**U.S.
      SECURITIES AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549





**Form
      10-KSB**





(Mark
      One)





**x** **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)**


**OF
      THE SECURITIES EXCHANGE ACT OF 1934**





For
      the
      fiscal year ended March 31, 2008





** ̈** **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 000-52182*










**Chatsworth
      Acquisitions III, Inc.**


(Name
      of
      small business issuer in its charter)








Delaware
            
            20-3721090(State
                or other jurisdiction of
            
            (I.R.S.
                Employerincorporation
                or organization)
            
            Identification
                No.)c/o
                DAS Consulting LLC56
                Pine Street, #11FNew
                York, New York
            
            10005(Address
                of principal executive offices)
            
            (zip
                code)





Issuer’s
      telephone number, including area code:


(212)
      750-3355








Securities
      registered under Section 12(b) of the Exchange Act:





None.





Securities
      registered under Section 12(g) of the Exchange Act:





Common
      Stock, $0.001 par value per share





(Title
      of
      Class)





Check
        whether the issuer is not required to file reports pursuant to Section 13
        or
        15(d) of the Exchange Act.  ̈
 
 Check
        whether the issuer (1) filed all reports required to be filed by Section
        13 or
        15(d) of the Exchange Act 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  ̈ .
 
 Check
        if
        there is no disclosure of delinquent filers in response to Item 405 of
        Regulation S-B contained in this form, and no disclosure will be contained,
        to
        the best of registrant's knowledge, in definitive proxy or information
        statements incorporated by reference in Part III of this Form 10-KSB or any
        amendment to this Form 10-KSB.  ̈
 
 Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act). Yes x No  ̈ .
 
 The
        issuer’s revenues for fiscal year end March 31, 2008 were $96 .
 
 As
        of
        June 26, 2008, there were 3,000,000 shares of common stock, par value $.001
        per
        share, outstanding
 
 Transitional
        Small Business Disclosure Format (check one): Yes  ̈ No x
 
 **DOCUMENTS
        INCORPORATED BY REFERENCE:**
 
 **None**
 
 **FORWARD-LOOKING
        STATEMENTS**
 
 Certain
        statements made in this Annual Report on Form 10-KSB are “forward-looking
        statements” (within the meaning of the Private Securities Litigation Reform Act
        of 1995) regarding the plans and objectives of management for future operations.
        Such statements involve known and unknown risks, uncertainties and other
        factors
        that may cause actual results, performance or achievements of Chatsworth
        Acquisitions III, Inc. (the “Company”) to be materially different from any
        future results, performance or achievements expressed or implied by such
        forward-looking statements. The forward-looking statements included herein
        are
        based on current expectations that involve numerous risks and uncertainties.
        The
        Company's plans and objectives are based, in part, on assumptions involving
        the
        continued expansion of business. Assumptions relating to the foregoing involve
        judgments with respect to, among other things, future economic, competitive
        and
        market conditions and future business decisions, all of which are difficult
        or
        impossible to predict accurately and many of which are beyond the control
        of the
        Company. Although the Company believes its assumptions underlying the
        forward-looking statements are reasonable, any of the assumptions could prove
        inaccurate and, therefore, there can be no assurance the forward-looking
        statements included in this Annual Report will prove to be accurate. In light
        of
        the significant uncertainties inherent in the forward-looking statements
        included herein particularly in view of the current state of our operations,
        the
        inclusion of such information should not be regarded as a statement by us
        or any
        other person that our objectives and plans will be achieved. Factors that
        could
        cause actual results to differ materially from those expressed or implied
        by
        such forward-looking statements include, but are not limited to, the factors
        set
        forth herein under the headings “Business,” “Plan of Operation” and “Risk
        Factors”. We undertake no obligation to revise or update publicly any
        forward-looking statements for any reason.
  
  **PART
        I**
 
 **Item
        1. Description of Business.**
 
 **Introduction**
 
 Chatsworth
        Acquisitions III, Inc. (“we”, “us”, “our” or the “Company”) was incorporated in
        the State of Delaware on July 22, 2005 and maintains its principal executive
        office at c/o DAS Consulting LLC, 56 Pine Street, #11F, New York, New York
        10005. Since inception, the Company has been engaged in organizational efforts
        and obtaining initial financing. The Company was formed as a vehicle to pursue
        a
        business combination through the acquisition of, or merger with, an operating
        business. The Company filed a registration statement on Form 10-SB with the
        U.S.
        Securities and Exchange Commission (the “SEC”) on August 14, 2006, and since its
        effectiveness, the Company has focused its efforts to identify a possible
        business combination. However, the Company has not entered into a letter
        of
        intent or any definitive agreement concerning any target business.
 
 The
        Company, based on proposed business activities, is a “blank check” company. The
        SEC defines those companies as "any development stage company that is issuing
        a
        penny stock, within the meaning of Section 3(a)(51) of the Securities Exchange
        Act of 1934, as amended (the “Exchange Act”), and that has no specific business
        plan or purpose, or has indicated that its business plan is to merge with
        an
        unidentified company or companies." Many states have enacted statutes, rules
        and
        regulations limiting the sale of securities of "blank check" companies in
        their
        respective jurisdictions. The Company is also a “shell company,” defined in Rule
        12b-2 under the Exchange Act as a company with no or nominal assets (other
        than
        cash) and no or nominal operations. Management does not intend to undertake
        any
        efforts to cause a market to develop in our securities, either debt or equity,
        until we have successfully concluded a business combination. The Company intends
        to comply with the periodic reporting requirements of the Exchange Act for
        so
        long as we are subject to those requirements.
 
 The
        Company was organized as a vehicle to investigate and, if such investigation
        warrants, acquire a target company or business seeking the perceived advantages
        of being a publicly held corporation. The Company’s principal business objective
        for the next 12 months and beyond such time will be to achieve long-term
        growth
        potential through a combination with an operating business. The Company will
        not
        restrict its potential candidate target companies to any specific business,
        industry or geographical location and, thus, may acquire any type of
        business.
 
 **Competition**
 
 The
        Company faces vast competition from other shell companies with the same
        objectives. The Company is in a highly competitive market for a small number
        of
        business opportunities which could reduce the likelihood of consummating
        a
        successful business combination. A large number of established and well-financed
        entities, including small public companies and venture capital firms, are
        active
        in mergers and acquisitions of companies that may be desirable target candidates
        for us. Nearly all these entities have significantly greater financial
        resources, technical expertise and managerial capabilities than we do;
        consequently, we will be at a competitive disadvantage in identifying possible
        business opportunities and successfully completing a business combination.
        These
        competitive factors may reduce the likelihood of our identifying and
        consummating a successful business combination.
 
 **Employees**
 
 We
        have
        no employees other than our management who devotes only a limited amount
        of time
        to our business.
  1
  **Risk
        Factors**
  **You
        should carefully review and consider the following risks as well as all other
        information contained in this Annual Report on Form 10-KSB, including our
        financial statements and the notes to those statements. The following risks
        and
        uncertainties are not the only ones facing us. Additional risks and
        uncertainties of which we are currently unaware or which we believe are not
        material also could materially adversely affect our business, financial
        condition, results of operations, or cash flows. To the extent any of the
        information contained in this annual report constitutes forward-looking
        information, the risk factors set forth below are cautionary statements
        identifying important factors that could cause our actual results
        for various financial reporting periods to differ materially from those
        expressed in any forward-looking statements made by or on our behalf and
        could
        materially adversely effect our financial condition, results of operations
        or
        cash flows.**
 
 ***There
        may be conflicts of interest between our management and our non-management
        stockholders.***
 
 Conflicts
        of interest create the risk that management may have an incentive to act
        adversely to the interests of the Company. A conflict of interest may arise
        between our management's personal pecuniary interest and its fiduciary duty
        to
        our stockholders. In addition, our management is currently involved with
        other
        blank check companies, and in the pursuit of business combinations, conflicts
        with such other blank check companies with which it is, and may in the future
        become, affiliated, may arise. If we and the other blank check companies
        that
        our management is affiliated with desire to take advantage of the same
        opportunity, then those members of management that are affiliated with both
        companies would abstain from voting upon the opportunity. In the event of
        identical officers and directors, the officers and directors will arbitrarily
        determine the company that will be entitled to proceed with the proposed
        transaction.
 
 ***We
        have a limited operating history.***
 
 We
        have a
        limited operating history and no revenues or earnings from operations, since
        inception, and there is a risk that we will be unable to continue as a going
        concern and consummate a business combination. We have no significant assets
        or
        financial resources. We will, in all likelihood, sustain operating expenses
        without corresponding revenues, at least until the consummation of a merger
        or
        other business combination with a private company. This may result in our
        incurring a net operating loss that will increase unless we consummate a
        business combination with a profitable business. We cannot assure you that
        we
        can identify a suitable business opportunity and consummate a business
        combination, or that any such business will be profitable at the time of
        its
        acquisition by us or ever.
 
