UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

Investment Company Act file number

811-22655

Northern Lights Fund Trust III

(Exact name of registrant as specified in charter)

17605 Wright Street, Omaha, Nebraska 68130

(Address of principal executive offices) (Zip code)

James Ash

80 Arkay Drive, Hauppauge, NY 11788

(Name and address of agent for service)

Registrant's telephone number, including area code:

631-470-2619

Date of fiscal year end:

 3/31

Date of reporting period:    9/30/14

Item 1.  Reports to Stockholders.  

Semi-Annual Report

September 30, 2014

1-888-985-9830

www.pinnacletacticalfunds.com

Distributed by Northern Lights Distributors, LLC

Member FINRA

PINNACLE TACTICAL ALLOCATION FUND

PORTFOLIO REVIEW (Unaudited)

September 30, 2014

The Fund’s performance figures* for the periods ending September 30, 2014, compared to its benchmarks:

			Inception** -
	Six Months	One Year	September 30, 2014
Pinnacle Tactical Allocation Fund – Class A	(0.28)%	4.67%	6.77%
Pinnacle Tactical Allocation Fund – Class A with load	(6.02)%	(1.38)%	2.10%
Pinnacle Tactical Allocation Fund – Class C	(0.65)%	3.90%	6.17%
Pinnacle Tactical Allocation Fund – Class I	(0.19)%	4.86%	6.99%
Dow Jones Moderate Portfolio Index	1.60%	7.93%	8.67%
Morningstar Global Flexible Allocation AW	0.37%	6.40%	6.53%

* Performance data quoted here represents past performance. The performance comparison includes reinvestment of all dividends and capital gain distributions and has been adjusted for the Class A maximum applicable sales charge of 5.75%. Current performance may be lower or higher than the performance data quoted above. Past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that investor’s shares, when redeemed, may be worth more or less than their original cost. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. The Fund’s total annual operating expenses are 4.89% for Class A shares, 5.64% for Class C shares and 4.64% for Class I shares per the August 1, 2014 prospectus. For performance information current to the most recent month-end, please call toll-free 1-888-985-9830.

Dow Jones Moderate Portfolio Index® – A global benchmark that takes 60% of the risk of the global securities market. It is a total return index that is a time-varying weighted average of stocks, bonds, and cash. The Index is the efficient allocation of stocks, bonds, and cash in a portfolio with 60% of the risk of the Dow Jones Aggressive Portfolio Index. The index is calculated on a total return basis with dividends reinvested. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for direct investment.

Morningstar Global Flexible Allocation AW® – Asset weighted category average of open end mutual funds, closed end funds, variable annuity underlying funds, and Exchange Traded Funds that Morningstar has classified in their Global Flexible Allocation institutional category. Portfolios from this group offer exposure to all of the major asset classes globally, but do not have a specific target asset allocation, thus they may invest in variable proportions of stocks, bonds or cash. Returns do reflect internal fees and expenses of the funds included in this category but returns do not reflect any sales charges. The category average is not available for direct investment.

** Inception date is June 3, 2013.

The Fund’s Top Asset Classes are as follows:

Asset Class	% of Net Assets
Equity Funds		90.0	%
Debt Funds		9.5	%
Other Assets Less Liabilities		0.5	%
		100.0	%

Please refer to the Portfolio of Investments in this Semi-Annual Report for a detailed analysis of the Fund’s holdings.

1

Pinnacle Tactical Allocation Fund

PORTFOLIO OF INVESTMENTS (Unaudited)

