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, 1999

    [ ]      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 [ ]   No [X]

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. [ ]

The Issuer's revenues for the fiscal year ended December 31, 1999 were $734.

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...............................    12
         ITEM 8.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                    ON ACCOUNTING AND FINANCIAL DISCLOSURE.............    12
         ITEM 8A.   CONTROLS AND PROCEDURES............................    13
         ITEM 8B.   OTHER INFORMATION..................................    13

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..............................    15
         ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.....    15
         ITEM 13.   EXHIBITS AND REPORTS OF FORM 8-K...................    16
         ITEM 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES.............    17

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 December  2000,  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, 1999  consisted of a
contractual  right to  participate  in 33% of the profits and losses (as of June
2005,  a 50% working  interest)  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, 1999 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 1999
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.  During 1998, Saratoga Delaware's  operations,  which are reflected on
our financial  statements  for that year,  were limited to efforts to enter into
various ventures, through its subsidiaries, in oil and gas and other markets.

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, 1999,  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,
1999, 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, 1999 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,  1999,  we  recorded  no
impairments of our long-lived assets.

Results of Operations

Year Ended December 31, 1999 Compared to Year Ended December 31, 1998

Revenues.  Revenues  during 1999 totaled $734, all of which was  attributable to
interest and dividend income.  Revenues during 1998 totaled $37,815,  consisting
of $18,664 of interest and dividend income and $19,151 of other income.

The decrease in interest and dividend  income was  attributable to the reduction
in  cash  balances  held by the  Company  following  its  spin-off  by  Saratoga
Delaware.

Other revenues during 1998 were attributable to the sale of securities.

Costs and Expenses.  Operating  costs and expenses  totaled  $360,250 in 1999 as
compared to $361,095 in 1998 and, during 1999, consisted  principally of general
and  administrative  expenses,   losses  on  sales  of  securities,   loss  from
securitization  of debt and a loss realized from the Company's  participation in
the Adcock Farms No. 1 well.

 - Loss From Participation Agreement.  Loss from participation agreement totaled
$7,862 in 1999 as  compared  to $0 in 1998.  The 1999  loss  from  participation
agreement was attributable to initial operations of the Adcock Farms No. 1 well.

 - General  and  Administrative  Expenses.  General and  administrative  expense
declined from $341,641 in 1998 to $286,845 in 1999.  The decrease in general and
administrative expense was attributable to a reduced level of activity following
the spin-off from Saratoga Delaware and ongoing cost control measures.

 - Depreciation  Expense.  Depreciation expense declined from $11,127 in 1998 to
$7,916 in 1999. The decline in depreciation expense during 1999 was attributable
to assets  reaching full  depreciation  in 1998 with minimal asset  additions in
1999.

 - Interest Expense. Interest expense increased from $1,449 in 1998 to $1,948 in
1999. The increase in interest expense was attributable to higher long-term debt
in  1999  attributable  to  loans  from  a  principal   shareholder  to  support
operations.

 -  Realized  Losses  on  Available  for Sale  Securities.  Realized  losses  on
available for sale securities  totaled $35,679 in 1999. The Company  reported no
such losses in 1998. The losses consist of the losses from the sale of shares of
Saratoga  Delaware stock held by the Company and pledged as security for debt of
Saratoga  Delaware  incurred  during the spin-off of the Company  from  Saratoga
Delaware.

 - Loss from  Securitization  of Debt. Loss from  securitization of debt totaled
$20,000 in 1999. The Company  reported no such losses in 1998. The loss consists
of the book  value of stock  delivered  in  performance  of a  guarantee  by the
Company of an obligation of Saratoga Delaware.

Financial Condition

Liquidity and Capital Resources.

The  Company  had a cash  balance  of $8,884  and a working  capital  balance of
$21,104 at December 31, 1999 as compared to a pro forma cash balance of $289,000
and a pro forma  working  capital  balance of  $286,000 at  December  31,  1998.
Balances as of December 31, 1998 reflect  holdings of the Company  giving effect
to the spin-off of the Company from Saratoga  Delaware  pursuant to the Eye Care
Acquisition.