 ***We
        have incurred and may continue to incur losses.***
 
 Since
        inception (July 22, 2005) through March 31, 2008, we have incurred a net
        loss of
        $(63,272 **)** .
        We
        expect that we will incur losses at least until we complete a merger or other
        business combination with an operating business and perhaps after such a
        combination as well. There can be no assurance that we will complete a merger
        or
        other business combination with an operating business or that we will ever
        be
        profitable.
 
 ***We
        face a number of risks associated with potential
        acquisitions.***
 
 We
        intend
        to use reasonable efforts to complete a merger or other business combination
        with an operating business. Such combination will be accompanied by risks
        commonly encountered in acquisitions, including, but not limited to,
        difficulties in integrating the operations, technologies, products and personnel
        of the acquired companies and insufficient revenues to offset increased expenses
        associated with acquisitions. Failure to manage and successfully integrate
        acquisitions we make could harm our business, our strategy and our operating
        results in a material way.
  2
  ***There
        is competition for those private companies suitable for a merger transaction
        of
        the type contemplated by management.***
 
 The
        Company is in a highly competitive market for a small number of business
        opportunities which could reduce the likelihood of consummating a successful
        business combination. We are, and will continue to be, an insignificant
        participant in the business of seeking mergers with, joint ventures with
        and
        acquisitions of small private and public entities. A large number of established
        and well-financed entities, including small public companies and venture
        capital
        firms, are active in mergers and acquisitions of companies that may be desirable
        target candidates for us. Nearly all these entities have significantly greater
        financial resources, technical expertise and managerial capabilities than
        we do;
        consequently, we will be at a competitive disadvantage in identifying possible
        business opportunities and successfully completing a business combination.
        These
        competitive factors may reduce the likelihood of our identifying and
        consummating a successful business combination.
 
 ***Future
        success is highly dependent on the ability of management to locate and attract
        a
        suitable acquisition.***
 
 The
        nature of our operations is highly speculative, and there is a consequent
        risk
        of loss of your investment. The success of our plan of operation will depend
        to
        a great extent on the operations, financial condition and management of the
        identified business opportunity. While management intends to seek business
        combination(s) with entities having established operating histories, we cannot
        assure you that we will be successful in locating candidates meeting that
        criterion. In the event we complete a business combination, the success of
        our
        operations may be dependent upon management of the successor firm or venture
        partner firm and numerous other factors beyond our control.
 
 ***Management
        intends to devote only a limited amount of time to seeking a target company
        which may adversely impact our ability to identify a suitable acquisition
        candidate.***
 
 While
        seeking a business combination, management anticipates devoting very limited
        time to the Company's affairs. Our sole officer has not entered into a written
        employment agreement with us and is not expected to do so in the foreseeable
        future. This limited commitment may adversely impact our ability to identify
        and
        consummate a successful business combination.
 
 ***There
        can be no assurance that the Company will successfully consummate a business
        combination.***
 
 We
        can
        give no assurances that we will successfully identify and evaluate suitable
        business opportunities or that we will conclude a business combination.
        Management has not identified any particular industry or specific business
        within an industry for evaluation. We cannot guarantee that we will be able
        to
        negotiate a business combination on favorable terms.
 
 ***The
        time and cost of preparing a private company to become a public reporting
        company may preclude us from entering into a merger or acquisition with the
        most
        attractive private companies.***
 
 Target
        companies that fail to comply with SEC reporting requirements may delay or
        preclude acquisition. Sections 13 and 15(d) of the Exchange Act require
        reporting companies to provide certain information about significant
        acquisitions, including certified financial statements for the company acquired,
        covering one, two, or three years, depending on the relative size of the
        acquisition. The time and additional costs that may be incurred by some target
        entities to prepare these statements may significantly delay or essentially
        preclude consummation of an acquisition. Otherwise suitable acquisition
        prospects that do not have or are unable to obtain the required audited
        statements may be inappropriate for acquisition so long as the reporting
        requirements of the Exchange Act are applicable.
  3
  ***The
        Company may be subject to further government regulation which would adversely
        affect our operations.***
 
 Although
        we are subject to the reporting requirements under the Exchange Act, management
        believes we are not subject to regulation under the Investment Company Act
        of
        1940, as amended (the “Investment Company Act”), since we are not engaged in the
        business of investing or trading in securities. If we engage in business
        combinations which result in our holding passive investment interests in
        a
        number of entities, we could be subject to regulation under the Investment
        Company Act. If so, we would be required to register as an investment company
        and could be expected to incur significant registration and compliance costs.
        We
        have obtained no formal determination from the SEC as to our status under
        the
        Investment Company Act and, consequently, violation of the Investment Company
        Act could subject us to material adverse consequences.
 
 ***Any
        potential acquisition or merger with a foreign company may subject us to
        additional risks.***
 
 If
        we
        enter into a business combination with a foreign company, we will be subject
        to
        risks inherent in business operations outside of the United States. These
        risks
        include, for example, currency fluctuations, regulatory problems, punitive
        tariffs, unstable local tax policies, trade embargoes, risks related to shipment
        of raw materials and finished goods across national borders and cultural
        and
        language differences. Foreign economies may differ favorably or unfavorably
        from
        the United States economy in growth of gross national product, rate of
        inflation, market development, rate of savings, and capital investment, resource
        self-sufficiency and balance of payments positions, and in other
        respects.
 
 ***The
        Company may be subject to certain tax consequences in our business, which
        may
        increase our cost of doing business.***
 
 We
        may
        not be able to structure our acquisition to result in tax-free treatment
        for the
        companies or their stockholders, which could deter third parties from entering
        into certain business combinations with us or result in being taxed on
        consideration received in a transaction. Currently, a transaction may be
        structured so as to result in tax-free treatment to both companies, as
        prescribed by various federal and state tax provisions. We intend to structure
        any business combination so as to minimize the federal and state tax
        consequences to both us and the target entity; however, we cannot guarantee
        that
        the business combination will meet the statutory requirements of a tax-free
        reorganization or that the parties will obtain the intended tax-free treatment
        upon a transfer of stock or assets. A non-qualifying reorganization could
        result
        in the imposition of both federal and state taxes that may have an adverse
        effect on both parties to the transaction.
 
 ***Our
        business will have no revenue from operations unless and until we merge with
        or
        acquire an operating business.***
  We
        are a
        development stage company and have had no revenue from operations. We do
        not
        expect to realize any revenue from operations unless and until we successfully
        merge with or acquire an operating business.
 
 ***Because
        we may seek to complete a business combination through a “reverse merger”,
        following such a transaction we may not be able to attract the attention
        of
        major brokerage firms.***
 
 Additional
        risks may exist since we expect to assist a privately held business to become
        public through a “reverse merger.” Securities analysts of major brokerage firms
        may not provide coverage of our Company since there is no incentive to brokerage
        firms to recommend the purchase of our common stock, par value $0.001 per
        share
        (the “Common Stock”). No assurance can be given that brokerage firms will want
        to conduct any secondary offerings on behalf of our post-merger company in
        the
        future.
  4
  ***We
        cannot assure you that following a business combination with an operating
        business, our Common Stock will be listed on NASDAQ or any other securities
        exchange.***
  Following
        a business combination, we may seek the listing of our Common
        Stock on
        NASDAQ
        or the American Stock Exchange. However, we cannot assure you that following
        such a transaction, we will be able to meet the initial listing standards
        of
        either of those or any other stock exchange, or that we will be able to maintain
        a listing of our Common
        Stock on
        either
        of those or any other stock exchange. After completing a business combination,
        until our Common
        Stock is
        listed
        on the NASDAQ or another stock exchange, we expect that our Common
        Stock would
        be
        eligible to trade on the Over-the-Counter Bulletin Board, another
        over-the-counter quotation system, or on the Pink Sheets, where our stockholders
        may find it more difficult to dispose of shares or obtain accurate quotations
        as
        to the market value of our Common
        Stock .
        In
        addition, we would be subject to an SEC rule that, if it failed to meet the
        criteria set forth in such rule, imposes various practice requirements on
        broker-dealers who sell securities governed by the rule to persons other
        than
        established customers and accredited investors. Consequently, such rule may
        deter broker-dealers from recommending or selling our Common
        Stock ,
        which
        may further affect its liquidity. This would also make it more difficult
        for us
        to raise additional capital following a business combination.
 
