 31, 2015 and 2014 and (v) Notes to the Financial Statements

(1)		Incorporated herein by reference to our Schedule 14A Definitive Proxy Statement filed on May 11, 2009 (File No. 000-51301)
(2)		Incorporated herein by reference to our Pre-Effective Amendment No. 3 to Form S-11 Registration Statement filed on September 2, 2003 (File No. 333-105017)
(3)		Incorporated herein by reference to our Form 10-Q filed on August 16, 2004 (File No. 333-105017)
(4)		Incorporated herein by reference to our Schedule 14A Definitive Proxy Statement filed on January 29, 2007 (File No. 000-51301)
(5)		Incorporated herein by reference to Exhibit 4.4 of our Post-Effective Amendment No. 5 to Form S-11 Registration Statement filed on April 28, 2006 (File No. 333-105017)
(6)		Incorporated herein by reference to our Form 10-KSB filed on March 30, 2005 (File No. 333-105017)
(7)		Incorporated herein by reference to the Annual Report on Form 10-K for the year ended December 31, 2008 filed on March 27, 2009 (File No. 000-51301)
(8)		Incorporated herein by reference to the Quarterly Report on Form 10-Q filed on May 14, 2009 (File No. 000-51301)
(9)		Incorporated herein by reference to the Proxy Statement dated May 11, 2009 (File No. 000-51301)
(10)		Incorporated herein by reference to the Annual Report on Form 10-K filed on May 16, 2012 (File No. 000-51301)
*		Filed concurrently herewith.
**		As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Section 11 an d 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934

VESTIN FUND III LLC 10-K