                                       10
<PAGE>

The  decline  in cash and  working  capital  balances  was  attributable  to the
operating  loss  incurred  during  1999  and  advances  to  Holdings  that  were
subsequently forgiven, partially offset by proceeds from the sale of securities,
unrealized  losses on  securities  held and  increases  in accounts  payable and
borrowings from related parties.

The Company,  at and for the year ended December 31, 1999,  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.

Marketable Securities.

At December 31, 1999, the Company's current assets included  securities holdings
classified  as   "available-for-sale   securities",   totaling  $27,436.   Those
securities  consisted  of  shares  of  stock  of  Opticare  (formerly,  Saratoga
Delaware).  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  $27,436,  net of
margin debt of $6,650, at December 31, 1999.

The  Company  had  unrealized  losses on its  available-for-sale  securities  of
$47,611 during 1999. Those unrealized losses are included in Other Comprehensive
Income (Loss).

Long-Term Debt

At December  31,  1999,  the Company had  long-term  debt of $20,349,  including
$10,000 owed to the Company's  principal  shareholder.  Loans from the Company's
principal  shareholder  bear  interest  at  12.5%  and are  payable  on  demand.
Long-term debt, other than amounts owed to the Company's principal  shareholder,
consisted  of a bank note  payable in monthly  installments  of $564,  including
interest  at 10%.  The bank  note is  secured  by a  vehicle  and  provides  for
maturities of $5,434 in 2000,  $6,004 in 2001 and $4,345 in 2002.  Subsequent to
December 31, 1999,  the vehicle  securing the bank loan was  transferred  to the
Company's principal shareholder and the shareholder assumed the balance owing on
the bank loan.

Capital Expenditures and Commitments

During 1999, the Company made no capital expenditures and, at December 31, 1999,
the Company had no fixed capital commitment obligations.

The Company, at December 31, 1999, was contractually obligated to bear one-third
of the expenses of operating the Adcock Farm prospect.

The  Company,  at December  31, 1999,  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, 1999, 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, 1999 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, 1999.


                                       11
<PAGE>

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 and Ernst & Young,  appears immediately after
the signature page of this report.  See "Index to Financial  Statements" on page
18 of this report.

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

On March 29, 1999,  the Board of Directors of Saratoga  Delaware,  the Company's
predecessor,  determined  not to engage  Hein and  Associates  ("Hein") to audit
Saratoga  Delaware's  consolidated  financial  statements as of and for the year
ended December 31, 1998.

The  reports  of Hein  on the  consolidated  financial  statements  of  Saratoga
Delaware as of and for the years ended  December 31, 1997 and 1996  contained no
adverse  opinion or  disclaimer of opinion and were not qualified or modified as
to uncertainty, audit scope or accounting principal.

The  determination  not to continue the  engagement  of Hein was reported in the
Company's Form 10-SB.  Management of the Company  requested that Hein furnish it
with a letter  addressed  to the  Securities  and  Exchange  Commission  stating
whether or not it agreed with the above statements.  The letter was received and
filed as an exhibit to the Company's Form 10-SB.

In connection with Hein's audits as of and for the years ended December 31, 1997
and 1996 and through March 29, 1999, there have been no disagreements  with Hein
on any  matter  of  accounting  principles  or  practices,  financial  statement
disclosure, or auditing scope or procedure,  which disagreements if not resolved
to the satisfaction of Hein would have caused them to make reference  thereto in
their reports on the consolidated  financial  statements as of and for the years
ended December 31, 1997 and 1996.

On March 29, 1999 the Board of Directors of Saratoga  Delaware formally approved
the  appointment  of Ernst & Young LLP as its  independent  accountant  to audit
Saratoga  Delaware's  consolidated  financial  statements as of and for the year
ended December 31, 1998. In view of the relationship  between Saratoga  Delaware
and the  Company,  the  Company  selected  Ernst & Young LLP as its  independent
auditors.

