UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)

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

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~March 3031, ~~2014~~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-~~51310~~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 W. SUNSET ROAD, SUITE 200, LAS VEGAS, NEVADA 89148

(Address of Principal Executive Offices) (Zip Code)

Registrant’s Telephone Number: 702.227.0965

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 (Section 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 [ X ] No [ ]

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 [ ] (Do not check if a smaller reporting company)	Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [ ] No [X]

As of ~~November~~May 1312, ~~2014,~~2015 2,024,424 membership units in the Company were outstanding.

Table of Contents

TABLE OF CONTENTS

		Page
Part I	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	1
	Balance Sheets as of September 30, 2014 and December 31, 2013	1
	Balance Sheets as of March 31, 2015 and December 31, 2014	1
	Statements of Operations for the Three and Nine Months Ended September 30, 2014 and 2013	2
	Statements of Operations for the Three Months ended March 31, 2015 and 2014	2
	Statement of Members’ Equity for the Nine Months ended September 30, 2014	3
	Statements of Cash Flows for the Three Months ended March 31, 2015 and 2014	3
	Statements of Cash Flows for the Nine Months Ended September 30, 2014 and 2013	4
	Notes to Financial Statements	4
	Notes to Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 4.	Controls and Procedures	15
Item 4.	Controls and Procedures	18
Part II	OTHER INFORMATION
Item 1.	Legal Proceedings	1815
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	1815
Item 6.	Exhibits	2017
	SIGNATURES	2118
	Exhibit 31.1
	Exhibit 31.2
	Exhibit 32

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

VESTIN FUND III, LLC
BALANCE SHEETS
(UNAUDITED)
	September 30, 2014		December 31, 2013
ASSETS
Assets
Cash and cash equivalents	$	480,000		$	409,000
Marketable securities – related party		580,000			551,000
Notes receivable, net of allowance of $308,000 at September 30, 2014 and $327,000 at December 31, 2013		--			--
Real estate held for sale		--			249,000
Investment in equity method investee held for sale		--			985,000
Due from related parties		678,000			948,000
Other assets		--			5,000
Total assets	$	1,738,000		$	3,147,000
LIABILITIES AND MEMBERS' EQUITY
Liabilities
Accounts payable and accrued liabilities	$	5,000		$	6,000
Deferred income		685,000			935,000
Total liabilities		690,000			941,000
Commitments and contingencies
Members' equity
Members' units - authorized 10,000,000 units, 2,024,424 units issued and outstanding at September 30, 2014 and December 31, 2013		1,048,000			2,206,000
Total members' equity		1,048,000			2,206,000
Total liabilities and members' equity	$	1,738,000		$	3,147,000

	March 31, 2015		December 31, 2015
ASSETS
Assets
Cash and cash equivalents	$	724,000	$	485,000
Notes receivable, net of allowance of $301,000 at March 31, 2015 and $305,000 at December 31, 2014		--		--
Marketable securities – related party		588,000		588,000
Due from related parties		681,000		681,000

Total assets	$	1,993,000	$	1,754,000

LIABILITIES AND MEMBERS' EQUITY

Liabilities
Accounts payable and accrued liabilities	$	3,000	$	5,000
Other		200,000		--
Deferred gain		685,000		685,000
Total liabilities		888,000		690,000

Commitments and contingencies

Members' equity
Members' units - authorized 10,000,000 units, 2,024,424 units issued and outstanding at March 31, 2015 and December 31, 2014		1,105,000		1,064,000

Total members' equity		1,105,000		1,064,000

Total liabilities and members' equity	$	1,993,000	$	1,754,000

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

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VESTIN FUND III, LLC STATEMENTS OF OPERATIONS ~~(UNAUDITED)~~

	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2014			2013		2014			2013
Revenues
Gain related to pay off of notes receivable, including recovery of allowance for notes receivable	$	10,000		$	431,000	$	10,000		$	433,000
Total revenues		10,000			431,000		10,000			433,000
Operating expenses
Professional fees		20,000			24,000		54,000			90,000
Other		7,000			3,000		28,000			18,000
Total operating expenses		27,000			27,000		82,000			108,000
Income (Loss) from operations		(17,000	)		404,000		(72,000	)		325,000
Non-operating income
Recovery from settlement with loan guarantor		--			--		16,000			--
Gain from former loan defeasance		--			--		15,000			--
Recovery of deferred revenue		250,000			--		250,000			--
Dividend income		10,000			--		29,000			--
Total non-operating income, net		260,000			--		310,000			--
Discontinued Operations
Income (loss) from equity method investee held for sale		(3,000)			20,000		39,000			63,000
Net gain (loss) on sale of real estate held for sale		--			4,000		(14,000)			4,000
Net gain on sale of investment in equity method investee		300,000			--		300,000			--
Expenses related to real estate held for sale		(6,000)			(2,000)		(21,000)			(13,000)
Total income from discontinued operations		291,000			22,000		304,000			54,000
NET INCOME	$	534,000		$	426,000	$	542,000		$	379,000
Net income allocated to members	$	534,000		$	426,000	$	542,000		$	379,000
Net income allocated to members per weighted average membership units	$	0.27		$	0.21	$	0.27		$	0.19
Weighted average membership units		2,024,424			2,024,424		2,024,424			2,024,424

