UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



Form 10-KSB



(Mark One)

[X]

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



For the fiscal year ended December 31, 2003



[  ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the transition period from _______  to _______



Commission file number 000-49993



HAMPTONS LUXURY HOMES, INC.

(Name of Small Business Issuer in its Charter)



|Delaware                                                       |  | 11-3320705                          
|-------------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer
Identification No.)
|                                                               |  |                                     
|PO Box 871                                                     |  |                                     
|367 Butter Lane
Bridgehampton, New York                        |  | 11932                               
|(Address of principal Executive Offices)                       |  | (Zip Code)                          



Issuers Telephone Number: 631- 537-1600



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

None



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

Common Stock par value $.001 per share



Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 No _X__



Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form 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-KSB or any amendment to this Form 10-KSB. [X]



State Issuers revenues for its most recent year: $29,530 as of December 31, 2004.



1







The number of shares outstanding of each of the Registrants classes of common stock, as of June 30, 2005 is 32,210,000 shares, all of one class, $.0001 par value per share.  Of this number, 2,210,000 shares were held by non-affiliates of the Registrant.



The Companys common stock has not traded on the OTCBB or any national exchange and accordingly, there is no aggregate market value to be indicated for such shares.  The value of the 2,210,000 shares held by non-affiliates, based upon the book value as of December 31, 2004 is $1,073.



*Affiliates for the purpose of this item refers to the Registrants officers and directors and/or any persons or firms (excluding those brokerage firms and/or clearing houses and/or depository companies holding Registrants securities as record holders only for their respective clienteles beneficial interest) owing 5% or more of the Registrants common stock, both of record and beneficially.



ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS

DURING THE PAST FIVE YEARS



Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.

Yes__________ No_________ NOT APPLICABLE







DOCUMENTS INCORPORATED BY REFERENCE



The following documents are herewith incorporated by reference: NONE



Transitional Small Business Disclosure Format

[  ] Yes  [  ] No



PART I



NOTE REGARDING FORWARD-LOOKING STATEMENTS



Certain matters discussed in this annual report statement on Form 10-KSB are forward-looking statements.  Such forward-looking statements contained in this Form 10-KSB involve risks and uncertainties, including statements as to:



·

our future operating results,

·

our business prospects,

·

our contractual arrangements and relationships with third parties,

·

the dependence of our future success on the general economy,

·

our possible financings, and

·

the adequacy of our cash resources and working capital.



2







These forward-looking statements can generally be identified as such because the context of the statement will include words such as we believe," anticipate, expect, estimate or words of similar meaning.   Similarly, statements that describe our future plans, objectives or goals are also forward-looking statements.   Such forward-looking statements are subject to certain risks and uncertainties which are described in close proximity to such statements and which could cause actual results to differ materially from those anticipated as of the date of this Form 10-KSB.   Shareholders, potential investors and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements.   The forward-looking statements included herein are only made as of the date of this report and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.



We are attempting to become current with respect to our reporting requirements under the Securities Exchange Act of 1934, as amended (the "34 Act"), so that we may have the opportunity to seek to have our securities publicly listed for trading on the OTC Bulletin Board maintained by the National Association of Securities Dealers, Inc. (the "NASD").



Item 1  DESCRIPTION OF BUSINESS



The Company was incorporated as Southampton Partners, Inc. pursuant to the General Corporation Law of the State of Delaware on May 15, 1996, and our principal office is in Bridgehampton, New York. We were formed for the initial purpose of engaging in computer software publishing and reselling, also known as "shareware." However, lack of funds made it impossible for us to establish business operations and we became inactive. Our corporate charter was revoked on March 1, 1998 by the State of Delaware for our failure to pay required taxes and for lack of a registered agent. We corrected the problems and filed a Certificate of Renewal and Revival of Certificate of Incorporation pursuant to Section 312 of the General Corporation Law of the State of Delaware, resulting in the reinstatement of our corporate charter on January 15, 1999.



For the years ended December 31, 2001 and 2002, we were inactive with no revenues whatsoever.



The following information which would otherwise not appear in this Form 10-KSB had it been timely filed, is provided solely to provide a summarized update as to events occurring passed December 31, 2003.



We remained inactive until December 2003 at which time we entered into agreements to construct nine homes for an aggregate purchase price of $2,125,000.  We intend to use an outside contractor affiliated with our president and chief financial officer to assist in the supervision of the construction. Construction of these homes is expected to start in the summer/fall of 2005 if all required permits are obtained and be completed late in the third quarter of 2006. Prior to starting construction, the customer needs to secure financing and numerous permits and approvals. As of May 2005, the customer has received a commitment for financing from Suffolk County National Bank and the permit process is underway. We will receive payments for work as performed.



In December 2003, we hired a president, Roy Dalene, and chief financial officer, Frank Dalene, both of whom have had significant experience in the construction industry and also are affiliated with the company that will be our primary subcontractor for building the homes covered by existing contracts. In 2005 we entered into several contracts to manage the construction of homes.



3







We believe that the aggregate contracts in place at August 15, 2005 have the potential to generate earnings of up to $380,000 through the third quarter of 2006 if they are completed as planned without unexpected delays or problems. We cannot provide any assurances that the contracts will be completed as planned without problems or delays.



In December 2003, we paid $2,000 to become an independent dealer of The Barden & Robeson Corporation. Barden is a custom panelized manufacturer which supplies materials for the housing and light industrial industries. Barden makes products for framing and roofing, as well as interior trim and cabinetry products. We earned our first commissions relating to the sale of Barden products in August 2004. All of our revenue in 2004 relates to the Barden dealership.



In October 2003, we changed our name to Hamptons Luxury Homes, Inc.



Employees



At June 30, 2005, we had two employees, neither of whom is currently serving in a fulltime capacity.



Item 2  DESCRIPTION OF PROPERTY



We operate out of office space provided by our president and chief financial officer at no cost to us. No lease agreement exists.



Item 3 -- LEGAL PROCEEDINGS



We are not involved in any litigation.



Item 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



None



Part II



Item 5 -- MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASE OF EQUITY SECURITIES



The Company became subject to Securities Exchange Act Reporting Requirements in 2000. There is no current public market for the shares of our common stock.  No symbol has been assigned for our securities, and our securities have not been listed or quoted on any Exchange to date.  There can be no assurance that a liquid market for our securities will ever develop. Transfer of our common stock may also be restricted under the securities or blue sky laws of various states and foreign jurisdictions. Consequently, investors may not be able to liquidate their investments and should be prepared to hold the common stock for an indefinite period of time.