 ***Our
        stockholders may have a minority interest in the Company following a merger
        or
        other business combination with an operating business.***
 
 If
        we
        consummate a merger or business combination with a company with a value in
        excess of the value of our Company and issue shares of Common
        Stock to
        the
        stockholders of such company as consideration for merging with us, our
        stockholders would own less than 50% of the Company after the business
        combination. The stockholders of the acquired company would therefore be
        able to
        control the election of our board of directors (the “Board of Directors”) and
        control our Company.
 
 ***There
        is currently no trading market for our Common Stock, and liquidity of shares
        of
        our Common Stock is limited.***
 
 Shares
        of
        our Common
        Stock are
        not
        registered under the securities laws of any state or other jurisdiction,
        and
        accordingly there is no public trading market for the Common
        Stock . 
        Further, no public trading market is expected to develop in the foreseeable
        future unless and until the Company completes a business combination with
        an
        operating business and the Company thereafter files a registration statement
        under the Securities Act of 1933, as amended (the “Securities Act”). 
Therefore, outstanding shares of Common
        Stock cannot
        be
        offered, sold, pledged or otherwise transferred unless subsequently registered
        pursuant to, or exempt from registration under, the Securities Act and any
        other
        applicable federal or state securities laws or regulations. S hares
        of Common
        Stock cannot
        be
        sold under the exemption from registration provided by Section 4(1) of the
        Securities Act in accordance with the letter from Richard K. Wulff, Chief
        of the
        Office of Small Business Policy of the Securities and Exchange Commission’s
        Division of Corporation Finance, to Ken Worm of NASD Regulation, dated January
        21, 2000 (the “Wulff Letter”).  The Wulff Letter provides that certain
        private transfers of the shares of common stock may be prohibited without
        registration under federal securities laws.  Further, stockholders may rely
        on the exemption from registration provided by Rule 144 of the Securities
        Act
        (“Rule 144”), subject to certain restrictions, starting one year after (i) the
        completion of a business combination with a private company in a reverse
        merger
        or reverse takeover transaction after which the company would cease to be
        a
“shell company” (as defined in Rule 12b-2 under the Exchange Act) and (ii) the
        disclosure of certain information on a Current Report on Form 8-K within
        four
        business days thereafter and only if the Company has been current in all
        of its
        periodic SEC filings for the 12 months preceding the contemplated sale of
        stock.
 
 Compliance
        with the criteria for securing exemptions under federal securities laws and
        the
        securities laws of the various states is extremely complex, especially in
        respect of those exemptions affording flexibility and the elimination of
        trading
        restrictions in respect of securities received in exempt transactions and
        subsequently disposed of without registration under the Securities Act or
        state
        securities laws.
 
 ***There
        are issues impacting liquidity of our securities with respect to the SEC’s
        review of a future resale registration statement.***
 
 Since
        shares of our Common
        Stock issued
        prior to a business combination or reverse merger cannot currently, nor will
        they for a considerable period of time after we complete a business combination,
        be available to be offered, sold, pledged or otherwise transferred without
        being
        registered pursuant to the Securities Act, we will likely file a resale
        registration statement on Form S-1, or some other available form, to register
        for resale such shares of Common
        Stock .
        We
        cannot control this future registration process in all respects as some matters
        are outside our control. Even if we are successful in causing the effectiveness
        of the resale registration statement, there can be no assurances that the
        occurrence of subsequent events may not preclude our ability to maintain
        the
        effectiveness of the registration statement. Any of the foregoing items could
        have adverse effects on the liquidity of our shares of Common
        Stock .
  5
  In
        addition, the SEC has recently disclosed that it has developed internal informal
        guidelines concerning the use of a resale registration statement to register
        the
        securities issued to certain investors in private investment in public equity
        (PIPE) transactions, where the issuer has a market capitalization of less
        than
        $75 million and, in general, does not qualify to file a Registration Statement
        on Form S-3 to register its securities if the issuer’s securities are listed on
        the Over-the-Counter Bulletin Board or on the Pink Sheets. The SEC has taken
        the
        position that these smaller issuers may not be able to rely on Rule 415 under
        the Securities Act (“Rule 415”), which generally permits the offer and sale of
        securities on a continued or delayed basis over a period of time, but instead
        would require that the issuer offer and sell such securities in a direct
        or
        "primary" public offering, at a fixed price, if the facts and circumstances
        are
        such that the SEC believes the investors seeking to have their shares registered
        are underwriters and/or affiliates of the issuer. It appears that the SEC
        in
        most cases will permit a registration for resale of up to one third of the
        total
        number of shares of common stock then currently owned by persons who are
        not
        affiliates of such issuer and, in some cases, a larger percentage depending
        on
        the facts and circumstances. Staff members also have indicated that an issuer
        in
        most cases will have to wait until the later of six months after effectiveness
        of the first registration or such time as substantially all securities
        registered in the first registration are sold before filing a subsequent
        registration on behalf of the same investors. Since, following a reverse
        merger
        or business combination, we may have little or no tradable shares of Common
        Stock ,
        it is
        unclear as to how many, if any, shares of Common
        Stock the
        SEC
        will permit us to register for resale, but SEC staff members have indicated
        a
        willingness to consider a higher percentage in connection with registrations
        following reverse mergers with shell companies such as the Company. The SEC
        may
        require as a condition to the declaration of effectiveness of a resale
        registration statement that we reduce or “cut back” the number of shares of
        common stock to be registered in such registration statement. The result
        of the
        foregoing is that a stockholder’s liquidity in Common
        Stock may
        be
        adversely affected in the event the SEC requires a cut back of the securities
        as
        a condition to allow the Company to rely on Rule 415 with respect to a resale
        registration statement, or, if the SEC requires us to file a primary
        registration statement.
 
 ***We
        have never paid dividends on our Common Stock.***
 
 We
        have
        never paid dividends on our Common
        Stock and
        do
        not presently intend to pay any dividends in the foreseeable future. We
        anticipate that any funds available for payment of dividends will be re-invested
        into the Company to further its business strategy.
 
 ***The
        Company intends to issue more shares in a merger or acquisition, which will
        result in substantial dilution.***
 
 Our
        Certificate of Incorporation authorizes the issuance of a maximum of
        75,000,000 shares of Common
        Stock and
        a
        maximum of 10,000,000 shares of preferred stock, par value $.001 per share
        (the
“Preferred Stock”). Any merger or acquisition effected by us may result in the
        issuance of additional securities without stockholder approval and the
        substantial dilution in the percentage of Common Stock held by our then existing
        stockholders. Moreover, the Common Stock issued in any such merger or
        acquisition transaction may be valued on an arbitrary or non-arm’s-length basis
        by our management, resulting in an additional reduction in the percentage
        of
        Common Stock held by our current stockholders. Our Board of Directors has
        the
        power to issue any or all of such authorized but unissued shares without
        stockholder approval. To
        the
        extent that additional shares of Common Stock or Preferred Stock are issued
        in
        connection with a business combination or otherwise, dilution to the interests
        of our stockholders will occur and the rights of the holders of Common Stock
        might be materially and adversely affected.
 
 ***Our
        stockholders may engage in a transaction to cause the Company to repurchase
        their shares of Common Stock.*** ****
 
 In
        order
        to provide an interest in the Company to third parties, our controlling
        stockholders may choose to cause the Company to sell Company securities to
        third
        parties, with the proceeds of such sale(s) being utilized by the Company
        to
        repurchase their shares of Common Stock. As a result of such transaction(s),
        our
        management, controlling stockholders and Board of Directors may
        change.
  6
  ***Our
        Board of Directors has the power to issue shares of Preferred Stock with
        certain
        rights without stockholder approval.***
 
 Our
        Certificate of Incorporation authorizes the issuance of up to 10,000,000
        shares
        of Preferred Stock with designations, rights and preferences determined from
        time to time by its Board of Directors. Accordingly, our Board of Directors
        is
        empowered, without stockholder approval, to issue shares of Preferred Stock
        with
        dividend, liquidation, conversion, voting, or other rights which could adversely
        affect the voting power or other rights of the holders of the Common
        Stock .
        In the
        event of issuance, the Preferred Stock could be utilized, under certain
        circumstances, as a method of discouraging, delaying or preventing a change
        in
        control of the Company. Although we have no present intention to issue any
        shares of our authorized Preferred Stock, there can be no assurance that
        we will
        not do so in the future.
 
 **Item
        2. Description of Property.**
 
 The
        Company neither rents nor owns any properties. The Company utilizes the office
        space and equipment of its management at no cost. Management estimates such
        amounts to be immaterial. The Company currently has no policy with respect
        to
        investments or interests in real estate, real estate mortgages or securities
        of,
        or interests in, persons primarily engaged in real estate activities .
 