(Unaudited)

	For the Three Months Ended March 31,
	2015			2014
Revenues
Gain related to pay off of notes receivable, including recovery of allowance for notes receivable	$	4,000		$	--
Total revenues		4,000			--

Operating expenses
Professional fees		20,000			20,000
Other		9,000			12,000
Total operating expenses		29,000			32,000

Loss from operations		(25,000	)		(32,000	)

Non-operating income
Recovery from settlement with loan guarantor		--			16,000
Other income		58,000			--
Dividend income – related party		10,000			9,000
Total non-operating income, net		68,000			25,000

Income (loss) from continuing operations		43,000			(7,000	)

Discontinued Operations
Income from equity method investee held for sale		--			20,000
Expenses related to real estate held for sale		(2,000	)		(13,000	)
Total income (loss) from discontinued operations		(2,000	)		7,000

NET INCOME	$	41,000		$	--

Net income allocated to members	$	41,000		$	--

Basic and diluted income per weighted average membership unit
Continuing operations	$	0.02	$	(0.01	)
Discontinued operations		0.00		0.01
Total basic and diluted income per weighted average membership unit	$	0.02	$	0.00
Dividends declared per membership unit	$	--	$	--
Weighted average membership units		2,024,424		2,024,424

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

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VESTIN FUND III, LLC
STATEMENT OF MEMBERS' EQUITY
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014
	For the Three Months Ended March 31,
(UNAUDITED)
	2015			2014
	Units			Amount
Cash flows from operating activities:
Members' equity at December 31, 2013	$	2,024,424		$	2,206,000
Net income	$	41,000		$	--
Net income					542,000
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Liquidating distributions					(1,700,000	)
Recovery of allowance for doubtful notes receivable		(4,000	)		--
Members' equity at September 30, 2014 (unaudited)	$	2,024,424		$	1,048,000
Dividend income – related party		(10,000	)		(9,000	)
Income from equity method investee held for sale		--			(20,000	)
Change in operating assets and liabilities:
Accounts payable and accrued liabilities		(2,000	)		4,000
Due to/from related parties		4,000			71,000
Other assets		--			4,000
Net cash provided by operating activities	$	29,000		$	50,000
Cash flows from investing activities:
Proceeds for sale of marketable securities-related party to be sold		200,000			--
Proceeds related to dividend income		10,000			--
Net cash provided by investing activities	$	210,000		$	--
Cash flows from financing activities:
Liquidating distributions, net of reinvestments		--			(297,000	)
Net cash used in investing activities	$	--		$	(297,000	)
NET CHANGE IN CASH		239,000			(247,000	)
Cash, beginning of period		485,000			409,000
Cash, end of period	$	724,000		$	162,000
Non-cash investing and financing activities:
Adjustment to note receivable and related allowance	$	4,000		$	--

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

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VESTIN FUND III, LLC
STATEMENTS OF CASH FLOWS
(UNAUDITED)
	For the Nine Months Ended September 30,
	2014			2013
Cash flows from operating activities:
Net income	$	542,000		$	379,000
Adjustments to reconcile net incometo net cash provided by (used in) operating activities:
Recovery of allowance for doubtful notes receivable		(10,000	)		(433,000	)
Gain from sale of investment in equity method investee		(300,000	)		--
Dividend income – related party		(29,000	)		--
Gain from former loan defeasance		(15,000	)		--
Recovery of deferred revenue		(250,000	)		--
Loss on sale of real estate held for sale		14,000			--
Income from equity method investee held for sale		(39,000	)		(63,000	)
Change in operating assets and liabilities:
Accounts payable and accrued liabilities		(1,000	)		(7,000	)
Due to/from related parties		280,000			(95,000	)
Other assets		5,000			(4,000	)
Net cash provided by (used in) operating activities		197,000			(223,000	)
Cash flows from investing activities:
Proceeds from notes receivable		--			2,000
Proceeds from former loan defeasance		15,000			--
Proceeds from real estate held for sale		235,000			--
Proceeds from sale of investment in equity method investee		1,287,000			--
Proceeds from nonrefundable earnest money deposit on real estate held for sale		--			3,000
Proceeds from distribution from investment in equity method investee		37,000			152,000
Net cash provided by investing activities		1,574,000			157,000
Cash flows from financing activities:
Liquidating distributions		(1,700,000	)		--
Net cash used in financing activities		(1,700,000	)		--
NET CHANGE IN CASH		71,000			(66,000	)
Cash, beginning of period		409,000			354,000
Cash, end of period	$	480,000		$	288,000

Non-cash investing and financing activities:
Adjustment to note receivable and related allowance		$	10,000			$	431,000

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VESTIN FUND III, LLC

NOTES TO FINANCIAL STATEMENTS

~~SEPTEMBER~~March 3031, ~~2014~~2015

(~~UNAUDITED~~Unaudited)

NOTE A — ORGANIZATION

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.

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 ~~now~~did do not ~~expect to be able to~~ complete the liquidation before the end of this year, and are now targeting completion by the end of ~~2015~~2016. The exact timing for completion of the liquidation will be impacted by ~~real estate market conditions,~~ 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 ~~September~~March 3031, ~~2014~~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 January 14, June 30, and September 15, 2014, we made liquidation distributions to all Fund Members in the aggregate amount of approximately $0.3 million, $0.3 million and $1.1 million, respectively, for each period, 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, and June 15, 2012, in the aggregate amount of approximately $1.0 million, $0.9 million, $0.3 million, $0.3 million, and $0.4 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 G – 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.