4







We have never paid any cash dividends on shares of our common sock and do not anticipate that we will pay dividends in the foreseeable future. We intend to apply any earnings to fund the development of our business. The purchase of shares of common stock is inappropriate for investors seeking current or near term income.



As of the close of business on June 30, 2005, there were 118 stockholders of record of our common stock, and 32,210,000 shares were issued and outstanding.



We have never repurchased any of our equity securities.



Quoting and Trading of our Common Stock



There is no established trading market for our common stock.  Application will be made to quote the shares of our common stock on the OTCBB. There can be no assurance as to whether our application will be accepted or, if accepted, the prices at which our common stock will trade if a trading market develops, of which there can be no assurance.  Until our common stock is fully distributed and an orderly market develops, if ever, the price at which it trades is likely to fluctuate significantly.  Prices for our common stock will be determined in the marketplace and may be influenced by many factors, including the depth and liquidity of the market for shares of our common stock, developments affecting our business generally, including the impact of the factors referred to in "Risk Factors," investor perception and general economic and market conditions. No assurances can be given that an orderly or liquid market will ever develop for the shares of our common stock.



General Market Risks



There is no public market for our common stock, and there can be no assurance that any market will develop in the foreseeable future.  Transfer of our common stock may also be restricted under the securities or securities regulations laws promulgated by various states and foreign jurisdictions, commonly referred to as Blue Sky laws.  Absent compliance with such individual state laws, our common stock may not be traded in such jurisdictions.  Consequently, investors may not be able to liquidate their investments and should be prepared to hold the common stock for an indefinite period of time.



The market price for our common stock, if publicly traded, is likely to be highly volatile and subject to wide fluctuations in response to factors, many of which are beyond its control, including the following:

·

actual or anticipated variations in quarterly operating results;

·

announcements by is or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;

·

additions or departures of key personnel;

·

sales or issuances of additional shares of common stock; and

·

potential litigation or regulatory matters.





5







The market prices of the securities of microcap companies have been especially volatile.  Broad market and industry factors may adversely affect the market price of our common stock, regardless of our actual operating performance.  In the past, following periods of volatility in the market price of their stock, many companies have been the subject of securities class action litigation.  A stockholder lawsuit could result in substantial costs and a diversion of management's attention and resources and would adversely affect our stock price.



The sale or availability for sale of a substantial number of shares of our common stock in the public market pursuant to Rule 144 under the Securities Act of 1933 or otherwise, could materially adversely affect the market price of the common stock and could impair the company's ability to raise additional capital through the public or private sale of its securities.  The 32,210,000 shares of common stock are "restricted securities," as that term is defined in Rule 144 and may, under certain circumstances, be sold without registration under the Securities Act of 1933.  The availability of Rule 144 to the holders of our restricted securities would be conditioned on, among other factors, the availability of certain public information concerning us.  Restricted Securities as referred to herein may be principally defined as indicated in the Securities Act of 1933, Rule 144(a)(3) Definitions:



Securities acquired directly or indirectly from the issuer, or from an affiliate of the issuer, in a transaction or chain of transactions not involving any public offering.



We have 200,000,000 authorized shares of common stock of which 32,210,000 are currently outstanding.  The board of directors, without stockholder approval, could issue up to 167,790,000 shares of common stock upon whatever terms it determines to whomever it determines, including persons or entities that would help our present management.



Item 6 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.



Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995



Information set forth herein contains  "forward-looking  statements"  which can be identified by the use of forward-looking  terminology such as "believes," "expects,"  "may," "should" or  "anticipates"  or the negative  thereof or other variations thereon or comparable terminology,  or by discussions of strategy. No assurance can be given that the future results covered by the forward-looking statements will be achieved. We caution readers that important factors may affect our actual results and could cause such results to differ materially from forward-looking statements made by or on our behalf. Such factors include, but are not limited to, changing market conditions, the impact of competitive services, products, pricing, acceptance of our services and/or products and other risks set forth  herein  and in other  filings  that we have made with the Securities and Exchange Commission.



Operations



For the years ended December 31, 2001 and 2002 we were inactive with no revenues whatsoever and remained inactive until December 2003. The following information which would otherwise not appear in this Form 10-KSB had it been timely filed, is provided solely to provide a summarized update as to events occurring passed December 31, 2003.



6







In December 2003, we entered into signed contracts covering the construction of nine homes for a total price of $2,125,000 and subsequently entered into management contracts to supervise construction projects and have hired officers who are experienced in the construction industry and will engage an independent contractor to assist in the supervision of such construction. We believe that the aggregate contracts in place at August 15, 2005 have the potential to generate earnings of up to $380,000 through the third quarter of 2006 if they are completed as planned without unexpected delays or problems. We cannot provide any assurances that the contracts will be completed as planned without problems or delays.  As a company, we have no experience in home construction and will engage an outside contractor to supervise the construction which will take place in Southampton Township on Long Island. Construction of these homes is expected to start in the summer/fall of 2005 if all required permits are obtained and be completed in the third quarter of 2006. Prior to starting construction, the customer needs to secure financing and numerous permits and approvals are required. As of May 2005, the customer had received a commitment for financing from Suffolk County National Bank and the permit process was underway. We received a cash payment of $11,016 in December 2003 to cover upfront and planning costs of the project and will receive payments for work as performed   In December 2003, we hired a president and chief financial officer, both of whom have had significant experience in the construction industry (see Part III, Item 9) and also are affiliated with the company that will be our primary subcontractor for building the homes covered by existing contracts.



In December 2003, we paid $2,000 to become an independent dealer of The Barden & Robeson Corporation. Barden is a custom panelized manufacturer which supplies materials for the housing and light industrial industries. Barden makes products for framing and roofing, as well as interior trim and cabinetry products. We earned our first commissions relating to the sale of Barden products in August 2004. All of our revenue in 2004 relates to the Barden dealership.



We incurred total expenses of $12,449 in December 2003, consisting principally of professional fees ($5,000), the application fee to Barden ($2,000), and expenses paid to officers and consultants. We satisfied certain obligations to our past and present officers, our consultants and counsel by the issuance of 31,209,900 shares of our common stock. The issuance of these shares was recorded at fair value.



We are subject to the reporting requirements of the Exchange Act of '34.  As a result, we will incur ongoing expenses associated with professional fees for accounting, legal and a host of other expenses including annual reports and proxy statements. We estimate that these costs will range up to $75,000 per year for the next few years and will be higher if our business volume and activity increases. These obligations will reduce our ability and resources to fund other aspects of our business. We hope to be able to use our status as a public company to increase our ability to use noncash means of settling obligations, acquire land and compensate independent contractors, although there can be no assurances that we will be successful in any of those efforts.



