UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

                                    FORM 10-K

    (Mark One)

           X            ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
         -----
                        SECURITIES EXCHANGE ACT OF 1934

                        For the fiscal year ended         December 31, 1999
                                                     ---------------------------

                                                        OR

                        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                  0-11176
                                                  ------------------------------

                               NTS-PROPERTIES III
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

            Georgia                                             61-1017240
-------------------------------                            ---------------------
(State or other jurisdiction of                             (I.R.S. Employer
 incorporation or organization)                              Identification No.)


  10172 Linn Station Road
  Louisville, Kentucky 40223                                     40223
--------------------------------                           ---------------------
(Address of principal executive                                (Zip Code)
 offices)

Registrant's telephone number, including area code:       (502) 426-4800
                                                   -----------------------------

Securities registered pursuant to Section 12(b) of the Act:          None

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

                          Limited Partnership Interests
--------------------------------------------------------------------------------
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                                       YES  X         NO
                                                           ----          ----

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and
will not be  contained,  to the best of  registrant's  knowledge,  in definitive
proxy or information  statements  incorporated  by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.              [X]

Exhibit Index: See Page 35

Total Pages: 38


<PAGE>



                                TABLE OF CONTENTS
                                -----------------
                                                                           Pages
                                                                           -----

                                     PART I

Items 1 and 2.             Business and Properties                           3-7

Item 3.                    Legal Proceedings                                   7

Item 4.                    Submission of Matters to a Vote
                            of Security Holders                                7


                                     PART II

Item 5.                    Market for the Registrant's Limited Partnership
                            Interests and Related Partner Matters              8

Item 6.                    Selected Financial Data                             9

Item 7.                    Management's Discussion and Analysis of
                            Financial Condition and Results of
                            Operations                                     10-16

Item 7A.                   Quantitative and Qualitative Disclosures
                            About Market Risk                                 16

Item 8.                    Financial Statements and Supplementary
                            Data                                           17-29

Item 9.                    Changes in and Disagreements with
                            Accountants on Accounting and
                            Financial Disclosure                              30


                                    PART III

Item 10.                   Directors and Executive Officers of
                            the Registrant                                 31-32

Item 11.                   Management Remuneration and Transactions           32

Item 12.                   Security Ownership of Certain Beneficial
                            Owners and Management                             33

Item 13.                   Certain Relationships and Related Transactions     34


                                     PART IV

Item 14.                   Exhibits, Financial Statement Schedules
                            and Reports on Form 8-K                        35-37


Signatures                                                                    38


                                      - 2 -
<PAGE>

                                     PART I

Items 1. and 2.  Business and Properties
                 -----------------------

Development of Business
-----------------------

NTS-Properties III (the "Partnership") is a limited partnership  organized under
the laws of the state of Georgia on June 24, 1982.  The General  Partner is NTS-
Properties Associates,  a Georgia limited partnership.  As of December 31, 1999,
the Partnership owned the following properties:

         -        Peachtree Corporate Center, a business park with approximately
                  191,000 net rentable square feet located in Norcross, Georgia,
                  a suburb of Atlanta. Acquired complete on January 26, 1983.

         -        NTS Center, an office complex with  approximately  115,000 net
                  rentable  square feet located in  Jeffersontown,  Kentucky,  a
                  suburb of Louisville. Acquired complete on January 26, 1983.

         -        Plainview Center, an office complex with approximately  94,000
                  net rentable square feet located in  Jeffersontown,  Kentucky.
                  Acquired complete on February 15, 1983.

In the second  quarter of 1999,  Plainview  Plaza II was  renamed NTS Center and
Plainview Triad North was renamed Plainview Center.

The  Partnership has a fee title interest in the above  properties.  The General
Partner  believes that the  Partnership's  properties are adequately  covered by
insurance.

As of December  31,  1999,  the  Partnership's  properties  were  encumbered  by
mortgages as shown in the table below:

                      Interest               Maturity                Balance
   Property             Rate                   Date                at 12/31/99
   --------             ----                   ----                -----------
NTS Center              6.89%              04/10/15 (1)           $6,427,622
Peachtree Corporate      --                      --                   None
 Center
Plainview Center     Prime -.25%            03/01/01              $1,646,234 (2)

(1)      Current   monthly   principal   payments   are  based  upon  a  17-year
         amortization  schedule. At maturity, the mortgage will have been repaid
         based on the current rate of amortization.

(2)      On March 3, 1999, the  Partnership  obtained a $2,000,000  note payable
         with a bank. The note is secured by Plainview Center, bears interest at
         Prime - 1/4% and is due March 1, 2001.

Currently,  the  Partnership's  plans for  renovations  and other major  capital
expenditures   include   tenant  finish   improvements   as  required  by  lease
negotiations at the Partnership's  properties.  Changes to current tenant finish
improvements are a typical part of any lease negotiation. Improvements generally
include a revision to the current floor plan to  accommodate  a tenant's  needs,
new  carpeting  and paint  and/or  wallcovering.  The  extent  and cost of these
improvements   are  determined  by  the  size  of  the  space  and  whether  the
improvements are for a new tenant or incurred because of a lease renewal. Tenant
finish  improvements will be funded by cash flow from operations,  cash reserves
or  additional  financing  where  necessary.   As  of  December  31,  1999,  the
Partnership  had  no  material   commitments  for  tenant  finish  improvements.
Subsequent  to  December  31,  1999,  the  Partnership  made  a  commitment  for
approximately $50,000 for tenant finish improvements at NTS Center.

                                      - 3 -

<PAGE>

Development of Business - Continued
-----------------------------------

During the third  quarter of 1997,  the  Partnership  received  notice  that the
tenant that  occupied  approximately  65% of  Plainview  Center would vacate the
property at the end of the lease term,  August 1998. The Partnership was able to
negotiate a 30 day renewal (through  September 30, 1998) with the tenant for the
approximately 63,000 square feet that they leased. The Partnership was also able
to  negotiate a renewal for  approximately  11,000  square feet of the  original
63,000 square feet through March 31, 1999.  Costs  associated  with this renewal
were not significant. As a result of this tenant vacating the remainder of their
space on March  31,  1999,  there  has been  and will  likely  continue  to be a
protracted  period for the property to become fully leased again and substantial
funds,  currently  estimated to be from $700,000 to  $1,000,000,  will likely be
needed for leasing  expenses;  especially those needed to refinish space for new
tenants.

At Plainview  Center,  the  Partnership  renovated  the common area and exterior
building.  These  renovations  have  been  designed  to make the  property  more
competitive  and enhance  its value.  The cost of the  renovations,  which began
during  1998  and  were  completed  during  the  fourth  quarter  of  1999,  was
approximately $1,000,000.

In August 1999, a portion of the vacant  space at  Plainview  Center,  discussed
above, was leased to a new tenant. The lease is for approximately  28,000 square
feet and has a term of five and one-half years. The tenant took occupancy of the
space  during  the  fourth  quarter  of  1999.  The   Partnership  has  incurred
approximately $500,000 of tenant finish improvements resulting from this lease.

The  renovation  and  leasing  costs  discussed  above will be funded  from loan
proceeds  ($2,000,000  note  payable  discussed  above)  and cash  reserves.  If
necessary,  it may be possible for the  Partnership to increase the note payable
secured by Plainview  Center.  However,  there is no assurance  that  additional
financing will be able to be obtained when needed, or that any financing will be
on favorable terms.

Financial Information About Industry Segments
---------------------------------------------

The  Partnership  is engaged  solely in the  business  of owning  and  operating
commercial  real estate.  A  presentation  of  information  concerning  industry
segments is not applicable.  See Note 10 in Item 8 for information regarding the
Partnership's operating segments.

Narrative Description of Business
---------------------------------

General
-------

The current  business of the Partnership is consistent with the original purpose
of the Partnership which was to acquire,  own and operate NTS Center,  Peachtree
Corporate Center and Plainview  Center.  The  Partnership's  properties are in a
condition suitable for their intended use.

The Partnership  intends to hold the Properties until such time as sale or other
disposition   appears  to  be   advantageous   with  a  view  to  achieving  the
Partnership's  investment objectives or it appears that such objectives will not
be met. In deciding  whether to sell a Property,  the Partnership  will consider
factors such as potential capital appreciation, cash flow and Federal income tax
considerations,  including  possible  adverse Federal income tax consequences to
the Limited Partners.

NTS Center
----------

As of December 31, 1999, there were nine tenants leasing the 115,000 square feet
of office  space at NTS Center.  All leases  provide  for tenants to  contribute
toward the payment of increases in common area maintenance expenses,  insurance,
utilities  and real  estate  taxes.  The  tenants  who  occupy  NTS  Center  are
professional      service-orientated      organizations.      The      principal
occupations/professions practiced include real estate,  telecommunications,  and
grocery chain management.  Three tenants individually lease more than 10% of NTS
Center's rentable area.

                                      - 4 -

<PAGE>

NTS Center - Continued
----------------------

The following  table contains  approximate  data concerning the leases for major
tenants in effect on December 31, 1999.

                                            Sq. Ft. and           Current Annual
                          Year of            % of Net               Rental per
                         Expiration        Rentable Area           Square Foot
                         ----------        -------------           -----------

Major Tenants (1):
      1                    2004            20,368 (17.7%)            $14.50
      2                    2003            16,937 (14.7%)            $12.00
      3                    2004            53,435 (46.5%)            $10.23 (2)

(1)      Major tenants are those that individually occupy 10 percent or more  of
         the rentable square footage.

(2)      In  accordance  with the lease  agreement,  the  tenant  pays their own
         electricity and cleaning costs thus the base rent is below market.

Plainview Center
----------------

As  of  December  31,  1999,  there  were  nine  tenants  leasing  office  space
aggregating  approximately  45,461  square  feet of the  94,130  square  feet of
rentable area at Plainview Center.  All leases provide for tenants to contribute
toward the payment of increases in common area maintenance expenses,  insurance,
utilities and real estate  taxes.  The tenants who occupy  Plainview  Center are
professional      service-orientated      organizations.      The      principal
occupation/professions  practices  include  healthcare,  mortgage  broker  and a
victim  notification  service.  One tenant  individually leases more than 10% of
Plainview Center's rentable area.

The following  table  contains  approximate  data  concerning the major lease in
effect on December 31, 1999:

                                            Sq. Ft. and         Current Annual
                         Year of              % of Net            Rental per
                       Expiration          Rentable Area          Square Foot
                       ----------          -------------          -----------

Major Tenant (1):
      1                   2005             27,835 (29.5%)           $14.00

(1)      Major tenants are those that individually occupy 10 percent or more  of
         the rentable square footage.

Peachtree Corporate Center
--------------------------

As of December 31, 1999,  there were 48 tenants  leasing  office,  warehouse and
storage space aggregating approximately 160,000 square feet of the rentable area
at Peachtree  Corporate  Center.  All leases  provide for tenants to  contribute
toward the payment of increases in common area maintenance  expenses,  insurance
and real estate taxes.  The tenants who occupy  Peachtree  Corporate  Center are
professional      service-orientated      organizations.      The      principal
occupation/profession  practiced is sales-related services. There are no tenants
at Peachtree Corporate Center who individually lease 10% or more of the rentable
square footage.

