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<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 7px; font: bold 10pt/115% Times New Roman, Times, Serif; text-align: right">Note A</td>
<td style="width: 7px"> </td>
<td style="font: bold 10pt/115% Times New Roman, Times, Serif; text-align: justify">- The Company</td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">AFH Holding III, Inc., a development
stage company (the “Company”), was incorporated under the laws of the State of Delaware on April 16, 2007. The Company
is 93.4% owned by AFH Holding & Advisory, LLC (the “Parent”). The financial statements presented represent only
those transactions of AFH Holding III, Inc. The Company is looking to acquire an existing company or acquire the technology to
begin operations.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: -44.6pt"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">As a blank check company, the
Company’s business is to pursue a business combination      through acquisition, or merger with,
an existing company. As of the date of the financial statements, the Company is not conducting negotiations with any target business.
No assurances can be given that the Company will be successful in locating or negotiating with any target company.<br />
<br />
Since inception, the Company has been engaged in organizational efforts.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">The accompanying unaudited
interim financial statements reflect all adjustments of a normal and recurring nature which are, in the opinion of management,
necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods
presented. The results of operations for these periods are not necessarily comparable to, or indicative of, results of any other
interim period or for the fiscal year taken as a whole. Certain information that is not required for interim financial reporting
purposes has been omitted.</p>
<p style="margin: 0pt"></p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 7px; font: bold 10pt/115% Times New Roman, Times, Serif; text-align: right">Note B</td>
<td style="width: 7px"> </td>
<td style="font: bold 10pt/115% Times New Roman, Times, Serif; text-align: justify">- Summary of Significant Accounting Policies</td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"><b>Method of Accounting</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">The Company maintains its books
and prepares its financial statements on the accrual basis of accounting.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"><b>Development Stage</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">The Company has operated as
a development stage enterprise since its inception by devoting substantially all of its efforts to financial planning, raising
capital, research and development, and developing markets for its services. The Company prepares its financial statements in accordance
with the requirements of FASB ASC 915.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify; text-indent: -44.6pt"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"><b>Cash and Cash Equivalents</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">Cash and cash equivalents include
time deposits, certificates of deposit, and all highly liquid debt instruments with original maturities of three months or less.
The Company maintains cash and cash equivalents at financial institutions, which periodically may exceed federally insured amounts.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify; text-indent: -44.6pt"><b>     </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"><b>Loss Per Common Share</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">Loss per common share is computed
in accordance with FASB ASC 260-10 by dividing income (loss) available to common stockholders by weighted average number of common
shares outstanding for each period. The calculation of diluted net loss per share gives effect to common stock equivalents, however,
potential common shares are excluded if their effect is anti-dilutive.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"><b> </b> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"><font style="letter-spacing: -0.1pt"><b>Use
of Estimates</b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"><font style="letter-spacing: -0.1pt">The
preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results
can differ from those estimates.</font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"><b>Income Taxes</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">The Company accounts for income
taxes in accordance with FASB ASC 740, using the asset and liability approach, which requires recognition of deferred tax liabilities
and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of
such assets and liabilities. This method utilizes enacted statutory tax rates in effect for the year in which the temporary differences
are expected to reverse and gives immediate effect to changes in income tax rates upon enactment. Deferred tax assets are recognized,
net of any valuation allowance, for temporary differences and net operating loss and tax credit carry forwards. Deferred income
tax expense represents the change in net deferred assets and liability balances.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"><b>Financial Instruments</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">The Company’s financial
instruments consist of cash and due to parent. Unless otherwise noted, it is management’s opinion that the Company is not
exposed to significant interest, currency or credit risks arising from these financial instruments. The fair value of these financial
instruments approximates their carrying value, unless otherwise noted.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"><b>Recent Pronouncements</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">The Company does not expect
the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations,
financial position, or cash flow.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"><b>Development Stage</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">The Company has operated as
a development stage enterprise since its inception by devoting substantially all of its efforts to financial planning, raising
capital, research and development, and developing markets for its services. The Company prepares its financial statements in accordance
with the requirements of FASB ASC 915.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"><b>Method of Accounting</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">The Company maintains its
books and prepares its financial statements on the accrual basis of accounting.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify; text-indent: -44.6pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"><b>Cash and Cash Equivalents</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">Cash and cash equivalents
include time deposits, certificates of deposit, and all highly liquid debt instruments with original maturities of three months