Risk Factors



We are an early stage company with minimal operating history.







7







We have never generated significant revenues and have no assets. Therefore, we have insufficient operating history upon which an evaluation of our future performance and prospects can be made. Our future prospects must be considered in light of the risks, expenses, delays, problems and difficulties frequently encountered in the establishment of a new business. An investor in our common stock must consider the risks and difficulties frequently encountered by early stage companies operating in new and competitive markets. These risks include:



*

competition from entities that are much more established and have greater financial and technical resources than do we;



*

need  to develop infrastructure;



*

ability to access and obtain capital when required; and



*

dependence upon key personnel.



We cannot be certain that our business strategy will be successful or that we will ever be able to commence revenue generating activities. Furthermore, we believe that it is possible that we will incur operating losses and negative cash flow for the foreseeable future.



We have no financial resources, and our auditors report states that there is substantial doubt about our ability to continue as a going concern.



We have no financial resources. Our auditors state in their opinion on our financial statements that this lack of resources causes substantial doubt about our ability to continue as a going concern. No assurances can be given that we will generate sufficient revenue or obtain necessary financing to continue as a going concern.



We have contracts to perform work in an area of business in which we have limited meaningful experience.



We have contracts to construct nine homes and perform management services for other construction projects. As a company, we have never been engaged in home building. Although our current management team has experience in the construction industry, we will be heavily reliant on subcontractors to complete much of the required work. We can give no assurances that the subcontractors will be successful in completing the work or that the required work will be performed in a profitable manner. If the work is not completed on time in a profitable manner, we lack the resources to correct material problems. If problems do arise that require the expenditure of additional funds, that requirement may require us to cease operations.



We will need financing which may not be available.



We have not established a source of equity or debt financing. We will require financing to establish our business and implement our strategic plan if we are unable to generate significant revenue generating contracts. There can be no assurance that financing will be available or found. If we are unable to obtain financing, we may not be able to attain profitable operations.



8







If we are unable to obtain financing or if the financing we do obtain is insufficient to cover any operating losses that we may incur, we may substantially curtail or terminate our operations or be required to seek other business opportunities through strategic alliances, acquisitions or other arrangements that may dilute the interests of existing stockholders.



Shareholders may be diluted significantly through our efforts to obtain financing and satisfy obligations.



We have no committed source of financing. Wherever possible, we will attempt to use noncash consideration to satisfy obligations. In many instances, we believe that the noncash consideration may consist of shares of our stock. In addition, if a trading market develops for our common stock, we may attempt to raise capital by selling shares of our common stock, possibly at a discount to market. These actions will result in dilution of the ownership interests of existing shareholders, and that dilution may be material.



Our board of directors is authorized to issue substantial additional shares of stock, which would dilute the ownership of our stockholders.





We are authorized to issue up to 200,000,000 shares of common stock, par value $0.0001 per share.  Our board of directors also has authority, without action or vote of the shareholders, to issue all or part of the authorized but unissued shares (167,790,000).  Any such issuance will dilute the percentage ownership of shareholders and may further dilute the book value of the common stock. Such issuances may also serve to enhance existing managements ability to maintain control of the Company.



We will be heavily dependent on the services of Roy Dalene and Frank Dalene.

Our business strategy is completely dependent upon the knowledge and business contacts of Roy Dalene, our president and Frank Dalene, our vice president and chief financial officer each of whom assumed their positions in December 2003. If we were to lose the services of Roy and/or Frank Dalene, it is unlikely that we would be able to implement our business plan of constructing homes even if some financing is obtained.



We will need to engage and retain qualified employees and contractors to implement our strategy.



We will have to locate, engage and retain qualified and experienced professionals to undertake the work required under contracts obtained by us. If we are unable to attract experienced industry professionals, it is unlikely that we will be able to generate a material amount of revenue. No assurances can be given that we will be able to locate, engage or retain qualified industry professionals.



Substantially all of our construction contracts are with a very limited number of  customers.



We currently have contracts to build nine homes for an aggregate sales price of $2,125,000 and contracts to manage the construction of homes. We believe that the aggregate contracts in place at August 15, 2005 have the potential to generate earnings of up to $380,000 through the third quarter of 2006 if they are completed as planned without unexpected delays or problems. We cannot provide any assurances that the contracts will be completed as planned without problems or delays. If there are delays affecting any project, it will adversely affect a material portion of our existing business.



9







Our articles of incorporation provide for indemnification of officers and directors at our expense and limit their liability.



Our articles of incorporation and applicable Delaware law provide for the indemnification of our directors, officers, employees, and agents, under certain circumstances, against attorney's fees and other expenses incurred by them in any litigation to which they become a party arising from their association with or activities on behalf of the Company. We will also bear the expenses of such litigation for any of our directors, officers, employees, or agents, upon such person's promise to repay us therefore if it is ultimately determined that any such person shall not have been entitled to indemnification. This indemnification policy could result in substantial expenditures by us which we will be unable to recoup.



The trading price of our common stock is likely to be subject to significant fluctuations



There can be no assurance as to the prices at which our common stock will trade, if any trading market develops at all.  Until our common stock is fully distributed and an orderly market develops in our common stock, if ever, the price at which such stock trades may fluctuate significantly and may be lower or higher than the price that would otherwise be expected for a fully distributed issue.  Prices for our common stock will be determined in the marketplace and may be influenced by many factors, including:

·

the depth and liquidity of the market for our common stock,

·

developments affecting the business of Hamptons Luxury Homes generally and the impact of those factors referred to below in particular,

·

investor perception of Hamptons Luxury Homes, and

·

general economic and market conditions.



No assurance can be given that an orderly trading market or any trading market will ever develop for our stock.



Our common stock has no prior trading market or liquidity, and there can be no assurances that any trading market will develop.



As of June 30, 2005, there has not been any public or established trading market for our common stock.  We will seek to have a market maker file an application with the NASD on our behalf to quote the shares of our common stock on the OTC Bulletin Board ("OTCBB") maintained by the NASD. There can be no assurance as to whether such market maker will agree to make such a filing or, if it does, whether the application will be accepted or, if accepted, the prices at which our common stock will trade if a trading market develops, of which there can be no assurance. We are not permitted to file such application on our own behalf. If the application is accepted, we cannot predict the extent to which investor interest in the Company will lead to the development of an active, liquid trading market.  Active trading markets generally result in lower price volatility and more efficient execution of buy and sell orders for investors.