General
-------

Additional operating data regarding the Partnership's properties is furnished in
the following table.

                                                                    Peachtree
                             NTS               Plainview            Corporate
                            Center               Center               Center
                            ------               ------               ------

Federal tax basis        $9,603,218           $6,895,447           $9,694,881
Realty tax rate              .01091               .01091               .03225
Annual realty taxes         $60,409              $46,932             $103,368

                                      - 5 -

<PAGE>

General - Continued
-------------------

Depreciation for book purposes is computed using the  straight-line  method over
the  estimated  useful  lives of the  assets  which  are 5 - 30  years  for land
improvements, 30 years for buildings, 5 - 30 years  for  building  improvements,
3 - 30 years for amenities and life of the lease for tenant improvements.

Competition
-----------

The  Partnership's  properties are subject to competition  from similar types of
properties  (including,  in  certain  areas,  properties  owned  or  managed  by
affiliates of the General  Partner) in the  respective  vicinities in which they
are located. Such competition is generally for the retention of existing tenants
or  for  new  tenants  when  vacancies  occur.  The  Partnership  maintains  the
suitability  and  competitiveness  of its  properties  primarily on the basis of
effective  rents and service  provided to  tenants.  Competition  is expected to
increase in the future as a result of the construction of additional properties.
As of December 31,  1999,  there are no  properties  under  construction  in the
respective  vicinities in which the properties are located.  The Partnership has
not  commissioned  a formal  market  analysis of  competitive  conditions in any
market  in which it owns  properties,  but  relies  upon  the  market  condition
knowledge of the employees of NTS  Development  Company who manage and supervise
leasing for each property.

Management of Properties
------------------------

NTS Development Company, an affiliate of NTS Properties Associates,  the General
Partner  of  the  Partnership,  directs  the  management  of  the  Partnership's
properties pursuant to a written agreement. NTS Development Company is a wholly-
owned  subsidiary  of NTS  Corporation.  Mr.  J. D.  Nichols  has a  controlling
interest  in  NTS  Corporation  and  is a  General  Partner  of  NTS  Properties
Associates.  Under  the  agreement,  the  Property  Manager  establishes  rental
policies and rates and directs the marketing activity of leasing  personnel.  It
also  coordinates the purchase of equipment and supplies,  maintenance  activity
and the selection of all vendors,  suppliers  and  independent  contractors.  As
compensation for its services,  the Property  Manager received  $157,290 for the
year ended  December 31, 1999. The fee is equal to 5% of gross revenues from the
Partnership's properties.

In addition,  the management  agreement requires the Partnership to purchase all
insurance relating to the managed  properties,  to pay the direct  out-of-pocket
expenses  of the  Property  Manager  in  connection  with the  operation  of the
properties,  including the cost of goods and materials used for and on behalf of
the  Partnership,  and to  reimburse  the  Property  Manager  for the  salaries,
commissions,  fringe  benefits,  and  related  employment  expenses  of  on-site
personnel.

The term of the Management  Agreement  between NTS  Development  Company and the
Partnership was for an initial term of five years, and thereafter for succeeding
one-year periods, unless cancelled.  The Agreement is subject to cancellation by
either  party upon sixty days  written  notice.  As of December  31,  1999,  the
Management Agreement is still in effect.

Working Capital Practices
-------------------------

Information  about the  Partnership's  working capital  practices is included in
Management  Discussion  and  Analysis  of  Financial  Condition  and  Results of
Operations in Part II, Item 7.

Seasonal Operations
-------------------

The Partnership  does not consider its operations to be seasonal to any material
degree.

                                      - 6 -

<PAGE>

Conflict of Interest
--------------------

Because the  principals of the General  Partner and/or its affiliates own and/or
operate real estate  properties  other than those owned by the Partnership  that
are or could be in  competition  with the  Partnership,  potential  conflicts of
interest  exist.  Because the  Partnership  was organized and is operated by the
General  Partner,   these  conflicts  are  not  resolved  through  arm's  length
negotiations  but through the exercise of the General  Partner's  good  judgment
consistent  with its fiduciary  responsibility  to the Limited  Partners and the
Partnership's  investment  objectives  and  policies.  The  General  Partner  is
accountable  to the  Limited  Partners  as a  fiduciary  and  consequently  must
exercise  good faith and  integrity in handling  the  Partnership's  affairs.  A
provision has been made in the  Partnership  Agreement that the General  Partner
will not be liable to the Partnership except for acts or omissions  performed or
omitted  fraudulently  in  bad  faith  or  with  negligence.  In  addition,  the
Partnership Agreement provides for indemnification of the General Partner by the
Partnership  for liability  resulting from errors in judgment or certain acts or
omissions.  With respect to these potential  conflicts of interest,  the General
Partner and its affiliates retain a free right to compete with the Partnership's
properties  including the right to develop  competing  properties now and in the
future,  in addition to those existing  properties which may compete directly or
indirectly.

NTS Development  Company,  the Property  Manager and an affiliate of the General
Partner,  acts in a similar capacity for other  affiliated  entities in the same
geographic  region where the Partnership has property  interests.  The agreement
with the Property  Manager is on terms no less favorable to the Partnership than
those  which could be  obtained  from a third party for similar  services in the
same  geographical  region in which the properties are located.  The contract is
terminable by either party without penalty upon 60 days written notice.

There are no other  agreements or  relationships  between the  Partnership,  the
General Partner and its affiliates other than those previously described.

Employees
---------

The  Partnership  has no  employees;  however,  employees of an affiliate of the
General  Partner are  available  to perform  services for the  Partnership.  The
Partnership  reimburses  this  affiliate for the actual costs of providing  such
services.   (See  Item  8  Note  8  for  further  discussion  of  related  party
transactions).

Governmental Contracts and Regulations
--------------------------------------

No portion of the Partnership's  business is subject to renegotiation of profits
or  termination  of  contracts  or  sub-contracts  at the election of the United
States Government.

Item 3.  Legal Proceedings
         -----------------

None.

Item 4.  Submission of Matters to a Vote of Security Holders
         ---------------------------------------------------

None.

                                      - 7 -

<PAGE>

                                     PART II

Item 5.        Market for Registrant's Limited Partnership Interests and Related
               -----------------------------------------------------------------
               Partner Matters
               ---------------

The  Partnership had 814 limited  partners as of February 29, 1999.  There is no
established  trading market for the limited  partnership  interests,  nor is one
likely to develop.  Cash  distributions and allocations of net income (loss) are
made as described in Note 1D to the Partnership's  1999 financial  statements in
Item 8.

No distributions were paid during 1999, 1998 and 1997.  Quarterly  distributions
are  determined  based on current cash  balances,  cash flow being  generated by
operations  and cash reserves  needed for future  leasing  costs,  tenant finish
costs, and capital improvements.

Due to the fact that no  distributions  were made during 1999, 1998 or 1997, the
table which represents that portion of the distributions that represent a return
of capital on a Generally Accepted Accounting Principle basis has been omitted.

                                      - 8 -

<PAGE>

Item 6.  Selected Financial Data
         -----------------------
<TABLE>
For the years ended December 31, 1999, 1998, 1997, 1996 and 1995.
<CAPTION>
                                  1999               1998                1997                1996                1995
                                  ----               ----                ----                ----                ----
<S>                           <C>                <C>                 <C>                 <C>                 <C>
Total revenues                $ 3,228,662        $ 3,698,431         $ 3,426,290         $ 3,265,631         $ 3,073,103

Total expenses                 (3,923,458)        (3,426,517)         (3,291,720)         (3,076,384)         (3,262,493)
                               -----------        -----------         -----------         -----------         -----------

Net income (loss) before
 extraordinary item              (694,796)           271,914             134,570             189,247            (189,390)
 Extraordinary item                  --              (65,258)               --                  --                  --
                               -----------        -----------         -----------         -----------         -----------

Net income (loss)             $  (694,796)       $   206,656         $   134,570         $   189,247         $  (189,390)
                               ===========        ===========         ===========         ===========         ===========

Net income(loss)
 allocated to:
  General Partner             $   (78,012)       $   (93,182)        $  (104,636)        $   (94,850)        $  (102,894)
  Limited partners            $  (616,784)       $   299,838         $   239,206         $   284,097         $   (86,496)

Net income (loss) per
 limited partnership
 unit                         $    (46.54)       $     21.64         $     17.00         $     19.70         $     (5.58)

Weighted average number
 of limited partnership
 units                             13,253             13,855              14,072              14,418              15,495

Cumulative net income (loss)
 allocated to:
  General Partner             $(2,566,315)       $(2,488,303)        $(2,395,121)        $(2,290,485)        $(2,195,635)
  Limited partners            $  (991,423)       $  (374,639)        $    74,801         $  (164,405)        $  (448,502)

Cumulative taxable income
 (loss) allocated to:
  General Partner             $(2,689,375)       $(2,578,046)        $(2,737,694)        $(2,845,410)        $(2,696,785)
  Limited partners            $  (974,971)       $  (694,314)        $  (851,088)        $  (682,815)        $  (928,736)

Distributions declared:
 General Partner              $      --          $      --           $     --            $     --            $      --
 Limited partners             $      --          $      --           $     --            $   108,018         $   154,125

Cumulative distributions
 declared:
  General Partner             $   206,985        $   206,985         $   206,985         $   206,985         $   206,985
  Limited partners            $11,349,845        $11,349,845         $11,349,845         $11,349,845         $11,241,827

At year end:
 Land, buildings and
  amenities, net              $11,316,969        $10,219,334         $ 9,828,962         $ 9,428,016         $ 9,585,286

Total assets                  $12,326,606        $11,170,156         $11,122,316         $10,975,886         $11,120,854

Mortgages Payable             $ 8,073,856        $ 6,656,145         $ 6,734,603         $ 6,859,637         $ 6,964,619
</TABLE>

The  above  selected  financial  data  should  be read in  conjunction  with the
financial  statements  and related notes  appearing  elsewhere in this Form 10-K
report.

                                      - 9 -

<PAGE>

Item 7.          Management's Discussion and Analysis of Financial Condition and
                 ---------------------------------------------------------------
                 Results of Operations
                 ---------------------

Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations  is  structured in four major  sections.  The first section  provides
information related to occupancy levels and rental and other income generated by
the  Partnership's  properties.  The second analyzes  results of operations on a
consolidated  basis.  The final  sections  address  consolidated  cash flows and
financial  condition.  Discussion  of certain  market  risks and our  cautionary
statements also follow. Management's analysis should be read in conjunction with
the financial statements in Item 8 and the cautionary statements below.

Occupancy Levels
----------------

The occupancy levels at the  Partnership's  properties as of December 31 were as
follows:

                                    1999(1)          1998        1997
                                    -------          ----        ----
NTS Center                           100%            100%         84%
Plainview Center (2)                  48%            35%          86%
Peachtree Corporate Center (3)        84%            89%          86%

(1)      With the exception of Plainview  Center,  current  occupancy levels are
         considered  adequate to continue  the  operation  of the  Partnership's
         properties. See below for details.