or less. The Company maintains cash and cash equivalents at financial institutions, which periodically may exceed federally insured
amounts.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify; text-indent: -44.6pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"><b>Loss Per Common Share</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"><b> </b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">Loss per common share is computed
in accordance with FASB ASC 260-10 by dividing income (loss) available to common stockholders by weighted average number of common
shares outstanding for each period. The calculation of diluted net loss per share gives effect to common stock equivalents, however,
potential common shares are excluded if their effect is anti-dilutive.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"><font style="letter-spacing: -0.1pt"><b>Use
of Estimates</b></font></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"><font style="letter-spacing: -0.1pt">The
preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual
results can differ from those estimates.</font></p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"><b>Income Taxes</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">The Company accounts for income
taxes in accordance with FASB ASC 740, using the asset and liability approach, which requires recognition of deferred tax liabilities
and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of
such assets and liabilities. This method utilizes enacted statutory tax rates in effect for the year in which the temporary differences
are expected to reverse and gives immediate effect to changes in income tax rates upon enactment. Deferred tax assets are recognized,
net of any valuation allowance, for temporary differences and net operating loss and tax credit carry forwards. Deferred income
tax expense represents the change in net deferred assets and liability balances.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"><b>Financial Instruments</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">The Company’s financial
instruments consist of cash and due to parent. Unless otherwise noted, it is management’s opinion that the Company is not
exposed to significant interest, currency or credit risks arising from these financial instruments. The fair value of these financial
instruments approximates their carrying value, unless otherwise noted.</p>
<p style="margin: 0pt"></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"><b>Recent Pronouncements</b></p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">The Company does not expect
the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations,
financial position, or cash flow.</p>
<p style="margin: 0pt"></p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 7px; font: bold 10pt/115% Times New Roman, Times, Serif; text-align: right">Note C</td>
<td style="width: 7px"> </td>
<td style="font: bold 10pt/115% Times New Roman, Times, Serif; text-align: justify">- Equity Securities</td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0">  </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">Holders of shares of common
stock shall be entitled to cast one vote for each common share held at all stockholder’s meetings for all purposes, including
the election of directors. The common stock does not have cumulative voting rights.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">The preferred stock of the
Company shall be issued by the Board of Directors of the Company in one or more classes or one or more series within any class
and such classes or series shall have such voting powers, full or limited, or no voting powers, and such designations, preferences,
limitations or restrictions as the Board of Directors of the Company may determine, from time to time.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">No holder of shares of stock
of any class shall be entitled as a matter of right to subscribe for or purchase or receive any part of any new or additional
issue of shares of stock of any class, or of securities convertible into shares of stock or any class, whether now hereafter authorized
or whether issued for money, for consideration other than money, or by way of dividend.</p>
46731
<p style="margin: 0pt"></p>
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<tr style="vertical-align: top">
<td style="width: 7px; font: bold 10pt/115% Times New Roman, Times, Serif; text-align: right">Note F</td>
<td style="width: 7px"> </td>
<td style="font: bold 10pt/115% Times New Roman, Times, Serif; text-align: justify">- Stock Transactions and Due from Parent</td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">In February 2008, the Company
commenced a private placement (the “Offering”) of up to 350,0000 shares (the “Shares”) of Common Stock
at a purchase price of $2.00 per share on a “best efforts” basis with expected gross proceeds of up to $700,000 to
“accredited investors” (as defined in Rule 501 promulgated under Regulation D under the Securities Act of 1933, amended
(the “Securities Act”)) pursuant to Rule 506 of Regulation D under the Securities Act.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">From February 1, 2008 to March
12, 2008 the Company sold an aggregate of 230,500 Shares with gross proceeds of $461,000. From April 8, 2008 to April 28, 2008
the Company sold an aggregate of 124,500 Shares with gross proceeds of $249,000. The total amount of Shares sold in the Offering
was 355,000 with gross proceeds of $710,000. These funds are held by the Company’s parent.</p>
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<p style="margin: 0pt"></p>
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<tr style="vertical-align: top">
<td style="width: 7px; font: bold 10pt/115% Times New Roman, Times, Serif; text-align: right">Note D</td>
<td style="width: 7px"> </td>
<td style="font: bold 10pt/115% Times New Roman, Times, Serif; text-align: justify">- Going Concern</td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">The Company’s financial
statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company has reported recurring losses from operations. As a result, there
is an accumulated deficit of $46,731 at September 30, 2012.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">The Company’s continued
existence is dependent upon its ability to raise capital or acquire a marketable company. The financial statements do not include
any adjustments that might be necessary should the Company be unable to continue as a going concern.</p>
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<td style="width: 7px; font: bold 10pt/115% Times New Roman, Times, Serif; text-align: right">Note E</td>
<td style="width: 7px"> </td>
<td style="font: bold 10pt/115% Times New Roman, Times, Serif; text-align: justify">- Due to Parent</td></tr>
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<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 40pt; text-align: justify">Due to parent represents cash
advances from AFH Holding & Advisory LLC. AFH Holding & Advisory LLC is related to the Company through common ownership.
There are no repayment terms. </p>