10







In addition, our common stock is unlikely to be followed by any market analysts, and there may be few if any institutions acting as market makers for the common stock. Either of these factors could adversely affect the liquidity and trading price of our common stock. Also, the stock market in general has experienced extreme price and volume volatility that has especially affected the market prices of securities of many companies. At times, this volatility has been unrelated to the operating performance of particular companies. These broad market and industry fluctuations may adversely affect the trading price of the common stock, regardless of our actual operating performance.



If a market develops for our shares, rule 144 sales may depress prices in that market.



Of the 32,210,000 outstanding shares of common stock held by present stockholders, 30,000,000 are restricted securities within the meaning of Rule 144 under the Securities Act of 1933, as amended. Of the restricted shares, 1,000,100 were issued in 1997 and the remainder were issued in December 2003.



As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements of Rule 144 or other applicable exemptions from registration under the 1933 Act and as required under applicable state securities laws.  Rule 144 provides in essence that a person who has held restricted securities for a prescribed period may, under certain conditions, sell every three months, in brokerage transactions, a number of shares that does not exceed 1.0% of a companys outstanding common stock  The alternative average weekly trading volume during the four calendar weeks prior to the sale will not be available to our shareholders being that the OTCBB (if and when we are listed for trading) is not an automated quotation system and, accordingly, market based volume limitations are not available for securities quoted only over the OTCBB.  As a result of revisions to Rule 144 which became effective on or about April 29, 1997, there is no limit on the amount of restricted securities that may be sold by a non-affiliate (i.e., a stockholder who is not an officer, director or control person of the Company) after the restricted securities have been held by the owner for a period of two years. In our case this 2 year (Rule 144K) holding period currently applies to 210,000 shares of our common stock and will apply to a further 2,000,000 shares on December 11, 2005. A sale under Rule 144 or under any other exemption from the 1933 Act, if available, or pursuant to subsequent registrations of shares of common stock of present stockholders, may have a depressive effect upon the price of the common stock in any market that may develop.



Any market that develops in shares of our common stock will be subject to the penny stock restrictions



Until our shares of common stock qualify for inclusion in the NASDAQ system, if ever, the trading of our securities, if any, will be in the over-the-counter markets which are commonly referred to as the "pink sheets" or on the OTCBB. As a result, an investor may find it difficult to dispose of, or to obtain accurate quotations as to the price of, our securities.



SEC Rule 15g-9 establishes the definition of a "penny stock," for purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to a limited number of exceptions. It is likely that our shares will be considered to be penny stocks for the immediately foreseeable future. For any transaction involving a penny stock, unless exempt, the penny stock rules require that a broker or dealer approve a person's account for transactions in penny stocks and the broker or dealer receive from the investor a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased.



11







In order to approve a person's account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience and objectives of the person and make a reasonable determination that the transactions in penny stocks are suitable for that person and that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.



The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, which, in highlight form, sets forth:



·

the basis on which the broker or dealer made the suitability determination, and



·

that the broker or dealer received a signed, written agreement from the investor prior to the transaction.



Disclosure also has to be made about the risks of investing in penny stock in both public offerings and in secondary trading and commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.



"Blue Sky" laws of the various states may further reduce the liquidity of our shares in any market that may develop.



Because the securities registered hereunder have not been registered for resale under the blue sky laws of any state, the holders of such shares and persons who desire to purchase them in any trading market that might develop in the future, should be aware that there may be significant state blue-sky law restrictions upon the ability of investors to sell the securities and of purchasers to purchase the securities. Accordingly, investors should consider the secondary market for our securities to be a limited one.



There are significant potential conflicts of interest



Neither of our key personnel (two persons) is required to commit full time to our affairs and, according­ly, these individuals may have conflicts of interest in allocating management time among various business activities. In the course of other business activities, our president or chief financial officer may become aware of business opportu­nities which may be appropriate for presenta­tion to us, as well as the other entities with which they are affiliated.  As such, there may have con­flicts of interest in determining to which entity a particular business opportunity should be presented.



In an effort to resolve such potential conflicts of interest the following oral agreements have been entered into with our president and chief financial officer:



·

any business opportunities that they may become aware of independently or directly through their association with us (as opposed to disclosure to them of such business opportunities by management or consultants associated with other businesses with which they are affiliated) would be presented by them solely to us;



12







·

any business opportunities disclosed to them by the management of other businesses with which they are associated would not be presented by them to us, unless and until the other business passed upon and approved such referral: and



·

any business opportunities disclosed to them by us would not be presented by them to other businesses with which they are associated, unless and until passed upon and approved such referral.



In the event that the same business opportunity is presented to them by both us and one of the other businesses with which they are involved, they shall only render their services to the entity that first disclosed such business opportunity to them.



For all of the foregoing reasons and others set forth herein, an investment in Hamptons Luxury Homes, Inc.s securities involve a high degree of risk.  Any person considering an investment in such securities should be aware of these and other risk factors set forth in this Form 10-KSB.



Liquidity



The Company has no committed source of debt or equity capital.



On April 29, 2005, the Company, together with another entity controlled by the Companys President and CFO, entered into an agreement with Chanin Capital L.L.C (Chanin) under which Chanin agreed to seek out possible investments funds in the form of: (i) common stock, convertible preferred stock, convertible debt securities, preferred stock, equity-linked securities, equity or equity-linked joint ventures or other equity or equity-linked arrangements, including, without limitation, debt securities (as distinguished from bank debt) with warrants; or (ii) secured or unsecured loans or lines of credit. Chanin is entitled to receive a fee ranging from 1% to 6% of amounts raised. Chanin received a fee of $50,000 concurrent with executing the Agreement which was paid by the other entity controlled by the Companys President and CFO. There are no assurances that any investment funds will be raised in connection with this Agreement.



New Accounting Pronouncements



In June 2003, the Securities and Exchange Commission (SEC) adopted final rules under Section 404 of the Sarbanes-Oxley Act of 2002 (Section 404). Commencing with our annual report for the year ended December 31, 2006, we will be required to include a report of management on our internal control over financial reporting. The internal control report must include a statement



·

of managements responsibility for establishing and maintaining adequate internal control over our financial reporting;



·

of managements assessment of the effectiveness of our internal control over financial reporting as of year end;



13







·

of the framework used by management to evaluate the effectiveness of our internal control over financial reporting; and



·

that our independent accounting firm has issued an attestation report on managements assessment of our internal control over financial reporting, which report is also required to be filed.



