SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)
   [X]         ANNUAL  REPORT  UNDER  SECTION  13 OR  15(d)  OF  THE  SECURITIES
               EXCHANGE ACT OF 1934

                   For the Fiscal Year Ended December 31, 2004

   [ ]         TRANSITION  REPORT  UNDER  SECTION 13 OR 15(d) OF THE  SECURITIES
               EXCHANGE ACT OF 1934

                 For the transition period from ____________ to

                           Commission File No. 0-27563

                            SARATOGA RESOURCES, INC.
                 ______________________________________________
                 (Name of Small Business Issuer in its charter)

                   Texas                             76-0314489
      _______________________________    ____________________________________
      (State or other jurisdiction of    (I.R.S. Employer Identification No.)
       incorporation or organization)

                           2304 Hancock Drive, Suite 5
                               Austin, Texas 78756
               __________________________________________________
               (Address of principal executive offices)(Zip code)

Issuer's telephone number, including area code:     (512) 478-5717

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

     Title of each class    Name of each exchange on which each is registered
     ___________________    _________________________________________________
            None                                  None

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

                         Common Stock, $0.001 par value
                         ______________________________
                                (Title of Class)

Check whether the issuer:  (1) 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 [X]   No [ ]

Check if disclosure  of delinquent  filers in response to Item 405 of Regulation
S-B is not  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]

The Issuer's revenues for the fiscal year ended December 31, 2004 were $9,948.

The  number of shares of the  registrant's  common  stock,  $0.001 par value per
share, outstanding as of June 10, 2005 was 3,465,292. The aggregate market value
of the  voting  and  non-voting  common  equity  held by  non-affiliates  of the
registrant  on June 10, 2005,  based on par value per share,  was  approximately
$1,000 (no market existed in the common stock).

                      DOCUMENTS INCORPORATED BY REFERENCE

None

      Transition Small Business Disclosure Format:     Yes  [ ]    No  [X]



<PAGE>

                                TABLE OF CONTENTS

                                                                         Page

PART I

     ITEM 1.   DESCRIPTION OF BUSINESS................................     3
     ITEM 2.   DESCRIPTION OF PROPERTY................................     8
     ITEM 3.   LEGAL PROCEEDINGS......................................     8
     ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF
               SECURITY HOLDERS.......................................     8

PART II

     ITEM 5.   MARKET FOR COMMON EQUITY AND
               RELATED STOCKHOLDER MATTERS............................     8
     ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS...................     9
     ITEM 7.   FINANCIAL STATEMENTS...................................    11
     ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
               ON ACCOUNTING AND FINANCIAL DISCLOSURE.................    12
     ITEM 8A.  CONTROLS AND PROCEDURES................................    12
     ITEM 8B.  OTHER INFORMATION......................................    12

PART III

     ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
               CONTROL PERSONS; COMPLIANCE WITH
               SECTION 16(a) OF THE EXCHANGE ACT......................    13
     ITEM 10.  EXECUTIVE COMPENSATION.................................    14
     ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
               OWNERS AND MANAGEMENT..................................    14
     ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.........    15
     ITEM 13.  EXHIBITS AND REPORTS OF FORM 8-K.......................    15
     ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.................    16

SIGNATURES




                                       2
<PAGE>

                           FORWARD-LOOKING STATEMENTS

This annual report on Form 10-KSB contains forward-looking statements within the
meaning of the federal  securities  laws.  These  forwarding-looking  statements
include without  limitation  statements  regarding our  expectations and beliefs
about the market and industry,  our goals, plans, and expectations regarding our
properties and drilling  activities  and results,  our intentions and strategies
regarding  future  acquisitions  and sales of  properties,  our  intentions  and
strategies  regarding  the  formation  of strategic  relationships,  our beliefs
regarding the future success of our  properties,  our  expectations  and beliefs
regarding competition,  competitors, the basis of competition and our ability to
compete,  our beliefs and expectations  regarding our ability to hire and retain
personnel,  our beliefs  regarding  period to period results of operations,  our
expectations  regarding revenues,  our expectations  regarding future growth and
financial  performance,  our beliefs and expectations  regarding the adequacy of
our  facilities,  and our  beliefs  and  expectations  regarding  our  financial
position,  ability to finance  operations and growth and the amount of financing
necessary  to support  operations.  These  statements  are  subject to risks and
uncertainties  that could cause actual results and events to differ  materially.
We undertake  no  obligation  to update  forward-looking  statements  to reflect
events or  circumstances  occurring after the date of this annual report on Form
10-KSB.

As used in this  annual  report on Form  10-KSB,  unless the  context  otherwise
requires, the terms "we," "us," "the Company," and "Saratoga Resources" refer to
Saratoga Resources, Inc., a Texas corporation.

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

General

Saratoga  Resources,  Inc. is an oil and gas exploration and production company.
Since  the  1996  sale of a  majority  of the  Company's  oil and gas  producing
properties,  the  Company's  operations  have been  limited  to  ownership  of a
participation interest in a single oil property and pursuit of various potential
business opportunities, both within and outside of the oil and gas industry.

History and Development of the Company

The Company was  incorporated  in Texas on July 25, 1990 under the name Saratoga
Resources,  Inc.  In 1993,  the  Company  became a  wholly-owned  subsidiary  of
Saratoga Resources, Inc., a Delaware corporation ("Saratoga Delaware").

In May 1994, the Company acquired 57.15% of the outstanding Common Stock of Lobo
Energy, Inc., a Texas corporation  ("LEI"), for $6,000,375.  In conjunction with
the  acquisition  of a controlling  interest in LEI, and to finance the purchase
price,  the Company entered into a credit  agreement and related  documents (the
"Initial  Credit  Agreement")  with  Internationale  Nederlanden  (U.S.) Capital
Corporation  ("ING").  Proceeds  from the ING credit  facility  were used to (i)
finance  acquisition of the LEI stock, (ii) pay off LEI's lenders at the time of
the  acquisition,  (iii) retire all credit  facilities at BankOne,  (iv) develop
existing oil and gas properties, and (v) provide general working capital.

In March 1995, the Company  acquired the remaining 42.85% of the Common Stock of
LEI from Peter Pickup for $5,401,000,  after which the Company owned 100% of the
stock of LEI. In conjunction  with the  acquisition  of the remaining  shares of
LEI,  the Company  and ING entered  into a new credit  agreement  (the  "Amended
Credit  Agreement")  to  refinance  the  existing  debt to ING under the Initial
Credit  Agreement,  to purchase  the  remaining  LEI Common Stock and to provide
additional money for acquisition of oil and gas properties.

In  May  1996,  the  Company  entered  into  an  agreement  (the   "ING-P/Energy
Agreement") by and among Saratoga Delaware,  the Company,  Lobo Operating,  Inc.
("LOI"),  LEI,  Thomas F.  Cooke  ("Cooke"),  Joseph T.  Kaminski  ("Kaminski"),
Randall F. Dryer ("Dryer") (the Company,  Saratoga Delaware, LOI, LEI, and their
subsidiaries,  Cooke,  Kaminski  and Dryer  sometimes  referred to herein as the
"Saratoga Parties"), Prime Energy Corporation ("P/Energy") and ING.



                                       3
<PAGE>

The  ING-P/Energy  Agreement  provided for a sale of virtually all of the assets
(the "Interests") of the Company,  LOI and LEI (the "Saratoga  Entities") to ING
pursuant to ING's rights under the Amended Credit Agreement and the simultaneous
sale of the  Interests  to P/Energy for cash  consideration  of  $7,180,000  and
additional  consideration  as provided in the agreement.  The cash proceeds from
the sale were applied to the  settlement  of  outstanding  vendor debt and other
related liabilities of the Saratoga Entities, Saratoga Delaware and their direct
and indirect subsidiaries, and $1,500,000 was paid to Saratoga Delaware.

Following the 1996 sale of substantially all of its oil and gas properties under
the  ING-P/Energy  Agreement,  the  Company  began  pursuing  various  potential
business opportunities both within and outside of the oil and gas industry.