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 ~~have~~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.

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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.

NOTE B — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

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. The information included in this Form 10-Q should be read in conjunction with information included in the ~~2013~~2014 annual report filed on Form 10-K.

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

~~Interest~~Revenue isrecognition ~~recognized~~– asThe ~~revenue~~Company onrecognizes ~~performing~~revenue ~~loans~~ when ~~earned~~persuasive ~~according~~evidence ~~to the terms~~ of ~~the~~an ~~loans,~~arrangement ~~using the effective interest method. We do not accrue interest income on loans once they are determined to be non-performing. A loan is non-performing when~~exists, ~~based~~services onhave ~~current~~been ~~information and events~~provided, ~~it is probable that we will be unable to collect all amounts due according to~~ the ~~contractual~~sales ~~terms~~price ofcharged ~~the~~is ~~loan~~fixed ~~agreement~~ or ~~when~~determinable, ~~the~~and ~~payment~~collectability ~~of interest~~ is 90reasonably ~~days past due~~assured. ~~Cash~~ ~~receipts~~This ~~will~~generally bemeans ~~allocated~~that torevenue ~~interest~~is ~~income,~~recognized ~~except~~ when ~~such~~services ~~payments~~have ~~are~~been ~~specifically~~provided ~~designated~~to by the ~~terms of the loan as principal reduction~~customers. ~~Interest is recognized on impaired loans on the cash basis method.~~

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 F – Related Party Transactions.

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.

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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.

Other

Proceeds received for sale of 22,690 shares of our investment in MVP REIT to JNL Parking for $200,000. The principals of JNL Parking are officers of an affiliate of MVP REIT. The shares were not transferred to the principals of JNL Parking until April 2015. There was no gain or loss recognized with this sale.

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 ~~September~~March 3031, ~~2014~~2015 and ~~December 31~~2014, ~~2013,~~ we had approximately $~~230,000~~0.5 million and ~~$159~~no funds,~~000,~~ respectively, in excess of the federally insured limits.

NOTE D — REAL ESTATE HELD FOR SALE

At ~~September~~March 3031, ~~2014~~2015, we held one property with no carrying value, which was acquired through foreclosure and recorded as investment in REO. Expenses incurred during the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015 and ~~2013~~2014 related to our present and past REO totaled approximately $212,000 and $13,000, respectively. Our REO is accounted for at the lower of cost or fair value less costs to sell, with fair value based on appraisals and knowledge of local market conditions. We seek to sell properties acquired through foreclosure as quickly as circumstances permit taking into account current economic conditions.

Beginning balance, January 1, 2014	$	249,000
Sales		(249,000	)
Ending balance, September 30, 2014	$	--

During June 2014, we, VRM I and VRM II sold an REO property to an unrelated third party for approximately $1.7 million, of which our portion was approximately $0.2 million. A net loss of approximately $14,000 was recorded.

NOTE E – INVESTMENTS IN EQUITY METHOD INVESTEE HELD FOR SALE

During May 2012, we, VRM I and VRM II foreclosed on a loan with a balance of approximately $6.0 million, of which our portion was approximately $1.5 million. The property includes 23 cottage units in a retirement community located in Eugene, Oregon. The property includes operations, which will be reported as an asset held for sale from the date of this foreclosure.

We account for investments using the equity method of accounting if the investments give us the ability to exercise significant influence, but not control, over the investees. Significant influence is generally deemed to exist if we have an ownership interest in the voting stock of an incorporated investee of between 20% and 50%, although other factors, such as representation on an investee’s board of managers, specific voting and veto rights held by each investor and the effects of commercial arrangements, are considered in determining whether equity method accounting is appropriate. We record our respective interests in the losses or income of such investees within the equity-method investees held for sale category on our statements of operations for each period. The carrying amount of our equity-method investments held for sale is recorded on our balance sheets as investments in equity-method investees held for sale.

We evaluate our investments in the equity-method investees for impairment each quarter by comparing the carrying amount of each investment to its fair value. Because no active market exists for the investees’ limited liability company membership interests, we evaluate our investments in the equity-method investees for impairment based on our evaluation of the fair value of the equity-method investees’ net assets relative to their carrying values. If we were to determine that the carrying values of our investments in equity-method investees were greater than their fair values, we would write the investments down to their fair values.

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Our acquisition of VREO XXV was accounted for in accordance with this standard and the Company has allocated the purchase price of VREO XXV based upon the estimated fair value of the net assets acquired and liabilities assumed and the fair value of the non-controlling interest measured at the acquisition date. The estimated fair value of VREO XXV at the time of the acquisition totaled $4.1 million.

We performed an allocation as of the foreclosure date as follows:

Cash	$	308,000
Property and equipment		3,841,000
Current assets		14,000
Accounts payable and accrued liabilities		(23,000	)
Net assets	$	4,140,000

In addition, we estimated the fair value of the asset at $1.0 million, which is 25% of the total asset.

