|  Delaware                                                                |   |  20-2852636                              |
|-------------------------------------------------------------------------------|--------|-----------------------------------------------|
|  (State                  or other jurisdiction                  of  |   |  (I.R.S.                  employer       |
|  incorporation                  or                  organization)        |   |  identification                  number) |

|  c/o                Spencer Trask Ventures,                Inc.               |   |                            |
|------------------------------------------------------------------------------------|--------|---------------------------------|
|  535                Madison Avenue, 18th                Floor                 |   |                            |
|  New                York, NY                                                  |   |   10022               |
|  (Address                of principal executive                offices)  |   |  (Zip                Code) |

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**ADAGIO      ACQUISITION III, INC.**

**-      INDEX -**

| **PART                I - FINANCIAL INFORMATION**:                                                                                                                                                            | Page                                                                           |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------|
|                                                                                                                                                                                                          |                                                                           |
| Condensed                Balance Sheets March 31, 2006 (unaudited)                                                                                                                                            | F-1                                                                            |
|                                                                                                                                                                                                          |                                                                           |
| Condensed                Statements of Operations (unaudited) Three months ended March 31,                2006 and                the period from April 22, 2005 (Inception) to March 31,                2006 | F-2                                                                            |
|                                                                                                                                                                                                          |                                                                           |
| Condensed                Statements of Cash Flows (unaudited) Three months ended March 31,                2006 and                the period from April 22, 2005 (Inception) to March 31,                2006 | F-3                                                                            |
|                                                                                                                                                                                                          |                                                                           |
| Notes                to Interim Unaudited Condensed Financial Statements                                                                                                                                      | F-4                                                                            |
|                                                                                                                                                                                                          |                                                                           |
| Item                2                                                                                                                                                                                         | Management’s                Discussion and Analysis or Plan of Operation | 1 |
|                                                                                                                                                                                                          |                                                                           |   |
| Item                3                                                                                                                                                                                         | Controls                and Procedures                                         | 1 |
|                                                                                                                                                                                                          |                                                                           |   |
| **PART                II - OTHER INFORMATION**:                                                                                                                                                               |                                                                           |
|                                                                                                                                                                                                          |                                                                           |
| Item                1.                                                                                                                                                                                        | Legal                Proceedings                                               | 1 |
|                                                                                                                                                                                                          |                                                                           |   |
| Item                2.                                                                                                                                                                                        | Unregistered                Sales of Equity Securities and Use of Proceeds     | 1 |
|                                                                                                                                                                                                          |                                                                           |   |
| Item                3.                                                                                                                                                                                        | Defaults                Upon Senior Securities                                 | 1 |
|                                                                                                                                                                                                          |                                                                           |   |
| Item                4.                                                                                                                                                                                        | Submission                of Matters to a Vote of Security Holders             | 1 |
|                                                                                                                                                                                                          |                                                                           |   |
| Item                5.                                                                                                                                                                                        | Other                Information                                               | 1 |
|                                                                                                                                                                                                          |                                                                           |   |
| Item                6.                                                                                                                                                                                        | Exhibits                                                                       | 2 |
|                                                                                                                                                                                                          |                                                                           |   |
|  Signatures                                                                                                                                                                                              |                                                                           |  3 |

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**PART      I - FINANCIAL INFORMATION**

**Item      1. Financial Statements.**

**ADAGIO      ACQUISITION III, INC.**

***A      DEVELOPMENT STAGE COMPANY***

***BALANCE      SHEET (Unaudited)***

***March      31, 2006***

| ***ASSETS***                                                                                                                                                                             |   |   |    |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|
| ***Current                Assets***                                                                                                                                                      |   |   |    |   |
| ***Cash                and cash equivalents***                                                                                                                                           |   | $      | 16,524  |   |
| ***Prepaid                expenses***                                                                                                                                                    |   |   | 6,250   |   |
|                                                                                                                                                                                     |   |   |    |   |
| ***Total                Assets***                                                                                                                                                        |   | $      | 22,774  |   |
|                                                                                                                                                                                     |   |   |    |   |
| **LIABILITIES                AND STOCKHOLDER’S EQUITY**                                                                                                                            |   |   |    |   |
| ***Current                Liabilities***                                                                                                                                                 |   |   |    |   |
| Accounts                payable and accrued expenses                                                                                                                                     |   | $      | 6,444   |   |
| ***STOCKHOLDER’S                EQUITY***                                                                                                                                          |   |   |    |   |
| ***Preferred                stock***                -                $.0001 par value - 10,000,000 shares authorized; -0- shares issued                and                outstanding    |   |   |    |   |
| ***Common                stock***                -                $.0001 par value - 75,000,000 shares authorized; 2,500,000 shares                issued                and outstanding |   |   | 250     |   |
| **Paid-in                capital**                                                                                                                                                       |   |   | 49,750  |   |
| **(Deficit)                accumulated during the development stage**                                                                                                                    |   |   | (33,670 | )      |
| ***Total                Stockholder’s Equity***                                                                                                                                    |   |   | 16,330  |   |
|                                                                                                                                                                                     |   | $      | 22,774  |   |