 **Item
        3. Legal Proceedings.**
 
 Presently,
        there are not any material pending legal proceedings to which the Company
        is a
        party or as to which any of its property is subject, and no such proceedings
        are
        known to the Company to be threatened or contemplated against it.
 
 **Item
        4. Submission of Matters to a Vote of Security Holders.**
 
 None.
 
 **PART
        II**
 
 **Item
        5. Market for Common Equity, Related Stockholder Matters and Small Business
        Issuer Purchases of Equity Securities.**
 
 **Common
        Stock**
 
 Our
        Certificate of Incorporation authorizes the issuance of up to
        75,000,000  shares
        of
        Common Stock. Our Common Stock is not listed on a publicly-traded market.
        As of
        June 26, 2008, there were 32 holders of record of our Common Stock.
 
 **Preferred
        Stock**
 
 Our
        Certificate of Incorporation authorizes the issuance of up to 10,000,000
        shares
        of Preferred Stock. The Company has not yet issued any of the Preferred Stock.
 
 **Dividend
        Policy**
 
 The
        Company has not declared or paid any cash dividends on Common Stock and does
        not
        intend to declare or pay any cash dividend in the foreseeable future. The
        payment of dividends, if any, is within the discretion of the Board of Directors
        and will depend on the Company’s earnings, if any, its capital requirements and
        financial condition and such other factors as the Board of Directors may
        consider.
  7
  **Securities
        Authorized for Issuance Under Equity Compensation Plans**
 
 None.
 
 **Recent
        Sales of Unregistered Securities**
 
 The
        Company did not sell any equity securities that were not registered under
        the
        Securities Act during the fiscal quarter ended March 31, 2008.
 
 On
        December 26, 2007, the Company sold 1,000,000 shares of Common Stock for
        aggregate proceeds equal to $30,000 in a private placement offering to
        accredited investors (the “Offering”). The Company sold these shares of Common
        Stock under the exemption from registration provided by Section 4(2) of the
        Securities Act and Regulation D promulgated thereunder.
 
 On
        July
        24, 2007, the Company sold 500,000 shares of Common Stock to Frank L. Kramer
        for
        an aggregate purchase price equal to $6,250. On July 25, 2007, the Company
        sold
        500,000 shares of Common Stock to Philip Yale Berman for an aggregate purchase
        price equal to $6,250. The Company sold these shares of Common Stock under
        the
        exemption from registration provided by Section 4(2) of the Securities Act.
 
 On
        July
        22, 2005, the Company sold 1,000,000 shares of Common Stock to Deborah A.
        Salerno, our sole officer and director, for an aggregate purchase price equal
        to
        $12,500. The Company sold these shares of Common Stock under the exemption
        from
        registration provided by Section 4(2) of the Securities Act.
 
 **Registration
        Rights**
 
 In
        connection with the Offering, the Company granted certain demand and piggyback
        registration rights to the investors in the Offering (the “Investors”) pursuant
        to the terms and conditions contained in that certain registration rights
        agreement (the “Registration Rights Agreement”). The following description of
        the Registration Rights Agreement is a summary and is qualified in its entirety
        by the provisions of the Registration Rights Agreement, a form of which is
        attached hereto as Exhibit 4.1.
 
 Pursuant
        to the Registration Rights Agreement, commencing on the date that is thirty
        days
        after the date the Company completes a business combination with a private
        company in a reverse merger or reverse take-over transaction, Investors shall
        each have a separate one-time right to request the Company to register for
        resale the shares of the Common Stock held by such persons. The Company is
        required to cause the registration statement filed as a result of such requests
        to be declared effective under the Securities Act as promptly as possible
        after
        filing and must keep the registration statement continuously effective under
        the
        Securities Act until the earlier of (i) two years after its effective date,
        (ii)
        such time as all of the shares of Common Stock covered by such registration
        statement have been publicly sold by the Investors, or (iii) such time as
        all of
        the shares of Common Stock covered by such registration statement may be
        sold by
        the Investors pursuant to Rule 144(k).
 
 Additionally,
        the Registration Rights Agreement provides the Investors with “piggyback”
registration rights such that at any time there is not an effective registration
        statement covering the shares of Common Stock, and the Company files a
        registration statement relating to an offering for its own account or the
        account of others under the Securities Act of any of its equity securities,
        other than on Form S-4 or Form S-8 (each as promulgated under the Securities
        Act) or their then equivalents relating to equity securities to be issued
        solely
        in connection with any acquisition of any entity or business or equity
        securities issuable in connection with stock option or other employee benefit
        plans, then the Company is required to send written notice to the Investors
        of
        such intended filings at least twenty (20) days prior thereto and is required
        to
        automatically include in such registration statement all shares of Common
        Stock
        held by the Investors for resale and offer on a continuous basis pursuant
        to
        Rule 415; provided, however, that (i) if, at any time after giving written
        notice of its intention to register any securities and prior to the effective
        date of the registration statement filed in connection with such registration,
        the Company determines for any reason not to proceed with such registration,
        the
        Company will be relieved of its obligation to register any shares of Common
        Stock in connection with such registration, (ii) in case of a determination
        by
        the Company to delay registration of its securities, the Company will be
        permitted to delay the registration of shares of Common Stock for the same
        period as the delay in registering such other securities, (iii) each Investor
        is
        subject to confidentiality obligations with respect to any information gained
        in
        this process or any other material non-public information he, she or it obtains,
        (iv) each Investor is subject to all applicable laws relating to insider
        trading
        or similar restrictions; and (v) if all of the shares of Common Stock of
        the
        Investors cannot be so included due to certain comments from the SEC, then
        the
        Company may reduce the number of each stockholders’ shares of Common Stock
        covered by such registration statement to the maximum number which would
        enable
        the Company to conduct such offering in accordance with the provisions of
        Rule
        415.
  8
  In
        the
        event all of the shares of Common Stock of the Investors cannot be included
        in a
        Registration Statement due to certain comments from the SEC or underwriter
        cutbacks, then the Company, unless otherwise prohibited by the SEC, shall
        cause
        the shares of Common Stock of the Investor to be included in such registration
        statement to be reduced pro rata based on the number of shares of Common
        Stock
        held by all holders of registration rights.
 
 The
        Registration Rights Agreement provides for cash to be paid to the Investors
        are
        partial liquidated damages in the event the Company does not file a registration
        statement pursuant to the terms set forth therein or fails to act in certain
        other respects prescribed in the Registration Rights Agreement. Additionally,
        if
        within 12 months after the closing of a reverse merger, registration statements
        covering all of the shares of Common Stock are not effective, the Investor
        will
        have the option, at any time thereafter, to require the Company to repurchase
        all of the Investor’s shares of Common Stock.
 
 The
        registration rights granted to Investors shall terminate on the earliest
        date
        when all shares of Common Stock of the Investors either: (i) have been publicly
        sold by the Investors pursuant to a registration statement, (ii) have been
        covered by an effective registration statement which has been effective for
        an
        aggregate period of twelve months (whether or not consecutive), or (iii)
        may be
        sold by the Investors pursuant to Rule 144(k).
 
 **Item
        6. Management’s Discussion and Analysis or Plan of
        Operation.**
 
 **Plan
        of Operation**
 
 The
        Company has not realized any revenues from operations since inception, and
        its
        plan of operation for the next twelve months is to locate a suitable acquisition
        or merger candidate and consummate a business combination. The Company may
        need
        additional cash advances from its stockholders or loans from other parties
        to
        pay for operating expenses until the Company consummates a merger or business
        combination with a privately-held operating company. Although it is currently
        anticipated that the Company can satisfy its cash requirements with additional
        cash advances or loans from other parties, if needed, for at least the next
        twelve months, the Company can provide no assurance that it can continue
        to
        satisfy its cash requirements for such period.
 
 Since
        our
        formation on July 22, 2005, our purpose has been to effect a business
        combination with an operating business which we believe has significant growth
        potential. We are currently considered to be a “blank check” company in as much
        as we have no specific business plans, no operations, revenues or employees.
        We
        currently have no definitive agreements or understanding with any prospective
        business combination candidates and have not targeted any business for
        investigation and evaluation nor are there any assurances that we will find
        a
        suitable business with which to combine. The implementation of our business
        objectives is wholly contingent upon a business combination and/or the
        successful sale of securities in the company.
 