On August 29, 2014, VRM I purchased the remaining 26% interest owned by us and VRM II for approximately $1.3 million, of which our portion was approximately $1.3 million. This resulted in a gain of approximately $314,000, of which our portion was approximately $300,000.

The following is a summary of the results of operations related to the investment in equity method investee held for sale for the two and eight months ended August 31, 2014:

	For The Two Months Ended August 31, 2014			For The Eight Months Ended August 31, 2014
Revenue	$	119,000			475,000
Expenses		(130,000	)		(320,000	)
Net Income		(11,000	)		155,000
% of ownership		25	%		25	%
Equity method income	$	(3,000	)		39,000

NOTE F — 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 three ~~and nine~~ months ended ~~September~~March 3031, ~~2014~~2015 and ~~2013~~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”), 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 March 31, 2015, we have a receivable from Vestin Group and deferred gain of approximately $685,000. 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-9-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 31, 2015, Mr. Shustek has paid interest in the amount of $48,816 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 January 2014, June 2014 and September 2014, we made distributions of approximately $42,000, $42,000 and $157,000, were payable, directly and indirectly to Mr. Shustek. Such amounts have been applied to decrease the receivable discussed above. See also “Transactions with Other Related Parties” below.

As of March 31, 2015 and December 31, 2014, our manager owned 54,863 of our units. During the three months ended March 31, 2014, we made liquidating distributions to our manager of approximately $8,000. These distributions were returned to the Company as partial repayment of the letter of credit mentioned above. There were no distributions made during the three months ended March 31, 2015.

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

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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”), 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. Vestin Group and Michael Shustek have provided us with a written agreement to fully indemnify and hold us harmless for any such withdrawals, including the full amount of the $985,000 drawn to date under the letter of credit. Vestin Group’s obligation was to make us whole by no later than August 2014. In August 2014, Vestin Group and Mr. Shustek requested an extension to pay its obligation. We engaged an independent third party valuation expert, at Vestin Group’s expense, to determine the terms and conditions upon which such extension should be granted. We expect the negotiation of the extension will be completed in the fourth quarter, 2014. 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 January 2014, June 30, 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. See also “Transactions with Other Related Parties” below.

As of September 30, 2014 and December 31, 2013, our manager owned 54,863 of our units. During the three and nine months ended September 30, 2014, we made liquidating distributions to Vestin Mortgage of approximately $30,000 and $46,000, respectively, in accordance with the plan. The distributions were returned to the company as partial repayment of the letter of credit mentioned above. There were no distributions made during the year ended December 31, 2013.

As of September 30, 2014 and December 31, 2013, we had receivables from our manager totaling approximately $0.7 and $0.9 million, respectively, primarily related to the withdrawal of the letter of credit referred to above.

Transactions with Other Related Parties

As of ~~September~~March 3031, ~~2014,~~2015 weand ~~owed VRM II approximately $7,200. As of~~ December 31, ~~2013~~2014, we ~~had~~owed ~~a receivable from~~ VRM II of approximately $204,000.

As of September 30, 2014 and December 31, 2013, we had no receivables or payables with VRM I.

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 ~~September~~March 3031, ~~2014~~2015 and December 31, ~~2013~~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 three ~~and nine~~ months ended ~~September~~March 3031, 2014, we made liquidating distributions to inVestin of approximately $195,000 ~~and $29,000, respectively~~. These distributions were returned to the Company as partial repayment of the letter of credit mentioned above. There were no distributions made during the ~~year~~three months ended ~~December~~March 31, ~~2013~~2015.

As of ~~September~~March 3031, ~~2014~~2015 and December 31, ~~2013~~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 three ~~and nine~~ months ended ~~September~~March 3031, 2014, we made liquidating distributions to Shustek Investments of approximately $~~109~~30,000 ~~and $169,000, respectively~~. These distributions were returned to the Company as partial repayment of letter of credit mentioned above. There were no distributions during the ~~year~~three months ended ~~December~~March ~~2013~~31, 2015.

~~-10-~~As of March 31, 2015, Mr. Shustek’s spouse owned 2,963 of our membership units, representing less than 1.0% of our total membership units. During the three months ended March 31, 2014, we made liquidating distributions to Mr. Shustek’s spouse of approximately $400. There were no distributions during the three months ended March 31, 2015.

~~Table~~During March 2015, we sold 22,690 shares of ~~Contents~~our investment in MVP REIT, Inc. (“MVP REIT”), a non-traded REIT, to JNL Parking for $200,000. The principals of JNL Parking are officers of an affiliate of MVP REIT. The shares were not transferred to the principals of JNL Parking until April 2015. There was no gain or loss recognized with this sale.

AsAccounting of September 30, 2014 and December 31, 2013, Mr. Shustek’s spouse owned 2,963 of our membership units, representing less than 1.0% of our total membership units. During the three and nine months ended September 30, 2014, we made liquidating distributions to Mr. Shustek’s spouse of approximately $1,000 and $2,000, respectively. There were no distributions during the year ended December 31, 2013.services

AsDuring ~~further~~the ~~described~~three inmonths ~~Note~~ended EMarch ~~above~~31, on2015 ~~August~~and ~~29,~~ 2014, ~~VRM~~Accounting ISolutions, ~~purchased~~an ~~the~~entity ~~remaining 26% interest in VREO XXV~~ owned by Tracee usGress, ~~and~~the ~~VRM~~Company’s IIChief ~~for~~Financial ~~approximately~~Officer, ~~$1.3~~received ~~million,~~fees of ~~which our portion was~~ approximately $1.3,000 ~~million. This~~and ~~resulted~~$2,000, inrespectively, afor ~~gain~~accounting ~~of approximately $300,000~~services.