September 30, 2014

Shares			Value
		EXCHANGE TRADED FUNDS - 99.5%
		DEBT FUNDS - 9.5%
	4,200	First Trust Exchange-Traded Fund IV First Trust Tactical High Yield ETF	$	212,604
	6,700	First Trust Senior Loan ETF		327,228
	2,020	iShares Core U.S. Aggregate Bond ETF		220,402
	3,725	ProShares Short 20+ Year Treasury *		103,332
	10,551	SPDR Barclays Short Term High Yield Bond ETF		315,791
				1,179,357
		EQUITY FUNDS - 90.0%
	1,925	Fidelity NASDAQ Composite Index Tracking Stock ETF		339,820
	29,820	First Trust Emerging Markets AlphaDEX Fund		708,523
	54,550	First Trust Health Care AlphaDEX Fund *		3,043,344
	14,650	First Trust ISE Chindia Index Fund		432,175
	16,690	First Trust Large Cap Core AlphaDEX Fund		726,182
	17,200	First Trust Large Cap Growth AlphaDEX Fund		748,544
	8,540	First Trust Large Cap Value AlphaDEX Fund		362,523
	24,750	First Trust Mid Cap Value AlphaDEX Fund		736,313
	55,480	First Trust NASDAQ-100 Equal Weighted Index Fund		2,220,310
	11,300	First Trust NASDAQ-100 Technology Index Fund		464,995
	17,920	First Trust North American Energy Infrastructure Fund		486,528
	26,500	First Trust Technology AlphaDEX Fund		858,600
				11,127,857
		TOTAL EXCHANGE TRADED FUNDS (Cost $12,375,478)		12,307,214
		TOTAL INVESTMENTS - 99.5% (Cost $12,375,478) (a)	$	12,307,214
		OTHER ASSETS LESS LIABILITIES - 0.5%		61,991
		NET ASSETS - 100.0%	$	12,369,205

(a) Represents cost for financial reporting purposes. Aggregate cost for federal tax purposes is $12,395,355 and differs from value by net unrealized appreciation (depreciation) of securities as follows:

Unrealized appreciation:	$	126,557
Unrealized depreciation:		(214,698	)
Net unrealized depreciation:	$	(88,141	)

* Non-income producing security.

See accompanying notes to financial statements.

2

PINNACLE TACTICAL ALLOCATION FUND

STATEMENT OF ASSETS AND LIABILITIES (Unaudited)

September 30, 2014

ASSETS
Investment in securities at value (identified cost $12,375,478)	$	12,307,214
Receivable for securities sold		275,237
Receivable due from Adviser		11,446
Dividends and interest receivable		10
Prepaid expenses and other assets		1,099
TOTAL ASSETS		12,595,006
LIABILITIES
Payable for Fund shares repurchased		175,123
Due to custodian		25,455
Distribution (12b-1) fees payable		3,977
Fees payable to other affiliates		10,065
Accrued expenses and other liabilities		11,181
TOTAL LIABILITIES		225,801
NET ASSETS	$	12,369,205
Net Assets Consist Of:
Paid in capital	$	12,073,976
Accumulated net investment income		22,036
Accumulated net realized gain from security transactions		341,457
Net unrealized depreciation on investments		(68,264	)
NET ASSETS	$	12,369,205
Net Asset Value Per Share:
Class A Shares:
Net Assets	$	5,294,616
Shares of beneficial interest outstanding ($0 par value, unlimited shares authorized)		491,314
Net asset value (Net Assets ÷ Shares Outstanding) and redemption price per share (a)	$	10.78
Maximum offering price per share (maximum sales charge of 5.75%)	$	11.44
Class C Shares:
Net Assets	$	2,537,296
Shares of beneficial interest outstanding ($0 par value, unlimited shares authorized)		236,967
Net asset value (Net Assets ÷ Shares Outstanding), offering price and redemption price per share (a)	$	10.71
Class I Shares:
Net Assets	$	4,537,293
Shares of beneficial interest outstanding ($0 par value, unlimited shares authorized)		420,109
Net asset value (Net Assets ÷ Shares Outstanding), offering price and redemption price per share (a)	$	10.80

(a) On investments of $1 million or more, the maximum sales charge will not apply. Instead, the investment may be subject to a 1.00% contingent deferred sales charge.

See accompanying notes to financial statements.

3

PINNACLE TACTICAL ALLOCATION FUND

STATEMENT OF OPERATIONS (Unaudited)

For the Six Months Ended September 30, 2014

INVESTMENT INCOME
Dividends	$	121,988
Interest		101
TOTAL INVESTMENT INCOME		122,089
EXPENSES
Investment advisory fees		62,969
Distribution (12b-1) fees:
Class A		6,001
Class C		15,939
Transfer agent fees		20,062
Administrative services fees		16,209
Accounting services fees		12,920
Audit fees		7,521
Trustees fees and expenses		7,355
Compliance officer fees		7,020
Printing and postage expenses		5,014
Registration fees		4,513
Legal fees		4,011
Custodian fees		2,509
Other expenses		1,755
TOTAL EXPENSES		173,798
Less: Fees waived and expenses reimbursed by the Adviser		(73,745	)
NET EXPENSES		100,053
NET INVESTMENT INCOME		22,036
REALIZED AND UNREALIZED GAIN(LOSS) ON INVESTMENTS
Net realized gain(loss) from:
Security transactions		262,921
Net change in unrealized depreciation on investments		(347,058	)
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS		(84,137	)
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	(62,101	)

See accompanying notes to financial statements.