In April 1999,  the  Company  entered  into an  agreement  with DBX  Geophysical
Corporation  whereby,  during the term of the agreement (which was for a minimum
period  of 12  months  and  thereafter  dependent  on the term of any  leasehold
interest acquired),  the Company had the exclusive right to acquire a license to
data and the exclusive  right to acquire all  leasehold  interests and any other
interest in oil,  gas, and other  mineral,  or the revenues  arising  there from
which were  attributable  to lands located  within an identified  area in Dawson
County,  Texas  (collectively,  the "DBX  Data").  Pursuant  to the terms of the
agreement with DBX, as consideration for the DBX Data, the Company agreed (1) to
grant to DBX a 3%  overriding  royalty in any  leasehold  acquired in the Adcock
Farms  prospect  and  (2) to  pay to DBX  $100,000,  payable  (a)  $25,000  upon
commencement  of drilling  operations  of the first  prospect,  (b) $25,000 as a
production  payment out of a 25% working interest in the first well, (c) $25,000
upon commencement of drilling  operations on a second well, and (d) $25,000 as a
production  payment out of a 25% working  interest  in the second  well.  In the
event  that the  required  production  payments  are not  made in full  from the
referenced  wells, such deficiency will be payable out of a 25% working interest
in all other wells drilled within the area of interest.

In March 1999,  the Company  entered into a one year  consulting  agreement with
Trek Oil and Gas, Inc. ("Trek"), an independent oil and gas exploration company,
to utilize the Company's seismic and well log data for the identification of oil
and gas  exploration  and  development  prospects  in the  Louisiana  gulf coast
region.  Under  this  agreement,  Trek  provided  advisory  services  related to
interpretation  of seismic data and received  compensation  for its expertise in
the form of a working  interest  and/or  royalties of up to 33%  generated  from
identified prospects.

In June 1999, the Company entered into an agreement,  with an unspecified  term,
with Ivy Oil Company LLC ("Ivy") and Trek (Trek  together  with Ivy, the "Dawson
County  Operators")  by which the  Company  supplied  the DBX Data to the Dawson
County  Operators and received in return a one third interest in the development
of certain prospects in Dawson County, Texas (the "Dawson Prospects Agreement").
As a result of the work  performed  under the Dawson  Prospects  Agreement,  the
Dawson County Operators acquired mineral leases covering 80 net acres underlying
the  identified  area in the DBX Data,  acquired  equipment,  including  service
equipment, down-hole equipment and a cased well bore to the depth of 12,000 feet
and re-entered the existing well (the "Adcock Farms No. 1") on the property.

Throughout  1999,  the Company  retained  other  consultants  for the purpose of
evaluating mineral lease  acquisitions in Houston County,  Texas, and production
purchases in the Los Angeles basin. No mineral lease  acquisitions or production
purchases were consummated as a result of those efforts.

In August 1999, Saratoga Delaware, then the parent of the Company, closed merger
agreements  with  each of  PrimeVision  Health,  Inc.,  a  Delaware  corporation
("Prime"),  a vertically  integrated vision services  company,  and OptiCare Eye
Health  Centers,  Inc., a Connecticut  corporation  ("OptiCare"),  a provider of
consulting,  administrative  and other  support  services to  ophthalmology  and
optometry  eye care  centers  located  in  Connecticut.  Pursuant  to the merger
agreements,  Saratoga  Delaware  acquired  Prime and  OptiCare  in an  all-stock
transaction  by issuance to the  shareholders  of OptiCare  and Prime  shares of
Saratoga  Delaware Common Stock  constituting  97.5% of the  outstanding  Common
Stock of Saratoga Delaware (the "Eye Care Acquisition").

In conjunction  with the Eye Care  Acquisition,  in August 1999, the Company was
spun off by Saratoga Delaware to continue its prior business operations.  In the
spin-off, Saratoga Delaware, which was then the 100% owning parent entity of the
Company,  made  an  in-kind  distribution  of all of the  Company's  issued  and
outstanding stock to the shareholders of Saratoga Delaware as of August 9, 1999.
The  distribution  was made on the  basis of one share of the  Company's  common
stock,  for each  share of  Saratoga  Delaware  stock  held.  As a result of the
spin-off  3,465,292  shares of the Company's  common stock were  distributed  to
1,363  shareholders.   In  conjunction  with  the  spin-off  and  the  Eye  Care
Acquisition,   Saratoga  Delaware   distributed  to  the  Company  100%  of  the
outstanding  shares  of LOI and LEI as well as 9% of the  outstanding  shares of
Saratoga Holdings I, Inc. ("Holdings").


                                       4
<PAGE>

In January  2001,  the Company and Ivy  acquired  the  interests  of Trek in the
Dawson  Prospects  Agreement,  including the Adcock Farms No. 1, bringing  their
interests  therein to 50% each. The Company paid $6,028 as consideration for the
interest of Trek.

In April 2002,  Holdings  entered into a Share  Exchange  Agreement  pursuant to
which  Holdings  acquired  Agence 21, Inc. and resulting in Agence 21 becoming a
subsidiary of Holdings and Holdings changing its name to A21, Inc.

Oil and Gas Operations and Properties

Since May 1999, our operations have been limited to ownership of a participation
interest in a single oil and gas property in Dawson County, Texas.

As of June 2005, we had no plans to acquire  additional oil and gas interests or
to conduct any other oil and gas operations  other than the continued  operation
of our existing property.

Our sole oil and gas property  interest as of December  31, 2004  consisted of a
contractual  right to participate in 50% of the profits and losses in an 80-acre
tract known as the Adcock Farms Prospect, including the Adcock Farms No. 1 well,
in Dawson  County,  Texas.  Under the  contractual  participation  interest,  we
receive our  proportionate  interest in revenues from the Adcock Farms  prospect
and bear a proportionate share of operating costs.

The Adcock Farms No. 1 well was drilled on the Adcock Farms Project in September
1993.  The  Adcock  Farms No. 1 well  tested  the  Fusselman  and  Mississippian
formations  to a  depth  of  12,000  feet.  The  Adcock  Farms  No.  1 well  was
successfully  completed in October 1993 and commenced production as an oil well.
We  presently  have no plans with  respect to drilling  additional  wells on the
Adcock Farms Prospect.

Marketing

At December 31, 2004 and June 10, 2005, we had no contractual agreements to sell
our gas and oil production and all production was sold on spot markets.

Risks Related to Our Oil and Gas Operations

Operational   Hazards  and  Insurance.   Our  oil  and  gas  activities  may  be
unsuccessful  for many reasons,  including  weather,  cost  overruns,  equipment
shortages and mechanical difficulties. A variety of factors, both geological and
market  related  can  cause a well to  become  uneconomical  or only  marginally
profitable.  Our  business  involves  a variety  of  operating  risks  which may
adversely affect our profitability, including:

         - fires;

         - explosions;

         - blow-outs and surface cratering;

         - uncontrollable flows of oil, natural gas, and formation water;

         - natural disasters, such as hurricanes and other adverse weather
           conditions;

         - pipe, cement, or pipeline failures;

         - casing collapses;

         - embedded oil field drilling and service tools;

         - abnormally pressured formations; and

         - environmental hazards, such as natural gas leaks, oil spills,
           pipeline ruptures and discharges of toxic gases.


                                       5
<PAGE>

In accordance with industry  practice,  our insurance  protects us against some,
but not all, operational risks.  Further, we do not carry business  interruption
insurance.  As  pollution  and  environmental  risks  generally  are  not  fully
insurable,  our  insurance may be inadequate to cover any losses or exposure for
such liability.

Volatility of Oil and Gas Prices.  As our sole source of revenue is our interest
in a single  producing  well, our revenue and  profitability  are  substantially
dependent upon the prevailing  prices of, and demand for,  natural gas, oil, and
condensate.  Prices for oil and natural gas are subject to wide  fluctuation  in
response to  relatively  minor changes in the supply of, and demand for, oil and
gas, market  uncertainty and a variety of additional factors that are beyond our
control.  Among the factors that can cause the  volatility of oil and gas prices
are:

         - worldwide or regional demand for energy, which is affected by
           economic conditions;

         - the domestic and foreign supply of natural gas and oil;

         - weather conditions;

         - domestic and foreign governmental regulations;

         - political conditions in natural gas and oil producing regions;

         - the ability of members of the Organization of Petroleum Exporting
           Countries to agree upon and maintain oil prices and production
           levels; and

         - the price and availability of other fuels.

