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Amendment No. 1 to Form 10-KSB

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-KSB/A



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|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED MARCH 31, 2005.
|- | ------------------------------------------------------------------------------------------------------------------------------



| ̈ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
 TO .
|- | -----------------------------------------------------------------------------------------------------------------------

Commission File No. 333-103651



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PARTNERS FINANCIAL CORPORATION

(Name of small business issuer in its charter)



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|                                                         |  |                                     
|-------------------------------------------------------- |  | ------------------------------------
|Florida                                                  |  | 20-1566911                          
|(State or jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                         | 
|1575 Pine Ridge Road, #15, Naples, Florida               |  | 34109                               
|(Address of principal executive offices)                 |  | (Zip Code)                          

Issuers telephone number: (239) 434-2069



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Securities registered under
Section 12(b) of the Securities Exchange Act of 1934: None.

Securities registered under Section 12(g) of the Securities
Exchange Act of 1934: None



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Indicate by check mark whether the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. ̈

Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.    Yes  x    No ̈

Check if disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best
of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.  x

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2).    Yes ̈No  x

Issuers revenues for its most recent fiscal year: $0

The total market value of the common stock held by
non-affiliates at June 10, 2005, was $0.

There were 150,000 shares of common stock outstanding at June 10, 2005. There were no shares of
preferred stock outstanding at June 10, 2005.

Documents incorporated by reference: None.

Transitional Small Business Disclosure Format: No



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TABLE OF CONTENTS



|                                            |  |   |  |     
|------------------------------------------- |  | - |  | ----
|                                            |  |   |  | Page
|PART II.                                    |  |   |  | 3   
|                                            | 
|Item 7. Financial Statements                |  | 3
|                                            |  |  
|PART III.                                   |  |   |  |     
|                                            | 
|Item 13. Exhibits and Reporting on From 8-K |  |  



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PART II

ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

PARTNERS FINANCIAL CORPORATION

(A Development Stage Company)

Naples, Florida

Audited Financial Statements

At March 31, 2005 and for the Period from February 11, 2004

(Date of Incorporation) to
March 31, 2005

(Together with Report of Independent Registered Public Accounting Firm)



3



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SIGNATURES

In accordance with Section 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                     |  |                                |  |                             
|-------------------- |  | ------------------------------ |  | ----------------------------
|                     |  | Partners Financial Corporation
|                     |  |                               
|Dated: March 7, 2006 |  | By:                            |  | /s/ James S. Weaver         
|                     |  |                                |  | James S. Weaver             
|                     |  |                                |  | Chief Executive Officer     
|                     |  |                               
|Dated: March 7, 2006 |  | By:                            |  | /s/ Charles T. DeBilio      
|                     |  |                                |  | Charles T. DeBilio          
|                     |  |                                |  | Principal Accounting Officer



4



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Index to Financial Statements

PARTNERS FINANCIAL CORPORATION

(A Development Stage Company)



|                                                                                  |  |      
|--------------------------------------------------------------------------------- |  | -----
|                                                                                  |  | Page 
|Financial Statements                                                              |  |      
|Report of Independent Registered Public Accounting Firm                           |  | F-1  
|                                                                                  | 
|Balance Sheet at March 31, 2005                                                   |  | F-2  
|                                                                                  | 
|Statement of Operations for the year ended to March 31, 2005                      |  | F-3  
|                                                                                  | 
|Statement of Stockholders Equity for the year ended March 31, 2005               |  | F-4  
|                                                                                  | 
|Statement of Cash Flows for the year ended March 31, 2005                         |  | F-5  
|                                                                                  | 
|Notes to Financial Statements at March 31, 2005 and the year ended March 31, 2005 |  | F-6-7



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Report of Independent Registered Public Accounting Firm

Partners Financial Corporation

Naples, Florida:

We have audited the accompanying balance sheet of Partners Financial Corporation (the Company) as of March 31, 2005, and the related statements of operations, stockholders equity and cash flows for the year ended
March 31, 2005. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (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. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides 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 the Company as of
March 31, 2005, and the results of its operations and its cash flows for the year ended March 31, 2005, in conformity with U.S. generally accepted accounting principles.