 As
        a
        result of our limited resources, we expect to effect only a single business
        combination. Accordingly, the prospects for our success will be entirely
        dependent upon the future performance of a single business. Unlike certain
        entities that have the resources to consummate several business combinations
        or
        entities operating in multiple industries or multiple segments of a single
        industry, we will not have the resources to diversify our operations or benefit
        from the possible spreading of risks or offsetting of losses. A target business
        may be dependent upon the development or market acceptance of a single or
        limited number of products, processes or services, in which case there will
        be
        an even higher risk that the target business will not prove to be commercially
        viable.
  9
  Our
        sole
        officer and director is only required to devote a very limited portion of
        her
        time to our affairs on a part-time or as-needed basis. We expect to use outside
        consultants, advisors, attorneys and accountants as necessary, none of which
        will be hired on a retainer basis. We do not anticipate hiring any full-time
        employees so long as we are seeking and evaluating business
        opportunities.
 
 We
        expect
        our present management to play no managerial role in the Company following
        a
        merger or business combination. Although we intend to scrutinize closely
        the
        management of a prospective target business in connection with our evaluation
        of
        a business combination with a target business, our assessment of management
        may
        be incorrect. We cannot assure you that we will find a suitable business
        with
        which to combine.
 
 **Results
        of Operations**
 
 The
        Company has not conducted any active operations since inception, except for
        its
        efforts to locate a suitable acquisition or merger transaction. No revenue
        has
        been generated by the Company from operations during such period, and it
        is
        unlikely the Company will have any revenue from operations unless it is able
        to
        effect an acquisition of or merger with another operating company, of which
        there can be no assurance.
 
 **Off-Balance
        Sheet Arrangements**
 
 The
        Company does not have any off-balance sheet arrangements that have or are
        reasonably likely to have a current or future effect on the Company’s financial
        condition, changes in financial condition, revenues or expenses, results
        of
        operations, liquidity, capital expenditures or capital resources that is
        material to investors.
  10
  **Item
        7. Financial Statements.**
 
 **CHATSWORTH
        ACQUISITIONS III, INC.**
 **(A
        Development Stage Company)**
 
 **– TABLE
          OF CONTENTS –**
  **Page**Report
                      of Independent Registered Public Accounting Firm
                  F
–
                      1Financial
                      Statements:Balance
                      Sheet as of March 31, 2008
                  F
–
                      2Statements
                      of Operations for the year ended March 31, 2008 and March 31,
                      2007 and for
                      the period from inception (July 22, 2005) to March 31,
                      2008
                  F
–
                      3Statement
                      of Stockholders’ Equity (Deficit) for the period from inception (July 22,
                      2005) to March 31, 2008
                  F
–
                      4Statements
                      of Cash Flows for the year ended March 31, 2008 and March 31,
                      2007 and for
                      the period from inception (July 22, 2005) to March 31,
                      2008
                  F
–
                      5Notes
                      to Financial Statements
                  F
–
                      6
 **REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
 
 Board
        of
        Directors
 Chatsworth
        Acquisitions III, Inc.
 New
        York,
        NY
 
 We
        have
        audited the accompanying balance sheet of Chatsworth Acquisitions III, Inc.
        (the
“Company”) (a development stage company) as of March 31, 2008, and the related
        statements of operations, stockholders’ equity, and cash flows for the years
        ended March 31, 2008 and 2007, and the period from inception ( J uly
        22,
        2005) to March 31, 2008. These financial statements are the responsibility
        of
        the Company’s management. Our responsibility is to express an opinion on these
        financial statements based on our audits.
 
 We
        conducted our audits in accordance with the standards of The Public Company
        Accounting Oversight Board (U.S.). Those standards require that we plan and
        perform the audit to obtain reasonable assurance about whether the financial
        statements are free of material misstatement. The Company is not required
        to
        have, nor were we engaged to perform, an audit of its internal control over
        financial reporting. Our audits included consideration of internal control
        over
        financial reporting as a basis for designing audit procedures that are
        appropriate in the circumstances, but not for the purpose of expressing an
        opinion on the effectiveness of the Company’s internal control over financial
        reporting. Accordingly, we express no such opinion. An audit also includes
        examining, on a test basis, evidence supporting the amounts and disclosures
        in
        the financial statements. An audit also includes assessing the accounting
        principles used and significant estimates made by management, as well as
        evaluating the overall financial statement presentation. We believe that
        our
        audits provide a reasonable basis for our opinion.
 
 In
        our
        opinion, the financial statements referred to above present fairly, in all
        material respects, the financial position of Chatsworth Acquisitions III,
        Inc.
        as of March 31, 2008, and the results of its operations and cash flows for
        the
        years ended March 31, 2008 and 2007, and for the period from inception (July
        22,
        2005) to March 31, 2008, in conformity with accounting principles generally
        accepted in the United States of America.
 
 The
        accompanying financial statements have been prepared assuming that the Company
        will continue as a going concern. As discussed in Note 1 to the financial
        statements, the Company has incurred operating losses since its inception
        and
        has a deficit in stockholders’ equity. These conditions raise substantial doubt
        about its ability to continue as a going concern. The financial statements
        do
        not include any adjustments that might result from the outcome of this
        uncertainty .
 
 Denver,
        Colorado
 June
        13,
        2008
 
 /s/
                  Comiskey & Company**PROFESSIONAL
                  CORPORATION**
  F-1
 
 **Chatsworth
        Acquisitions III, Inc.**
 **(A
        Development Stage Company)**
 **BALANCE
        SHEET**
 **March
        31, 2008**
 
 **ASSETS*****CURRENT
                  ASSETS***Cash
                  and cash equivalents
              
              $
              6,052Total
                  current assets
              
              
              6,052**TOTAL
                  ASSETS**
              
              $
              6,052**LIABILITIES
                  AND STOCKHOLDERS' EQUITY (DEFICIT)*****CURRENT
                  LIABILITIES***Advance
                  from shareholder
              
              $
              12,324Total
                  current liabilities
              
              
              12,324**STOCKHOLDERS'
                  EQUITY (DEFICIT)**Preferred
                      stock, $0.001 par value; 10,000,000 shares authorized; 0 shares
                      issued and
                      outstanding
              
              
              -Common
                      stock, $0.001 par value; 75,000,000 shares authorized; 3,000,000
                      shares
                      issued and outstanding
              
              
              3,000Additional
                  paid-in capital
              
              
              54,000Deficit
                    accumulated during the developmentstage
              
              
              (63,272
              )**Total
                  stockholders' equity (deficit)**
              
              
              (6,272
              )**TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)**
              
              $
              6,052
  **The
        accompanying notes are an integral part of the financial
        statements.**
  F-2
 
 **Chatsworth
        Acquisitions III, Inc.**
 **(A
        Development Stage Company)**
 **STATEMENTS
        OF OPERATIONS**
 
 **For the period****from inception****For the year**
              
              **For the year**
              
              **(July 22, 2005)****ended March 31,**
              
              **ended March 31,**
              
              **to March 31,****2008**
              
              **2007**
              
              **2008****REVENUES**
              
              $
              96
              
              $
              -
              
              $
              96**EXPENSES**Selling,
                  general and administrative
              
              
              34,258
              
              
              16,610
              
              
              63,368**NET
                  LOSS**
              
              $
              (34,162
              )
              $
              (16,610
              )
              $
              (63,272
              )**NET
                  LOSS PER SHARE**
              
              $
              (0.02
              )
              $
              (0.02
              )
              $
              (0.05
              )**WEIGHTED
                  AVERAGE NUMBER OF SHARES OUTSTANDING**
              
              
              1,980,874
              
              
              1,000,000
              
              
              1,365,209
  **The
        accompanying notes are an integral part of the financial
        statements.**
  F-3
 
 **Chatsworth
        Acquisitions III, Inc.**
 **(A
        Development Stage Company)**
 **STATEMENT
        OF STOCKHOLDERS’ EQUITY (DEFICIT)**
 **For
        the period from inception (July 22, 2005) to March 31,
        2008**
 
 **Deficit****accumulated**
              
              **Total****Common stock**
              
              **Additional**
              
              **during the**
              
              **stockholders'****Number of**
              
              
              
              **paid-in**
              
              **development**
              
              **equity****shares**
              
              **Amount**
              
              **capital**
              
              **stage**
              
              **(deficit)**Common
                  stock issued for cash, July 22, 2005 at $0.0125 per share
              
              
              1,000,000
              
              $
              1,000
              
              $
              11,500
              
              $
              -
              
              $
              12,500Shareholder
                  contributions July 22, 2005
              
              
              -
              
              
              -
              
              
              2,000
              
              
              -
              
              
              2,000Net
                  loss for the period ended March 31, 2006
              
              
              -
              
              
              -
              
              
              -
              
              
              (12,500
              )
              
              (12,500
              )Balance,
                  March 31, 2006
              
              
              1,000,000
              
              
              1,000
              
              
              13,500
              
              
              (12,500
              )
              
              2,000Net
                  loss for the year ended March 31, 2007
              
              
              -
              
              
              -
              
              
              -
              
              
              (16,610
              )
              