Competition

Competition  in the  oil  and gas  industry  is  intense.  While  the  Company's
activities  are currently  limited to its interest in a single well,  should the
Company  seek to expand its oil and gas  activities,  it will compete with major
and other  independent  oil and gas companies with respect to the acquisition of
producing  properties  and  proved  undeveloped  acreage.  Existing  competitors
actively bid for desirable oil and gas properties,  as well as for the equipment
and  labor  required  to  operate  and  develop  the  properties.  Many of those
competitors have significant financial resources and exploration and development
budgets. The Company presently has no financial resources that would allow it to
compete in that market. Our ability to acquire additional properties and develop
new and  existing  properties  in the future  will depend on our  capability  to
secure financing to support those efforts and our ability to conduct operations,
to evaluate and select  suitable  properties and to consummate  transactions  in
this highly competitive environment.

Governmental Regulation

Our  business  and the oil and gas  industry in general are subject to extensive
laws and regulations,  including environmental laws and regulations. As such, we
may be required to make large  expenditures  to comply  with  environmental  and
other governmental regulations.  State and federal regulations,  including those
enforced by the Texas  Railroad  Commission as the primary  regulator of the oil
and gas industry in the State of Texas, are generally  intended to prevent waste
of oil and gas, protect rights to produce oil and gas between owners in a common
reservoir  and control  contamination  of the  environment.  Matters  subject to
regulation in the State of Texas include:

         - location and density of wells;

         - the handling of drilling fluids and obtaining discharge permits for
           drilling operations;

         - accounting for and payment of royalties on production from state,
           federal and Indian lands;

         - bonds for ownership, development and production of natural gas and
           oil properties;

         - transportation of natural gas and oil by pipelines;

         - operation of wells and reports concerning operations; and

         - taxation.


                                       6
<PAGE>

Under  these laws and  regulations,  we could be liable for  personal  injuries,
property damage, oil spills,  discharge of hazardous materials,  remediation and
clean-up  costs and other  environmental  damages.  Failure to comply with these
laws and  regulations  also may result in the  suspension or  termination of our
operations  and  subject us to  administrative,  civil and  criminal  penalties.
Moreover,  these laws and  regulations  could change in ways that  substantially
increase our operating costs.

Natural  gas  operations  are  subject to  various  types of  regulation  at the
federal,  state and local levels.  Prior to commencing drilling activities for a
well, we are required to procure permits and/or approvals for the various stages
of the drilling  process from the applicable  state and local agencies.  Permits
and approvals include those for the drilling of wells, and regulations including
maintaining  bonding  requirements  in order to drill or  operate  wells and the
location of wells,  the method of drilling and casing wells, the surface use and
restoration  of  properties  on  which  wells  are  drilled,  the  plugging  and
abandoning  of  wells,  and the  disposal  of  fluids  used in  connection  with
operations.

Our operations are also subject to various  conservation  laws and  regulations.
These  include the  regulation of the size of drilling and spacing units and the
density of wells, which may be drilled and the unitization or pooling of natural
gas  properties.  In this  regard,  some  states  allow the  forced  pooling  or
integration  of  tracts  to  facilitate  exploration  while  other  states  rely
primarily  or  exclusively  on voluntary  pooling of lands and leases.  In areas
where  pooling  is  voluntary,  it may be  more  difficult  to form  units,  and
therefore,  more  difficult to develop a project if the operator  owns less than
100 percent of the leasehold.

Regulation  of Sales  and  Transportation  of  Natural  Gas.  Historically,  the
transportation  and  resale of  natural  gas in  interstate  commerce  have been
regulated  by the Natural  Gas Act of 1938,  the Natural Gas Policy Act of 1978,
and the  regulations  promulgated by the Federal Energy  Regulatory  Commission.
Maximum  selling prices of some categories of natural gas sold in "first sales,"
whether sold in interstate  or intrastate  commerce,  were  regulated  under the
NGPA.  The Natural Gas Well Head  Decontrol Act removed,  as of January 1, 1993,
all remaining  federal price  controls from natural gas sold in "first sales" on
or after that date.  FERC's  jurisdiction  over natural gas  transportation  was
unaffected by the Decontrol Act. While sales by producers of natural gas and all
sales of crude oil,  condensate and natural gas liquids can currently be made at
market prices, Congress could reenact price controls in the future.

Sales  of  natural  gas are  affected  by the  availability,  terms  and cost of
transportation.  The price and terms for access to pipeline  transportation  are
subject to extensive  regulation.  In recent years, FERC has undertaken  various
initiatives to increase competition within the natural gas industry. As a result
of  initiatives  like FERC Order No. 636,  issued in April 1992,  the interstate
natural  gas   transportation   and  marketing  system  has  been  substantially
restructured to remove various barriers and practices that historically  limited
non-pipeline  natural  gas  sellers,   including  producers,   from  effectively
competing with interstate  pipelines for sales to local  distribution  companies
and large industrial and commercial customers.  The most significant  provisions
of Order No.  636  require  that  interstate  pipelines  provide  transportation
separate or  "unbundled"  from their sales  service,  and require that pipelines
make available firm and interruptible  transportation  service on an open access
basis that is equal for all natural gas suppliers.

In many instances,  the result of Order No. 636 and related initiatives has been
to substantially reduce or eliminate the interstate pipelines'  traditional role
as   wholesalers  of  natural  gas  in  favor  of  providing  only  storage  and
transportation  services.  Another  effect of  regulatory  restructuring  is the
greater transportation access available on interstate pipelines.  In some cases,
producers  and  marketers  have  benefited  from  this  availability.   However,
competition  among  suppliers has greatly  increased and  traditional  long-term
producer  pipeline  contracts  are rare.  Furthermore,  gathering  facilities of
interstate pipelines are no longer regulated by FERC, thus allowing gatherers to
charge higher gathering rates.

Environmental  Regulations.  Our operations  are subject to additional  laws and
regulations  governing  the  discharge  of  materials  into the  environment  or
otherwise  relating  to  environmental   protection.   Public  interest  in  the
protection of the  environment  has increased  dramatically  in recent years. It
appears that the trend of more expansive and stricter environmental  legislation
and regulations will continue.


                                       7
<PAGE>

We generate wastes that may be subject to the Federal Resource  Conservation and
Recovery Act  ("RCRA") and  comparable  state  statutes,  which have limited the
approved methods of disposal for some hazardous wastes. Additional wastes may be
designated as "hazardous  wastes" in the future, and therefore become subject to
more  rigorous  and  costly  operating  and  disposal   requirements.   Although
management believes that we utilize good operating and waste disposal practices,
prior  owners  and  operators  of our  properties  may not  have  done  so,  and
hydrocarbons  or other wastes may have been  disposed of or released on or under
the properties  owned or leased by us or on or under locations where wastes have
been  taken for  disposal.  These  properties  and the  wastes  disposed  on the
properties  may  be  subject  to  the  Comprehensive   Environmental   Response,
Compensation and Liability Act ("CERCLA"),  RCRA and analogous state laws, which
require the removal and  remediation of previously  disposed  wastes,  including
waste disposed of or released by prior owners or operators.

CERCLA and similar state laws impose  liability,  without regard to fault or the
legality of the original conduct, on some classes of persons that are considered
to  have  contributed  to  the  release  of a  "hazardous  substance"  into  the
environment. These persons include the owner or operator of the disposal site or
sites where the release  occurred and companies that disposed of or arranged for
the disposal of the hazardous  substances found at the site.  Persons who are or
were responsible for release of hazardous substances under CERCLA may be subject
to joint and  several  liability  for the  costs of  cleaning  up the  hazardous
substances  that have been  released  into the  environment  and for  damages to
natural resources,  and it is not uncommon for neighboring  landowners and other
third parties to file claims for personal injury and property  damage  allegedly
caused by the hazardous substances released into the environment.