4

PINNACLE TACTICAL ALLOCATION FUND

STATEMENT OF CHANGES IN NET ASSETS

	Six Months Ended
	September 30			Period Ended
	2014			March 31,
	(Unaudited)			2014**
FROM OPERATIONS
Net investment income (loss)	$	22,036		$	(10,097	)
Net realized gain from security transactions		262,921			181,234
Distributions of capital gains from underlying investment companies		—			65
Net change in unrealized appreciation (depreciation) on investments		(347,058	)		278,794
Net increase (decrease) in net assets resulting from operations		(62,101	)		449,996
DISTRIBUTIONS TO SHAREHOLDERS
From net realized gains:
Class A		—			(26,765	)
Class C		—			(21,261	)
Class I		—			(36,189	)
From net investment income:
Class A		—			(2,273	)
Class I		—			(6,178	)
Net decrease in net assets resulting from distributions to shareholders		—			(92,666	)
FROM SHARES OF BENEFICIAL INTEREST
Proceeds from shares sold:
Class A		1,260,635			3,953,942
Class C		147,200			3,017,455
Class I		101,500			4,250,010
Net asset value of shares issued in reinvestment of distributions:
Class A		—			29,038
Class C		—			21,260
Class I		—			42,367
Redemption fee proceeds:
Class A		2			—
Class C		2			—
Class I		3			—
Payments for shares redeemed:
Class A		(86,317	)		(4,970	)
Class C		(658,151	)		—
Net increase in net assets resulting from shares of beneficial interest		764,874			11,309,102
TOTAL INCREASE IN NET ASSETS		702,773			11,666,432
NET ASSETS
Beginning of Period		11,666,432			—
End of Period *	$	12,369,205		$	11,666,432
*  Includes accumulated net investment income of:	$	22,036		$	—

** The Pinnacle Tactical Allocation Fund commenced operations on June 3, 2013.

See accompanying notes to financial statements.

5

PINNACLE TACTICAL ALLOCATION FUND

STATEMENT OF CHANGES IN NET ASSETS (Continued)

	Six Months Ended
	September 30			Period Ended
	2014			March 31,
	(Unaudited)			2014**
SHARE ACTIVITY
Class A:
Shares Sold		114,985			381,976
Shares Reinvested		—			2,732
Shares Redeemed		(7,919	)		(460	)
Net increase in shares of beneficial interest outstanding		107,066			384,248
Class C:
Shares Sold		13,501			282,572
Shares Reinvested		—			2,002
Shares Redeemed		(61,108	)		—
Net increase (decrease) in shares of beneficial interest outstanding		(47,607	)		284,574
Class I:
Shares Sold		9,416			406,707
Shares Reinvested		—			3,986
Net increase in shares of beneficial interest outstanding		9,416			410,693

** The Pinnacle Tactical Allocation Fund commenced operations on June 3, 2013.

See accompanying notes to financial statements.

6

PINNACLE TACTICAL ALLOCATION FUND

FINANCIAL HIGHLIGHTS

Per Share Data and Ratios for a Share of Beneficial Interest Outstanding Throughout The Period

	Six Months Ended
	September 30, 2014			Period Ended
Class A	(Unaudited)			March 31, 2014 (1)
Net asset value, beginning of period	$	10.81		$	10.00
Activity from investment operations:
Net investment income (loss) (2)		0.03			(0.02	)
Net realized and unrealized gain (loss) on investments		(0.06	)		0.96
Total from investment operations		(0.03	)		0.94
Less distributions from:
Net investment income		—			(0.01	)
Net realized gains		—			(0.12	)
Total distributions		—			(0.13	)
Paid-in-Capital From Redemption Fees		0.00	(8)		—
Net asset value, end of period	$	10.78		$	10.81
Total return (3)(7)		(0.28	)%		9.37	%
Net assets, at end of period (000s)	$	5,295		$	4,154
Ratio of gross expenses to average net assets (4)(5)(6)		2.66	%		4.36	%
Ratio of net expenses to average net assets (5)(6)		1.49	%		1.49	%
Ratio of net investment income (loss) to average net assets (5)(6)		0.48	%		(0.21	)%
Portfolio Turnover Rate (7)		311	%		372	%

(1) The Pinnacle Tactical Allocation Fund’s Class A shares commenced operations on June 3, 2013.