*See      notes to interim unaudited financial statements.*

*F-1*

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**ADAGIO      ACQUISITION III, INC.**

***A      DEVELOPMENT STAGE COMPANY***

***STATEMENTS      OF OPERATIONS (Unaudited)***

|                                                                    |   | **For                the Three****Months                Ended****March                31, 2006** | ** **    | **Cumulative                Period From****April                22, 2005 (Inception)****Through                March 31, 2006** |   |
|-------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------|---------------|---------------------------------------------------------------------------------------------------------------------------------|--------|
| **Net                Sales**                                            |   | $                                                                                                | —  |                                                                                                                            | $      | —  |   |
| **Cost                of Sales**                                        |   |                                                                                             | —  |                                                                                                                            |   | —  |   |
| **Gross                Profit**                                         |   |                                                                                             | —  |                                                                                                                            |   | —  |   |
| **General                and Administrative Expenses**                  |   |                                                                                             | (9,569        | )                                                                                                                               |   | (34,371 | ) |
| **Investment                Income**                                    |   |                                                                                             | 185      |                                                                                                                            |   | 701  |   |
| **Net                (Loss)**                                           |   | $                                                                                                | (9,384        | )                                                                                                                               | $      | (33,670 | ) |
| **Basic                and Diluted (Loss) Per Share**                   |   | $                                                                                                | (0.00         | )                                                                                                                               | $      | (0.02 | ) |
| **Weighted                Average Number of Common Shares Outstanding** |   |                                                                                             | 2,500,000     |                                                                                                                            |   | 2,215,743 |   |

*See      notes to interim unaudited financial statements.*

*F-2*

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**ADAGIO      ACQUISITION III, INC.**

***A      DEVELOPMENT STAGE COMPANY***

***STATEMENTS      OF CASH FLOWS (Unaudited)***

|                                                                                                                                   |   | **For                the Three****Months                Ended****March                31, 2006** | ** ** | **Cumulative                Period From****April                22, 2005 (Inception)****Through                March 31, 2006** |   |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------------------|--------|
| ***Cash                Flows from Operating Activities***                                                                              |   |                                                                                             |       |                                                                                                                            |   |   |   |
| Net                (Loss)                                                                                                              |   | $                                                                                                | (9,384     | )                                                                                                                               | $      | (33,670 | ) |
| ***Adjustments                to reconcile net (loss) to ***net                cash used in operating                activities:****** |   |                                                                                             |       |                                                                                                                            |   |   |   |
| Decrease                (increase) in prepaid expenses                                                                                 |   |                                                                                             | 3,125      |                                                                                                                            |   | (6,250 | ) |
| Increase                in accounts payable and accrued liabilities                                                                    |   |                                                                                             | 3,104      |                                                                                                                            |   | 6,444 |   |
| ***Net                cash used in operating activities:***                                                                            |   |                                                                                             | (3,155     | )                                                                                                                               |   | (33,476 | ) |
| ***Cash                Flows from Financing Activities***                                                                              |   |                                                                                             |       |                                                                                                                            |   |   |   |
| Proceeds                from issuance of common stock                                                                                  |   |                                                                                             | —    |                                                                                                                            |   | 50,000 |   |
| ***Net                Increase (decrease) in Cash and Cash Equivalents***                                                              |   |                                                                                             | (3,155     | )                                                                                                                               |   | 16,524 |   |
| ***Cash                and Cash Equivalents - beginning***                                                                             |   |                                                                                             | 19,679     |                                                                                                                            |   | — |   |
| ***Cash                and Cash Equivalents - end***                                                                                   |   | $                                                                                                | 16,524     |                                                                                                                            | $      | 16,524 |   |