During the three months ended March 31, 2015 and 2014, Strategix Solutions, an entity owned by Ms. Gress, the Company’s Chief Financial Officer, received fees of approximately $4,000 and $0, respectively, for accounting services.

NOTE G — 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.

Distributions were paid monthly to members; however, on August 27, 2008, we suspended payment of distributions as a result of our current losses.

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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 ~~September~~March 3031, ~~2014~~2015. Based on this review, the value of members’ capital accounts was adjusted from $0.8053 per unit to $0.5255 per unit, as of ~~October~~April 1, ~~2014~~2015. The change in valuation is primarily for tax and capital account purposes and does not reflect the change in the value of the units calculated in accordance with GAAP. Accordingly, unit prices calculated under GAAP may be different than the adjusted price per unit.

Liquidating Distributions

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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 H — INVESTMENT IN MARKETABLE SECURITIES – RELATED PARTY

As of ~~September~~March 3031, ~~2014~~2015 and December 31, ~~2013~~2014, we owned 6644,~~519~~212 and 6166,~~714~~902 shares of common stock, respectively, of MVP REIT~~, Inc~~. ~~(“MVP REIT”), a non-traded REIT.~~ The shares were assigned to us by SERE Holdings, LLC in consideration of the cancellation of certain unsecured notes. During the ~~year~~three months ended ~~December~~March 31, ~~2013,~~2015 weand ~~recorded~~2014 awe ~~gain~~received of approximately $~~551~~10,000 ~~upon receipt of such shares,~~ and ~~the shares are recorded on our balance sheet as Marketable securities - related party, currently valued at~~ $~~580~~9,000~~. Such amount was determined based upon the offer price for such shares in MVP REIT’s pending public offering. During the three and nine months ended September 30~~, ~~2014 we received 1~~respectively,~~507~~ ~~and~~in ~~3,709~~dividend ~~shares through MVP REIT’s distribution reinvestment program~~income.

NOTE I — RECENT ACCOUNTING PRONOUNCEMENTS

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

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NOTE J— 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 K — 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 L — SUBSEQUENT EVENTS

~~Management~~The ~~evaluated~~following subsequent events have been evaluated through the date of this filing ~~and~~with ~~determined that no such events have occurred that would require adjustment to or disclosure in~~ the ~~financial statements~~SEC.

~~-12-~~On May 13, 2015, we made liquidating distributions to all Fund Members, in the aggregate amount of approximately $0.4 million 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. inVestin, Vestin Mortgage and Shustek Investments returned their entire distribution amounts to us in partial satisfaction of their outstanding obligations to us as described in this report above.

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ITEM 2.

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 three ~~and nine~~ months ended ~~September~~March 3031, ~~2014~~2015 and ~~2013~~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 report on Form 10-Q and our report filed on Form 10-K, Part II, Item 7 for the year ended December 31, ~~2013~~2014.

FORWARD-LOOKING STATEMENTS

Certain statements in this report, including, without limitation, matters discussed under this Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” should be read in conjunction with the financial statements, related notes, and other detailed information included elsewhere in this report on Form 10-Q. We are including this cautionary statement to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements that are not historical fact are forward-looking statements. Certain of these forward-looking statements can be identified by the use of words such as “believes,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “estimates,” “assumes,” “may,” “should,” “will,” or other similar expressions. 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 described in this Quarterly Report on Form 10-Q , our 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. Our estimates of the value of collateral securing our loans may change, or the value of the underlying property could decline subsequent to the date of our evaluation. As a result, such estimates are not guarantees of the future value of the collateral. 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.

RESULTS OF OPERATIONS

OVERVIEW

Because the liquidation of the Fund was not imminent, as of ~~September~~March 3031, ~~2014~~2015, the financial statements are presented assuming the Fund will continue as a going concern.

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We currently have no outstanding loans ~~and our future operations will be focused on disposition of one property acquired through foreclosure~~. In addition, we will attempt to convert our other non-cash assets into cash which may be distributed under the Plan. 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 ~~September~~March 3031, ~~2014~~2015, our cash was approximately $0.57 million.

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 Vestin Originations 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 three months ended ~~September~~March 3031, ~~2014~~2015, to the three months ended ~~September~~March 3031, ~~2013~~2014.

Revenues:	2014		2013		$ Change		% Change
Total Revenue:	2015		2014		$ Change		% Change
Recovery of allowance for doubtful notes receivable	$	104,000	$	~~431,000~~--	$	~~421~~4,000		~~98%~~100	%
Total	$	104,000	$	~~431,000~~--	$	~~421~~4,000		~~98%~~100	%

~~Our~~As ~~revenues~~we ~~for~~have ~~the~~liquidated ~~three~~all ~~month period ended September 30, 2013 consisted entirely~~ of aour ~~non-cash~~loans ~~gain~~and/or ~~realized~~foreclosed ~~upon~~on the ~~receipt~~underlying ~~of 48~~properties,~~999~~ ~~shares~~we ofdo ~~common~~not ~~stock~~expect ofany ~~MVP~~future ~~REIT,~~interest ~~Inc.~~income (“MVP REIT”) in consideration of cancellation of certain unsecured notes guaranteed by SERE Holdings, LLC. The unsecured notes had previously been written off. The value of the gain was based upon the price charged by MVP REIT for its shares in its pending public offering. The managing member of SERE, LLC is also the principal manager of L.L. Bradford and was a former officer of our manager from ~~April 1999 through January 2005~~loans.