(2) Per share amounts calculated using the average shares method, which more appropriately presents the per share data for the period.

(3) Total returns shown are historical in nature and assume changes in share price, reinvestment of dividends and distributions, if any, and exclude the effect of applicable sales charges and redemption fees. Had the Adviser not waived a portion of its expenses, total returns would have been lower.

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

(5) Annualized.

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

(7) Not annualized.

(8) Amount represents less than $0.01 per share.

See accompanying notes to financial statements.

7

PINNACLE TACTICAL ALLOCATION FUND

FINANCIAL HIGHLIGHTS

Per Share Data and Ratios for a Share of Beneficial Interest Outstanding Throughout The Period

	Six Months Ended
	September 30, 2014			Period Ended
Class C	(Unaudited)			March 31, 2014 (1)
Net asset value, beginning of period	$	10.78		$	10.00
Activity from investment operations:
Net investment loss (2)		(0.02	)		(0.07	)
Net realized and unrealized gain (loss) on investments		(0.05	)		0.97
Total from investment operations		(0.07	)		0.90
Less distributions from:
Net investment income		—			—
Net realized gains		—			(0.12	)
Total distributions		—			(0.12	)
Paid-in-Capital From Redemption Fees		0.00	(8)		—
Net asset value, end of period	$	10.71		$	10.78
Total return (3)(7)		(0.65	)%		8.97	%
Net assets, at end of period (000s)	$	2,537		$	3,068
Ratio of gross expenses to average net assets (4)(5)(6)		3.41	%		5.11	%
Ratio of net expenses to average net assets (5)(6)		2.24	%		2.24	%
Ratio of net investment loss to average net assets (5)(6)		(0.32	)%		(0.83	)%
Portfolio Turnover Rate (7)		311	%		372	%

(1) The Pinnacle Tactical Allocation Fund’s Class C shares commenced operations on June 3, 2013.

(2) Per share amounts calculated using the average shares method, which more appropriately presents the per share data for the period.

(3) Total returns shown are historical in nature and assume changes in share price, reinvestment of dividends and distributions, if any, and exclude the effect of applicable sales charges and redemption fees. Had the Adviser not waived a portion of its expenses, total returns would have been lower.

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

(5) Annualized.

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

(7) Not annualized.

(8) Amount represents less than $0.01 per share.

See accompanying notes to financial statements.

8

PINNACLE TACTICAL ALLOCATION FUND

FINANCIAL HIGHLIGHTS

Per Share Data and Ratios for a Share of Beneficial Interest Outstanding Throughout The Period

	Six Months Ended
	September 30, 2014			Period Ended
Class I	(Unaudited)			March 31, 2014 (1)
Net asset value, beginning of period	$	10.82		$	10.00
Activity from investment operations:
Net investment income (2)		0.04			0.01
Net realized and unrealized gain (loss) on investments		(0.06	)		0.95
Total from investment operations		(0.02	)		0.96
Less distributions from:
Net investment income		—			(0.02	)
Net realized gains		—			(0.12	)
Total distributions		—			(0.14	)
Paid-in-Capital From Redemption Fees		0.00	(8)		—
Net asset value, end of period	$	10.80		$	10.82
Total return (3)(7)		(0.19	)%		9.58	%
Net assets, at end of period (000s)	$	4,537		$	4,444
Ratio of gross expenses to average net assets (4)(5)(6)		2.41	%		4.11	%
Ratio of net expenses to average net assets (5)(6)		1.24	%		1.24	%
Ratio of net investment income to average net assets (5)(6)		0.68	%		0.10	%
Portfolio Turnover Rate (7)		311	%		372	%

(1) The Pinnacle Tactical Allocation Fund’s Class I shares commenced operations on June 3, 2013.

(2) Per share amounts calculated using the average shares method, which more appropriately presents the per share data for the period.

(3) Total returns shown are historical in nature and assume changes in share price, reinvestment of dividends and distributions, if any, and exclude the effect of applicable sales charges and redemption fees. Had the Adviser not waived a portion of its expenses, total returns would have been lower.

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

(5) Annualized.

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

(7) Not annualized.

(8) Amount represents less than $0.01 per share.