*See      notes to interim unaudited financial statements.*

*F-3*

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**Adagio      Acquisition III, Inc.**

***A      Development Stage Company***

***Notes      to Interim Unaudited Financial Statements***

|   | **1.** | **Development                Stage Company** |
|--------|--------|----------------------------------------------|

|  |  | ** **Adagio                Acquisition III, Inc., a development stage company (the “Company”), was                incorporated in the name of Scimitar Acquisition III, Inc., in the                State                of Delaware on April 22, 2005. The Company changed its name to Adagio                Acquisition III, Inc. on May 25, 2005. The Company is looking to                acquire                an existing company to begin                operations. |
|--|--|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **2.** | **Summary                of Significant Accounting                Policies** |
|--------|--------|------------------------------------------------------------------------------|

|  |  |  The                accompanying financial statements are prepared in accordance with                accounting principles generally accepted in the United States. Significant                accounting policies follow: |
|--|--|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | **b.** | ***Cash                and Cash Equivalents*****-**For                purposes of the statement of cash  flows, the Company considers                highly liquid financial instruments  purchased                with a maturity of three months or less to be cash                equivalents. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **c.** | ***Income                Taxes***                -                The Company utilizes the liability method of accounting  for income                taxes. Under the liability method, deferred tax assets and                 liabilities are determined based on the differences between                financial  reporting                basis and tax basis of the assets and liabilities and are measured                 using enacted tax rates that will be in effect when the differences                are  expected to reverse. An allowance against deferred tax assets is                recognized, when it is more likely than not, that such tax benefits                will                not be realized. The Company has a deferred tax asset which is fully                offset by a valuation                allowance. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **d.** | ***Loss                per Common Share***                -                Basic loss per share is calculated using the  weighted-average number                of common shares outstanding during each  period. Diluted loss per                share includes potentially dilutive securities such  as outstanding                options and warrants, using various methods such as the  *treasury                stock*                or                *modified                treasury stock*                method in the determination of dilutive shares outstanding during                each                period. The Company does not have                any potentially dilutive                instruments. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*F-4*

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|   | **e.** | ***Fair                Value of Financial Instruments*****-**The                carrying value of cash equivalents, prepaid expenses and accounts                payable                and accrued expenses approximate fair value due to their short-term                nature. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**3.      Related Party Transactions **

|  | **4.** | **Recent                Accounting Pronouncements** |
|--|--------|-----------------------------------------------------|

|  | **5.** | **INTERIM                FINANCIAL STATEMENTS** |
|--|--------|-------------------------------------------------|

*F-5*

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**Item      2. Management’s Discussion and Analysis or Plan of Operation.**

**Item      3. Controls and Procedures**

**______________**

**PART      II — OTHER INFORMATION**

**Item      1. Legal Proceedings.**

**Item      2. Unregistered Sales of Equity Securities and Use of Proceeds.**

**Item      3. Defaults Upon Senior Securities.**

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

**Item      5. Other Information.**

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**Item        6. Exhibits. **

|  Exhibit |   |  Description                                                                                                                                                                                                                                                                                                                                        |
|---------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  *3.1    |   |  Certificate                of Incorporation                                                                                                                                                                                                                                                                                                        |
|  *3.2    |   |  Amendment                to Certificate of Incorporation                                                                                                                                                                                                                                                                                           |
|  *3.3    |   |  By-laws                                                                                                                                                                                                                                                                                                                                            |
|  31.1    |   |  Certification                of the Company’s Principal Executive Officer and Principal Financial                Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,                with                respect to the registrant’s Quarterly Report on Form 10-QSB for the year                ended December 31, 2005 |
|  32.1    |   |  Certification                of the Company’s Principal Executive Officer and Principal Financial                Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to                Section                906 of the Sarbanes Oxley Act of                2002.                                                              |

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**SIGNATURES**

|                                              |                                          |                                       |
|---------------------------------------------------|-----------------------------------------------|--------------------------------------------|
|                                              | **ADAGIO              ACQUISITION III, INC.** |
|                                         |                                     |                                  |
| Date: May              11,              2006 | By:                                 | /s/ William              P. Dioguardi |
|                                              | William              P. Dioguardi             |
|                                              | President                                     |

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