Employees

As of June 10, 2005, we had one full-time  employee and no part time  employees.
The employee is not covered by a collective bargaining agreement,  and we do not
anticipate that any of our future employees will be covered by such agreement.

ITEM 2.  DESCRIPTION OF PROPERTY

As of June 10, 2005, the Company's  executive  offices consist of  approximately
200 square feet in Austin, Texas which space is leased on a month-to-month basis
at a current rate of $150 per month.  Management  anticipates that the Company's
office space will be sufficient for the foreseeable future.

A description of our interests in oil and gas properties is included in "Item 1.
Description of Business."

ITEM 3.  LEGAL PROCEEDINGS

As of June 10, 2005,  we were not party to any pending  litigation  and were not
aware of any threatened litigation.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

There is no  established  trading  market in the  Company's  Common Stock and no
guarantee that a trading market will develop.

As of June 10, 2005, there were  approximately  1,363 beneficial  holders of our
Common Stock.

The Company has not paid any cash  dividends  since its  inception and presently
anticipates  that all earnings,  if any, will be retained for development of the
Company's  business  and that no dividends on the shares of Common Stock will be
declared in the foreseeable  future. Any future dividends will be subject to the
discretion of the Company's Board of Directors and will depend upon, among other
things,  future earnings,  the operating and financial condition of the Company,
its capital requirements, general business conditions and other pertinent facts.
Therefore, there can be no assurance that any dividends on the Common Stock will
be paid in the future.


                                       8
<PAGE>

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

General

Saratoga  Resources,  Inc. is an oil and gas exploration and production company.
Since  the  1996  sale of a  majority  of the  Company's  oil and gas  producing
properties  pursuant to the ING-P/Energy  Agreement (see "Item 1. Description of
Business - History and  Development of the Company"),  the Company's  operations
have been  limited to  ownership  of a  participation  interest  in a single oil
property and pursuit of various potential  business  opportunities,  both within
and outside of the oil and gas industry.

Overview of Operations

Our operations,  and our operating results, are a continuation of the operations
previously conducted by our prior parent company, Saratoga Delaware. During 2002
and  2003  our  operations  were  exclusively  devoted  to  our  ownership  of a
participation interest in a single oil well, the Adcock Farms No. 1, and efforts
relating acquisitions of business opportunities, both within and outside the oil
and gas industry.

Our interest in the Adcock Farms No. 1 are reflected on our financial statements
as gain or loss from participation  agreement. The gain or loss reported reflect
the excess of our  allocable  portion of revenues over expenses or expenses over
revenues, as appropriate. The gain or loss from the participation agreement is a
function of production  volumes from the well,  our interest in the well and the
market  prices of  production  sold as well as costs  incurred in operating  the
well.

Critical Accounting Policies

The following  describes the critical  accounting policies used in reporting our
financial  condition  and  results  of  operations.  In some  cases,  accounting
standards allow more than one alternative accounting method for reporting,  such
is the case with accounting for oil and gas activities described below. In those
cases, our reported results of operations would be different should we employ an
alternative accounting method.

Revenue Recognition.

The Company recognizes  revenues from its participating  interest in the profits
and losses of the Adcock Farm prospect in accordance with Statement of Financial
Accounting  Standard  ("SFAS") No. 69 - Disclosures  About Oil and Gas Producing
Activities.  As of December 31, 2004,  the Company had no  capitalized or equity
interest in, and had not realized  significant net royalties with respect to the
participating  interest in the  profits and losses of the Adcock Farm  prospect.
Due to the  lack  of  significant  revenue  generation  and the  excessive  cost
involved in reporting the associated activities, disclosure required by SFAS No.
69 is neither  relevant nor reliable and has been  excluded  from the  Company's
financial statements.

Marketable Securities.

Marketable securities are classified as available-for-sale  and, at December 31,
2004, were available to support current operations or to take advantage of other
investment  opportunities.  The  securities  were stated at estimated fair value
based upon market quotes.  Unrealized gains and losses, net of tax, are computed
on the basis of specific identification and are included as a separate component
of stockholders' equity. Realized gains, realized losses, and declines in value,
judged to be  other-than-temporary,  are included in Other  Income.  The cost of
securities  sold is based on the  specific  identification  method and  interest
earned is included in Interest  Income.  Certain  marketable  securities held at
December 31, 2004 were pledged as security for a debt of Saratoga Delaware.

Impairment of Long-Lived Assets

We review all  long-lived  assets on a regular  basis to  determine if there has
been impairment in the value of those assets.  If, upon review, it is determined
that the carrying value of those assets may not be recoverable, we will record a
charge to earnings and reduce the value of the asset on the balance sheet to the
amount determined to be recoverable.


                                       9
<PAGE>

For  purposes  of   evaluating   recoverability   of  long-lived   assets,   the
recoverability test is performed using undiscounted cash flows of the individual
assets and consolidated  undiscounted  net cash flows for long-lived  assets not
identifiable to individual properties compared to the related carrying value. If
the undiscounted operating income is less than the carrying value, the amount of
the  impairment,  if any, will be determined by comparing the carrying  value of
each asset with its fair value.  Fair value is  generally  based on a discounted
cash flow analysis.

Based on our review of our present  operating  properties  and other  long-lived
assets,  during  the  fiscal  year ended  December  31,  2004,  we  recorded  no
impairments of our long-lived assets.

Results of Operations

Year Ended December 31, 2004 Compared to Year Ended December 31, 2003

Revenues.  Revenues during 2004 were $9,948 as compared to $0 in 2003.  Revenues
during 2004 were  principally  attributable  to gain from  participation  in the
Adcock Farm No. 1 well.

As  a  result  of  work-over  expenses,  the  Company  recognized  a  loss  from
participation in the Adcock Farm No. 1 well during 2003.

Costs and  Expenses.  Operating  costs and expenses  totaled  $52,919 in 2004 as
compared to $50,795 in 2003 and, during 2004,  consisted  principally of general
and administrative  expenses and interest expense. 2003 Operating costs included
a net loss from participation agreement of $3,246.

 - General  and  Administrative  Expenses.  General and  administrative  expense
increased marginally from $22,807 in 2003 to $22,846 in 2004.

 - Depreciation Expense.  Depreciation expense was unchanged, being $351 in 2003
and 2004.

 - Interest Expense.  Interest expense increased from $24,391 in 2003 to $29,722
in 2004. The increase in interest  expense was  attributable to higher long-term
debt in 2004  attributable  to loans  from a  principal  shareholder  to support
operations.

 - Net Loss from  Participation  Agreement.  During 2003, the Company realized a
net loss from  participation  in the Adcock Farm No. 1 well of $3,246.  The loss
was principally attributable to expenses of working-over the well.

Financial Condition

Liquidity and Capital Resources.

The Company had a cash balance of $985 and a working capital deficit of $125,304
at  December  31, 2004 as  compared  to a cash  overdraft  of $833 and a working
capital deficit of $104,673 at December 31, 2003.

The Company's  cash and working  capital  positions at December 31, 2004 reflect
the operating  loss  incurred  during 2004,  offset by  borrowings  from related
parties.

The Company,  at and for the year ended December 31, 2004,  had limited  capital
resources and limited  operating  revenues to support its overhead.  The Company
is, and was,  dependent upon its principal  shareholder to provide  financing to
support  operations and ongoing cost control measures to minimize  negative cash
flow. Unless that shareholder continues to provide financing the Company will be
required to substantially  limit its activities and may be unable to sustain its
operations.


                                       10
<PAGE>

Available-For-Sale Securities.

At December 31, 2004, the Company's current assets,  totaling $27,640,  included
$26,655 of securities  holdings classified as  "available-for-sale  securities".
Those securities  consisted of shares of stock of Opticare  (formerly,  Saratoga
Delaware) and A21, Inc. (formerly, Saratoga Holdings). All of the Opticare stock
is held in a pledge account to secure obligations guaranteed by the Company. The
Company's  guarantee is limited to the extent of the shares pledged,  the market
value  of  which  was $0 at  December  31,  2004.  The  A21  shares  are  freely
transferable  by the Company and had a market  value of $26,655 at December  31,
2004.