See accompanying notes to financial statements.

9

PINNACLE TACTICAL ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited)
September 30, 2014

1. ORGANIZATION

The Pinnacle Tactical Allocation Fund (the “Fund”), is a diversified series of shares of beneficial interest of the Northern Lights Fund Trust III (the “Trust”), a Delaware statutory trust organized on December 5, 2011 under the laws of the state of Delaware. The Fund is registered under the Investment Company Act of 1940, as amended, (the “1940 Act”), as an open-end management investment company. The investment objective of the Fund is to seek high total return with reasonable risk. The Fund commenced operations on June 3, 2013.

The Fund currently offers Class A, Class C and Class I shares. Class C and Class I shares are offered at net asset value. Class A shares are offered at net asset value plus a maximum sales charge of 5.75%. Each class represents an interest in the same assets of the Fund and classes are identical except for differences in their sales charge structures and ongoing service and distribution charges. All classes of shares have equal voting privileges except that each class has exclusive voting rights with respect to its service and/or distribution plans. The Fund’s income, expenses (other than class specific distribution fees) and realized and unrealized gains and losses are allocated proportionately each day based upon the relative net assets of each class.

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies followed by the Fund in preparation of the financial statements. These policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements 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 income and expenses for the period. Actual results could differ from those estimates.

Securities Valuation – Securities listed on an exchange are valued at the last reported sale price at the close of the regular trading session of the primary exchange on the business day the value is being determined, or in the case of securities listed on NASDAQ at the NASDAQ Official Closing Price (“NOCP”). In the absence of a sale such securities shall be valued at the mean between the current bid and ask prices on the day of valuation. Investments in open-end investment companies are valued at net asset value. Options contracts listed for trading on a securities exchange or board of trade (whether domestic or foreign) for which market quotations are readily available shall be valued at the mean price between the current bid and asked price. Short-term debt obligations having 60 days or less remaining until maturity, at time of purchase, may be valued at amortized cost.

Valuation of Fund of Funds – The Fund may invest in portfolios of open-end or closed-end investment companies (the “underlying funds”). Underlying open-end funds are valued at their respective net asset values as reported by such investment companies. The underlying funds value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value by the methods established by the Boards of the underlying funds. The shares of many closed-end investment companies, after their initial public offering, frequently trade at a price per share, which is different than

10

PINNACLE TACTICAL ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued)
September 30, 2014

the net asset value per share. The difference represents a market premium or market discount of such shares. There can be no assurances that the market discount or market premium on shares of any closed-end investment company purchased by the Fund will not change.

The Fund may hold securities, such as private placements, interests in commodity pools, other non-traded securities or temporarily illiquid securities, for which market quotations are not readily available or are determined to be unreliable. These securities will be valued at their fair market value as determined using the “fair value” procedures approved by the Board of Trustees (the “Board”). The Board has delegated execution of these procedures to a fair value team composed of one or more representatives from each of the (i) Trust, (ii) administrator, and (iii) adviser. The team may also enlist third party consultants such as an audit firm, valuation consultant or financial officer of a security issuer on an as-needed basis to assist in determining a security-specific fair value. The Board reviews and ratifies the execution of this process and the resultant fair value prices at least quarterly to assure the process produces reliable results.

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

11

PINNACLE TACTICAL ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued)
September 30, 2014

(ix) the liquidity characteristics of the security; (x) current market conditions; and (xi) the market value of any securities into which the security is convertible or exchangeable.

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

Level 1 – Unadjusted quoted prices in active markets for identical assets and liabilities that the Fund has the ability to access.

Level 2 – Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument in an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.

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

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

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

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following tables summarize the inputs used as of September 30, 2014 for the Fund’s assets measured at fair value:

Assets	Level 1		Level 2		Level 3		Total
Exchange Traded Funds	$	12,307,214	$	—	$	—	$	12,307,214
Total	$	12,307,214	$	—	$	—	$	12,307,214

There were no transfers into or out of Level 1 and Level 2 during the current period presented. It is the Fund’s policy to record transfers into or out of Level 1 and Level 2 at the end of the reporting period.

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

12

PINNACLE TACTICAL ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued)
September 30, 2014

Security Transactions and Related Income – Investment security transactions are accounted for on a trade date basis. Cost is determined and gains and losses are based upon the specific identification method for both financial statement and federal income tax purposes. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Purchase discounts and premiums on securities are accreted and amortized over the life of the respective securities.