In December 2004, the FASB issued FASB SFAS No. 123 (revised 2004), Share-Based Payment, which is a revision of SFAS No. 123, Accounting for Stock-Based Compensation. SFAS No. 123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and amends SFAS No. 95, Statement of Cash Flows. Generally, the approach in SFAS No. 123(R) is similar to the approach described in SFAS No. 123. However, SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. The new standard will be effective for the Company in the fiscal year ended December 31, 2006. The Company has not yet assessed the impact on future operations of adopting this new standard.



Critical Accounting Policies



Construction Revenue Recognition.As discussed in our financial statements, housing and other real estate sales are recognized when title passes to the buyer and all of the following conditions are met: a sale is consummated, a significant down payment is received, the earnings process is complete and the collection of any remaining receivables is reasonably assured. The percentage of completion method is not applied.



Seasonality



Construction business in the Northeast portion of the United States is affected by the weather. Less work is done in winter months than is done throughout the remainder of the year.



Item 7 -- FINANCIAL STATEMENTS



The financial statements filed as part of this Annual Report on Form 10-KSB are set forth starting on page 24.



Item 8 -- CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE



On July 20, 2005, the Board of Directors of Hamptons Luxury Homes, Inc., dismissed Sherb & Co., LLP (Sherb) as the Companys independent registered public accounting firm, effective immediately.



Sherbs reports on the Companys financial statements as of and for the years ended December 31, 2002 and 2001 did not contain an adverse opinion or disclaimer of opinion, nor were such reports qualified or modified as to uncertainty, audit scope, or accounting principles; however each year-end report contained a modification paragraph that expressed substantial doubt about the Companys ability to continue as a going concern.



14







During the period from January 13, 2005, the date that the Company engaged Sherb, through July 20, 2005, there were no disagreements with Sherb on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of Sherb, would have caused it to make reference to the subject matter of the disagreements in connection with its reports. None of the reportable events set forth in Item 304(a)(1)(iv)(B) of Regulation S-B occurred within the Companys audited periods nor through July 20, 2005.



The Company has engaged Most & Company, LLP (Mostco) to serve as its independent public accounting firm. During the two years ended December 31, 2004 and through the date hereof, neither the Company nor anyone on its behalf consulted Mostco regarding either the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Companys financial statements, nor has Mostco provided to the Company a written report or oral advice regarding such principles or audit opinion.



Item 8A-- CONTROLS AND PROCEDURES



Messrs. Roy and Frank Dalene currently serve as our chief executive officer and our chief financial officer, respectively (collectively, the "Certifying Officers") and are responsible for establishing and maintaining disclosure controls and procedures for us.  They have  concluded (based upon their evaluation of these controls and procedures as of a date within 90 days of the filing of this report) that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in this Form 10-KSB is accumulated and communicated to management, including our principal executive officers as appropriate, to allow timely decisions regarding required disclosure.



The Certifying Officers also have indicated that there were no significant changes in our internal controls or other factors that could significantly affect such controls subsequent to the date of their evaluation, and there were no corrective actions with regard to significant deficiencies and material weaknesses.



Item 8B OTHER INFORMATION



None



PART III



Item 9 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT



Our current executive officers and directors are as follows:



|Name         | Age | Title                                                          
|------------ | --- | ---------------------------------------------------------------
|             |     |                                                                
|Roy Dalene   | 46  | President, CEO and chairman of the Board of Directors          
|Frank Dalene | 50  | Vice President, Treasurer, chief financial officer and director





15







Roy Daleneassumed each of his positions in December 2003. He is also a senior vice president and co-founder of Telemark, Inc. (which was founded in 1978 as Telemark Construction), a group of affiliated construction companies based in Bridgehampton, NY which will serve as our primary subcontractor on our homebuilding contracts. Prior thereto, he was employed by Bechtel Power Corporation. He served on the Advisory Board for Custom Builder Magazine and Custom Builder National Conference and Expo. He is active in many civic and philanthropic endeavors and served as a judge for the ARDA Custom Home of the Year Award. Mr. Dalene received his Bachelor of Science degree in civil engineering from Polytechnic Institute of New York.



Frank Dalene  assumed each of his positions in December 2003. He is president and a co-founder of Telemark, Inc. (which was founded in 1978 as Telemark Construction), a group of affiliated construction companies based in Bridgehampton, NY which will serve as our primary subcontractor on our homebuilding contracts. He is active in professional and civic affairs and has served on the Advisory Board for Custom Builder Magazine and Custom Builder National Conference and Expo. He served as an Advisory Board member for The American Council of Construction Consultants, Co-Chair of the Education Committee of the Long Island Builders Institute. He currently serves on the Business Advisory Council of the National Republican Congressional Committee. Mr. Dalene also serves on the Board of Directors of the Long Island Builders Institute, served on the Board of the New York State Builders Association and the National Association of Home Builders. He is a member of the Long Island Builders Institute, New York State Builders Association, National Association of Home Builders, and International Who's Who of Professionals. Mr. Dalene, who is the brother of Roy Dalene, received his Bachelor of Arts Degree from Nyack College.



NOTE: Robert Wilson, our founder, resigned from all positions held with us effective December 10, 2003.



Board of Directors



All directors hold office until the completion of their term of office, which is not longer than three years, or until their successors have been elected.



Committees of the Board of Directors



Concurrent with having sufficient members and resources, our board of directors will establish an audit committee and a compensation committee.  The audit committee will review the results and scope of the audit and other services provided by the independent auditors and review and evaluate the system of internal controls.  The compensation committee will manage our stock option plan, once established, and review and recommend compensation arrangements for the officers. No final determination has yet been made as to the memberships of these committees or when we will have sufficient members to establish committees.



All directors will be reimbursed by us for any expenses incurred in attending directors' meetings provided that we have the resources to pay these fees.  We will consider applying for officers and directors liability insurance if we have the resources to do so.



16







Conflicts of Interest



See Risk Factor entitled There are significant potential conflicts of interest.



Item 10 -- Executive Compensation



No officer, director or employee has received compensation of $100,000 or more, and no director, officer or employee has a contract or commitment to receive annual compensation in excess of $100,000.





ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS



The following table sets forth information known to us regarding beneficial ownership of our common stock as of June 30, 2005 by:



·

each person known or believed by us to own, directly or beneficially, more than 5% of our common stock,



·

each of our directors, and



·

all of our officers and directors as a group.