The Company had unrealized gains on its available-for-sale  securities of $4,013
during 2004. Those unrealized gains are included in Other  Comprehensive  Income
(Loss).

Long-Term Debt

At December 31, 2004, the Company had long-term  debt of $182,063,  attributable
entirely to amounts owed to the Company's principal shareholder.  Loans from the
Company's  principal  shareholder  bear  interest  at 12.5% and are  payable  on
demand.

Capital Expenditures and Commitments

During 2004, the Company made no capital expenditures and, at December 31, 2004,
the Company had no fixed capital commitment obligations.

The Company,  at December 31, 2004, was  contractually  obligated to bear 50% of
the expenses of operating the Adcock Farm prospect.

The  Company,  at December  31, 2004,  was also  contractually  obligated to pay
certain amounts  relating to the licensing of the right to certain data from DBX
Geophysical.  Pursuant to the terms of the agreement with DBX, as  consideration
for the DBX Data, the Company agreed (1) to grant to DBX a 3% overriding royalty
in any  leasehold  acquired in the Adcock  Farms  prospect and (2) to pay to DBX
$100,000,  payable (a) $25,000 upon  commencement of drilling  operations of the
first  prospect,  (b)  $25,000  as a  production  payment  out of a 25%  working
interest in the first well, (c) $25,000 upon commencement of drilling operations
on a second well,  and (d) $25,000 as a production  payment out of a 25% working
interest in the second well. In the event that the required  production payments
are not made in full from the referenced  wells, such deficiency will be payable
out of a 25%  working  interest in all other  wells  drilled  within the area of
interest. As of December 31, 2004, no wells had been drilled on the Adcock Farms
prospect.  Accordingly, other than the overriding royalty, no amounts had, as of
that date, been paid to DBX.

Off-Balance Sheet Arrangements

As noted elsewhere,  all of our marketable  securities at December 31, 2004 were
pledged  to  secure  obligations  of our  predecessor,  Saratoga  Delaware.  Our
exposure in that regard is limited to the value of the securities pledged.

Except for the pledge of securities to secure  obligations of Saratoga Delaware,
we  had  no  off-balance  sheet   arrangements  or  guarantees  of  third  party
obligations at December 31, 2004.

Inflation

We believe that  inflation  has not had a significant  impact on our  operations
since inception.

ITEM 7.  FINANCIAL STATEMENTS

Our financial  statements,  together with the  independent  accountants  reports
thereon of Robnett & Company,  LLP, appears immediately after the signature page
of this report. See "Index to Financial Statements" on page 17 of this report.


                                       11
<PAGE>

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

In March 2000, the Company's  Board of Directors  decided that the Company would
select  a  regional  accounting  firm  as the  Company's  principal  independent
accountant to audit the Company's consolidated financial statements for the 1999
fiscal year;  and thus, the Company would not  re-appointment  Ernst & Young LLP
("E&Y") as the Company's principal independent account.  However, with regard to
completion  of the  Company's  Form 10-SB (which had yet to reach the no comment
stage) the Company and E&Y agreed that the Company would continue to employ E&Y.

The reports of E&Y on any of the Company's financial statements for the past two
fiscal years did not contain an adverse  opinion or a disclaimer  of opinion and
were not  qualified or modified as to  uncertainty,  audit scope,  or accounting
principles.

In connection with any audits of the Company's financial  statements for each of
the two fiscal years ended  December 31, 1997 and December 31, 1998,  and in any
subsequent  interim period,  there were no disagreements with E&Y on any matters
of accounting  principles  or  practices,  financial  statement  disclosure,  or
auditing scope and procedures  which, if not resolved to the satisfaction of E&Y
would have caused E&Y to make  reference to the matter in their report.  None of
the  reportable  events listed in Item  304(a)(1)(v)  of Regulation S-K occurred
with respect to the Company and E&Y.

The determination not to re-appoint E&Y as independent  accountants was reported
on Form 8-K dated  March 23,  2000.  Pursuant  to Item 4(a) of Form 8-K and Item
304(a)(3) of  Regulation  S-K, the Company  provided E&Y with a copy of the Form
8-K  and  requested  E&Y to  furnish  the  Company  a  letter  addressed  to the
Securities  and  Exchange  Commission  stating  whether it agrees with the above
statements  and, if not, to state the  respects in which E&Y does not agree with
such statements. The letter was received and filed with the Form 8-K.

In September 2004, the Company's Board of Directors  approved the appointment of
Robnett & Company, LLP as the Company's principal independent accounting firm.

Prior to the  engagement of Robnett & Company,  the Company did not consult with
such firm  regarding  the  application  of  accounting  principles to a specific
completed or contemplated transaction, or any matter that was either the subject
of a disagreement or a reportable  event.  The Company also did not consult with
Robnett & Company regarding the type of audit opinion which might be rendered on
the Company's financial statements and no oral or written report was provided by
Robnett & Company.

ITEM 8A. CONTROLS AND PROCEDURES

As of the end of the period  covered by this report,  the Company has  evaluated
the  effectiveness  of the design and operation of its  disclosure  controls and
procedures  under  the  supervision  and with  the  participation  of its  chief
executive  officer ("CEO") who also serves as chief financial  officer  ("CFO").
Based on this  evaluation,  management,  including the CEO,  concluded  that the
Company's disclosure controls and procedures were effective.

During the quarter ended December 31, 2004, there were no significant changes in
the  Company's  internal  controls  over  financial  reporting  that  materially
affected, or are reasonably likely to materially affect,  internal controls over
financial reporting.

ITEM 8B. OTHER INFORMATION

Not applicable.


                                       12
<PAGE>

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

The  following  table  sets  forth the names,  ages and  offices of the  present
executive  officers and directors of the Company.  The periods during which such
persons  have served in such  capacities  are  indicated in the  description  of
business experience of such persons below.

              Name               Age                      Position
         ______________          ___          _________________________________
         Thomas Cooke             56          President, Treasurer and Director
         Kevin M. Smith           60          Director

The  following  is a  biographical  summary of the  business  experience  of the
present directors and executive officers of the Company:

Thomas F. Cooke has  served as our  president,  secretary  and  treasurer  since
co-founding the Company in 1990. In addition to his service as an officer of the
Company, Mr. Cooke has been self-employed as an independent oil and gas producer
for the last 23 years.

Kevin M. Smith has served as a Director of the Company since 1997. Mr. Smith has
in excess of 35 years experience as an exploration geophysicist.  Since 1984 Mr.
Smith's work  experience  has been  exclusively  devoted to his own  geophysical
consulting firm (Kevin M. Smith, Inc.). Mr. Smith received a Bachelor of Science
degree  with a dual major of  Geology  and  Geophysics  from the  University  of
Houston.  He also did post  graduate  studies in Geology and  Geophysics  at the
University of Houston.

The Company's  directors serve for a term of one year or until their  successors
are elected by the shareholders. The Company's executive officers are elected by
our  board of  directors  and  serve  terms of one  year or until  their  death,
resignation or removal by the board of directors.

Board Committees

The  Company  does not  presently  maintain  an  audit  committee  or any  other
committee  of our  board  of  directors.  Because  we  presently  have  only two
directors and do not  presently  maintain an audit  committee,  we have no audit
committee financial expert.

Compliance With Section 16(a) of Exchange Act

Under the securities  laws of the United States,  the Company's  directors,  its
executive  officers,  and any  person  holding  more  than  ten  percent  of the
Company's  Common Stock are required to report  their  initial  ownership of the
Company's  Common  Stock and any  subsequent  changes in that  ownership  to the
Securities  and Exchange  Commission.  Specific due dates for these reports have
been  established and the Company is required to disclose any failure to file by
these dates during  fiscal year 2004.  To the  Company's  knowledge,  all of the
filing  requirements  were  satisfied on a timely basis in fiscal year 2004.  In
making  these  disclosures,  the Company has relied  solely on copies of reports
provided to the Company.