LOGO

HACKER, JOHNSON & SMITH PA

Tampa, Florida

June 28, 2005



F-1



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PARTNERS FINANCIAL CORPORATION

(A Development Stage Company)

Balance Sheet



|                                                                                                |  |               |          |  
|----------------------------------------------------------------------------------------------- |  | ------------- | -------- | -
|                                                                                                |  | March 31,2005 |         
|Assets                                                                                          |  |               |          |  
|Cash                                                                                            |  | $             | 32,221   |  
|Equipment                                                                                       |  |               | 140,265  |  
|Prepaid common stock offering costs                                                             |  |               | 62,884   |  
|Deposits on property and equipment                                                              |  |               | 149,309  |  
|Other assets                                                                                    |  |               | 27,148   |  
|                                                                                                |  |               |          |  
|Total                                                                                           |  | $             | 411,827  |  
|                                                                                                |  |               |          |  
|Liabilities and Stockholders Equity                                                            |  |               |          |  
|Liabilities:                                                                                    |  |               |          |  
|Other liabilities                                                                               |  |               | 3,872    |  
|Note payable                                                                                    |  |               | 401,050  |  
|                                                                                                |  |               |          |  
|Total liabilities                                                                               |  |               | 404,922  |  
|                                                                                                |  |               |          |  
|Commitments and related party transactions (Notes 3 and 5)                                      |  |               |          |  
|                                                                                                | 
|Stockholders equity:                                                                           |  |               |          |  
|Preferred stock, no par value, 1,000,000 shares authorized, 2,350 shares issued and outstanding |  |               | 235,000  |  
|Common stock, $.01 par value, 9,000,000 shares authorized, none issued or outstanding           |  |               |         |  
|Deficit accumulated during the development stage                                                |  |               | (228,095 | )
|                                                                                                |  |               |          |  
|Total stockholders equity                                                                      |  |               | 6,905    |  
|                                                                                                |  |               |          |  
|Total                                                                                           |  | $             | 411,827  |  
|                                                                                                |  |               |          |  

See Accompanying Notes to Financial Statements.



F-2



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PARTNERS FINANCIAL CORPORATION

(A Development Stage Company)

Statement of Operations



|                                                  |  |                                  |        
|------------------------------------------------- |  | -------------------------------- | -------
|                                                  |  | For the year endedMarch 31, 2005
|Organizational expenses:                          |  |                                  |        
|Interest Expense                                  |  | $                                | 2,611  
|Salaries and employee benefits                    |  |                                  | 79,283 
|Consulting Expense                                |  |                                  | 53,336 
|Application fees                                  |  |                                  | 14,745 
|Professional fees                                 |  |                                  | 9,454  
|Air/fuel/mileage                                  |  |                                  | 7,176  
|Meals & entertainment                             |  |                                  | 5,952  
|Marketing and design expenses                     |  |                                  | 4,464  
|Insurance expense                                 |  |                                  | 4,405  
|Telephone expense                                 |  |                                  | 3,936  
|Office supplies                                   |  |                                  | 2,788  
|Professional development                          |  |                                  | 2,765  
|Lodging                                           |  |                                  | 2,754  
|Other miscellaneous organizational expenses       |  |                                  | 34,426 
|                                                  |  |                                  |        
|Total organizational expenses                     |  |                                  | 228,095
|                                                  |  |                                  |        
|Net loss accumulated during the development stage |  | $                                | 228,095
|                                                  |  |                                  |        

See Accompanying Notes to Financial Statements.



F-3



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PARTNERS FINANCIAL CORPORATION

(A Development Stage Company)

Statement of Stockholders Equity

For the year ended March 31, 2005



|                                                  |  |                |         |             |   |                    |          |   |                          |          |  
|------------------------------------------------- |  | -------------- | ------- | ----------- | - | ------------------ | -------- | - | ------------------------ | -------- | -
|                                                  |  | PreferredStock |         | CommonStock |   | AccumulatedDeficit |          |   | TotalStockholdersEquity |         
|Balance at March 31, 2004                         |  | $              |        |             |  |                    |         |   |                          |         |  
|Net loss accumulated during the Development stage |  | $              |        |             |  |                    | (228,095 | ) |                          | (228,095 | )
|Issuance of preferred stock                       |  |                | 235,000 |             |  |                    |         |   |                          | 235,000  |  
|                                                  |  |                |         |             |   |                    |          |   |                          |          |  
|Balance at March 31, 2005                         |  | $              | 235,000 |             |  |                    | (228,095 | ) |                          | 6,905    |  
|                                                  |  |                |         |             |   |                    |          |   |                          |          |  

See Accompanying Notes to Financial Statements.