(2)      The current occupancy level is the result of one tenant vacating 52,000
         square feet on September  30, 1998 and 11,000  square feet on March 31,
         1999.  In the opinion of the General  Partner of the  Partnership,  the
         year- ending occupancy level is only a temporary situation and does not
         represent a permanent downward occupancy trend.

(3)      In the opinion of the General Partner of the Partnership,  the decrease
         in year-ending  occupancy is only a temporary  fluctuation and does not
         represent a permanent downward occupancy trend.

The Average Occupancy levels at the  Partnership's  properties as of December 31
were as follows:

                                    1999           1998         1997
                                    ----           ----         ----
NTS Center                          100%            98%         88%
Plainview Center                     30%            75%         90%
Peachtree Corporate Center           84%            87%         86%

The following is an analysis of material  changes in results of  operations  for
the periods ending December 31, 1999,  1998 and 1997.  Items that did not have a
material  impact on operations for the periods listed above have been eliminated
from this discussion.

                                     - 10 -

<PAGE>

Rental and Other Income
-----------------------

The rental and other income  generated by the  Partnership's  properties for the
years ended December 31 1999, 1998 and 1997 were as follows:

                               1999                 1998                 1997
                               ----                 ----                 ----
NTS Center                 $ 1,594,725          $ 1,484,593          $ 1,244,744
Plainview Center           $   410,490          $ 1,045,951          $ 1,057,964
Peachtree Corporate Center $ 1,211,827          $ 1,153,808          $ 1,088,708

Rental and other income  decreased  approximately  $470,000 or 12% in 1999.  The
decrease is  primarily a result of a decrease in average  occupancy at Plainview
Center  following  the  move-out of one tenant who  previously  occupied  63,000
square  feet  or 65% of the  building  (see  Item 8 Note  9).  The  decrease  at
Plainview  Center is  partially  offset by  increased  cost  recovery  income at
Peachtree Corporate Center and NTS Center.

Rental and other  income  increased  approximately  $270,000 or 7% in 1998.  The
increase in rental and other income is  primarily a result of  increased  rental
rates on lease renewals and increased average  occupancy at Peachtree  Corporate
Center  and  NTS  Center  and  increased  cost  recovery  income  at  all of the
Partnership's  properties.  These  increases are  partially  offset by decreased
average occupancy at Plainview Center.

Year-ending  occupancy  percentages represent occupancy only on a specific date;
therefore,  the above analysis considers average occupancy percentages which are
more representative of the entire year's results.

In cases of tenants who cease making rental  payments or abandon the premises in
breach of the lease terms, the Partnership pursues collection through the use of
collection  agencies or other remedies  available by law when  practical.  There
have been no funds  recovered  as a result of these  actions  during the periods
ended December 31, 1999, 1998 or 1997. As of December 31, 1999 there were no on-
going cases.

Operating expenses increased  approximately $66,000 or 8% in 1999 primarily as a
result of increased  repairs and  maintenance  expenses at  Peachtree  Corporate
Center and increased irrigation and building maintenance expenses at NTS Center.

Operating expenses increased  approximately $88,000 or 11% in 1998. The increase
in operating  expenses was primarily  driven by the  increased  occupancy at NTS
Center which  resulted in  increased  janitorial,  utility and  restroom  supply
costs. The increase in operating  expenses was also a result of the cost to seal
and stripe the parking lot at Plainview Center.

Operating expenses - affiliated increased  approximately  $67,000 or 16% in 1999
primarily due to increased leasing, administrative and architectural salaries at
Peachtree  Corporate  Center and  Plainview  Center.  The  increase is partially
offset by decreased  architectural salaries at NTS Center.  Operating expenses -
affiliated  are expenses  incurred  for  services  performed by employees of NTS
Development Company, an affiliate of the General Partner.

Operating expenses - affiliated  decreased  approximately  $28,000 or 6% in 1998
primarily as a result of decreased  leasing costs partially  offset by increased
property management costs.

The 1999 write-off of unamortized building,  land and tenant improvements is the
result of the write-off of the following items:  land  improvements at Peachtree
Corporate Center,  building  improvements at NTS Center and Plainview Center and
tenant  improvements  at  Plainview  Center.  The  write-offs  are the result of
various property renovations  including resurfacing the parking lot at Peachtree
Corporate Center, replacing corridor carpet at NTS Center, redesigning the lobby
area at  Plainview  Center  and  accommodating  new  leases  and  improving  the
marketability  of vacant  suites at Plainview  Center.  In order to complete the
renovations,  it was  necessary  to  replace  improvements  which were not fully
depreciated. The write-offs represent the costs of unamortized assets which were
replaced as a result of the renovations.

                                     - 11 -

<PAGE>

Rental and Other Income - Continued
-----------------------------------

The  1998  and  1997  write-off  of  unamortized   building,   land  and  tenant
improvements  can  primarily  be  attributed  to NTS Center.  The  write-off  of
unamortized building  improvements at NTS Center is the result of renovations of
the common area lobbies,  corridors and restrooms.  The write-off of unamortized
land  improvements  at NTS Center is the result of  renovations of the sidewalks
and landscaping  during 1997. The write-off  represents the cost of assets which
had not been fully depreciated.

Interest expense increased  approximately $40,000 or 9% in 1999 as a result of a
$2,000,000  note  payable  secured by Plainview  Center in March 1999.  The note
bears  interest  at  prime  -1/4%  and the  balance  at  December  31,  1999 was
$1,646,234.  The increase in interest  expense is partially  offset by principal
payments made on the Partnership's mortgage secured by NTS Center.

Interest expense decreased approximately $56,000 or 11% in 1998 as the result of
a lower interest rate (6.89%) on the $6,800,000  debt financing  obtained by the
Partnership on April 1, 1998. Prior to the new financing, the Partnership's debt
bore interest at a fixed rate of 9.125% (on an approximately $2,200,000 mortgage
payable)  and a variable  rate based on the 10-year  treasury  bill rate plus 60
basis points (on a $4,500,000  mortgage  payable).  The variable  interest  rate
which adjusts  quarterly was 6.94% from January to March 1997,  7.39% from April
to June 1997,  7.05% from July to September 1997, and 6.68% from October 1997 to
March  1998.  The  decrease  in  interest  expense  in 1998 is also a result  of
principal payments made.

Management  fees are  calculated as a percentage of cash  collections;  however,
revenue  for  reporting  purposes  is on the  accrual  basis.  As a result,  the
fluctuations  of revenues  between  years will differ from the  fluctuations  of
management fee expense.  The  approximate  $29,000 or 16% decrease in management
fees in 1999 can be  attributed to decreased  occupancy and related  revenues at
Plainview Center. The approximate  $18,000 or 11% increase in management fees in
1998 can be  attributed  to  increased  occupancy  and  related  revenues at NTS
Center.

Professional and administrative  expenses increased approximately $35,000 or 48%
in 1999 and approximately  $14,000 or 23% in 1998 primarily as a result of costs
incurred in connection with the Tender Offers (see discussion below).

Professional and administrative  expenses - affiliated  decreased  approximately
$29,000  or 22% in 1999  primarily  as a result of a decrease  in salary  costs.
Professional and administrative  expenses - affiliated are expenses incurred for
the services performed by employees of NTS Development  Company, an affiliate of
the General Partner.

Depreciation and amortization increased  approximately $57,000 or 6% in 1999 and
approximately  $138,000 or 16% in 1998 as the result of assets  being  placed in
service.  Assets placed in service are tenant improvements and building and land
improvements at all the Partnership's  properties.  The increase in depreciation
and amortization  expense is partially offset by a portion of the  Partnership's
assets  (primarily  tenant  finish  improvements)  becoming  fully  depreciated.
Depreciation  is computed  using the  straight  line  method over the  estimated
useful live of the assets which are 5 - 30 years for land improvements, 30 years
for  buildings,  5 - 30  years  for  building  improvements,  3 - 30  years  for
amenities and the life of the lease for tenant improvements. The aggregate costs
of the  Partnership's  properties  for  Federal tax  purposes  is  approximately
$26,214,477.

The 1998 write-off of unamortized loan costs (recorded as an extraordinary item)
relates to the loan costs associated with two mortgages of the Partnership.  The
unamortized  loan costs were  expensed due to the fact that the  mortgages  were
repaid April 1, 1998 prior to their maturity  (November 1998 and June 2001) as a
result of a new mortgage loan obtained April 1, 1998 as discussed above.

                                     - 12 -

<PAGE>

Consolidated Cash Flows and Financial Condition
-----------------------------------------------

The majority of the Partnership's cash flow is derived from operating activities
and investing activities. Cash flows used in investing activities are for tenant
finish  improvements  and other  capital  additions  and are funded by operating
activities,  cash reserves and  financing  activity.  Changes to current  tenant
improvements are a typical part of any lease negotiation. Improvements generally
include a revision to the current floor plan to  accommodate  a tenant's  needs,
new  carpeting  and paint  and/or  wallcovering.  The  extent  and cost of these
improvements   are  determined  by  the  size  of  the  space  and  whether  the
improvements are for a new tenant or incurred  because of a lease renewal.  Cash
flows  used  in  investing  activities  also  include  purchases  of  investment
securities.  As part of its cash  management  activities,  the  Partnership  had
purchased  Certificates of Deposit or securities  issued by the U.S.  Government
with  initial  maturities  of greater than three months to improve the return on
its excess cash. The Partnership held the securities until maturity.  Cash flows
provided by investing activities are from the maturity of investment securities.
Cash flows  provided by investing  activities  also include the release of funds
escrowed as required by a loan agreement. The funds were required to be escrowed
for the replacement of the HVAC system and asphalt paving at Peachtree Corporate
Center.  The balance in the escrow was returned to the Partnership when the loan
was repaid in 1998. Cash flows used in financing  activities  include  principal
payments on the mortgages payable,  the repurchase of limited partnership Units,
cash  reserved by the  Partnership  to fund the Tender Offer and the addition of
loan  costs.  Cash  flows  provided  by  financing   activities   represent  the
utilization  of  cash  which  has  been  reserved  by the  Partnership  for  the
repurchase of limited  partnership Units and proceeds received from new mortgage
loans  obtained in 1998 and 1999. The  Partnership  does not expect any material
changes in the mix and relative cost of capital resources from those in 1999.

Cash flows provided by (used in):

                            1999                1998                 1997
                            ----                ----                 ----
Operating activities    $    463,486         $ 1,295,737         $ 1,075,282
Investing activities      (1,866,317)           (967,030)         (1,366,451)
Financing activities       1,273,519            (361,803)            (13,574)
                         ------------         -----------         -----------
Net decrease in cash
 and equivalents        $   (129,312)        $   (33,096)        $  (304,743)
                         ============         ===========         ===========

Net cash provided by operating  activities decreased  approximately  $830,000 or
64% in 1999. The decrease was primarily  driven by a decrease in net income as a
result of decreased revenues from Plainview Center (as discussed above), as well
as net negative changes in various working capital accounts.

Net cash provided by operating  activities increased  approximately  $220,000 or
21% in 1998.  This  increase was  primarily  driven by higher net income  before
depreciation and other non-cash charges.

