Income STREAMS III Corporation: Semi-Annual Financial Results to May 31, 2005.

TORONTO -- Income STREAMS III Corporation ("STQ STREAMS") (TSX:STQ)(TSX:STQ.E) today announced its semi-annual financial results for the six months ending May 31, 2005.

During the six months, Equity Dividend shareholders received distributions at the 7% annualized rate. Capital Yield shareholders did not receive distributions under the variable distribution program as a result of the minimum managed portfolio threshold of $18 per unit not being achieved in any month during the six months. Since inception of Income STREAMS III Equity Dividend shareholders have received a total of $4.08 per share, and the Capital Yield shareholders have received a total of $3.97 per share in distributions to May 31, 2005. The net asset value per unit (one Capital Yield share and one Equity Dividend share) was $34.53 as at May 31, 2005. The Managed Portfolio per unit was $16.92 as at May 31, 2005.

Selected Financial Information from the Semi-Annual Statement of
 Financial Operations:
($ Millions)

                                 Six months Ended   Six months Ended
                                     May 31, 2005       May 31, 2004
                                                $                  $

Income                                       .831               .762

Expenses                                    (.721)            (1.178)
                                            ------            -------

Net investment income                        .110              (.416)

Realized option premiums and
 gain on sale of investments                (.037)            (4.345)

Change in unrealized
 appreciation on
 investments/forward agreements            12.435             14.604
                                           ------             ------

Increase (decrease) in net
 assets from operations before
 distributions                             12.508              9.843

STQ STREAMS is a mutual fund corporation that invests in a diversified portfolio consisting principally of common shares issued by corporations whose shares are included in the S&P 500 and the S&P/TSE 60 Index. STQ STREAMS was launched on July 11, 2001 and its investment portfolio is actively managed by Quadravest Capital Management.

STQ STREAMS' investment objectives are to provide holders of Equity Dividend shares with; (i) monthly cash dividends in the amount of $0.0875 per share to yield 7.0% per annum, and (ii) to return the original issue price of $15.00 at termination (November 30, 2013). The objectives for holders of Capital Yield shares are to provide; (i) monthly dividends of $0.2083 per share to yield 10.0% per annum, and (ii) to return the original issue price of $25.00 at termination (November 30, 2013) by way of a forward agreement with Merrill Lynch and TD Global Finance (a guaranteed subsidiary of the TD Bank). Effective July 2002, the Corporation implemented a variable distribution program for Capital Yield shareholders, in which monthly distributions are based on the size of the Managed portfolio per unit.

Income Streams III (TSX:STQ) (TSX:STQ.E)