                                       13
<PAGE>

ITEM 10.  EXECUTIVE COMPENSATION

The  following  table  sets  forth  information  concerning  cash  and  non-cash
compensation  paid or accrued  for  services  in all  capacities  to the Company
during  the year  ended  December  31,  2004 of each  person  who  served as the
Company's  Chief  Executive  Officer  during  fiscal 2004 and the next four most
highly paid executive officers (the "Named Officers").
<TABLE>
<S><C>
                                                                                      Long Term
                                                     Annual Compensation            Compensation
                                                     -------------------    -----------------------------
 Name and Principal Position    Year    Salary($)         Bonus($)          Other ($)    Stock Options($)
 ---------------------------    ----    ---------         --------          ---------    ----------------

 Thomas Cooke                   2004       -0-               -0-                    -                   -
   President and                2003       -0-               -0-                    -                   -
   Chief Executive Officer      2002       -0-               -0-                    -                   -
</TABLE>

The Company currently pays no compensation for service of directors. The Company
may consider  payment of certain  amounts to attract the services of independent
directors.

The Company, during 2004 and at June 10, 2005, had no employment agreements with
any employees.

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

The  following  table  sets  forth  information  as of June 10,  2005,  based on
information  obtained  from  the  persons  named  below,  with  respect  to  the
beneficial  ownership of shares of the  Company's  Common Stock held by (i) each
person  known by the Company to be the owner of more than 5% of the  outstanding
shares of the  Company's  Common  Stock,  (ii) each  director,  (iii) each named
executive officer, and (iv) all executive officers and directors as a group:

    Name and Address                 Number of Shares             Percentage
 of Beneficial Owner (1)          Beneficially Owned (2)           of Class
 -----------------------          ----------------------          ----------

 Thomas F. Cooke (3)                    2,220,422                      64.1%
   1304 Alta Vista Ave
   Austin, TX  78704

 Kevin Smith (4)                          203,643                       5.9%
   14003 Cherry Mound
   Houston, TX  77077

 All directors and officers
 as a group (2 persons)                 2,424,065                      70.0%
 ----------

(1)      Unless otherwise indicated,  each beneficial owner has both sole voting
         and sole investment power with respect to the shares beneficially owned
         by such  person,  entity  or  group.  The  number  of  shares  shown as
         beneficially  owned  include  all  options,  warrants  and  convertible
         securities held by such person, entity or group that are exercisable or
         convertible within 60 days of June 10, 2005.
(2)      The  percentages of beneficial  ownership as to each person,  entity or
         group assume the exercise or  conversion  of all options,  warrants and
         convertible  securities held by such person,  entity or group which are
         exercisable  or  convertible  within 60 days,  but not the  exercise or
         conversion  of options,  warrants and  convertible  securities  held by
         others shown in the table.
(3)      Includes  109,148  shares held by June Cooke,  Mr. Cooke's  spouse,  of
         which Mr. Cooke disclaims beneficial ownership.
(4)      Includes  20,000 shares held by Sandra Smith,  Mr. Smith's  spouse,  of
         which Mr. Smith disclaims beneficial ownership.


                                       14
<PAGE>

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During 1999, in conjunction with the spin-off of the Company's stock by Saratoga
Delaware  and  pursuant  to the terms of the Eye Care  Acquisition,  the Company
pledged marketable securities to secure certain debt of Saratoga Delaware.

During  2003 and  2004,  Thomas  Cooke,  the  principal  officer,  director  and
shareholder  of the Company  loaned  funds to the Company to support  operations
and, for the  foreseeable  future,  Mr. Cooke  continued to advance funds to the
Company after 2004 to support  operations.  Amounts loaned to the Company by Mr.
Cooke,  totaling  $182,063 at December 31, 2004,  bear interest at 12.5% and are
repayable on demand.

ITEM 13. EXHIBITS

         Exhibit
         Number                      Description of Exhibit
         _______      __________________________________________________________
         3.1          Restated Articles of Incorporation of Saratoga  Resources,
                      Inc.  (incorporated  by  reference  to Exhibit 3(i) to the
                      Company's  Registration Statement on Form 10-SB filed with
                      the SEC on October 6, 1999).

         3.2          Bylaws  of  Saratoga  Resources,   Inc.  (incorporated  by
                      reference to Exhibit 3(ii) to the  Company's  Registration
                      Statement  on Form 10-SB  filed with the SEC on October 6,
                      1999).

         10.1         Geophysical/Geological   Data   Review   Agreement   dated
                      December 1999, between Saratoga  Resources,  Inc. and Trek
                      Oil and Gas,  Inc.  (incorporated  by reference to Exhibit
                      10.1 to the Company's Registration Statement on Form 10-SB
                      filed with the SEC on February 16, 2000).

         10.2         Letter Agreement,  dated March 22, 1999,  between Saratoga
                      Resources,   Inc.   and   DBX   Geophysical   Corporation.
                      (incorporated   by   reference  to  Exhibit  10.2  to  the
                      Company's  Annual Report on Form 10-KSB for the year ended
                      December 31, 1999)

         10.3         Letter  Agreement,  dated June 21, 1999,  between Saratoga
                      Resources,  Inc.,  Ivy Oil  Company  and Trek Oil and Gas,
                      Inc.  (incorporated  by  reference  to Exhibit 10.3 to the
                      Company's  Annual Report on Form 10-KSB for the year ended
                      December 31, 1999)

         10.4         Letter Agreement,  dated January 3, 2001, between Saratoga
                      Resources,  Inc. and Trek Oil and Gas, Inc.  (incorporated
                      by  reference  to  Exhibit  10.4 to the  Company's  Annual
                      Report on Form  10-KSB  for the year  ended  December  31,
                      2000)

         21.1         List of subsidiaries (incorporated by reference to Exhibit
                      21 to the Company's  Registration  Statement on Form 10-SB
                      filed with the SEC on October 6, 1999).

         31.1      *  Section 302 Certifications

         32.1      *  Section 906 Certifications

*        Filed herewith



                                       15
<PAGE>

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table presents fees billed for professional  services  rendered by
the  Company's  principal  accountants  for the  audit of the  Company's  annual
financial  statements  for the years ended  December  31, 2003 and 2004 and fees
billed for other services rendered by that firm during those periods.

                                       2003          2004
                                     --------      --------
          Audit fees (1)             $  9,857      $  9,418
          Audit related fees                -             -
          Tax fees                          -             -
          All other fees                    -             -
                                     --------      --------
          Total                      $  9,857      $  9,418
                                     ========      ========

     (1) Audit fees consist of fees billed for  professional  services  rendered
         for the audit of the Company's consolidated annual financial statements
         and review of the interim consolidated financial statements included in
         quarterly  reports  and  services  that  are  normally  provided  by in
         connection with statutory and regulatory  filings or  engagements.  The
         audit of the Company's  financial  statements for 1999 through 2002 was
         performed  during  2003,  2004 and later  periods  and the audit of the
         Company's financial  statements for 2003 and 2004 was performed in 2004
         and later  periods.  Fees shown as billed during 2003 relate to periods
         beginning in 1999 and running through 2002. Fees shown as billed during
         2004 relate to periods beginning in 1999 and running through 2003.

The Company does not maintain an Audit  Committee.  The policy of the  Company's
board is to  pre-approve  all  audit  and  non-audit  services  provided  by the
independent auditors.

                                   SIGNATURES

In  accordance  with  Section 13 or 15(d) of the Exchange  Act,  the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                                SARATOGA RESOURCES, INC.
Dated:  July 8, 2005

                                           By:  /S/ Thomas F. Cooke
                                                ___________________________
                                                Thomas F. Cooke
                                                President

In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  registrant and in the capacities and on the
dates indicated.

       Signatures                       Title                          Date

/S/ THOMAS F. COOKE           President, Director and              July 8, 2005
________________________      Treasurer (Principal Executive
THOMAS F. COOKE               and Financial Officer)


/S/ KEVIN SMITH               Director                             July 8, 2005
________________________
KEVIN SMITH






                                       16
<PAGE>

                            SARATOGA RESOURCES, INC.