Net cash used in investing activities increased  approximately  $899,000 in 1999
as compared to 1998 primarily as a result of increased capital expenditures. Net
cash used in investing  activities decreased  approximately  $399,000 in 1998 as
compared to 1997 as a result of increased  funds  received from the escrow which
was required by a loan agreement and the fact that no investment securities were
purchased during 1998.

The approximate $1,635,000 increase in net cash provided by financing activities
in 1999 as  compared  to 1998 is  primarily  the result of a new  mortgage  loan
obtained March 2, 1999 to fund renovations at Plainview Center. Net cash used in
financing  activities  increased  approximately  $348,000 in 1998 as compared to
1997 as a result of funds being reserved for the purchase of limited partnership
Units through the Tender Offer,  higher repurchases of limited partnership Units
through the Interest Repurchase Reserve and the payment of loan costs.

                                     - 13 -

<PAGE>

Consolidated Cash Flows and Financial Condition - Continued
-----------------------------------------------------------

The Partnership  indefinitely suspended distributions starting December 31, 1996
as a result of the anticipated  decrease in occupancy at Plainview Center.  Cash
reserves (which are unrestricted cash and equivalents and investment  securities
as shown on the Partnership's balance sheet as of December 31) were $104,532 and
$233,844 at December 31, 1999 and 1998, respectively.

In the next 12  months,  the  General  Partner  expects  the  demand  on  future
liquidity to increase as a result of future leasing activity driven primarily by
the  decreased  occupancy  at Plainview  Center.  There has been and will likely
continue to be a protracted  period for Plainview  Center to become fully leased
again  and  substantial  funds,  currently  estimated  to be  from  $700,000  to
$1,000,000, will likely be needed for leasing expenses;  especially those needed
to refinish space for new tenants.  As of December 31, 1999, the Partnership had
no material  commitments  for tenant finish  improvements.  The demand on future
liquidity will be managed by the General  Partner  through funds from operations
or additional borrowings secured by the Partnership's  properties.  There can be
no guarantee that such funds will be available at which time the General Partner
will manage the demand on liquidity accordingly.

Subsequent  to  December  31,  1999,  the   Partnership  had  a  commitment  for
approximately $50,000 of tenant finish improvements at NTS Center.

Due to the fact that no  distributions  were made during 1999, 1998 or 1997, the
table which represents that portion of the distribution  that represent a return
of capital on a Generally Accepted Accounting Principal basis has been omitted.

Pursuant to Section 16.4 of the Partnership's  Amended and Restated Agreement of
Limited Partnership,  the Partnership established an Interest Repurchase Reserve
in 1995.  During the years ended  December  31, 1998 and 1997,  the  Partnership
funded  $75,000  and $0,  respectively,  to the  reserve.  For the  year  ending
December  31,  1999,  the  Partnership  has  funded $0 to the  reserve.  Through
September  30, 1998 (the  commencement  date of the  Partnership's  First Tender
Offer), the Partnership had repurchased a total of 1,830 Units for $393,240 at a
price  ranging  from  $208 to $250 per  Unit.  The  offering  price per Unit was
established by the General  Partner in its sole  discretion and does not purport
to  represent  the  fair  market  value  or  liquidation  value  of  the  Units.
Repurchased Units are retired by the Partnership, thus increasing the percentage
of ownership of each remaining limited partner investor. The Interest Repurchase
Reserve  was funded from cash  reserves.  The balance in the reserve at December
31, 1999 was $0.

On  September  30,  1998,  the  Partnership  and ORIG,  LLC, an affiliate of the
Partnership,  (the"bidders") commenced a tender offer (the "First Tender Offer")
to purchase up to 1,000 Units of the Partnership's  limited partnership Units at
a price of $250 per Unit as of the date of the First Tender  Offer.  The initial
expiration  date of the First  Tender  Offer was  December  29,  1998,  and this
expiration  date was  subsequently  extended  through March 31, 1999. A total of
1,160 Units were tendered and the bidders  accepted all Units.  The  Partnership
repurchased  500 Units  and ORIG,  LLC  purchased  660 Units at a total  cost of
$290,000 plus offering expenses.

On  July  27,  1999,  the  Partnership  and  ORIG,  LLC,  an  affiliate  of  the
Partnership,  (the  "bidders")  commenced  a tender  offer (the  "Second  Tender
Offer") to purchase up to 1,000 of the Partnership's  limited  partnership Units
at a price of $250 per Unit.  Although  the bidders  believe  that this price is
appropriate,  the price of $250 per Unit may not equate to the fair market value
or the  liquidation  value of the Unit, and is less than the book value per Unit
as of the date of the Second Tender Offer.  The initial  expiration  date of the
Second  Tender  Offer  was  October  29,  1999  and  this  expiration  date  was
subsequently  extended  through  December  8,  1999.  A total of 938 Units  were
tendered and the bidders  accepted all Units.  The  Partnership  repurchased 500
Units  and  ORIG,  LLC  purchased  438 Units at a total  cost of  $234,500  plus
offering expenses.

                                     - 14 -

<PAGE>

Consolidated Cash Flows and Financial Condition - Continued
-----------------------------------------------------------

The following  describes the efforts being taken by the  Partnership to increase
the occupancy levels at the  Partnership's  properties.  At Peachtree  Corporate
Center in Norcross,  Georgia,  the  Partnership has an on-site leasing agent, an
employee of NTS Development  Company (an affiliate of the General Partner),  who
makes calls to potential tenants, negotiates lease renewals with current tenants
and manages local  advertising with the assistance of NTS Development  Company's
marketing  staff.  The  leasing  and  renewal  negotiations  for NTS  Center and
Plainview  Center are handled by leasing  agents,  employees of NTS  Development
Company, located in Louisville,  Kentucky. The leasing agents are located in the
same city as both  commercial  properties.  All  advertising  for the Louisville
properties is also  coordinated by NTS  Development  Company's  marketing  staff
located in Louisville, Kentucky.

Leases at all the  Partnership's  properties  provide for tenants to  contribute
toward the payment of increases in common area maintenance expenses,  insurance,
utilities  and real  estate  taxes.  This lease  provision  should  protect  the
Partnership's operations from the impact of inflation and changing prices.

Year 2000
---------

During 1999, all divisions of NTS Corporation, including NTS-Properties III, the
General  Partner of the  Partnership,  reviewed the effort  necessary to prepare
NTS'  information  systems (IT) and  non-information  technology  with  embedded
technology  (ET) for the Year 2000. The  information  technology  solutions were
addressed  separately  for the Year 2000 since the  Partnership  saw the need to
move to more advance  management  and  accounting  systems made available by new
technology  and  software  development  during  the decade of the  1990's.  NTS'
property  management staff surveyed vendors to evaluate  embedded  technology in
our  alarm  systems,  HVAC  controls,   telephone  systems  and  other  computer
associated facilities.  Some equipment was replaced,  while others had circuitry
upgrades.

In 1999, the PILOT software system,  purchased in the early 1990's, was replaced
by a Windows based network system both for NTS' headquarters functions and other
locations.  The real estate accounting system developed,  sold, and supported by
the Yardi Company of Santa Barbara,  California replaced PILOT. The Yardi system
is fully implemented and operational as of December 31, 1999. There have been no
Year 2000 related problems with either system.

The costs of these advances in NTS' systems  technology are not all attributable
to the Year 2000 issue  since NTS had already  identified  the need to move to a
network based system regardless of the Year 2000. The Partnership's share of the
costs  involved were  approximately  $25,000  during 1999 and 1998.  These costs
include primarily purchase, lease and maintenance of hardware and software.

At the date of this filing the  Partnership  did not experience any  significant
operating issues relative to the Year 2000 issue. Despite diligent  preparation,
unanticipated  third-party  failures,  inability of our tenants to pay rent when
due, more general public  infrastructure  failures or failure of our remediation
efforts  as  planned  could have a  material  adverse  impact on our  results of
operations, financial conditions and/or cash flows in 2000 and beyond.

                                     - 15 -

<PAGE>

Cautionary Statements
---------------------

Some of the  statements  included in Items 1 and 2, Business and  Properties and
Item 7, Management's  Discussion and Analysis of Financial Condition and Results
of Operations,  may be considered to be "forward-looking  statements" since such
statements relate to matters which have not yet occurred.  For example,  phrases
such as "the Partnership anticipates",  "believes" or "expects" indicate that it
is possible  that the event  anticipated,  believed  or expected  may not occur.
Should such event not occur, then the result which the Partnership expected also
may  not  occur  or  occur  in a  different  manner,  which  may be more or less
favorable to the Partnership. The Partnership does not undertake any obligations
to  publicly  release  the  result  of any  revisions  to these  forward-looking
statements that may be made to reflect any future events or circumstances.

Any forward-looking statements included in Managements's Discussion and Analysis
of Financial  Condition and Results of Operations,  or elsewhere in this report,
which reflect  management's best judgement based on factors known, involve risks
and uncertainties. Actual results could differ materially from those anticipated
in any forward-looking  statements as a result of a number of factors, including
but not  limited  to those  discussed  below.  Any  forward-looking  information
provided by the  Partnership  pursuant to the safe harbor  established by recent
securities legislation should be evaluated in the context of these factors.

The Partnership's principal activity is the leasing and management of commercial
office buildings and a business center. If a major commercial tenant defaults on
its  lease,  the  Partnership's  ability  to make  payments  due  under its debt
agreements,  payment of operating costs and other partnership  expenses would be
directly  impacted.  A lessee's  ability to make  payments  are subject to risks
generally  associated with real estate,  many of which are beyond the control of
the Partnership,  including general or local economic  conditions,  competition,
interest rates, real estate tax rates, other operating expenses and acts of God.

At Plainview Center,  there has been and will likely continue to be a protracted
period for the  property  to become  fully  leased  again.  Failure to lease the
vacant space at Plainview Center may have an adverse effect on the Partnership's
operations. The extent of the impact on the Partnership is unknown at this time.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk
          ----------------------------------------------------------

Our primary  market risk  exposure  with  regards to  financial  instruments  is
changes in interest  rates.  All of the  Partnership's  debt bears interest at a
fixed  rate  with  the  exception  of the  $2,000,000  note  payable  which  the
Partnership  obtained on March 2, 1999. At December 31, 1999, a hypothetical 100
basis point  increase  in interest  rates  would  increase  interest  expense by
approximately $16,000.

                                     - 16 -

<PAGE>

Item 8.  Financial Statements and Supplementary Data
         -------------------------------------------

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
                    ----------------------------------------

To NTS-Properties III, a Georgia limited Partnership:

We have  audited  the  accompanying  balance  sheets of  NTS-Properties  III, (a
Georgia  limited  partnership) as of December 31, 1999 and 1998, and the related
statements of operations,  partners' equity and cash flows for each of the three
years in the period ended December 31, 1999. These financial  statements and the
schedules  referred  to  below  are  the  responsibility  of  the  Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements and schedules based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit 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  NTS-Properties  III as of
December 31, 1999 and 1998, and the results of its operations and its cash flows
for each of the three years in the period ended  December 31, 1999 in conformity
with accounting principles generally accepted in the United States.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial statements taken as a whole. The schedules included on pages 36 and 37
are  presented  for  purposes of  complying  with the  Securities  and  Exchange
Commission's  rules and  regulations  and are not a  required  part of the basic
financial  statements.  These  schedules  have been  subjected  to the  auditing
procedures  applied in the audits of the basic financial  statements and, in our
opinion, fairly state in all material respects the financial data required to be
set forth  therein in  relation  to the basic  financial  statements  taken as a
whole.