Except as otherwise indicated, we believe that the beneficial owners of the common stock listed below, based on information furnished by the owners, have sole investment and voting power over the shares.



|Name and Address of
Beneficial Owner1           | Number of Shares
Beneficially Owned2 | Percent of Class3
|----------------------------------------------- | ------------------------------------ | -----------------
|                                                |                                      |                  
|Roy Dalene                                      | 10,000,0003                          | 31.05            
|Frank Dalene                                    | 10,000,0003                          | 31.05            
|Robert A. Wilson                                | 10,000,00034                         | 31.05            
|Officers and Directors
as  a group ( 2 members) | 20,000,0003                          | 62.09            



1.

The address for each person is P.O. Box 871, 367 Butter Lane, Bridgehampton, NY 11932.



2.

Unless otherwise indicated, the Company believes that all persons named in the table have sole voting and investment power with respect to all shares of the Common Stock beneficially owned by them.  A person is deemed to be the beneficial owner of securities which may be acquired by such person within 60 days from the date indicated above upon the exercise of options, warrants or convertible securities.  Each beneficial owners percentage ownership is determined by assuming that options, warrants or convertible securities that are held by such person (but not those held by any other person) and which are exercisable within 60 days of the date indicated above, have been exercised.



17







3.

Roy Dalene and Frank Dalene each received 10,000,000 shares in December 2003 in satisfaction of amounts due to them for services rendered. Mr. Wilson, who had been president and a director until December 2003, at which time he resigned both positions, received 9,209,900 shares in December 2003 for services previously rendered.



4.

Mr. Wilson has agreed to waive all voting rights with respect to the 10,000,000 shares held by him so long as those shares are in his name and so long as those shares bear a restricted legend.  Mr. Wilson has also agreed that in the event he desires to sell all or any portion of the restricted Company shares owned by him, that a condition of such sale would require any purchasers to similarly forego any voting rights so long as such shares bear a restricted legend.



The Company and Mr. Wilson have agreed that all provisions relating to non-voting as described above, shall no longer be applicable with respect to all or a portion of such shares that are subsequently sold by Mr. Wilson (or sold by any person who acquired all or a portion of the 10,000,000 shares currently owned by Mr. Wilson from Mr. Wilson with restricted legend) in accordance with a Registration Statement or applicable exemption whereby the purchaser would receive non-legended securities.



Delaware Anti-Takeover Law



We will be subject to the provisions of Section 203 of the Delaware General Corporation Law regulating corporate takeovers. This section prohibits, subject to exceptions, publicly- traded Delaware corporations from engaging in a business combination, which includes a merger or sale of more than 10% of the corporation's assets, with any interested stockholder. An interested stockholder is generally defined as a person who, with its affiliates and associates, owns or, within three years before the time of determination of interested stockholder status, owned 15% or more of a corporation's outstanding voting securities. This prohibition does not apply if:



·

the transaction is approved by the board of directors before the time the interested stockholder attained that status;



·

upon the closing of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the start of the transaction; or



·

at or after the time the stockholder became an interested stockholder, the business combination is approved by the board and authorized at an annual or special meeting of stockholders by at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.



A Delaware corporation may opt out of this provision with an express provision in its original certificate of incorporation or an express provision in its certificate of incorporation or bylaws resulting from an amendment approved by at least a majority of the outstanding voting shares. However, we have not opted out of this provision. This provision of the Delaware General Corporation Law could prohibit or delay a merger or other takeover or change-in-control attempts and may discourage attempts to acquire us.



18







Shareholder Matters



As a Delaware corporation, we are subject to the Delaware Revised Statutes ("DRS" or "Delaware law"). Certain provisions of Delaware law create rights that might be deemed material to our shareholders. Other provisions might delay or make more difficult acquisitions of our stock or changes in our control or might also have the effect of preventing changes in our management or might make it more difficult to accomplish transactions that some of our shareholders may believe to be in their best interests.



Dissenters' Rights. Among the rights granted under Delaware law which might be considered as material is the right for shareholders to dissent from certain corporate actions and obtain payment for their shares (see Delaware Revised Statutes ("DRS") 92A.380-390). This right is subject to exceptions, summarized below, and arises in the event of mergers or plans of exchange. This right normally applies if shareholder approval of the corporate action is required either by Delaware law or by the terms of the articles of incorporation.



A shareholder does not have the right to dissent with respect to any plan of merger or exchange, if the shares held by the shareholder are part of a class of shares which are:



·

listed on a national securities exchange,



·

included in the national market system by the National Association of Securities Dealers, or



·

held of record by not less than 2,000 holders.



This exception notwithstanding, a shareholder will still have a right of dissent if it is provided for in the articles of incorporation (our certificate of incorporation does not so provide) or if the shareholders are required under the plan of merger or exchange to accept anything but cash or owner's interests, or a combination of the two, in the surviving or acquiring entity, or in any other entity falling in any of the three categories described above in this paragraph.



Inspection Rights. Delaware law also specifies that shareholders are to have the right to inspect company records. This right extends to any person who has been a shareholder of record for at least six months immediately preceding his demand. It also extends to any person holding, or authorized in writing by the holders of, at least 5% of our outstanding shares. Shareholders having this right are to be granted inspection rights upon five days' written notice. The records covered by this right include official copies of:



·

the articles of incorporation, and all amendments thereto,



·

bylaws and all amendments thereto; and



·

a stock ledger or a duplicate stock ledger, revised annually, containing the names, alphabetically arranged, of all persons who are stockholders of the corporation, showing their places of residence, if known, and the number of shares held by them, respectively.



19







In lieu of the stock ledger or duplicate stock ledger, Delaware law provides that the corporation may keep a statement setting out the name of the custodian of the stock ledger or duplicate stock ledger, and the present and complete post office address, including street and number, if any, where the stock ledger or duplicate stock ledger specified in this section is kept.



Item 12 -- CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



None, except as indicated in Part I, Item 2 as relates to the Companys office space. In addition, Frank Dalene and Roy Dalene agreed to accept an aggregate of 20,000,000 shares of common stock in December 2003 in consideration for amounts due to them for services rendered.





PART IV



Item 13--  EXHIBITS, LISTS AND REPORTS ON FORM 8-K



a.

Exhibits



|31.1 | CERTIFICATION PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002  Chief Executive Officer
|---- | -------------------------------------------------------------------------------------------------
|31.2 | CERTIFICATION PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002  Chief Financial Officer
|32.1 | CERTIFICATION PURSUANT SECTION 906 OF THE SARBANES-
OXLEY ACT OF 2002  Chief Executive Officer  
|32.2 | CERTIFICATION PURSUANT SECTION 906 OF THE SARBANES-
OXLEY ACT OF 2002  Chief Financial Officer  
|     |                                                                                                  



Item 14-- Principal Accountant Fees and Services



All fees relating to our principal accountant ($5,000) pertained to assurance services and EDGARIZATION of filings. The accounting firm performed no tax or consulting services for us.