                          INDEX TO FINANCIAL STATEMENTS




Independent Auditors' Report.......................................       18

Consolidated Balance Sheets as of December 31, 2004................       19

Consolidated Statements of Operations for the years ended
  December 31, 2004 and 2003.......................................       20

Consolidated Statements of Changes in Stockholders' Equity
  (Deficit) for the years ended December 31, 2004 and 2003.........       21

Consolidated Statements of Cash Flows for the years ended
  December 31, 2004 and 2003.......................................       22

Notes to Consolidated Financial Statements.........................       23




                                       17

<PAGE>

                         Report of Independent Auditors

Board of Directors
Saratoga Resources, Inc. and Subsidiaries

We  have  audited  the  accompanying  consolidated  balance  sheet  of  Saratoga
Resources,  Inc.  and  Subsidiaries  as of December  31,  2004,  and the related
consolidated   statements  of  operations,   changes  in  stockholders'   equity
(deficit),  and cash flows for the years ended December 31, 2004 and 2003. These
consolidated  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility is to express an opinion on these  consolidated
financial statements based on our audit.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  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 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 consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Saratoga  Resources,  Inc.  and  Subsidiaries  as of  December  31, 2004 and the
consolidated  results of their  operations  and cash  flows for the years  ended
December 31, 2004 and 2003 in  conformity  with  generally  accepted  accounting
principles.

As  discussed  in Note 5, certain  conditions  indicate  that the Company may be
unable to continue as a going concern. The accompanying  financial statements do
not include any adjustments to the financial  statements that might be necessary
should the Company be unable to continue as a going concern.



Robnett & Company, LLP
Austin, Texas

March 24, 2005


                                       18

<PAGE>

                    Saratoga Resources, Inc. and Subsidiaries
                           CONSOLIDATED BALANCE SHEET
                                December 31, 2004

                                     ASSETS

Current assets:
   Cash                                                             $       985
   Available-for-sale securities                                         26,655
                                                                    -----------
                                                                         27,640
Fixed assets:
   Furniture and equipment                                               26,688
   Accumulated depreciation                                             (25,434)
                                                                    -----------
                                                                          1,254

Other assets                                                              4,125
                                                                    -----------

Total assets                                                        $    33,019
                                                                    ===========
                      LIABILITIES AND STOCKHOLDERS' CAPITAL


Current liabilities:
   Accounts payable & other accrued liabilities                     $   152,944

Long-term debt:
   Due to related parties                                               182,063
                                                                    -----------
                                                                        335,007
Stockholders' capital:
   Preferred stock, $0.001 par value; 100,000 shares
     authorized, 0 shares issued and outstanding                           --
   Common stock, $0.001 par value; 100,000,000 shares
     authorized, 3,465,292 shares issued and outstanding                  3,465
   Additional paid-in capital                                         2,489,499
   Accumulated deficit                                               (2,821,637)
   Accumulated other comprehensive loss                                  26,685
                                                                    -----------
                                                                       (301,988)
                                                                    -----------

Total liabilities and stockholders' capital                         $    33,019
                                                                    ===========


                       See notes to financial statements.


                                       19
<PAGE>

                    Saratoga Resources, Inc. and Subsidiaries
         CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
                 For the Years Ended December 31, 2004 and 2003

                                                      2004             2003
                                                   -----------      -----------
REVENUES:
   Net gain from participation agreement           $     9,888      $      --
   Other                                                    60             --
                                                   -----------      -----------
                                                         9,948             --

COSTS AND EXPENSES:
   Net loss from participation agreement                  --              3,246
   Depreciation                                            351              351
   General and administrative                           22,846           22,807
   Interest expense                                     29,722           24,391
                                                   -----------      -----------
                                                        52,919           50,795
                                                   -----------      -----------

Loss before extraordinary item                         (42,971)         (50,795)

   Gain from forgiveness of debt                          --              6,176
                                                   -----------      -----------

Net loss                                           $   (42,971)     $   (44,619)
                                                   -----------      -----------

OTHER COMPREHENSIVE INCOME:
   Unrealized holding gains (losses)
    arising during the period                            4,013          (32,839)
                                                   -----------      -----------

Comprehensive (loss)                               $   (38,958)     $   (77,458)
                                                   ===========      ===========

Basic and diluted loss per share:                  $    (0.012)     $    (0.015)
                                                   ===========      ===========

Weighted-average number of common
   shares outstanding                                3,465,292        3,465,292


                       See notes to financial statements.


                                       20
<PAGE>
<TABLE>
<CAPTION>

                    Saratoga Resources, Inc. and Subsidiaries
      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' CAPITAL (DEFICIT)
                 For the Years Ended December 31, 2004 and 2003


                                                                                                 Accumulated
                                              Common Stock          Additional                      Other
                                        -------------------------     Paid-in      Retained     Comprehensive
                                          Amount        Shares        Capital       Deficit      Gain (Loss)       Total
                                        -----------   -----------   -----------   -----------   -------------   -----------
<S>                                     <C>           <C>           <C>           <C>           <C>             <C>
January 1, 2003                         $     3,465     3,465,292   $ 2,489,499   $(2,734,048)  $      55,511   $  (185,573)

   Net loss                                    --            --            --         (44,619)           --            --

   Unrealized losses on securities             --            --            --            --           (32,839)         --
                                                                                                -------------

   Comprehensive loss                          --            --            --            --              --         (77,458)
                                        -----------   -----------   -----------   -----------   -------------   -----------

December 31, 2003                             3,465     3,465,292     2,489,499    (2,778,667)         22,672      (263,031)

   Net loss                                    --            --            --         (42,971)           --            --

   Unrealized losses on securities             --            --            --            --             4,013          --
                                                                                                -------------

   Comprehensive loss                          --            --            --            --              --         (38,958)
                                        -----------   -----------   -----------   -----------   -------------   -----------

December 31, 2004                       $     3,465     3,465,292   $ 2,489,499   $(2,821,637)  $      26,685   $  (301,988)
                                        ===========   ===========   ===========   ===========   =============   ===========
</TABLE>


                       See notes to financial statements.


                                       21
<PAGE>

                    Saratoga Resources, Inc. and Subsidiaries
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 For the Years Ended December 31, 2004 and 2003

                                                        2004          2003
                                                      --------      --------
Cash flows from operating activities:
   Net loss                                           $(42,971)     $(44,619)
   Adjustments to reconcile net loss to net
     cash provided by operating activities:
       Depreciation and amortization                       351           351
       Increase in other assets                         (4,094)         --
       Increase in accounts payable                     26,432          --
       Increase in accrued liabilities                    --          23,564
                                                      --------      --------
                                                       (20,282)      (20,704)
                                                      --------      --------

Cash flows from financing activities:
   Cash borrowed from related parties                   22,100        20,675

Net decrease in cash and equivalents                     1,818           (29)
Cash and equivalents, beginning of year                   (833)         (804)
                                                      --------      --------
Cash and equivalents, end of year                     $    985      $   (833)
                                                      ========      ========


                       See notes to financial statements.


                                       22

<PAGE>

                    Saratoga Resources, Inc. and Subsidiaries
                          Notes to Financial Statements
                                December 31, 2004

1.   Organization and Summary of Significant Accounting Policies

Organization

Saratoga Resources, Inc., a Texas Corporation (the "Company",  "Saratoga" or the
"Registrant")  was incorporated on July 25, 1990 to engage in the transaction of
any and all lawful businesses for which  corporations may be incorporated  under
the Texas  Business  Corporation  Act. The Company  derives its revenues  from a
contractual interest in a single oil and gas property.