Total Operating Expenses:	~~2014~~2015		~~2013~~2014		$ Change			% Change
Professional fees	$	20,000	$	2420,000	$	~~(4,000~~--	)		~~(17~~--	%)
Other		79,000		312,000		4(3,000	)		~~133~~(25	%)
Total	$	2729,000	$	2732,000	$	--(3,000	)		--(9	%)

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Total Non-operating income:	~~2014~~2015		~~2013~~2014		$ Change			% Change
Dividend income	$	10,000	$	--	$	10,000			100%
Recovery from settlement with loan guarantor	$	--	$	16,000	$	(16,000	)		(100	%)
Recovery of deferred revenue		250,000		--		250,000			100%
Other income		58,000		--		58,000			100	%
Total	$	260,000	$	--	$	260,000			100%
Dividend income – related party		10,000		9,000		1,000			11	%
Total	$	68,000	$	25,000	$	43,000			172	%

During ~~the~~January ~~three~~2011, ~~months~~we, ~~ended~~VRM ~~September~~I ~~30,~~and ~~2014,~~VRM weII ~~received~~were ~~dividend~~awarded ~~income~~unsecured ofclaims ~~approximately~~up to $~~10,000~~3.6 onmillion ~~our~~from ~~shares~~a inbankruptcy ~~MVP~~settlement ~~REIT. We~~with ~~did~~a ~~not~~guarantor ~~hold~~of ~~these~~certain ~~shares~~loans. ~~during~~Pursuant to the ~~same~~terms ~~period~~of inthe ~~2013. During~~settlement ~~2014~~ we received payment of approximately $~~0.3~~16,000 ~~million~~during ~~from~~the Mrthree months ended March 31, 2014. During ~~Shustek~~the ~~through~~three ~~liquidating~~months ~~distributions~~ended inMarch ~~satisfaction~~31, of2015 ~~the~~and ~~amounts~~2014, ~~associated~~we ~~with~~received ~~the~~dividend ~~due~~income ~~from~~of ~~related~~approximately ~~party~~$10,000 ~~balance~~and ~~reported~~$9,000 on ~~the~~our ~~accompanying~~shares ~~balance~~in ~~sheet~~MVP REIT, respectively. ~~During~~Additionally, ~~the~~during ~~three~~March 2015, we received approximately $58,000 in interest and ~~nine~~fees ~~months~~from ~~ended~~Michael ~~September~~Shustek ~~30,~~based ~~2014,~~on wethe ~~recognized~~extension ~~deferred~~agreement ~~revenue~~related ~~for~~to ~~approximately~~the ~~$0.3~~letter ~~million~~of credit.

For additional information see Note F – Related Party Transactions of the Notes to the Financial Statements included in Part I, Item I Financial Statements of this Quarterly Report on Form 10-Q.

Total Discontinued Operations	~~2014~~2015			~~2013~~2014			$ Change			% Change
Income (loss) from equity method investee held for sale	$	(3,000	)	$	20,000		$	(23,000	)		(115	%)
Income from equity method investee held for sale	$	--		$	20,000		$	(20,000	)		(100	%)
Net gain on sale of investment in equity method investee		300,000			--			300,000	)		100	%
Expenses related to real estate held for sale		(2,000	)		(13,000	)		11,000			85	%
Net gain on sale of real estate held for sale		--			4,000			(4,000	)		(100	%)
Total	$	(2,000	)	$	7,000		$	(9,000	)		(129	%)
Expenses related to real estate held for sale		(6,000	)		(2,000	)		(4,000	)		(200	%)
Total	$	291,000		$	22,000		$	269,000			1,223	%

OnDecrease ~~August~~in ~~29,~~income ~~2014,~~from ~~VRM~~equity Imethod ~~purchased~~investee ~~our~~is ~~25%~~due ~~interest~~to inthe ~~VREO~~sale ~~XXV~~of ~~reported~~this asinvestment anin ~~Investment~~August 2014. The decrease in ~~Equity~~expenses ~~Method~~related ~~Investee~~to real estate held for sale~~. This~~ ~~resulted~~is indue to the stabilization of the markets where our real estate owned are located and a ~~gain~~decrease in upkeep and litigation of ~~approximately~~the ~~$300~~properties,~~000~~ along with the disposal of properties in 2014.