              (16,610
              )Balance,
                  March 31, 2007
              
              
              1,000,000
              
              
              1,000
              
              
              13,500
              
              
              (29,110
              )
              
              (14,610
              )Common
                  stock issued for cash, July 24, 2007 at $0.0125 per share
              
              
              500,000
              
              
              500
              
              
              5,750
              
              
              -
              
              
              6,250Common
                  stock issued for cash, July 25, 2007 at $0.0125 per share
              
              
              500,000
              
              
              500
              
              
              5,750
              
              
              -
              
              
              6,250Common
                  stock issued for cash, December 26, 2007 at $0.03 per
                  share
              
              
              1,000,000
              
              
              1,000
              
              
              29,000
              
              
              -
              
              
              30,000Net
                  loss for the year ended March 31, 2008
              
              
              -
              
              
              -
              
              
              -
              
              
              (34,162
              )
              
              (34,162
              )Balance,
                  March 31, 2008
              
              
              3,000,000
              
              $
              3,000
              
              $
              54,000
              
              $
              (63,272
              )
              $
              (6,272
              )
  **The
        accompanying notes are an integral part of the financial
        statements.**
 
 F-4
 
 **Chatsworth
        Acquisitions III, Inc.**
 **(A
        Development Stage Company)**
 **STATEMENTS
        OF CASH FLOWS**
 
 **For the period****from inception****For the year**
              
              **For the year**
              
              **(July 22, 2005)****ended March 31,**
              
              **ended March 31,**
              
              **to March 31,****2008**
              
              **2007**
              
              **2008****CASH
                  FLOWS FROM OPERATING ACTIVITIES**Net
                  loss
              
              $
              (34,162
              )
              $
              (16,610
              )
              $
              (63,272
              )Adjustments
                  to reconcile net loss to net cash flows from operating
                  activities:Increase
                  (decrease) in accounts payable
              
              
              (605
              )
              
              605
              
              
              -Net
                  cash flows from operating activities
              
              
              (34,767
              )
              
              (16,005
              )
              
              (63,272
              )**CASH
                  FLOWS FROM INVESTING ACTIVITIES**
              
              
              -
              
              
              -
              
              
              -**CASH
                  FLOWS FROM FINANCING ACTIVITIES**Shareholder
                  contributions
              
              
              -
              
              
              -
              
              
              2,000Advance
                  from shareholder
              
              
              (2,159
              )
              
              14,483
              
              
              12,324Issuance
                  of common stock
              
              
              42,500
              
              
              -
              
              
              55,000Net
                  cash flows from financing activities
              
              
              40,341
              
              
              14,483
              
              
              69,324**NET
                  INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS**
              
              
              5,574
              
              
              (1,522
              )
              
              6,052**CASH
                  AND CASH EQUIVALENTS, BEGINNING OF PERIOD**
              
              
              478
              
              
              2,000
              
              
              -**CASH
                  AND CASH EQUIVALENTS, END OF PERIOD**
              
              $
              6,052
              
              $
              478
              
              $
              6,052
  **The
        accompanying notes are an integral part of the financial
        statements.**
  F-5
 
 **Chatsworth
        Acquisitions III, Inc.**
 **(A
        Development Stage Company)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **March
        31, 2008 and 2007**
 
 **1.**  **Summary
        of Significant Accounting Policies**
 
 **Development
        Stage Company**
 Chatsworth
        Acquisitions III, Inc. (a development stage company) (the "Company") was
        incorporated under the laws of the State of Delaware on July 22, 2005. The
        principal office of the corporation is 56 Pine Street, 11F, New York, NY
        10005.
 
 The
        Company is a new enterprise in the development stage as defined by Statement
        No. 7 of the Financial Accounting Standards Board and has not engaged in
        any business other than organizational efforts. It has no full-time employees
        and owns no real property. The Company intends to operate as a capital market
        access corporation by registering with the U.S. Securities and Exchange
        Commission under the Securities Exchange Act of 1934. After this, the Company
        intends to seek to acquire one or more existing businesses that have existing
        management, through merger or acquisition. Management of the Company will
        have
        virtually unlimited discretion in determining the business activities in
        which
        the Company might engage.
 
 **Accounting
        Method**
 The
        Company records income and expenses on the accrual method.
 
 **Loss
        per Share**
 Loss
        per
        share was computed using the weighted average number of shares outstanding
        during the period. Shares issued to insiders in anticipation of a public
        offering have been accounted for as outstanding since inception.
 
 **Organization
        Costs**
 Costs
        to
        incorporate the Company are charged to expense as incurred.
 
 **Financial
        Instruments**
 Unless
        otherwise indicated, the fair value of all reported assets and liabilities
        that
        represent financial instruments (none of which are held for trading purposes)
        approximate the carrying values of such amount.
 
 **Statements
        of Cash Flows**
 For
        purposes of the statements of cash flows, the Company considers all highly
        liquid debt instruments purchased with an original maturity of three months
        or
        less to be cash equivalents.
 
 **Use
        of Estimates**
 The
        preparation of the Company's financial statements in conformity with generally
        accepted accounting principles requires the Company's management to make
        estimates and assumptions that effect the amounts reported in these financial
        statements and accompanying notes. Actual results could differ from those
        estimates.
 
 **Consideration
        of Other Comprehensive Income Items**
 SFAS 130 —
        Reporting Comprehensive Income, requires companies to present comprehensive
        income (consisting primarily of net income plus other direct equity changes
        and
        credits) and its components as part of the basic financial statements. For
        the
        years ended March 31, 2008 and 2007, the Company’s financial statements do not
        contain any changes in equity that are required to be reported separately
        in
        comprehensive income.
 
 **Stock
        Basis**
 Shares
        of
        common stock issued for other than cash have been assigned amounts equivalent
        to
        the fair value of the service or assets received in exchange.
  F-6
  **Chatsworth
        Acquisitions III, Inc.**
 **(A
        Development Stage Company)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **March
        31, 2008 and 2007**
 
 **1.**  **Summary
        of Significant Accounting Policies (continued)**
 
 **Recent
        Pronouncements**
 In
        December 2007, the Financial Accounting Standards Board (“FASB”) revised
        Statement of Financial Accounting Standards (“SFAS”) No. 141, “Business
        Combinations”. This Statement requires an acquirer to measure the identifiable
        assets acquired, the liabilities assumed, and any noncontrolling interest
        in the
        acquire at their fair values on the acquisition date, with goodwill being
        the
        excess value over the net identifiable assets acquired. SFAS No. 141(R) is
        effective as of the beginning of the Company’s first fiscal year beginning on or
        after December 15, 2008. The Company does not expect application of SFAS
        No. 141
        (R) to have a material effect on its financial statements.
 
 In
        December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
        Consolidated Financial Statements – an amendment of ARB No. 51”. This Statement
        clarifies that a noncontrolling interest in a subsidiary should be reported
        as
        equity in consolidated financial statements. The calculation of earnings
        per
        share will continue to be based on income amounts attributable to the parent.
        SFAS No. 160 is effective as of the beginning of the Company’s first fiscal yea
        that begins on or after December 15, 2008. The Company does not expect
        application of SFAS No. 160 to have a material effect on its financial
        statements.
 
 In
        February of 2007, the FASB issued SFAS no. 159, “The Fair Value Option for
        Financial Assets and Financial Liabilities—including an amendment of FASB
        Statement No. 115”. SFAS 159 permits entities to choose to measure many
        financial instruments and certain other items at fair value. The objective
        is to
        improve financial reporting by providing entities with the opportunity to
        mitigate volatility in reported earnings caused by measuring related assets
        and
        liabilities differently without having to apply complex hedge accounting
        provisions. The fair value option established by this Statement permits all
        entities to choose to measure eligible items at fair value at specified election
        dates. A business entity shall report unrealized gains and losses on items
        for
        which the fair value option has been elected in earnings (or another performance
        indicator if the business entity does not report earnings) at each subsequent
        reporting date. This requirement is effective for our fiscal year ending
        December 2, 2008. The Company is currently reviewing this pronouncement,
        but
        believes it will not have a material impact on the financial
        statements.
 
 In
        September 2006, the FASB issued SFAS No. 157, “Fair Value Measurement”,
        effective for our fiscal year beginning April 1, 2008. This Statement defines
        fair value, establishes a framework for measuring fair value and expands
        disclosures about fair value measurements. This Statement does not require
        any
        new fair value measurements, but simplifies and codifies related guidance
        within
        GAAP. This Statement applies under other accounting pronouncements that require
        or permit fair value measurements. The Company is currently reviewing this
        pronouncement, but believes it will not have a material impact on our financial
        statements.
 