F-4



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PARTNERS FINANCIAL CORPORATION

(A Development Stage Company)

Statement of Cash Flows



|                                                                               |  |                                  |          |  
|------------------------------------------------------------------------------ |  | -------------------------------- | -------- | -
|                                                                               |  | For the year endedMarch 31, 2005 |         
|Cash flows used in organizational activities during the Development stage:     |  |                                  |          |  
|Net loss accumulated during the development stage                              |  | $                                | (228,095 | )
|Increase in other assets                                                       |  |                                  | (27,148  | )
|Increase in other liabilities                                                  |  |                                  | 3,872    |  
|                                                                               |  |                                  |          |  
|Cash flows used in organizational activities during the Development stage      |  |                                  | (251,371 | )
|                                                                               |  |                                  |          |  
|Cash flows from investing activities:                                          |  |                                  |          |  
|Purchase of equipment                                                          |  |                                  | (140,265 | )
|Deposits on property and equipment                                             |  |                                  | (149,309 | )
|                                                                               |  |                                  |          |  
|Net cash used in investing activities                                          |  |                                  | (289,574 | )
|                                                                               |  |                                  |          |  
|Cash flows from financing activities:                                          |  |                                  |          |  
|Proceeds received from organizers                                              |  |                                  | 130,000  |  
|Proceeds from issuance of preferred stock                                      |  |                                  | 105,000  |  
|Proceeds from note payable                                                     |  |                                  | 401,050  |  
|Payment of common stock offering costs                                         |  |                                  | (62,884  | )
|                                                                               |  |                                  |          |  
|Net cash provided by financing activities                                      |  |                                  | 573,166  |  
|                                                                               |  |                                  |          |  
|Net increase in cash                                                           |  |                                  | 32,221   |  
|                                                                               | 
|Cash at beginning of period                                                    |  |                                  |         |  
|                                                                               |  |                                  |          |  
|Cash at end of period                                                          |  | $                                | 32,221   |  
|                                                                               |  |                                  |          |  
|Supplemental disclosures of cash flow information-Cash paid during period for: |  |                                  |          |  
|Interest                                                                       |  | $                                |         |  
|                                                                               |  |                                  |          |  
|Income taxes                                                                   |  | $                                |         |  
|                                                                               |  |                                  |          |  
|Noncash transaction-Transfer of due to organizers to preferred stock           |  | $                                | 130,000  |  
|                                                                               |  |                                  |          |  

See Accompanying Notes to Financial Statements.



F-5



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PARTNERS FINANCIAL CORPORATION

(A Development Stage Company)

Notes to Financial Statements

At
March 31, 2005 and the Period from February 11, 2004

(Date of Incorporation) to March 31, 2005

(1) Summary of Significant Accounting Policies

General.Partners Financial Corporation (the Company) was incorporated on February 11, 2004 in the State of Florida. There were no financial transactions at the Company until July 2004. The Company
plans to acquire 100% of the outstanding shares of Partners Bank (the Bank), which is planned to be chartered as a federal savings bank and located in Naples, Florida. The operations of the Company, which initially are intended to
consist solely of the ownership of the Bank, have not commenced as of March 31, 2005. Therefore, with the exception of organizational costs, which are being expensed when incurred, accounting policies have not been established. The Company has
adopted a fiscal year end of March 31.

Estimates. The preparation of financial statements in conformity with U.S.
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.

(2) Organization

On October 18, 2004, the Organizers of the Company filed applications for authority to become a thrift holding company and to
organize a federally chartered savings bank with the Office of Thrift Supervision (OTS) and on October 19, 2004, the Organizers filed an application for federal deposit insurance with the Federal Deposit Insurance Corporation which
was declared complete on January 28, 2005.

(3) Commitments

The Company has entered into a purchase agreement dated October 19, 2004 to purchase a parcel of land for $996,000 for which they have paid a $96,000 deposit. The Company expects to close on the purchase of this
property in the second quarter of fiscal 2005. The Company plans to purchase the parcel of land with the proceeds from the sale of common stock (see Note 5). The Company expects to construct on this land the main office of the Bank and an office for
the Company. The developer of this project is related to a director of the Company. Also architectural services of approximately $107,000 will be provided by a company owned by a director.