~~For~~Stated ~~additional~~Unit ~~information~~Value ~~see~~Adjustment: In ~~Note~~accordance Dwith –Section ~~Real~~7.8 ~~Estate~~of ~~Held~~our ~~for~~Operating ~~Sale~~Agreement, ~~Note~~our Fmanager –reviewed ~~Related~~the ~~Party~~value ~~Transactions~~of ~~and~~our ~~Note~~assets Eduring –the ~~Investment~~three inmonths ~~Equity~~ended ~~Method~~March ~~Investee~~31, ~~Held~~2015. Based ~~for~~on ~~Sale~~this ofreview, the ~~Notes~~value of members’ capital accounts was adjusted from $0.53 per unit to ~~the~~$0.55 ~~Financial~~per ~~Statements~~unit, ~~included~~as inof ~~Part~~April I1, ~~Item~~2015. The Iperiodic ~~Financial~~review ~~Statements~~of the estimated net unit value includes an analysis of ~~this~~unrealized ~~Quarterly~~gains ~~Report~~that onour ~~Form~~manager ~~10-Q~~reasonably believes exist at the time of the review, but that cannot be added to net asset value under GAAP.

~~Comparison~~Redemptions: At a special meeting of ~~Operating~~our ~~Results~~members ~~for~~held on July 2, 2009, a majority of the ~~nine~~members ~~months~~voted ~~ended~~to ~~September~~approve 30the dissolution and winding up of the Fund, ~~2014~~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 ~~nine~~total ~~months~~redemptions ~~ended~~made ~~September~~from 30inception were approximately $10.4 million. For additional information regarding members redemptions, ~~2013~~see Note G – Members’ Equity of the Notes to the Financial Statements included in Part I, Item I Financial Statements of this Quarterly Report on Form 10-Q.

Revenue:	2014		2013		$ Change		% Change
Recovery of allowance for doubtful notes receivable	$	10,000	$	433,000	$	(423,000)		(98%)
Total revenue	$	10,000	$	433,000	$	(423,000)		(98%)

Our revenues for the nine month period ended September 30, 2013 consisted entirely of a non-cash gain realized upon the receipt of 48,999 shares of common stock of MVP REIT in consideration of cancellation of certain unsecured notes guaranteed by SERE Holdings, LLC. The unsecured notes had previously been written off. The value of the gain was based upon the price charged by MVP REIT for its shares in its pending public offering. The managing member of SERE, LLC is also the principal manager of L.L. Bradford and was a former officer of our manager from April 1999 through January 2005.

Total Operating Expenses:	2014		2013		$ Change			% Change
Professional fees	$	54,000	$	90,000	$	(36,000	)		(40	%)
Other		28,000		18,000		10,000			56	%
Total	$	82,000	$	108,000	$	(26,000	)		(24	%)

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Total Non-operating income:	2014		2013		$ Change		% Change
Dividend income	$	29,000	$	--	$	29,000		100%
Gain from former loan defeasance		15,000		--		15,000		100%
Recovery of deferred revenue		250,000		--		250,000		100%
Recovery from settlement with loan guarantor		16,000		--		16,000		100%
Total	$	60,000	$	--	$	60,000		100%

During the nine months ended September 30, 2014, we received dividend income of approximately $29,000 on our shares in MVP REIT. We did not hold these shares during the same period in 2013. During January 2011, we, VRM I and VRM II were awarded unsecured claims 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 nine months ended September 30, 2014. No similar transaction occurred in 2013. During 2014 we received approximately $0.3 million 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. During the three and nine months ended September 30, 2014, we recognized deferred revenue for approximately $0.3 million.

Total Discontinued Operations	2014			2013			$ Change			% Change
Income from equity method investee held for sale	$	39,000		$	63,000		$	(24,000	)		(38	%)
Net gain (loss) on sale of real estate held for sale		(14,000	)		4,000			(18,000	)		(450	%)
Net gain on sale of investment in equity method investee		300,000			--			300,000			100	%
Expenses related to real estate held for sale		(21,000	)		(13,000	)		(8,000	)		(62	%)
Total	$	304,000		$	54,000		$	250,000			463	%

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.

For additional information see Note D – Real Estate Held for Sale, Note F – Related Party Transactions and Note E – Investment in Equity Method Investee Held for Sale of the Notes to the Financial Statements included in Part I, Item I Financial Statements of this Quarterly Report on Form 10-Q.

Stated Unit Value Adjustment: In accordance with Section 7.8 of our Operating Agreement, our manager reviewed the value of our assets during the three months ended September 30, 2014. Based on this review, the value of members’ capital accounts was adjusted from $0.80 per unit to $0.52 per unit, as of October 1, 2014. 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 G – Members’ Equity of the Notes to the Financial Statements included in Part I, Item I Financial Statements of this Quarterly Report on Form 10-Q

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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 nine months ended September 30, 2014, net cash flows provided by operating activities totaled approximately $0.2 million. Cash flows provided by investing activities for the nine months ended September 30, 2014 totaled approximately $1.6 million from proceeds from sale of real estate held of approximately $0.2 million, proceeds from sale of investment in equity method investee of approximately $1.3 million, distributions from our investment in equity method investee held for sale of approximately $37,000 and proceeds from former loan defeasance of approximately $15,000. Cash flows used in financing activities for the nine months ended September 30, 2014 totaled approximately $1.7 million from liquidating distributions to members.-13-

AtTable ~~September~~of 30, 2014, we had approximately $0.5 million in unrestricted cash and approximately $1.7 million in total assets. We believe we have sufficient working capital to meet our operating needs during the next 12 months.Contents

During the three months ended March 31, 2015, net cash flows provided by operating activities totaled approximately $29,000. Cash flows provided by investing activities for the three months ended March 31, 2015 totaled approximately $0.2 million and include proceeds from the partial sale of investment in MVP REIT, which were transferred in April 2015.