20







**********





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







/s/ Roy Dalene



ROY DALENE

Title: President





Date:

September 13, 2005



/s/ Frank Dalene



FRANK DALENE

Title: Chief Financial Officer





Date:

September 13, 2005







21







FINANCIAL STATEMENTS







TABLE OF CONTENTS







REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

23

BALANCE SHEET

24

STATEMENTS OF OPERATIONS

25

STATEMENT OF STOCKHOLDERS DEFICIT

26

STATEMENTS OF CASH FLOWS

27

NOTES TO FINANCIAL STATEMENTS

28









22







REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the Board of Directors

Hamptons Luxury Homes, Inc.

Bridgehampton, NY



We have audited the accompanying balance sheet of Hamptons Luxury Homes, Inc. (Company) as of December 31, 2003 and the related statements of operations, stockholders deficit and cash flows for the years ended December 31, 2003 and 2002.  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.  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  Hamptons Luxury Homes, Inc. as of December 31, 2003 and the results of its operations and its cash flows for the years ended December 31, 2003 and 2002 in conformity with accounting principles generally accepted in the United States of America.



The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 3 to the financial statements, the Company has had no revenues to date and an accumulated deficit which raises substantial doubt about its ability to continue as a going concern.  Managements plans in regard to these matters are also described in Note 3.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.





/s/ Most & Company, LLP

New York, New York

August 18, 2005





23







HAMPTONS LUXURY HOMES, INC



Balance Sheet

December 31, 2003





|ASSETS                                                    |          
|--------------------------------------------------------- | ---------
|                                                          |          
|                                                          |          
|CURRENT ASSETS:                                           |          
|                                                          |          
|Cash                                                      | $   3,188
|Prepaid expenses                                          | 3,000    
|                                                          |          
|Total Current Assets                                      | 6,188    
|                                                          |          
|Deferred project costs                                    | 500      
|                                                          |          
|TOTAL ASSETS                                              | $  6,688 
|                                                          |          
|                                                          |          
|LIABILITIES AND STOCKHOLDERS DEFICIT                     |          
|                                                          |          
|CURRENT LIABILITIES:                                      |          
|                                                          |          
|Advances from customer                                    | $  11,016
|Accrued expenses                                          | 5,000    
|                                                          |          
|Total Current Liabilities                                 | 16,016   
|                                                          |          
|STOCKHOLDERS DEFICIT                                     |          
|                                                          |          
|Common stock at $0.0001 par value; authorized 200,000,000 |          
|shares; issued and outstanding 32,210,000 shares          | 3,221    
|Additional paid-in capital                                | 34,40    
|Deferred compensation                                     | (19,800) 
|Accumulated deficit                                       | (27,149) 
|                                                          |          
|Stockholders Deficit                                     | (9,328)  
|                                                          |          
|TOTAL LIABILITIES AND STOCKHOLDERS DEFICIT               | $  6,688 







See notes to financial statements.



24







HAMPTONS LUXURY HOMES, INC.



Statements of Operations

Years Ended December 31, 2003 and 2002





|                                                     | 2003          |  | 2002     
|---------------------------------------------------- | ------------- |  | ---------
|                                                     |               |  |          
|Revenue                                              | $         -   |  | $      - 
|                                                     |               |  |          
|General and administrative                           | 12,449        |  | -        
|                                                     |               |  |          
|Net loss                                             | $ (12,449)    |  | $      - 
|                                                     |               |  |          
|Basic and diluted loss per share                     | $       .(01) |  | $   .00  
|Weighted average number of common shares outstanding | 2,300,513     |  | 1,000,100
|                                                     |               |  |          
|                                                     |               |  |          
|See notes to financial statements                   





25







HAMPTONS LUXURY HOMES, INC.



Statement of Stockholders Deficit





|                                          | Common stock | Additional Paid-in Capital | Deferred Compensation | Accumulated deficit | Total     
|----------------------------------------- | ------------ | -------------------------- | --------------------- | ------------------- | ----------
|Shares                                    | Amount       |                            |                       |                     |           
|                                          |              |                            |                       |                     |           
|Balance, January 1, 2002                  | 1,000,100    | $ 100                      | $ 14,600              | $          -        | $ (14,700)
|                                          |              |                            |                       |                     |           
|                                          |              |                            |                       |                     |           
|Net loss for year ended December 31, 2002 | -            | -                          | -                     | -                   | -         
|                                          |              |                            |                       |                     |           
|Balance, December 31, 2002                | 1,000,100    | 100                        | 14,600                | -                   | (14,700)  
|                                          |              |                            |                       |                     |           
|Issuance of shares in December 2003       | 31,209,900   | 3,121                      | 19,800                | (19,800)            | -         
|                                          |              |                            |                       |                     |           
|Net loss for year ended December 31, 2003 | -            | -                          | -                     | -                   | (12,449)  
|                                          |              |                            |                       |                     |           
|Balance, December 31, 2003                | 32,210,000   | $ 3,221                    | $ 34,400              | $(19,800)           | $ (27,149)



See notes to financial statements.





26







HAMPTONS LUXURY HOMES, INC.

Statements of Cash Flows

Years Ended December 31, 2003 and 2002







|                                               |                |  |               
|---------------------------------------------- | -------------- |  | --------------
|                                               | 2003           |  | 2002          
|OPERATING ACTIVITIES:                          |                |  |               
|Net loss                                       | $    (12,449)  |  | $            -
|Adjustment to reconcile net loss to cash       |                |  |               
|used in operating activities                   |                |  |               
|Stock based compensation                       | 3,121          |  |               
|Changes in assets and liabilities              |                |  |               
|Increase in accrued expenses                   | 5,000          |  |               
|Increase in prepaid expenses                   | (3,000)        |  | -             
|Increase in deferred project costs             | (500)          |  | -             
|                                               |                |  |               
|Net Cash Used in Operating Activities          | (7,828)        |  | -             
|                                               |                |  |               
|FINANCING ACTIVITIES:                          |                |  |               
|Increase in advances from customer             | 11,016         |  | -             
|                                               |                |  |               
|INCREASE IN CASH                               | 3,188          |  | -             
|CASH AT BEGINNING OF YEAR                      | -              |  | -             
|CASH AT END OF YEAR                            | $     3,188    |  | $          -  
|                                               |                |  |               
|SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES: |                |  |               
|Cash Paid For:                                 |                |  |               
|Interest                                       | $            - |  | $           - 
|Income taxes                                   | $            - |  | $           - 
|                                               |                |  |               



See notes to financial statements



27







HAMPTONS LUXURY HOMES, INC.