 In
        June
        2006, the FASB issued FIN No. 48, “Accounting for Uncertainty in Income Taxes —
an Interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 clarifies the
        accounting for uncertainty in income taxes recognized in an entity’s financial
        statements in accordance with SFAS 109. FIN 48 prescribes that a company
        should
        use a more likely-than-not recognition threshold based on the technical merits
        of the tax position taken. Tax positions that meet the more-likely-than-not
        threshold should be measured in order to determine the tax benefit to be
        recognized in the financial statements. FIN 48 is effective for our fiscal
        year
        beginning April 1, 2007. The Company has reviewed FIN 48 and has no
        uncertainties with regard to its tax position. Should uncertainties arise,
        the
        Company shall adopt a tax position that is more likely than not that the
        tax
        position will be sustained upon examination.
  F-7
 
 **Chatsworth
        Acquisitions III, Inc.**
 **(A
        Development Stage Company)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 **March
        31, 2008 and 2007**
 
 **1.**  **Summary
        of Significant Accounting Policies (continued)**
 
 **Going
        Concern**
 Since
        its
        inception, the Company has incurred a net loss of $63,272. Since inception
        the
        Company has been dependent upon receipt of capital investment or other financing
        to fund its continuing activities. The Company has not identified any business
        combination and therefore, ascertain with any degree of certainty the capital
        requirements for any particular transaction. In addition, the Company is
        dependent upon certain related parties to provide continued funding and capital
        resources. These factors indicate substantial doubt that the Company will
        be
        able to continue as a going concern. The accompanying financial statements
        have
        been presented on the basis of the continuation of the Company as a going
        concern and do not include any adjustments relating to the recoverability
        and
        classification of recorded asset amounts or the amounts and classification
        of
        liabilities that might be necessary should the Company be unable to continue
        as
        a going concern.
 
 **2.**  **Stockholders’
        Equity**
 As
        of
        March 31, 2008, 75,000,000 shares of the Company’s $0.001 par value common stock
        had been authorized. Of the total shares authorized for issuance 2,000,000
        were
        issued for cash of $0.0125 per share for a total of $25,000 and 1,000,000
        shares
        were issued for cash of $0.03 per share for a total of $30,000.
 
 **3.**  **Related
        Party Transactions**
 As
        of the
        date hereof, one shareholder is acting as officer of the Company, and is
        the
        direct owner of 1,000,000 shares of its issued and outstanding common stock.
        In
        addition, this shareholder controls a company that owns 172,500 of the issued
        outstanding shares. Together, these shares constitute 39% of the Company’s
        issued and outstanding common stock.
 
 During
        the year ended March 31, 2008, the Company reimbursed advances from this
        same
        shareholder in the amount of $2,159. Advances from this shareholder were
        previously used to assist in cash flow to fund operating expenses.
  **4.**  **Income
        Taxes**
 The
        Company has Federal net operating loss carryforwards of approximately $57,439
        expiring 2027. Deductible temporary differences of $5,833 comprise startup
        costs
        amortized over 60 months for tax and deducted currently for financial statement
        purposes. The tax benefit of these net operating losses and temporary
        differences is approximately $1,875 and has been offset by a full allowance
        for
        realization. The net operating loss carryforward may be limited upon
        consummation of a business combination under IRC Section
        381.
  F-8
 
 **Item
        8. Changes in and Disagreements with Accountants on Accounting and Financial
        Disclosure.**
 
 None.
 
 **Item
        8A. Controls and Procedures.**
 
 **Evaluation
        of Disclosure Controls and Procedures**
 
 We
        maintain disclosure controls and procedures that are designed to ensure that
        information required to be disclosed in our reports filed pursuant to the
        Exchange Act is recorded, processed, summarized and reported within the time
        periods specified in the SEC’s rules, regulations and related forms, and that
        such information is accumulated and communicated to our principal executive
        officer and principal financial officer, as appropriate, to allow timely
        decisions regarding required disclosure.
 
 As
        of
        March 31, 2008, we carried out an evaluation, under the supervision and with
        the
        participation of our principal executive officer and our principal financial
        officer of the effectiveness of the design and operation of our disclosure
        controls and procedures. Based on this evaluation, our principal executive
        officer and our principal financial officer concluded that our disclosure
        controls and procedures were effective as of the end of the period covered
        by
        this report.
 
 **Internal
        Control over Financial Reporting**
 
 *Management’s
        Annual Report on Internal Control over Financial Reporting*
 
 Our
        management is also responsible for establishing and maintaining adequate
        internal control over financial reporting for the Company.  As defined by
        the SEC, internal control over financial reporting is a process designed
        by, or
        under the supervision of our principal executive officer and principal financial
        officer and effected by our Board of Directors, management and other personnel,
        to provide reasonable assurance regarding the reliability of financial reporting
        and the preparation of the financial statements in accordance with U.S.
        generally accepted accounting principles.
 
 Our
        internal control over financial reporting includes those policies and procedures
        that (1) pertain to the maintenance of records that, in reasonable detail,
        accurately and fairly reflect our transactions and dispositions of our assets;
        (2) provide reasonable assurance that transactions are recorded as necessary
        to
        permit preparation of the financial statements in accordance with U.S. generally
        accepted accounting principles, and that our receipts and expenditures are
        being
        made only in accordance with authorizations of our management and directors;
        and
        (3) provide reasonable assurance regarding prevention or timely detection
        of
        unauthorized acquisition, use or disposition of our assets that could have
        a
        material effect on the financial statements.
 
 Because
        of its inherent limitations, internal control over financial reporting may
        not
        prevent or detect misstatements. Also, projections of any evaluation of
        effectiveness to future periods are subject to the risk that controls may
        become
        inadequate because of changes in conditions, or that the degree of compliance
        with the policies or procedures may deteriorate.
 
 In
        connection with the preparation of our annual financial statements, management
        has undertaken an assessment of the effectiveness of our internal control
        over
        financial reporting as of March 31, 2008, based on criteria established in
        Internal Control - Integrated Framework issued by the Committee of Sponsoring
        Organizations of the Treadway Commission, or the COSO Framework. Management’s
        assessment included an evaluation of the design of our internal control over
        financial reporting and testing of the operational effectiveness of those
        controls.
  11
  Based
        on
        this evaluation, management has concluded that our internal control over
        financial reporting was effective as of March 31, 2008. However,our principal executive officer and principal financial officer also
        concluded that we have material weaknesses in our internal control over
        financial reporting because we do not have an independent board of directors
        or
        audit committee or adequate segregation of duties. We have no independent
        body
        to oversee our internal control over financial reporting. The lack of
        segregation of duties is due to the limited nature and resources of the
        Company.  We plan to rectify these deficiencies upon consummation of a
        business combination with an operating company that has an independent board
        of
        directors in place and the resources to eliminate the lack of segregation
        of
        duties.
  This
        Annual Report does not include an attestation report of the Company’s registered
        public accounting firm regarding internal control over financial reporting.
         Management’s report was not subject to attestation by the Company’s
        registered public accounting firm pursuant to temporary rules of the SEC
        that
        permit the Company to provide only management’s report in this Annual
        Report.
 
 *Changes
        in Internal Controls*
 
 There
        have been no changes in our internal controls over financial reporting during
        the quarter ended March 31, 2008 that have materially affected or are reasonably
        likely to materially affect our internal controls.
 
 **Item
        8B. Other Information.**
 
 None.
 
 **PART
        III**
 
 **Item
        9. Directors and Executive Officers of the Company.**
 
 (a)
        Identification of Directors and Executive Officers. The following table sets
        forth certain information regarding the Company’s directors and executive
        officers for the fiscal year ended March 31, 2008:
 
 **Name**
              
              **Age**
              
              **Position**
              
              **Term**Deborah
                  A. Salerno
              
              54
              
              President,
                  Secretary,
                Treasurer
                  and Director
              
              July
                  22, 2005 thru Present
 
 **Deborah
        A. Salerno, President, Secretary, Treasurer and Director.** **** Deborah
        A. Salerno **** is
        a
        Managing Member of DAS Consulting, LLC, a private company located in New
        York
        City that provides financial consulting services to corporations. She has
        been a
        Managing Member of DAS Consulting, LLC since 1985. She also acts as General
        Partner of Horizon Capital Fund LP, a hedge fund whose primary business is
        investing in PIPE transactions. From 1986 through 1987, Ms. Salerno was Vice
        President of Wellshire Securities, Inc. From 1985 through 1986, Ms. Salerno
        was
        employed as a manger at Yves Hentic & Company, Inc. From 1978 through 1985,
        Ms. Salerno was involved with the risk arbitrage market and was Vice-President
        of Bodkin Securities from 1980 through 1985 and Assistant Options P&S
        Manager for Ivan Boesky, from 1978 through 1980. Ms. Salerno graduated from
        the
        Lubin School of Business, Pace University and received graduate credits in
        business, finance, and management from the Freeman School of Business, Tulane
        University. Ms. Salerno also serves as the President, Secretary, Treasurer
        and
        sole director of Chatsworth Acquisitions I, Inc. and Chatsworth Acquisitions
        II,
        Inc., both of which are blank check, non-trading, publicly-reporting shell
        companies. Ms. Salerno is the Secretary and Treasurer of Franklyn Resources
        I,
        Inc. and Franklyn Resources II, Inc., both of which are blank check,
        non-trading, publicly-reporting shell companies, incorporated on March 2,
        1999.
 