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

Federal Income Taxes – The Fund intends to continue to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to its shareholders. Therefore, no provision for Federal income tax is required. The Fund recognizes the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. Management has analyzed the Fund’s tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions expected to be taken in the Fund’s 2013 tax returns. The Fund identifies its major tax jurisdictions as U.S. Federal, Nebraska and foreign jurisdictions where the Fund makes significant investments; however, the Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.

Exchange Traded Funds – The Funds may invest in exchange traded funds (“ETFs”). ETFs are a type of index fund bought and sold on a securities exchange. An ETF trades like common stock and represents a fixed portfolio of securities designed to track the performance and dividend yield of a particular domestic or foreign market index. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity on an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.

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

Indemnification – The Trust indemnifies its officers and trustees for certain liabilities that may arise from the performance of their duties to the Trust. Additionally, in the normal course of business, the

13

PINNACLE TACTICAL ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued)
September 30, 2014

Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. However, based on experience, the risk of loss due to these warranties and indemnities appears to be remote.

3. INVESTMENT TRANSACTIONS

For the six months ended September 30, 2014, cost of purchases and proceeds from sales of portfolio securities, other than short-term investments and U.S. Government securities, amounted to $38,710,229 and $37,504,004 respectively.

4. INVESTMENT ADVISORY AGREEMENT / TRANSACTIONS WITH AFFILIATES

Pinnacle Family Advisors, LLC serves as the Fund’s Investment Adviser (the “Adviser”). The Fund has employed Gemini Fund Services, LLC (“GFS”) to provide administration, fund accounting, and transfer agent services. A Trustee and certain officers of the Fund are also officers of GFS, and are not paid any fees directly by the Fund for serving in such capacities.

Pursuant to an Advisory Agreement with the Fund, the Adviser, under the oversight of the Board, directs the daily operations of the Fund and supervises the performance of administrative and professional services provided by others. As compensation for its services and the related expenses borne by the Adviser, the Fund pays the Adviser a management fee, computed and accrued daily and paid monthly, at an annual rate of 1.00% of the Fund’s average daily net assets.

Pursuant to a written contract (the “Waiver Agreement”), the Adviser has agreed, at least until July 31, 2015, to waive a portion of its advisory fee and has agreed to reimburse the Fund for other expenses to the extent necessary so that the total expenses incurred by the Fund (excluding front-end or contingent deferred loads, brokerage fees and commissions, acquired fund fees and expenses, borrowing costs such as interest and dividend expenses on securities sold short, taxes, or extraordinary expenses, such as litigation, not incurred in the ordinary course of the Fund’s business) do not exceed 1.49% per annum of Class A average daily net assets, 2.24% per annum for Class C average daily net assets, and 1.24% per annum for Class I average daily net assets.

If the Adviser waives any fee or reimburses any expense pursuant to the Waiver Agreement, and the Fund’s Operating Expenses attributable to Class A, Class C and Class I shares are subsequently less than 1.49%, 2.24% and 1.24% of average daily net assets, respectively, the Adviser shall be entitled to reimbursement by the Fund for such waived fees or reimbursed expenses provided that such reimbursement does not cause the Fund’s expenses to exceed 1.49%, 2.24% and 1.24% of average daily net assets for Class A, Class C and Class I, respectively. If the Operating Expenses attributable to the Class A, Class C and Class I shares subsequently exceed 1.49%, 2.24% and 1.24% per annum of the Fund’s average daily net assets, the reimbursements shall be suspended. The Adviser may seek recoupment only for expenses waived or paid by it during the three fiscal years prior to such reimbursement; provided, however, that such expenses may only be reimbursed to the extent they were waived or paid after the date of the Waiver Agreement (or any similar agreement). The Board

14

PINNACLE TACTICAL ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued)
September 30, 2014

may terminate this expense reimbursement arrangement at any time.

The following amount is subject to recapture by the Fund until the following date:

3/31/2017
$	136,303

Distributor – The Trust, on behalf of the Fund, has adopted the Trust’s Master Distribution and Shareholder Servicing Plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. The Plan provides that a monthly service and/or distribution fee is calculated by the Fund at an annual rate of 0.25% and 1.00% of the average daily net assets attributable to Class A shares and Class C shares, respectively, and is paid to Northern Lights Distributors, LLC (the “Distributor”), to provide compensation for ongoing distribution-related activities or services and/or maintenance of the Fund’s shareholder accounts, not otherwise required to be provided by the Advisor. Pursuant to the Plan, $6,001 in distribution fees for Class A shares and $15,939 in distribution fees for Class C shares were incurred during the six months ended September 30, 2014.