Prior to August 9, 1999,  the Company was a wholly owned  subsidiary of Saratoga
Resources, Inc., a Delaware Corporation (the "Predecessor").  On August 9, 1999,
the  Predecessor  distributed  100% of the  outstanding  shares of the Company's
common stock to the Predecessor's  shareholders (the "Spin-Off").  Concurrently,
the Predecessor distributed its assets and 100% of the outstanding common shares
of its  previously  wholly owned  subsidiaries,  Lobo  Operating,  Inc., a Texas
Corporation  ("Lobo  Operating"),  and Lobo Energy,  Inc.,  a Texas  Corporation
("Lobo Energy"),  as well as a 9% equity interest in Saratoga Holdings,  Inc., a
Texas  Corporation  ("Holdings"),  to the Company.  Holdings had no identifiable
assets or a readily  determinable  fair  market  value  and did not  affect  the
Company's  financial  position or results of activities  and cash flows as of or
for the year ended December 31, 2004.

Use of Estimates

The preparation of the Company's consolidated financial statements in accordance
with  generally  accepted  accounting  principles  requires  management  to make
estimates  and  assumptions  that affect the amounts  reported in the  financial
statements  and  accompanying  notes.  Actual  results  could  differ from these
estimates.

Principles of Consolidation

The accompanying  consolidated  financial statements include the accounts of the
Company  and  all of  its  wholly-owned  and  majority-owned  subsidiaries.  All
significant   inter-company   accounts  and   transactions   are  eliminated  in
consolidation.



                                       23
<PAGE>

                    Saratoga Resources, Inc. and Subsidiaries
                          Notes to Financial Statements
                                December 31, 2004

1.   Organization and Summary of Significant Accounting Policies - Continued

Cash and Cash Equivalents

The company  considers all  investments  with  maturities of ninety days or less
when purchased to be cash equivalents.

Marketable Securities

All marketable securities are classified as available-for-sale. These securities
are stated at estimated  fair value based upon market quotes.  Unrealized  gains
and losses, net of tax, are computed on the basis of specific identification and
are included as a separate  component of stockholders'  equity.  Realized gains,
realized losses, and declines in value, judged to be  other-than-temporary,  are
included in Other Income.  The cost of securities  sold is based on the specific
identification  method and  interest  earned is  included  in  Interest  Income.
Marketable securities of the Company's are pledged as security for a debt of the
Predecessor incurred during the Spin-Off.  (See Note 4). The exposure to loss in
the surety is limited to the value of 7,839  shares of the  Predecessor's  stock
held in the  Company's  brokerage  accounts,  valued at $-0-, as of December 31,
2004.

Equipment

Equipment is recorded at cost less  accumulated  depreciation.  Depreciation  of
equipment is computed using the  straight-line  method over the estimated useful
life of the assets  (five to seven  years).  Expenditures  for  maintenance  and
repairs are charged to expense,  and  expenditures  which extend the physical or
economic life of the assets are  capitalized.  Gains or losses on disposition of
assets  are  recognized  in  income  and  the  related  assets  and  accumulated
depreciation accounts are adjusted accordingly.

Recognition of Revenues

The  Company  recognizes  net gains and losses  arising  from its  participating
interest  in the  profits  and losses of an  unaffiliated  oil & gas  production
company in accordance with Statement of Financial  Accounting  Standard ("SFAS")
No. 69 - Disclosures About Oil and Gas Producing  Activities.  As of the date of
report,  the  Company  has no  capitalized  or equity  interest  in, and has not
realized significant net royalties with respect to the participating interest in
the profits and losses of the unaffiliated oil & gas production company.  Due to
the lack of  significant  revenue  generation and the excessive cost involved in
reporting  the  associated  activities,  disclosure  required by SFAS No. 69 are
neither relevant nor reliable and are therefore excluded from this report.



                                       24
<PAGE>

                    Saratoga Resources, Inc. and Subsidiaries
                          Notes to Financial Statements
                                December 31, 2004

1.   Organization and Summary of Significant Accounting Policies - Continued

Income Taxes

The Company  accounts for income taxes in accordance with Statement of Financial
accounting Standards (SFAS) No. 109, Accounting for Income Taxes. This statement
prescribes the use of the asset and liability  method whereby deferred tax asset
and liability  account  balances are  determined  based on  differences  between
financial  reporting  and tax bases of assets and  liabilities  and are measured
using the enacted tax rates and laws that will be in effect when the differences
are expected to reverse.

Loss Per Share

The Company  follows the provisions of SFAS No. 128,  Earnings Per Share.  Basic
net loss per  share is  computed  by  dividing  net  loss  available  to  common
stockholders by the weighted average number of common shares  outstanding during
the period.

Segments

In  1997,  the  Financial  Accounting  Standards  Board  issued  SFAS  No.  131,
Disclosures  About  Segments of an  Enterprise  and Related  Information,  which
establishes  reporting  standards for a company's  operating  segments in annual
financial  statements and the reporting of selected  information about operating
segments in financial statements.  The adoption of SFAS No. 131 had no effect on
the disclosure of segment  information as the Company  continues to consider its
business activities as a single segment.


2. Related Parties

Due to Related Parties

As of December 31, 2004 the company was indebted to the principal shareholder in
the  amount  of  $279,061  which  includes  $96,998  of  accrued  interest.  The
indebtedness to the principle  shareholder  bears interest at 12.5% and is to be
repaid from proceeds from operations as they become available.  Accrued interest
of $29,722 is included in the interest  expense  recognized in the  Consolidated
Statement of Operations and Comprehensive Income for the year ended December 31,
2004.  Subsequent  to December  31,  2004,  operations  of the Company have been
funded by loans from the Company's principal shareholder, Thomas F. Cooke.



                                       25
<PAGE>

                    Saratoga Resources, Inc. and Subsidiaries
                          Notes to Financial Statements
                                December 31, 2004

3. Income Taxes.

As of December 31, 2004,  the company had estimated  federal net operating  loss
carry-forwards  approximating  $856,600.  The net  operating  losses will expire
beginning in 2012, if not utilized.

Utilization of the net operating  losses may be subject to a substantial  annual
limitation due to the "change in ownership"  provisions of the Internal  Revenue
Code of 1986. The annual limitation, if applicable, may result in the expiration
of net operating losses.

Deferred  income  taxes  reflect  the net tax effects of  temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's  deferred taxes for the years ended December 31, 2004 and 2003 are
as follows:

      Deferred tax asset (liabilities)                 2004          2003
                                                    ----------    ----------
      Depreciable assets                            $   (1,798)   $   (1,798)
      Tax carry-forwards                               366,122       350,154
      Accrual to cash adjustment                        25,386        14,377
      Total deferred tax assets                        389,710       362,712
      Valuation allowance for deferred tax assets     (389,710)     (362,712)
      Net deferred tax assets (liabilities)         $    -0-      $    -0-

The Company has established  valuation  allowances equal to the net deferred tax
assets due to uncertainties regarding their realization. The valuation allowance
increased by  approximately  $27,000 during the year ended December 31, 2004 due
primarily to current year net operating losses, which were aggregated with prior
year un-utilized net operating losses.

The  reconciliation  of generally  accepted  accounting  principles  net loss to
taxable net loss is as follows:

                                                2004         2003
                                              ---------    ---------
      GAAP Net Loss                           $ (43,212)   $ (44,619)
         Differences in realized losses
         Cash to accrual adjustments             29,754       23,949
      Taxable Net Loss                        $ (13,458)   $ (24,172)




                                       26
<PAGE>

                    Saratoga Resources, Inc. and Subsidiaries
                          Notes to Financial Statements
                                December 31, 2004


4. Commitments & Contingencies

Debt Surety

The Company pledged equity securities to secure debt of the Predecessor incurred
in the  Spin-Off.  The amount of the surety is limited to the equity  securities
held in brokerage accounts pledged as collateral for the debt.

5. Going Concern

As shown in the accompanying  financial statements,  Saratoga Resources incurred
recurring net losses of $42,971 and $44,619 in 2004 and 2003, respectively,  has
an accumulated  deficit of $2,821,637 and a working  capital deficit of $125,304
as of December 31, 2004. These conditions raise substantial doubt as to Saratoga
Resources' ability to continue as a going concern.  The financial  statements do
not include any  adjustments  that might be necessary  if Saratoga  Resources is
unable to continue as a going concern.



                                       27
<PAGE>