                                                   ARTHUR ANDERSEN LLP


Louisville, Kentucky
March 24, 2000

                                     - 17 -

<PAGE>
<TABLE>
                               NTS-PROPERTIES III
                               ------------------

                                 BALANCE SHEETS
                                 --------------

                        AS OF DECEMBER 31, 1999 AND 1998
                        --------------------------------
<CAPTION>

                                               1999          1998
                                               ----          ----
ASSETS
------
<S>                                       <C>           <C>
Cash and equivalents                      $   104,532   $   233,844
Cash and equivalents - restricted               8,073       139,350
Accounts receivable, net of allowance
 for doubtful accounts of $15,512 (1999)
 and $3,034 (1998)                            404,773       184,327
Land, buildings and amenities, net         11,316,969    10,219,334
Other assets                                  492,259       393,301
                                          -----------   -----------

                                          $12,326,606   $11,170,156
                                          ===========   ===========


LIABILITIES AND PARTNERS' EQUITY
--------------------------------

Mortgages payable                         $ 8,073,856   $ 6,656,145
Accounts payable - operations                 114,813        40,632
Accounts payable - construction               775,219       180,272
Security deposits                             142,573        98,611
Other liabilities                              43,995        73,550
                                          -----------   -----------

                                            9,150,456     7,049,210


Commitments and contingencies (Note 9)


Partners' equity                            3,176,150     4,120,946
                                          -----------   -----------

                                          $12,326,606   $11,170,156
                                          ===========   ===========
</TABLE>
The  accompanying  notes to financial  statements  are an integral part of these
statements.

                                     - 18 -

<PAGE>
<TABLE>
                               NTS-PROPERTIES III
                               ------------------

                            STATEMENTS OF OPERATIONS
                            ------------------------

              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
              ----------------------------------------------------
<CAPTION>
                                                          1999           1998           1997
                                                          ----           ----           ----
Revenues:
---------
<S>                                                   <C>            <C>            <C>
Rental income, net of provision for
 doubtful accounts of $19,081 (1999),
 $1,943 (1998) and $28,661 (1997)                     $ 2,919,927    $ 3,386,729    $ 3,090,978
Rental income - affiliated                                295,336        295,336        295,031
Interest and other income                                  13,399         16,366         40,281
                                                      -----------    -----------    -----------

                                                        3,228,662      3,698,431      3,426,290
Expenses:
---------

Operating expenses                                        948,995        882,594        794,637
Operating expenses - affiliated                           479,799        412,338        440,458
Write-off of unamortized building, land
 and tenant improvements                                  332,333         48,108         86,406
Interest Expense                                          509,224        468,749        524,901
Management fees                                           157,290        186,416        168,006
Real estate taxes                                         210,708        206,038        206,603
Professional and administrative
 expenses                                                 109,381         74,514         60,604
Professional and administrative
 expenses - affiliated                                    104,227        133,297        133,969
Depreciation and amortization                           1,071,501      1,014,463        876,136
                                                      -----------    -----------    -----------

                                                        3,923,458      3,426,517      3,291,720
                                                      -----------    -----------    -----------

Net income (loss) before extraordinary
 item                                                    (694,796)       271,914        134,570
Extraordinary item-write-off of
 unamortized loan costs                                      --          (65,258)          --
                                                      -----------    -----------    -----------

Net income (loss)                                     $  (694,796)   $   206,656    $   134,570
                                                      ===========    ===========    ===========


Net income (loss)allocated to the
 limited partners:
 Income (loss) before extraordinary item              $  (616,784)   $   364,443    $   239,206
 Extraordinary item                                          --          (64,605)          --
                                                      -----------    -----------    -----------

Net income (loss)                                     $  (616,784)   $   299,838    $   239,206
                                                      ===========    ===========    ===========

Net income (loss) per limited
 partnership Unit:
 Income (loss) before extraordinary item              $    (46.54)   $     26.30    $     17.00
 Extraordinary item                                          --            (4.66)          --
                                                      -----------    -----------    -----------

Net income (loss)                                     $    (46.54)   $     21.64    $     17.00
                                                      ===========    ===========    ===========


Weighted average number of Units                           13,253         13,855         14,072
                                                      ===========    ===========    ===========
</TABLE>

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

                                     - 19 -

<PAGE>
<TABLE>
                               NTS-PROPERTIES III
                               ------------------

                       STATEMENTS OF PARTNERS' EQUITY (1)
                         ------------------------------

              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
              ----------------------------------------------------
<CAPTION>

                                      Limited        General
                                      Partners       Partners        Total
                                      --------       --------        -----
<S>                                 <C>            <C>            <C>
Balance at December 31, 1996          3,772,918         87,210      3,860,128
 Net income(loss)                       239,206       (104,636)       134,570
 Repurchase of limited partnership
  units                                  (5,408)          --           (5,408)
                                    -----------    -----------    -----------
Balances at December 31, 1997         4,006,716        (17,426)     3,989,290
 Net income (loss)                      299,838        (93,182)       206,656
 Repurchase of limited partnership
  units                                 (75,000)          --          (75,000)
                                    -----------    -----------    -----------
Balances at December 31, 1998         4,231,554       (110,608)     4,120,946
 Net loss                              (616,784)       (78,012)      (694,796)
 Repurchase of limited partnership
  units                                (250,000)          --         (250,000)
                                    -----------    -----------    -----------
Balances at December 31, 1999       $ 3,364,770    $  (188,620)   $ 3,176,150
                                    ===========    ===========    ===========
</TABLE>
The  accompanying  notes to  financial  statements are an integral part of these
statements.

(1)      For the periods presented, there are no elements of other comprehensive
         income as defined by the Financial Accounting Standards Board,Statement
         of  Financial  Accounting   Standards  Statement  No.  130,   Reporting
                                                                       ---------
         Comprehensive Income.
         ---------------------

                                     - 20 -


<PAGE>
<TABLE>
                               NTS-PROPERTIES III
                               ------------------

                            STATEMENTS OF CASH FLOWS
                            ------------------------

              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
              ----------------------------------------------------
<CAPTION>

                                                  1999            1998          1997
                                                  ----            ----          ----
CASH FLOWS FROM OPERATING ACTIVITIES
------------------------------------
<S>                                           <C>            <C>            <C>
Net income (loss)                             $  (694,796)   $   206,656    $   134,570
Adjustments to reconcile net income to
net cash provided by operating activities:
Provision for doubtful accounts                    19,081          1,943         28,661
Accrued interest on investment securities            --              923           (923)
Write-off of unamortized building, land and
tenant improvements                               332,333         48,108         86,406
Write-off of unamortized loan costs                  --           65,258           --
Depreciation and amortization                   1,071,501      1,014,464        876,136
Change in assets and liabilities:
Cash and equivalents - restricted                   6,277         (3,384)        (4,595)
Accounts receivable                              (239,527)        83,652        (99,613)
Other assets                                     (119,971)       (38,907)       (39,079)
Accounts payable - operations                      74,181          3,859        (60,929)
Security deposits                                  43,962         (5,205)        10,882
Other liabilities                                 (29,555)       (81,630)       143,766
                                              -----------    -----------    -----------

Net cash provided by operating activities         463,486      1,295,737      1,075,282
                                              -----------    -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES
------------------------------------
Additions to land, buildings, amenities and
construction in progress                       (2,461,264)    (1,418,950)    (1,318,585)
Accounts payable - construction                   594,947         77,619         48,583
Decrease in cash equivalents - restricted            --          273,633          4,219
Purchase of investment securities                    --             --         (304,521)
Maturity of investment securities                    --          100,668        203,853
                                              -----------    -----------    -----------

Net cash used in investing activities          (1,866,317)      (967,030)    (1,366,451)
                                              -----------    -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES
------------------------------------
Increase in mortgage payable                    1,646,234      6,800,000           --
Principal payments on mortgages payable          (228,523)    (6,878,458)      (125,034)
Increase in loan costs                            (19,192)       (83,345)          --
Repurchase of limited partnership Units          (250,000)       (75,000)        (5,408)
Decrease (increase)in cash and equivalent-
restricted                                        125,000       (125,000)       116,868
                                              -----------    -----------    -----------

Net cash provided by (used in) financing
activities                                      1,273,519       (361,803)       (13,574)
                                              -----------    -----------    -----------

Net decrease in cash and equivalents             (129,312)       (33,096)      (304,743)

CASH AND EQUIVALENTS, beginning of period         233,844        266,940        571,683
                                              -----------    -----------    -----------

CASH AND EQUIVALENTS, end of period           $   104,532    $   233,844    $   266,940
                                              ===========    ===========    ===========

Interest paid on a cash basis                 $   498,283    $   444,145    $   570,819
                                              ===========    ===========    ===========
</TABLE>
The  accompanying  notes to  financial statements  are an integral part of these
statements.

                                     - 21 -

<PAGE>

                               NTS-PROPERTIES III
                               ------------------

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------

              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
              ----------------------------------------------------

1.       Significant Accounting Policies
         -------------------------------

         A)       Organization
                  ------------

                  NTS-Properties   III   (the   "Partnership")   is  a   limited
                  partnership  organized  under the laws of the State of Georgia
                  on June  24,  1982.  The  General  Partner  is  NTS-Properties
                  Associates, a Georgia limited partnership.  The Partnership is
                  in the  business  of  owning  and  operating  commercial  real
                  estate.

         B)       Properties
                  ----------

                  The Partnership owns and operates the following properties:

                  -        Peachtree  Corporate  Center,  a  business  park with
                           approximately   191,000  net  rentable   square  feet
                           located in Norcross, Georgia, a suburb of Atlanta.

                  -        NTS  Center  an  office  complex  with  approximately
                           115,000  net   rentable   square   feet   located  in
                           Jeffersontown, Kentucky, a suburb of Louisville.

                  -        Plainview    Center,    an   office    complex   with
                           approximately 94,000 net rentable square feet located
                           in Jeffersontown, Kentucky.

         C)       Changes in the Names of Properties Held by the Partnership
                  ----------------------------------------------------------

                  In the second quarter of 1999,  Plainview Plaza II was renamed
                  NTS Center and  Plainview  Triad North was  renamed  Plainview
                  Center.