At March 31, 2015, we had approximately $0.7 million in unrestricted cash and approximately $1.8 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 ~~September~~March 3031, ~~2014~~2015 and December 31, ~~2013~~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, 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. ~~Vestin~~In ~~Group~~February ~~and~~2015, ~~Michael~~Mr. Shustek ~~have~~and ~~provided~~the usCompany ~~with~~entered ainto ~~written~~an ~~agreement~~Extension toAgreement ~~fully~~extending ~~indemnify~~the ~~and~~due ~~hold~~date usof ~~harmless~~the ~~for~~obligation ~~any~~until ~~such~~August ~~withdrawals~~31, ~~including~~2016. ~~the~~Mr. ~~full~~Shustek ~~amount~~paid ofto the ~~$985,000~~Company ~~drawn~~an toextension ~~date~~fee ~~under the letter~~ of ~~credit. Vestin~~$10,120 ~~Group’s~~which ~~obligation~~is ~~was~~equal to ~~make~~one usand ~~whole~~one-half bypercent no(1.50%) ~~later~~of ~~than~~the ~~August~~outstanding ~~2014~~obligation. In ~~August 2014~~addition, ~~Vestin Group and~~ Mr. Shustek ~~requested~~agreed ~~an extension~~ to pay ~~its~~interest ~~obligation. We~~on ~~engaged~~the anoutstanding ~~independent~~balance ~~third~~at ~~party~~the ~~valuation~~rate ~~expert,~~of atone ~~Vestin~~percent ~~Group’s~~(1%) ~~expense~~per month, retroactive to ~~determine~~October ~~the~~2014. ~~terms~~As ~~and~~of ~~conditions~~March ~~upon~~2015, ~~which~~Mr. ~~such~~Shustek ~~extension~~has ~~should~~paid beinterest ~~granted. We~~in ~~expect~~ the ~~negotiation~~amount of ~~the~~$48,816 ~~extension~~in ~~will~~connection bewith ~~completed in~~ the ~~fourth~~Extension ~~quarter, 2014~~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 January 2014, June ~~30,~~ 2014 and September 2014, we made distributions of approximately $42,000, $42,000 and $157,000, were payable, directly and indirectly to Mr. Shustek, Such ~~with~~amounts have ~~which~~been weapplied ~~have~~to decrease ~~decreased~~ the receivable discussed above.

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

OFF-BALANCE SHEET ARRANGEMENTS

As of ~~September~~March 3031, ~~2014~~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 I – Recent Accounting Pronouncements of the Notes to the Financial Statements included in Part I, Item I Financial Statements of this Quarterly Report on Form 10-Q.

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ITEM 4.

CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

The Company’s Chief Executive Officer and Chief Financial Officer has evaluated the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as of the end of the period covered by this report, and they have concluded that these controls and procedures are effective.

(b) Changes in Internal Control over Financial Reporting

There have been no changes in internal control over financial reporting during the ~~third~~first quarter of ~~2014~~2015 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

Please refer to Note J – Legal Matters Involving the Manager and Note K – Legal Matters Involving the Company in the notes to the financial statement under Part I, Item I Financial Statements of this Quarterly Report on Form 10-Q, for information regarding our legal proceedings, which are incorporated herein by reference.

ITEM 2.

UNREGISTERED SALES OF EQUITY AND USE OF PROCEEDS

Market Information

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

Holders

As of ~~November~~March 1331, ~~2014~~2015, ~~approximately~~512 ~~509~~ unit holders held 2,024,424 units in the Company.

Liquidation Distribution Policy

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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 targeting completion of the liquidation by the end of 2015. The exact timing for completion of the liquidation will be impacted by real estate market conditions 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 complete the liquidation within a particular date or by the anticipated time frame. Because the liquidation of the Fund was not imminent, as of September 30 2014, the financial statements are presented assuming the Fund will continue as a going concern.-15-

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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 real estate market conditions 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 complete the liquidation within a particular date or by the anticipated time frame. Because the liquidation of the Fund was not imminent, as of March 31, 2015, the financial statements are presented assuming the Fund will continue as a going concern.

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.

Recent Sales of Unregistered Securities

None.

Equity Compensation Plan Information

None.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

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ITEM 6.

EXHIBITS

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)
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 quarterly report on Form 10-Q for the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Balance Sheets as of ~~September~~March 3031, ~~2014~~2015 and December 31, ~~2013~~2014 (unaudited), (ii) Statements of Operations for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2014~~2015 and ~~2013~~2014 (unaudited) (iii) Statement of Equity for the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015 (unaudited) (iv) Statements of Cash Flows for the ~~nine~~three months ended ~~September~~March 3031,2015 ~~2014~~ and ~~2013~~2014 (unaudited) and (v) Notes to the Financial Statements (unaudited)

(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)
*		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..

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SIGNATURES

Pursuant to the requirements 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: May 12, 2015

Date: November 13 , 2014

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VESTIN FUND III, LLC

BALANCE SHEETS

(UNAUDITED)

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