 The
        Company’s officers and directors are elected annually for a one year term or
        until their respective successors are duly elected and qualified or until
        their
        earlier resignation or removal.
  (b)
        Significant Employees.
 
 As
        of the
        date hereof, the Company has no significant employees.
  12
  (c)
        Family Relationships.
 
 None.
 
 (d)
        Involvement in Certain Legal Proceedings.
 
 There
        have been no events under any bankruptcy act, no criminal proceedings and
        no
        judgments, injunctions, orders or decrees material to the evaluation of the
        ability and integrity of any director, executive officer, promoter or control
        person of Company during the past five years.
 
 **Compliance
        with Section 16(a) of the Exchange Act**
  Section 16(a)
        of the Exchange Act requires the Company’s directors and officers, and persons
        who beneficially own more than 10% of a registered class of the Company’s equity
        securities, to file reports of beneficial ownership and changes in beneficial
        ownership of the Company’s securities with the SEC on Forms 3, 4 and 5.
        Officers, directors and greater than 10% stockholders are required by SEC
        regulation to furnish the Company with copies of all Section 16(a) forms
        they file.
  Based
        solely on the Company’s review of the copies of the forms received by it during
        the fiscal year ended March 31, 2008 and written representations that no
        other
        reports were required, the Company believes that the following persons who,
        at
        any time during such fiscal year, was a director, officer or beneficial owner
        of
        more than 10% of Common Stock failed to comply with all Section 16(a)
        filing requirements during such fiscal year:
 
 Name
              
              Number of Late Reports
              
              Number of Transactions Not Reported on a Timely BasisDeborah
                  A. Salerno
              
              1
              
              1Philip
                  Yale Berman
              
              1
              
              1Frank
                  L. Kramer
              
              1
              
              1
 
 **Code
        of Ethics**
 
 Due
        to
        the limited scope of our current operations, the Company has not yet adopted
        a
        Code of Business Conduct and Ethics that applies to our principal executive
        officer, principal financial officer, principal accounting officer or
        controller, or persons performing similar functions. However, upon the
        completion of a reverse merger transaction or business combination with an
        operating company, we intend to adopt a formal Code of Ethics.
 
 **Nominating
        Committee**
 
 We
        have
        not adopted any procedures by which security holders may recommend nominees
        to
        our Board of Directors.
 
 **Audit
        Committee**
 
 The
        Board
        of Directors acts as the audit committee. The Company does not have a qualified
        financial expert at this time because it has not been able to hire a qualified
        candidate. Further, the Company believes that it has inadequate financial
        resources at this time to hire such an expert. The Company intends to continue
        to search for a qualified individual for hire.
 
 **Item
        10. Executive Compensation.**
 
 The
        following table sets forth the cash compensation paid by the Company to its
        President for services rendered during the fiscal years ended March 31, 2008
        and
        2007:
  13
 
 Name
                  and Position
              
              Year
              
              Total
                  CompensationDeborah A. Salerno, President, Secretary, Treasurer and Director
              
              2008
                2007
              
              None
                None
  **Director
        Compensation**
 
 We
        do not
        currently pay any cash fees to our sole officer and director, nor do we pay
        her
        expenses in attending board meetings.
 
 **Employment
        Agreements**
 
 The
        Company is not a party to any employment agreements.
 
 **Item
        11. Security Ownership of Certain Beneficial Owners and Management and Related
        Stockholder Matters.**
 
 The
        following tables set forth certain information as of June 26, 2008, regarding
        (i) each person known by the Company to be the beneficial owner of more than
        5%
        of the outstanding shares of Common Stock, (ii) each director, nominee and
        executive officer of the Company and (iii) all officers and directors as
        a
        group.
 
 Name and Address
              
              Amount and Nature of
                Beneficial Ownership
              
              Percentage
                of ClassDeborah
                  A. Salerno (1)
                c/o
                  DAS Consulting LLC
                56
                  Pine Street, #11F
                New
                  York, NY 10005
              
              
              1,172,500
              (2)
              
              39.08
              %Philip
                  Yale Berman
                10
                  Jacksonville Road
                Towaco,
                  NJ 07082
              
              
              500,000
              
              
              16.67
              %Frank
                  L. Kramer
                P.O.
                  Box 461029
                Glendale,
                  CO 80246
              
              
              500,000
              
              
              16.67
              %All
                  Directors and Officers as a Group
                (1
                  individual)
              
              
              1,172,500
              
              
              39.08
              %
  
 (1)
              Ms.
                  Salerno is the President, Secretary, Treasurer and sole director
                  of the
                  Company.
 (2)
              Represents
                  1,000,000 shares of Common Stock owned directly by Ms. Salerno
                  and 172,500
                  shares of Common Stock owned by Horizon Capital Fund LP. Ms. Salerno
                  has
                  investment and voting control over the shares of Common Stock owned
                  by
                  Horizon Capital Fund LP and accordingly may be deemed beneficial
                  owner
                  thereof.
 
 **Item
        12. Certain Relationships and Related Transactions.**
 
 Except
        as
        otherwise indicated herein, there have been no related party transactions,
        or
        any other transactions or relationships required to be disclosed pursuant
        to
        Item 404 of Regulation S-B.
  14
  **Item
        13. Exhibits.**
 
 Index
        to
        Exhibits
 
 Exhibit
              
              Description*3.1
              
              Certificate
                  of Incorporation, as filed with the Delaware Secretary of State
                  on July
                  22, 2005.*3.2
              
              By-laws.4.1
              
              Form
                    of Registration
                    Rights Agreement, dated December 26, 2007.31.1
              
              Certification
                  of the Company’s Principal Executive Officer and Principal Financial
                  Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,
                  with
                  respect to the registrant’s Annual Report on Form 10-KSB for the year
                  ended March 31, 2008.32.1
              
              Certification
                  of the Company’s Principal Executive Officer and Principal Financial
                  Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
                  to Section
                  906 of the Sarbanes-Oxley Act of
                  2002.
 
 *
              Filed
                  as an exhibit to the Company's Registration Statement on Form 10-SB,
                  as
                  filed with the Securities and Exchange Commission on August 14,
                  2006, and
                  incorporated herein by this
                  reference.
 
 **Item
        14. Principal Accountant Fees and Services.**
 
 Comiskey
        & Company, P.C. (“Comiskey”) is the Company’s independent registered public
        accounting firm.
 
 **Audit
        Fees**
 
 The
        aggregate fees billed by Comiskey for professional services rendered for
        the
        audit of our annual financial statements and review of financial statements
        included in our quarterly reports on Form 10-QSB or services that are normally
        provided in connection with statutory and regulatory filings were $6,075
        for the
        fiscal year ended March 31, 2008 and $3,451 for the fiscal year ended March
        31,
        2007.
 
 **Audit-Related
        Fees**
 
 There
        were no fees billed by Comiskey for assurance and related services that are
        reasonably related to the performance of the audit or review of the Company’s
        financial statements for the fiscal years ended March 31, 2008 and
        2007.
 
 **Tax
        Fees**
 
 There
        were no fees billed by Comiskey for professional services for tax compliance,
        tax advice, and tax planning for the fiscal years ended March 31, 2008 and
        2007.
 
 **All
        Other Fees**
 
 There
        were no fees billed by Comiskey for other products and services for the fiscal
        years ended March 31, 2008 and 2007.
  15
  **Audit
        Committee’s Pre-Approval Process**
 
 The
        Board
        of Directors acts as the audit committee of the Company, and accordingly,
        all
        services are approved by all the members of the Board of Directors.
  16
  **SIGNATURES**
 
 In
        accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
        the
        registrant caused this report to be signed on its behalf by the undersigned,
        thereunto duly authorized.
 
 **CHATSWORTH
                  ACQUISITIONS III, INC.**Dated:
                  June 26, 2008
              By:
              /s/
                  Deborah A. SalernoDeborah
                  A. SalernoPresident,
                  Secretary, Treasurer and Director
  17