         D)       Allocation of Net Income (Loss) and Cash Distributions
                  ------------------------------------------------------

                  Net Cash Receipts,  as defined in the  partnership  agreement,
                  will be  distributed,  to the extent  made  available,  to the
                  limited  partners in an amount equal to the greater of 10% per
                  year,  non-cumulative,  of their invested capital or their pro
                  rata  share of such  Net  Cash  Receipts,  as  defined  in the
                  partnership  agreement.  The balance of the Net Cash Receipts,
                  as defined in the  partnership  agreement,  would be available
                  for  distribution  to the  General  Partner  until the General
                  Partner  has  received  its pro  rata  share  of such Net Cash
                  Receipts.  At such time as the limited  partners have received
                  cash   distributions   equal   to   their   original   capital
                  contributions,  cash  flow  would  be  distributed  52% to the
                  limited partners and 48% to the General  Partner.  In general,
                  operating income and losses  (exclusive of  depreciation)  are
                  allocated to the limited  partners and the General  Partner in
                  proportion to their  respective  distributions of cash for all
                  period presented in the accompanying Financial Statements.  In
                  no event, however, will the portion of any item of Partnership
                  income,  gain,  loss,  deduction  or credit  allocated  to the
                  General Partner be less than 1%.  Starting  December 31, 1996,
                  the Partnership has indefinitely interrupted distributions.

                                     - 22 -

<PAGE>



1. Significant Accounting Policies - Continued
   -------------------------------------------

         D)       Allocation  of  Net  Income  (Loss)  and  Cash Distributions -
                  --------------------------------------------------------------
                  Continued
                  ---------

                  Depreciation  of the assets  acquired  on the date  operations
                  commenced  is allocated  directly to the limited  partners and
                  the General  Partner based upon their  respective tax basis in
                  the property.  Depreciation of assets subsequently acquired is
                  allocated based on the limited partners'  interests of 65% and
                  the General  Partner's  interest  of 35%. In the  accompanying
                  Statements of Operations,  net income (loss) was allocated 99%
                  to the limited  partners and 1% to the General  Partner net of
                  the  effects  of   depreciation   on  contributed   assets  in
                  accordance with the Partnership Agreement.

         E)       Tax Status
                  ----------

                  The  Partnership  has  received  a ruling  from  the  Internal
                  Revenue  Service stating that the Partnership is classified as
                  a limited  partnership  for federal  income tax  purposes.  As
                  such, the Partnership makes no provision for income taxes. The
                  taxable  income or loss is passed  through  to the  holders of
                  interests  for  inclusion  on  their  individual   income  tax
                  returns.

                  The  reconciliation  of net  income  for  financial  statement
                  purposes and for income tax reporting is as follows:

                                1999                1998                 1997
                                ----                ----                 ----
Net income (loss)            $(694,796)           $ 206,656           $ 134,570
Items handled differently
 for tax purposes:
  Depreciation                 523,494              409,636            (204,471)
  Write-off of unamortized
   building and tenant
   improvements               (231,592)            (116,602)            (86,819)
  Rental income                (44,971)            (145,195)            139,596
  Allowance for doubtful
   accounts                     12,478              (39,001)            (39,945)
  Other                         43,401                  928              (3,490)
                              ---------            ---------           ---------

Taxable income(loss)         $(391,986)           $ 316,422           $ (60,559)
                              =========            =========           =========


         F)       Use of Estimates in the Preparation of Financial Statements
                  -----------------------------------------------------------

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

                                     - 23 -

<PAGE>

1.       Significant Accounting Policies - Continued
         -------------------------------------------

         G)       Cash and Equivalents - Restricted
                  ---------------------------------

                  Cash and  equivalents  -  restricted  represent 1) funds which
                  have been  escrowed  with a mortgage  company for NTS Center's
                  property  taxes in accordance  with the loan  agreement and 2)
                  funds which the partnership has reserved for the repurchase of
                  limited Partnership Units (1998 balance only).

         H)       Basis of Property and Depreciation
                  ----------------------------------

                  Land,  buildings  and  amenities  are  stated  at  cost to the
                  Partnership  as  determined  by  the  historical  cost  of the
                  property to the General  Partner for its  interest  and by the
                  purchase  price of the  property  to the  Partnership  for the
                  limited  partners'  interests.  Depreciation is computed using
                  the  straight-line  method over the estimated  useful lives of
                  the assets  which are 5-30 years for land  improvements,  5-30
                  years  for  buildings  and  improvements,  3 -  30  years  for
                  amenities and the life of the lease for tenant improvements.

                  Statement of Financial  Accounting  Standards  (SFAS) No. 121,
                  Accounting  for the  Impairment of  Long-Lived  Assets and for
                  Long- Lived Assets to be Disposed Of, specifies  circumstances
                  in  which  certain  long-lived  assets  must be  reviewed  for
                  impairment.  If such review indicates that the carrying amount
                  of an asset exceeds the sum of its expected future cash flows,
                  the asset's carrying value must be written down to fair value.
                  Application  of this standard  during the years ended December
                  31, 1999, 1998 and 1997 did not result in an impairment loss.

         I)       Rental Income and Deferred Leasing Commissions
                  ----------------------------------------------

                  Certain of the  Partnership's  lease agreements are structured
                  to include  scheduled and specified  rent  increases  over the
                  lease term. For financial reporting purposes,  the income from
                  these leases is being recognized on a straight-line basis over
                  the lease term.  Accrued income connected with these leases is
                  included  in accounts  receivable  and  totaled  $136,323  and
                  $129,197  December  31,  1999  and  1998,  respectively.   All
                  commissions  paid to leasing agents are deferred and amortized
                  on a  straight-line  basis over the term of the lease to which
                  they apply.

         J)       Advertising
                  -----------

                  The Partnership expenses  advertising-type  costs as incurred.
                  Advertising  expense was immaterial to the Partnership  during
                  the years ended December 31, 1999, 1998 and 1997.

                                     - 24 -

<PAGE>

1.       Significant Accounting Policies - Continued
         -------------------------------------------

         K)       Statements of Cash Flows
                  ------------------------

                  For purposes of  reporting  cash flows,  cash and  equivalents
                  include cash on hand and short-term, highly liquid investments
                  with initial maturities of three months or less.

         L)       Reclassifications of 1998 and 1997 Financial Statements
                  -------------------------------------------------------

                  Certain  reclassifications  have been made to the December 31,
                  1998 and 1997  financial  statements  to conform with December
                  31,  1999  classifications.  These  reclassifications  have no
                  material effect on previously reported operations.

2.       Concentration of Credit Risk
         ----------------------------

         NTS-Properties  III is a limited  partnership  which owns and  operates
         commercial  properties in Norcross,  Georgia, a suburb of Atlanta,  and
         Jeffersontown,  Kentucky,  a suburb of  Louisville.  One  tenant in NTS
         Center  occupies  46% of  the  office  building's  net  rentable  area.
         Substantially all of the Partnership's  tenants are local businesses or
         are  businesses  which have  operations  in the  location in which they
         lease space.

3.       Interest Repurchase Reserve
         ---------------------------

         Pursuant to Section  16.4 of the  Partnership's  Amended  and  Restated
         Agreement  of  Limited  Partnership,  the  Partnership  established  an
         Interest  Repurchase  Reserve in 1995.  During the years ended December
         31, 1998 and 1997, the Partnership funded $75,000 and $0, respectively,
         to the reserve.  For the year ending December 31, 1999, the Partnership
         has  funded  $0  to  the  reserve.  Through  September  30,  1998  (the
         commencement  date  of  the  Partnership's  First  Tender  Offer),  the
         Partnership  had  repurchased  a total of 1,830 Units for $393,240 at a
         price ranging from $208 to $250 per Unit.  The offering  price per Unit
         was  established by the General Partner in its sole discretion and does
         not purport to represent fair market value or liquidation  value of the
         Units.   Repurchased  Units  are  retired  by  the  Partnership,   thus
         increasing  the  percentage  of  ownership  of each  remaining  limited
         partner investor.  The Interest Repurchase Reserve was funded from cash
         reserves. The balance in the reserve at December 31, 1999 was $0.

4.       Tender Offer
         ------------

         On September 30, 1998, the  Partnership  and ORIG, LLC, an affiliate of
         the  Partnership,  (the"bidders")  commenced a tender offer (the "First
         Tender  Offer")  to  purchase  up to 1,000  Units of the  Partnership's
         limited partnership Units at a price of $250 per Unit as of the date of
         the First Tender Offer. The initial expiration date of the First Tender
         Offer was December 29, 1998, and this expiration date was  subsequently
         extended  through  March 31, 1999. A total of 1,160 Units were tendered
         and the  bidders  accepted  all  Units.  The  Partnership  repurchased,
         pursuant to the First Tender Offer,  500 Units and ORIG,  LLC purchased
         660 Units at a total cost of $290,000 plus offering expenses.

                                     - 25 -

<PAGE>

4.       Tender Offer - Continued
         ------------------------

         On July 27, 1999, the  Partnership  and ORIG,  LLC, an affiliate of the
         Partnership,  (the  "bidders")  commenced a tender  offer (the  "Second
         Tender  Offer") to  purchase up to 1,000 of the  Partnership's  limited
         partnership  Units at a price of $250 per Unit.  Although  the  bidders
         believe that this price is appropriate,  the price of $250 per Unit may
         not equate to the fair  market  value or the  liquidation  value of the
         Unit,  and is less  than the book  value per Unit as of the date of the
         Second Tender Offer.  The initial  expiration date of the Second Tender
         Offer was October 29, 1999 and this  expiration  date was  subsequently
         extended  through  December 8, 1999. A total of 938 Units were tendered
         and the  bidders  accepted  all  Units.  The  Partnership  repurchased,
         pursuant to the Second Tender Offer,  500 Units and ORIG, LLC purchased
         438 Units at a total cost of $234,500 plus offering expenses.

5.       Land, Buildings and Amenities
         -----------------------------

         The  following  schedule  provides  an  analysis  of the  Partnership's
         investment in property held for lease as of December 31:

                                          1999                  1998
                                          ----                  ----
Land and improvements                 $ 4,817,717           $ 4,737,375
Buildings and improvements             22,230,344            21,481,396
Amenities                                 148,876               122,429
                                       ----------            ----------

                                       27,196,937            26,341,200

Less accumulated depreciation          15,879,968            16,121,866
                                       ----------            ----------

                                      $11,316,969           $10,219,334
                                       ==========            ==========


6.       Mortgages Payable
         -----------------

         Mortgages payable as of December 31 consist of the following:

                                                  1999                 1998
                                                  ----                 ----
Mortgage payable to an insurance  company,
bearing interest at 6.89%,  maturing
April 10, 2015, secured by land and building  $ 6,427,622         $ 6,656,145

$2,000,000 mortgage payable to a bank
maturing March 1, 2001, secured by
land and buildings, bearing a variable
interest of prime minus .25%.  The
current rate at December 31, 1999 is
8.5% and current amount available at
December 31, 1999 is $353,766.                  1,646,234              --
                                               ----------          ----------
                                              $ 8,073,856         $ 6,656,145
                                               ==========          ==========


                                     - 26 -

<PAGE>

6.       Mortgages Payable
         -----------------

         Scheduled maturities of debt are as follows:

                  For the Years Ended December 31,              Amount
                  --------------------------------              ------

                           2000                             $   334,774
                           2001                               1,818,416
                           2002                                 280,828
                           2003                                 300,800
                           2004                                 322,192
                  Thereafter                                  5,016,846
                                                              ---------

                                                             $8,073,856
                                                              =========

         Based on the borrowing rates currently available to the Partnership for
         mortgages with similar terms and average maturities,  the fair value of
         long-term debt is approximately $7,400,000.