NOTES TO FINANCIAL STATEMENTS







1.

ORGANIZATION AND OPERATIONS



Hamptons Luxury Homes, Inc. (Company)  was incorporated as Southampton Partners, Inc. in the State of Delaware on May 15, 1996 and, in October 2003, the Company changed its name to Hamptons Luxury Homes, Inc. The Company was inactive from January 2002 until December 2003. In December 2003, the Company commenced operations as a builder of single family homes, a provider of administrative construction services  and a distributor of building materials in the Hamptons area of Long Island, New York.



2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Use of Estimates



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.



Stock-Based Compensation



Compensation costs for common stock issued for services were based on the fair value method. Fair value was based on the value of the common stock for officers and a former officer and on the fair value of the services provided for nonemployees.



Income Taxes



Deferred income taxes have been provided for temporary differences between financial statement and income tax reporting under the liability method, using expected tax rates and laws that are expected to be in effect when the differences are expected to reverse. A valuation allowance is provided when it is more likely than not, that the deferred tax assets will not be realized.



Financial Instruments



The carrying amounts of financial instruments, including cash, accrued expenses and advances from customer, approximate their fair values because of their relatively short maturities.



Cash Equivalents



The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.



28







Net Loss Per Common Share



Basic net loss per share was computed by dividing the net loss for the year by the basic weighted average number of shares outstanding during the year.



New Accounting Pronouncements



The Financial Accounting Standards Board has revised the accounting for stock based payments. SFAS No. 123R will be effective for the fiscal year ending December 31, 2006. The Company has not yet determined what the impact will be, if any, on their financial statements.



In June 2003, the Securities and Exchange Commission (SEC) adopted final rules under Section 404 of the Sarbanes-Oxley Act of 2002 (Section 404). Commencing with the Companys Annual Report for the year ended December 31, 2006, the Company is required to include a report of management on the Companys internal control over financial reporting. The internal control report must include a statement of managements responsibility for establishing and maintaining adequate internal control over financial reporting for the Company; of managements assessment of the effectiveness of the Companys internal control over financial reporting as of year end; of the framework used by management to evaluate the effectiveness of the Companys internal control over financial reporting; and that the Companys independent accounting firm has issued an attestation report on managements assessment of the Companys internal control over financial reporting, which report is also required to be filed as part of the Annual Report on Form 10-KSB.



Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.



3.

GOING CONCERN



The accompanying financial statements have been prepared on a going concern basis which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.  As of December 31, 2003, the Company had negative working capital of $9,828, accumulated stockholders deficit of $9,328 and no revenues. These factors, among others, indicate that the Company's continuation as a going concern is dependent upon its ability to achieve profitable operations or obtain adequate financing. The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.



The Company has subsequently entered into various agreements to commence operations and provide revenues (Notes 7 and 8)



4.

STOCKHOLDERS DEFICIT



Common Stock



In December 2003, prior to commencing operations, the Company issued 10,000,000 shares of common stock to each of two new stockholders and 9,209,900 shares of common stock to another stockholder of the Company, which were valued at $.0001, per share. These shares were valued at par value as the Company was inactive and had no net assets.



29







In December 2003, the Company issued 1,000,000 shares of common stock each to a financial consultant and securities counsel for services to be rendered during 2004 and 2005. These shares were  valued at $.01, per share, the value of the services to be rendered.



5.

INCOME TAXES



At December 31, 2003, the Company had net operating loss carryforwards of $32,449 available to reduce future Federal taxable income through 2023, subject to possible limitations due to changes in ownership.



As of December 31, 2003,  deferred tax assets consisted of the following:



| | Net operating loss  | $13,000
| | ------------------- | -------
| | Compensation        | (8,000)
| | Valuation allowance | (5,000)
| |                     | -      



For the years ended December 30, 2003 and 2002, deferred income taxes consisted of the following:



| |                     | 2003        | 2002      
| | ------------------- | ----------- | ----------
| | Net operating loss  | ($13,000)   | $        -
| | Compensation        | 8,000       | -         
| | Valuation allowance | 5,000       | -         
| |                     |             |           
| |                     | $         - | $        -



For the years ended December 30, 2003 and 2002, the following is a reconciliation of expected income tax benefit utilizing the statutory Federal tax rate to the income tax benefit reported on the statement of operations:



| |                                       | 2003     | 2002    
| | ------------------------------------- | -------- | --------
| |                                       |          |         
| | Expected Federal income tax (benefit) | ($4,000) | $      -
| | State income tax (benefit)            | (1,000)  | -       
| | Change in valuation allowance         | 5,000    | -       
| |                                       |          |         
| |                                       | -        | -       



6.

CONSTRUCTION AGREEMENTS



In December 2003, the Company entered into agreements to build nine homes for an aggregate price of $2,125,000. Construction of these homes is not expected to start until late 2005, upon the customer (owner) obtaining financing and permits/ approvals, and be completed in the third quarter of 2006. These agreements provide for progress payments during the construction period.







30







In December 2003, the Company received an advance from the customer of $11,016 to be utilized for planning costs. The advance has no interest and has no repayment terms, but is expected to applied against amounts due under agreement.



7.

DEALER AGREEMENT



In December 2003, the Company entered in to an agreement to become a dealer of building materials, from flooring and roofing materials to internal trim. The company will earn a rebate of 15% of customer net purchases, plus an additional 1% for co-op advertising.





8.

SUBSEQUENT EVENTS



In March 2005, the Company formed a wholly-owned subsidiary, DWD Construction Services, Inc. (DWD).



In April 2005, the Company entered into an agreement to assist with private placement financing in exchange for $50,000, payable upon signing and creditable against the total fee of 1% to 6%, depending upon the type of financing entered into within six months. The $50,000 was provided by a related party.



In April and June 2005, DWD entered into two agreements to provide administration construction services in exchange for a fee equal to 15% of the total construction costs, payable monthly, for an aggregate fee of approximately $225,000. These homes are expected to be completed late in the third quarter of 2006.





In July 2005, the Company entered into a financial consulting agreement through July 2006 in exchange for a $15,000 nonrefundable fee payable in cash, and 350,000 shares of common stock payable half in January 2006 and the balance in July 2006.



31