The Distributor acts as the Fund’s principal underwriter in a continuous public offering of the Fund’s shares. The Distributor is an affiliate of GFS. On sales of Class A for the six months ended September 30, 2014, the Distributor received $17,022 from front-end sales charge of which $2,462 was retained by the principal underwriter or other affiliated broker-dealers.

Pursuant to separate servicing agreements with GFS, the Fund pays GFS customary fees for providing administration, fund accounting, transfer agency and custody administration services to the Fund. GFS provides a Principal Executive Officer and a Principal Financial Officer to the Fund.

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

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

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

15

PINNACLE TACTICAL ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued)
September 30, 2014

5. DISTRIBUTION TO SHAREHOLDERS AND TAX COMPONENTS OF CAPITAL

The tax character of distributions paid during the following period was as follows:

	Fiscal Period Ended
	March 31, 2014
Ordinary Income	$	92,666
Long-Term Capital Gain		—
	$	92,666

As of March 31, 2014, the components of accumulated earnings/(deficit) on a tax basis were as follows:

Undistributed		Undistributed		Capital Loss		Other		Post October Loss		Unrealized		Total
Ordinary		Long-Term		Carry		Book/Tax		and		Appreciation/		Accumulated
Income		Gains		Forwards		Differences		Late Year Loss		(Depreciation)		Earnings/(Deficits)
$	98,413	$	—	$	—	$	—	$	—	$	258,917	$	357,330

The difference between book basis and tax basis unrealized appreciation and accumulated net realized gains from security transactions is primarily attributable to the tax deferral of losses on wash sales.

Permanent book and tax differences, primarily attributable to the reclassification of Fund distributions, the tax treatment of short-term capital gains, and tax adjustments for partnerships, resulted in reclassification for the period ended March 31, 2014 as follows:

Paid		Undistributed		Accumulated
In		Net Investment		Net Realized
Capital		Income (Loss)		Gains (Loss)
$	—	$	18,548	$	(18,548	)

6. SUBSEQUENT EVENTS

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

16

PINNACLE TACTICAL ALLOCATION FUND
EXPENSE EXAMPLES (Unaudited)
September 30, 2014

As a shareholder of the Pinnacle Tactical Allocation Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases of Class A shares; (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Pinnacle Tactical Allocation Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from April 1, 2014 through September 30, 2014.

Actual Expenses

The “Actual Expenses” line in the table below provides information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The “Hypothetical” line in the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balances or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption fees. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning	Ending	Expenses Paid	Expense Ratio
	Account Value	Account Value	During Period*	During Period**
Actual	4/1/14	9/30/14	4/1/14 – 9/30/14	4/1/14 – 9/30/14
Class A	$1,000.00	$997.20	$7.46	1.49%
Class C	1,000.00	993.50	11.19	2.24
Class I	1,000.00	998.10	6.21	1.24
	Beginning	Ending	Expenses Paid	Expense Ratio
Hypothetical	Account Value	Account Value	During Period*	During Period**
(5% return before expenses)	4/1/14	9/30/14	4/1/14 – 9/30/14	4/1/14 – 9/30/14
Class A	$1,000.00	$1,017.60	$7.54	1.49%
Class C	1,000.00	1,013.84	11.31	2.24
Class I	1,000.00	1,018.85	6.28	1.24

* Expenses are equal to the average account value over the period, multiplied by the Fund’s annualized expense ratio, multiplied by the number of days in the period (183) divided by the number of days in the fiscal year (365).

** Annualized.

17

PRIVACY NOTICE

NORTHERN LIGHTS FUND TRUST III

Rev. February 2014

FACTS WHAT DOES NORTHERN LIGHTS FUND TRUST III DO WITH YOUR PERSONAL INFORMATION?

Why? Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.

What? The types of personal information we collect and share depend on the product or service you have with us. This information can include: ■      Social Security number and income   ■      assets, account transfers and transaction history   ■      investment experience and risk tolerance   When you are no longer our customer, we continue to share your information as described in this notice.

How? All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons Northern Lights Fund Trust III chooses to share and whether you can limit this sharing.