7.       Rental Income Under Operating Leases
         ------------------------------------

         The  following  is a  schedule  of  minimum  future  rental  income  on
         noncancellable operating leases as of December 31, 1999:

                  For the Years Ended December 31,            Amount
                  --------------------------------            ------

                           2000                           $ 2,829,775
                           2001                             2,325,592
                           2002                             1,873,324
                           2003                             1,554,438
                           2004                             1,091,658
                           Thereafter                         257,697
                                                           ----------

                                                          $ 9,932,484
                                                           ==========
8.       Related Party Transactions
         --------------------------

         Property  management  fees of  $157,290  (1999),  $186,416  (1998)  and
         $168,006 (1997) were paid to NTS Development  Company,  an affiliate of
         the General Partner, pursuant to an agreement with the Partnership. The
         fee is equal to 5% of gross revenues from the Partnership's properties.
         Also permitted by an agreement with the  Partnership,  NTS  Development
         Company  will  receive a repair  and  maintenance  fee equal to 5.9% of
         costs incurred which relate to capital  improvements.  The  Partnership
         has  incurred  $141,626  and  $80,897 as a repair and  maintenance  fee
         during the years ended  December 31, 1999 and 1998,  respectively,  and
         has capitalized  this cost as a part of land,  buildings and amenities.
         As  permitted by an  agreement,  the  Partnership  also was charged the
         following  amounts  from NTS  Development  Company  for the years ended
         December 31, 1999,  1998 and 1997.  These  charges  include items which
         have been expensed as operating  expenses - affiliated or  professional
         and  administrative  expenses -  affiliated  and items  which have been
         capitalized as other assets or as land, buildings and amenities.

                                     - 27 -

<PAGE>

8.       Related Party Transactions - Continued
         --------------------------------------

                                1999              1998              1997
                                ----              ----              ----

         Leasing              $262,508          $169,294         $279,851
         Administrative        134,215           132,949          166,422
         Property manager      252,627           230,315          171,324
         Other                   8,679            59,411           28,460
                               -------           -------          -------

                              $658,029          $591,969         $646,057
                               =======           =======          =======

         During 1999, NTS  Development  Company leased 20,368 square feet in NTS
         Center at a rental  rent of $14.50 per  square  foot.  The  Partnership
         received approximately $295,000 in rental payments from NTS Development
         Company during 1999, 1998 and 1997.

         During January 1997, NTS Development  Company leased 23,160 square feet
         of the  available  space in NTS  Center at a base  rent of  $13.50  per
         square foot. During February and March of 1997, NTS Development Company
         leased 20,368 square feet. Effective April 1, 1997, the NTS Development
         Company  lease was  extended  for five  years to March 2002 at a rental
         rate of $14.50 per square foot for 20,368 square feet.

         Effective  November 19, 1999,  the NTS  Development  Company  lease was
         extended  two years to March 2004 at a rental rate of $14.50 per square
         foot  for  20,368  square  feet.  Leasing   arrangements   contemplated
         allowances for certain tenant finish.  Expenses  related to such tenant
         finish were capitalized within the line item land, buildings, amenities
         in the  accompanying  balance sheets.  Such capital  expenditures  were
         approximately  $225,000  and  $394,000  as of and for the  years  ended
         December 31, 1999 and 1998, respectively.

9.       Commitments and Contingencies
         -----------------------------

         One  tenant  at  Plainview  Center  occupied  approximately  65% of the
         building. During the  third  quarter of 1997,  the Partnership received
         notice  that  the  tenant  would vacate  the property at the end of the
         lease  term,  August 1998.  A 30-day renewal  extension was  negotiated
         (through  September 30, 1998) with the  tenant for approximatel  63,000
         leased square feet. A renewal for  approximately 11,000 square feet  of
         the original 63,000 square feet  was also  negotiated through March 31,
         1999.  Costs  associated with this renewal were not  significant.  As a
         result of this tenant  vacating the  remainder of their space on  March
         31, 1999, there  has been and  will likely continue  to be a protracted
         period  for the property  to  become full leased  again and substantial
         funds,  currently estimated  to  be  from $700,000 to $1,000,000,  will
         likely  be  needed  for leasing  expenses; especially  those  needed to
         refinish  space  for  new  tenants.  Such  costs  will  be  funded from
         additional  available loan proceeds (See Note 6) and cash reserves.  If
         necessary, it may be  possible for the Partnership to increase the note
         payable secured by Plainview  Center.  However,  there is no  assurance
         that  additional  financing  will be obtained when needed,  or that any
         financing will be available on favorable terms.

                                     - 28 -

<PAGE>
10.      Segment Reporting
         -----------------

         The Company's reportable operating  segments  include  only one segment
         that is Commercial real estate operations.

11.      Subsequent Event
         ----------------

         Subsequent to  December 31, 1999,  the Affiliate (ORIG,  LLC) purchased
         Interests in the Partnership pursuant to an Agreement, Bill of Sale and
         Assignment dated February  7, 2000, by and among the Affiliate and four
         investors  in the Partnership (the "Purchase Agreement"). The Affiliate
         purchased 135  Interests in the  Partnership  from one of the investors
         for total consideration of $38,676,  or an average price of $286.49 per
         Interest.  The  Affiliate  paid these  investors  a  premium  above the
         purchase  price  previously  offered  for  Interests  pursuant to prior
         tender offers because this purchase allowed the  Affiliate  to purchase
         substantial number of Interests without incurring the expenses involved
         with a tender offer and multiple transfers.

                                     - 29 -

<PAGE>
Item 9.   Changes  in  and  Disagreements  with  Accountants  on  Accounting and
          ----------------------------------------------------------------------
          Financial Disclosure
          --------------------

None.

                                     - 30 -

<PAGE>

                                    PART III

Item 10. Directors and Executive Officers of the Registrant
         --------------------------------------------------

Because the Partnership is a limited  partnership and not a corporation,  it has
no  directors  or  officers  as  such.  Management  of  the  Partnership  is the
responsibility   of  the  General  Partner,   NTS-Properties   Associates.   The
Partnership has entered into a management contract with NTS Development Company,
an affiliate of the General Partner, to provide property management services.

The General Partners of NTS-Properties Associates are as follows:

J. D. Nichols
-------------

Mr.  Nichols  (age  58)  is  the  managing  General  Partner  of  NTS-Properties
Associates and is Chairman of the Board of NTS Corporation  (since 1985) and NTS
Development Company (since 1977).

L. C. Aroh
----------

Mr. Aroh (age 70) has been an independent real estate developer for the past ten
years. He is a partner in other real estate  developments with the principals of
NTS Development Company.

NTS Capital Corporation
-----------------------

NTS Capital  Corporation  (formerly NTS  Corporation) is a Kentucky  corporation
formed in October  1979.  J. D.  Nichols is  Chairman  of the Board and the sole
director of NTS Capital Corporation.

Alliance Realty Corporation
---------------------------

Alliance Realty  Corporation was formed in September 1982, and is a wholly-owned
subsidiary  of S.N.  Alliance,  Inc.  S.N.  Alliance,  Inc.  is also the  parent
corporation of Stifle, Nicolas & Company, Inc. which acted as the Dealer Manager
in connection with the offering for the interests.

Gary D. Adams
-------------

Mr. Adams (age 54) is Senior Vice President of NTS  Development  Company.  Since
joining the NTS  organization  in May 1977,  Mr. Adams has been  involved in the
development, construction and management of properties in the southeast region.

A. Toni Rizzo
-------------

Mr.  Rizzo (age 52) joined  Abel  Construction  during  1995 as the  Director of
Business  Development.  From  1985 to 1995,  Mr.  Rizzo  was an  officer  of the
Huntington Group and prior to 1985 was an employee of NTS Development Company.

The Manager of the Partnership's properties is NTS Development Company, the
executive officers and/or directors of which are Messrs. J. D. Nichols, Brian F.
Lavin and Gregory A. Wells.


                                     - 31 -

<PAGE>

Item 10. Directors and Executive Officers of the Registrant - Continued
         --------------------------------------------------------------

Brian F. Lavin
--------------

Mr. Lavin (age 46), President of NTS Corporation and NTS Development Company
joined the Manager in June 1997. From November 1994 through June 1997, Mr. Lavin
served as President of the Residential Division of Paragon Group, Inc., and as
a Vice President of Paragon's Midwest Division prior to November 1994. In this
capacity, he directed the development, marketing, leasing and management
operations for the firms expanding portfolios. Mr. Lavin attended the University
of Missouri where he received his Bachelor's Degree in Business Administration.
He has served as a Director of the Louisville Apartment Association. He is a
licensed Kentucky Real Estate Broker and Certified Property Manager.  Mr. Lavin
is a member of the Institute of Real Estate Management,and council member of the
Urban Land Institute.  He currently serves on the University of Louisville Board
of Overseers and is on the Board of Directors of the National Multi-Housing
Council and the Louisville Science Center.

Gregory A. Wells
----------------

Mr. Wells (age 41),  Senior Vice  President and Chief  Financial  Officer of NTS
Corporation and NTS Development  Company joined the Manager in July,  1999. From
May 1998 through  July 1999,  Mr.  Wells  served as Chief  Financial  Officer of
Hokanson Companies, Inc. and as Secretary and Treasurer of Hokanson Construction
Inc.,  Indianapolis,  Indiana  from  January  1995  through  May 1998.  In these
capacities  he directed  financial and  operational  activities  for  commercial
rental real estate,  managed property,  building and suite  renovations,  out of
ground  commercial  and  residential   construction  and  third  party  property
management.  Mr. Wells  previously  served as Vice  President of Operations  and
Treasurer  of Executive  Telecom  Systems,  Inc. a  subsidiary  of the Bureau of
National  Affairs,  Inc.  (Washington,  D.C.).  Mr. Wells attended  George Mason
University,  where he received a Bachelor's  Degree in Business  Administration.
Mr. Wells is a Certified  Public  Accountant in both Virginia and Indiana and is
active in various  charitable and philanthropic  endeavors in the Louisville and
Indianapolis areas.

Mr. Richard L. Good, who was Vice Chairman and former President of NTS Capital
Corporation and NTS Development Company, retired effective September 3, 1999.

Item 11. Management Remuneration and Transactions
         ----------------------------------------

The officers and/or directors of the corporate General Partner receive no direct
remuneration in such  capacities.  The Partnership is required to pay a property
management  fee  based  on  gross  rentals  to  NTS  Development   Company.  The
Partnership  is also  required  to pay to NTS  Development  Company a repair and
maintenance  fee on costs related to specific  projects.  Also, NTS  Development
Company provides  certain other services to the  Partnership.  See Note 8 to the
financial  statements which sets forth transactions with NTS Development Company
for the years ended December 31, 1999, 1998 and 1997.