The Banks initial main office will be a store front located in a strip retail shopping center. The lease is for $7,660 a month which expires in
August 2005 and has a six month and five year renewal option. The Company expects to use this location as a branch office after the main office facility is completed. The Company utilized the services of businesses owned by two directors for
architectural and general contractor services at a total cost to the Company of approximately $12,900. The Company is currently negotiating a lease agreement for a new branch which will replace the store front location in fiscal 2006. This branch
will be leased from a company owned by various directors.

(continued)



F-6



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PARTNERS FINANCIAL CORPORATION

(A Development Stage Company)

Notes to Financial Statements, Continued

(4) Note Payable

On
October 11, 2004, the Company obtained a $300,000 line of credit from the Independent Bankers Bank of Florida, Lake Mary, Florida. The line bears interest at the prime rate minus one percent. It is unsecured, but guaranteed by the
Companys Organizers. On November 15, 2004 the line was increased to $500,000. At March 31, 2005 the balance of the line outstanding was $401,050. This note payable was paid-off in May, 2005.

(5) Sale of Common Shares and Warrants

In a
Prospectus dated March 18, 2005, the Company offered a total of 1,500,000 shares of its common stock to the public. During the offering period, 1,500,000 shares were included in units with a unit consisting of one share of common stock and one
warrant. Each warrant will entitle the holder thereof to purchase one share of additional common stock at $10. The price per unit was $10. A total of 1,500,000 units were offered for sale. The warrants are exercisable during the 36 month period
following the commencement of banking operations. After the sale of 1,500,000 units has been completed, up to 1,500,000 shares will be available to holders of the warrants. However there can be no assurance given that any of the warrants will be
exercised. The Company expects to incur approximately $95,000 in offering costs relating to this sale. As of June 10, 2005, the Company has issued 150,000 shares of common stock to 14 shareholders for $1.5 million.

The Company intends to adopt a directors warrant plan. This plan will only be adopted if the OTS consents. In the proposed plan the exercise price
of the warrant will be will be $10 per share. The warrant will vest over a four year period and expire in five years.

(6) Preferred Stock

The Organizers of the Company contributed $130,000 to the Company for organizational expenses incurred by the Company. On
October 14, 2004, the Company extinguished its $130,000 in debts due to its Organizers by issuing 1,300 shares of its Class A Preferred Stock, no par value (Preferred Stock). The Preferred Stock may be redeemed by the Company
at any time for $100 per share and will only pay a dividend when and if declared by the Board of Directors. Holders of the Preferred Stock do not have voting rights, but do have a liquidation preference in the event the Company is liquidated or
dissolved.

At March 31, 2005, the Company had sold a total of 2,350 shares of Class A Preferred Stock to the Organizers for
$235,000.



F-7



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ITEM 13. EXHIBITS

The following exhibits are filed with the Securities and Exchange Commission and are incorporated by
reference into this Registration Statement. The Exhibits denominated with an (a) were filed with the Companys Form SB-2 which was filed with the Securities and Exchange Committee on October 29, 2004, the Exhibits denominated with a
(b) were filed with the Companys Pre-Effective Amendment Number four to Form SB-2 which was filed with the Securities and Exchange Commission on March 16, 2005.



|              |  |                                                                                                                                     
|------------- |  | ------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description of Exhibit                                                                                                              
|(a) 3.1       |  | Articles of Incorporation                                                                                                           
|              | 
|(a) 3.2       |  | Bylaws                                                                                                                              
|              | 
|(a) 4.1       |  | Specimen Common Stock Certificate                                                                                                   
|              | 
|(b) 4.2       |  | 2004 Warrant Plan  included in Prospectus as Appendix A                                                                            
|              | 
|(b) 4.3       |  | Form of Proposed Directors Warrant Plan                                                                                             
|              | 
|(a) 10.1      |  | Sales Contract for Main Office                                                                                                      
|              | 
|31.1          |  | Certification Pursuant to Rule 13a-14(a)/15d-14(a) Under the Securities Exchange Act of 1934  President and Chief Executive Officer
|              | 
|31.2          |  | Certification Pursuant to Rule 13a-14(a)/15d-14(a) Under the Securities Exchange Act of 1934  Chief Financial Officer              
|              | 
|32.1          |  | Certification Pursuant to 18 U.S.C. Section 1350 Under the Securities Exchange Act of 1934  President and Chief Executive Officer  
|              | 
|32.2          |  | Certification Pursuant to 18 U.S.C. Section 1350 Under the Securities Exchange Act of 1934  Chief Financial Officer