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

 Questions? Call 1-888-339-4230

18

Page 2

What we do
How does Northern Lights Fund Trust III protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. Our service providers are held accountable for adhering to strict policies and procedures to prevent any misuse of your nonpublic personal information.
How does Northern Lights Fund Trust III collect my personal information?	We collect your personal information, for example, when you ■     open an account or give us contact information ■     provide account information or give us your income information ■     make deposits or withdrawals from your account We also collect your personal information from other companies.
Why can’t I limit all sharing?	Federal law gives you the right to limit only ■     sharing for affiliates’ everyday business purposes—information about your creditworthiness ■     affiliates from using your information to market to you ■     sharing for nonaffiliates to market to you State laws and individual companies may give you additional rights to limit sharing

Definitions
Affiliates	Companies related by common ownership or control. They can be financial and nonfinancial companies. ■      Northern Lights Fund Trust III doesn’t share with our affiliates.
Nonaffiliates	Companies not related by common ownership or control. They can be financial and nonfinancial companies. ■      Northern Lights Fund Trust III doesn’t share with nonaffiliates so they can market to you.
Joint marketing	A formal agreement between nonaffiliated financial companies that together market financial products or services to you. ■      Northern Lights Fund Trust III doesn’t jointly market.

19

PROXY VOTING POLICY

Information regarding how the Fund voted proxies relating to portfolio securities for the most recent period ended September 30 as well as a description of the policies and procedures that the Fund used to determine how to vote proxies is available without charge, upon request, by calling 1-888-985-9830 or by referring to the Securities and Exchange Commission’s (“SEC”) website at http://www.sec.gov.

PORTFOLIO HOLDINGS

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Form N-Q is available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC (1-800-SEC-0330). The information on Form N-Q is available without charge, upon request, by calling 1-888-985-9830.

INVESTMENT ADVISER

Pinnacle Family Advisors, LLC

4200 S. Quail Creek Ave., Suite A

Springfield, MO 65810

ADMINISTRATOR

Gemini Fund Services, LLC

80 Arkay Drive, Suite 110

Hauppauge, New York 11788

Item 2. Code of Ethics.  

Not applicable for semi-annual reports.   

Item 3. Audit Committee Financial Expert.  

Not applicable for semi-annual reports.   

Item 4. Principal Accountant Fees and Services.  

Not applicable for semi-annual reports.   

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

Item 6.  Schedule of Investments.  Schedule of investments in securities of unaffiliated issuers is included under Item 1.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Funds.  Not applicable to open-end investment companies.

Item 8.  Portfolio Managers of Closed-End Management Investment Companies.  Not applicable to open-end investment companies.

Item 9.  Purchases of Equity Securities by Closed-End Funds.  Not applicable to open-end investment companies.

Item 10.  Submission of Matters to a Vote of Security Holders.  None

Item 11.  Controls and Procedures.  

(a)

Based on an evaluation of the Registrant’s disclosure controls and procedures as of a date within 90 days of filing date of this Form N-CSR, the principal executive officer and principal financial officer of the Registrant have concluded that the disclosure controls and procedures of the Registrant are reasonably designed to ensure that the information required in filings on Form N-CSR is recorded, processed, summarized, and reported by the filing date, including that information required to be disclosed is accumulated and communicated to the Registrant’s management, including the Registrant’s principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

(b)

There were no significant changes in the Registrant’s internal control over financial reporting that occurred during the Registrant’s last fiscal half-year that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 12.  Exhibits.  

(a)(1)

Code of Ethics filed herewith.

(a)(2)

Certifications required by Section 302 of the Sarbanes-Oxley Act of 2002 (and Item 11(a)(2) of Form N-CSR) are filed herewith.

(a)(3)

Not applicable for open-end investment companies.

(b)

Certifications required by Section 906 of the Sarbanes-Oxley Act of 2002 (and Item 11(b) of Form N-CSR) are filed herewith.

SIGNATURES

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

(Registrant) Northern Lights Fund Trust III

By (Signature and Title)

/s/ Andrew B. Rogers

       Andrew B. Rogers, President

Date  

12/11/14

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

By (Signature and Title)

/s/ Andrew B. Rogers

        Andrew B. Rogers, President

Date

12/11/14

By (Signature and Title)

/s/ Brian Curley

       Brian Curley, Treasurer

Date

12/11/14