The General Partner is entitled to receive cash distributions and allocations of
profits  and losses from the  Partnership.  Generally,  the  General  Partner is
entitled to a 10% non-cumulative annual return on its capital contributions from
the cash  income  of the  Partnership  (after  payment  of a like  amount to the
limited  partners).  At such time as the limited  partners  have  received  cash
distributions  from all sources equal to their original  capital  contributions,
cash flow will be  distributed  52% to limited  partners  and 48% to the General
Partner.  In no event,  however,  will the  portion  of any item of  Partnership
income, gain, loss, deduction or credit allocated to the General Partner be less
than 1%.

                                     - 32 -

<PAGE>

Item 12.   Security Ownership of Certain Beneficial Owners and Management
           --------------------------------------------------------------

The following  provides  details  regarding  owners of more than 5% of the total
outstanding limited partnership Units as of February 25, 2000.

           ORIG, LLC
           10172 Linn Station Road                  1,233 Units (9.66%)
           Louisville, Kentucky 40223

ORIG, LLC is a Kentucky limited liability company, the members of which are J.D.
Nichols and Brian F. Lavin, Chairman and President of NTS Capital Corporation, a
general  partner  of NTS  Properties  Associates,  the  general  partner  of the
Partnership.

The General Partner is NTS-Properties Associates, a Georgia limited partnership,
10172 Linn Station Road, Louisville, Kentucky 40223. The partners of the General
Partner and their total respective interests in NTS-Properties Associates are as
follows:

           J. D. Nichols
           10172 Linn Station Road                             86.07%
           Louisville, Kentucky 40223

           L. C. Aroh
           10904 Old Bridge Place                               8.64%
           Louisville, Kentucky 40223

           Gary D. Adams
           3300 University Boulevard, Suite 150                 1.26%
           Winter Park, Florida 32792

           A. Toni Rizzo
           515 Willowhurst Place                                1.26%
           Louisville, Kentucky 40223

           NTS Capital Corporation
           10172 Linn Station Road                              2.67%
           Louisville, Kentucky 40223

           Alliance Realty Corporation
           500 North Broadway                                   0.10%
           St. Louis, Missouri 63102


                                     - 33 -

<PAGE>

Item 13.          Certain Relationships and Related Transactions
                  ----------------------------------------------

Property management fees of $157,290 (1999), $186,416 (1998) and $168,006 (1997)
were paid to NTS  Development  Company,  an  affiliate  of the General  Partner,
pursuant to an agreement with the  Partnership.  The fee is equal to 5% of gross
revenues from the Partnership's properties.  Also permitted by an agreement with
the Partnership,  NTS Development  Company will receive a repair and maintenance
fee equal to 5.9% of costs  incurred which relate to capital  improvements.  The
Partnership  has incurred  $141,626 and $80,897 as a repair and  maintenance fee
during  the  years  ended  December  31,  1999 and 1998,  respectively,  and has
capitalized this cost as a part of land,  buildings and amenities.  As permitted
by an agreement, the Partnership also was charged the following amounts from NTS
Development  Company for the years ended December 31, 1999, 1998 and 1997. These
charges  include  items  which  have  been  expensed  as  operating  expenses  -
affiliated or professional  and  administrative  expenses - affiliated and items
which have been capitalized as other assets or as land, buildings and amenities.

                               1999              1998              1997
                               ----              ----              ----

Leasing                      $262,508          $169,294         $279,851
Administrative                134,215           132,949          166,422
Property manager              252,627           230,315          171,324
Other                           8,679            59,411           28,460
                              -------           -------          -------

                             $658,029          $591,969         $646,057
                              =======           =======          =======

During 1999, NTS Development  Company leased 20,368 square feet in NTS Center at
a rental rate of $14.50 per square foot. The Partnership received  approximately
$295,000 in rental payments from NTS  Development  Company during 1999, 1998 and
1997.

During  January 1997, NTS  Development  Company leased 23,160 square feet of the
available  space in NTS Center at a base rent of $13.50 per square foot.  During
February and March of 1997, NTS  Development  Company leased 20,368 square feet.
Effective April 1, 1997, the NTS Development Company lease was extended for five
years to March 2002 at a rental rate of $14.50 per square foot for 20,368 square
feet.

Effective November 19, 1999, the NTS Development  Company lease was extended two
years to March 2004 at a rental rate of $14.50 per square foot for 20,368 square
feet. Leasing  arrangements  contemplated  allowances for certain tenant finish.
Expenses  related to such tenant  finish were  capitalized  within the line item
land,  buildings and amenities in the accompanying  balance sheets. Such capital
expenditures  were  approximately  $225,000 and $394,000 as of and for the years
ended December 31, 1999 and 1998, respectively.

                                     - 34 -

<PAGE>

                                     PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
         ----------------------------------------------------------------

1. Financial statements
   --------------------

   The  financial statements for the years ended  December 31 1999,  1998,  1997
   together with the report of Arthur Andersen LLP dated March 24, 2000,  appear
   in Item 8. The following financial statement  schedules  should  be  read  in
   conjunction with such financial statements.

2. Financial statement schedules
   -----------------------------

   Schedules:                                            Page No.
                                                         --------

   III - Real Estate and Accumulated Depreciation         36-37

   All other schedules have been omitted because they are not applicable, or not
   required, or because the required information  is  included in the  financial
   statements or notes thereto.

3. Exhibits
   --------

   Exhibit No.                                          Page No.
   -----------                                          --------

    3. Amended and Restated
       Agreement and Certificate
       of Limited Partnership of
       NTS-Properties III                                   *

   10. Management Agreement between
       NTS Development Company and
       NTS-Properties III                                   *

   27. Financial Data Schedule                          Included
                                                        herewith

* Incorporated  by reference to documents filed with the Securities and Exchange
Commission in connection with the filing of Registration Statements on Form S-11
on June 25, 1982 (effective October 13, 1982) under Commission File No. 2-78152.

4. Reports on Form 8-K

No reports on Form 8-K were filed  during the three  month  ended  December  31,
1999.

                                     - 35 -

<PAGE>
<TABLE>
                               NTS-PROPERTIES III
                               ------------------
             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
             -------------------------------------------------------
                             AS OF DECEMBER 31, 1999
                             -----------------------
<CAPTION>
                                                                                 Peachtree
                                                         NTS        Plainview    Corporate
                                                        Center       Center       Center          Total
                                                        ------       ------       ------          -----
<S>                                                  <C>           <C>           <C>           <C>
Encumbrances                                             (A)           (B)

Initial cost to Partnership:
 Land                                                $ 1,379,172   $ 1,217,886   $ 1,408,375   $ 4,005,433
 Buildings and improvements                            4,963,604     4,512,172     6,231,114    15,706,890
Cost capitalized subsequent to acquisition:
 Improvements                                          3,485,705     1,875,316     2,102,661     7,463,682
 Carrying costs                                             --            --            --            --

Gross amount at which carried December 31,1999(C):
 Land                                                $ 1,765,889   $ 1,384,663   $ 1,667,164   $ 4,817,716
 Buildings, improvements and amenities                 8,062,592     6,220,711     8,074,986    22,358,289
                                                     -----------   -----------   -----------   -----------
 Total (E)                                           $ 9,828,481   $ 7,605,374   $ 9,742,150   $27,176,005
                                                     ===========   ===========   ===========   ===========

Accumulated depreciation                             $ 5,406,075   $ 3,457,419   $ 7,014,381   $15,877,875
                                                     ===========   ===========   ===========   ===========

Date of construction                                    N/A           N/A            N/A

Date acquired                                          01/83         02/83          01/83

Life at which depreciation in
 latest income statement is
 computed                                               (D)           (D)            (D)
</TABLE>

(A)        First mortgage held by an insurance company.
(B)        First mortgage held by a bank.
(C)        Aggregate cost of real estate for tax purposes is $26,214,477.
(D)        Depreciation is  computed  using  the  straight-line  method over the
           estimated useful lives of the assets  which  are  5 -  30  years  for
           land improvements,  5 - 30 years for  buildings, improvements and 3 -
           30 years for amenities and life of the lease for tenant improvements.
(E)        Reconciliation,  net  of  accumulated  depreciation  to  consolidated
           financial statements:

Total Gross Cost at December 31, 1999                            $   27,176,005
 Additions to Partnership for computer hardware and
  software in 1998 and 1999                                              20,931
                                                                  --------------
Balance at December 31, 1999                                         27,196,936
 Less Accumulated Depreciation per above                            (15,877,875)
 Less Accumulated Depreciation - computer equipment                      (2,092)
                                                                  --------------
 Land, Buildings and amenities, net at December 31, 1999         $   11,316,969
                                                                  ==============



                                     - 36 -

<PAGE>

                               NTS-PROPERTIES III
                               ------------------

             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
             -------------------------------------------------------

              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
              ----------------------------------------------------



                                            Real                 Accumulated
                                           Estate                Depreciation

Balances at December 31, 1996          $ 24,497,620              $ 15,069,604

Additions during period:
 Improvements                             1,318,585                        --
 Depreciation (a)                                --                   831,231

Deductions during period:
 Retirements                               (460,619)                 (374,211)
                                        ------------              ------------

Balances at December 31, 1997            25,355,586                15,526,624

Additions during period:
 Improvements                             1,418,950                        --
 Depreciation (a)                                --                   980,469

Deductions during period:
 Retirements                               (433,336)                 (385,227)
                                        ------------              ------------

Balances at December 31, 1998            26,341,200                16,121,866

Additions during period:
 Improvements                             2,461,264                        --
 Depreciation (a)                                --                 1,031,295

Deductions during period:
 Retirements                             (1,605,527)               (1,273,193)
                                        ------------              ------------

Balances at December 31, 1999          $ 27,196,937              $ 15,879,968
                                        ============              ============


  (a)      The additions  charged to accumulated  depreciation  on this schedule
           will differ from the  depreciation and amortization on the Statements
           of Cash Flows due to the  amortization  of loan costs and capitalized
           leasing costs.

                                     - 37 -

<PAGE>



                                   SIGNATURES
                                   ----------

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

                                                    NTS-PROPERTIES III
                                                    ------------------
                                                       (Registrant)

                                            BY:     NTS-Properties Associates,
                                                    General Partner
                                                    BY: NTS Capital Corporation,
                                                        General Partner

                                            /s/ Gregory A. Wells
                                            ------------------------------------
                                            Gregory A. Wells
                                            Senior Vice President and
                                            Chief Financial Officer of
                                            NTS Capital Corporation

Date: March 29, 2000



Pursuant to the  requirements  of the Securities and Exchange Act of 1934,  this
Form  10-K has been  signed  below by the  following  persons  on  behalf of the
registrant in their capacities and on the date indicated above.

           Signature                                   Title
           ---------                                   -----

/s/ J. D. Nichols                          General Partner of NTS-Properties
--------------------------------           Associates and Chairman of the Board
J. D. Nichols                              and Sole Director of NTS Capital
                                           Corporation


/s/ Brian F. Lavin                         President and Chief Operating Officer
--------------------------------           of NTS Capital Corporation
Brian F. Lavin



/s/ Gregory A. Wells                       Senior Vice President and
--------------------------------           Chief Financial Officer of
Gregory A. Wells                           NTS Capital Corporation


The Partnership is a limited  partnership and no proxy material has been sent to
the limited partners.

                                     - 38 -

<PAGE>