The  decision  to  change  independent  accounts  was  approved  by the Board of
Directors  of  Saratoga  Delaware.  Saratoga  Delaware  did not  have  an  audit
committee.

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.


                                       12
<PAGE>

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 July 2003,  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, 1999, 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.

                                    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.


                                       13
<PAGE>

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 1999.  To the  Company's  knowledge,  all of the
filing requirements were satisfied on a timely basis in fiscal year 1999, except
for the following:  Thomas Cooke and Kevin Smith failed to file Form 3 reporting
their initial status as officer and/or director  and/or ten percent  shareholder
of the Company  following the effective  date of the  Company's  Form 10-SB.  In
making  these  disclosures,  the Company has relied  solely on copies of reports
provided to the Company.

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,  1999 of each  person  who  served as the
Company's  Chief  Executive  Officer  during  fiscal 1999 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 (1)               1999       85,000           -0-                     -                   -
   President and                1998      120,000           -0-                     -                   -
   Chief Executive Officer      1997      120,000           -0-                     -                   -
</TABLE>

 ---------------

 (1)     Salary  shown as paid or accrued  for  services of Mr.  Cooke  includes
         amounts paid by Saratoga  Delaware which may be deemed a predecessor of
         the  Company.  Salary paid to Mr.  Cooke by Saratoga  Delaware  totaled
         $120,000 and $120,000 during 1998 and 1997, respectively.

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 1999 and at June 10, 2005, had no employment agreements with
any employees.



                                       14
<PAGE>

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.

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 1999,  Thomas Cooke, the principal  officer,  director and shareholder of
the Company  loaned  $10,000 to the Company to support  operations  and, for the
foreseeable  future,  Mr. Cooke  continued to advance funds to the Company after
1999 to support  operations.  Amounts  loaned to the  Company by Mr.  Cooke bear
interest at 12.5% and are repayable on demand.

Subsequent to December 31, 1999, the Company transferred a vehicle to Mr. Cooke,
with a net book value of $1,027, and Mr. Cooke assumed the remaining debt on the
vehicle, totaling $1,662.



                                       15
<PAGE>

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.

         10.3       *   Letter Agreement, dated June 21, 1999,  between Saratoga
                        Resources,  Inc., Ivy Oil  Company and Trek Oil and Gas,
                        Inc.

         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



                                       16
<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 year ended  December  31,  1999 and 1998 and fees
billed for other services rendered by those firms during those periods.

                                     1999         1998
                                   --------     --------
          Audit fees (1) (2)       $  4,250     $      -
          Audit related fees              -            -
          Tax fees                    7,214        5,597
          All other fees                  -
                                   --------     --------
          Total                    $ 11,464     $  5,597
                                   ========     ========

(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 was  performed
         during  2003,  2004 and later  periods.  Accordingly,  limited fees are
         shown in 1999.
(2)      In conjunction with the spin-off and the Eye Care Acquisition in August
         1999, various audit fees were paid by Opticare and Prime.

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







                                       17
<PAGE>

                            SARATOGA RESOURCES, INC.

                          INDEX TO FINANCIAL STATEMENTS




Independent Auditors Reports........................................       19

Balance Sheet as of December 31, 1999...............................       21

Statements of Operations For the Years ended December 31, 1999
and 1998............................................................       22

Statements of Shareholders' Equity for the Years ended
December 31, 1999 and 1998..........................................       23

Statements of Cash Flows For the Years Ended December 31, 1999
and 1998............................................................       24

Notes to Financial Statements.......................................       25




                                       18
<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,  1999,  and the related
consolidated   statements  of  operations,   changes  in  stockholders'   equity
(deficit),  and cash flows for the year then ended. 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.  The  consolidated  statements  of  operations,
changes in stockholders' equity (deficit), and cash flows of Saratoga Resources,
Inc. and Subsidiaries for the year ended December 31, 1998 were audited by other
auditors whose report dated March 19, 1999,  expressed an unqualified opinion on
those statements.

We conducted our audit 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 audit provides a reasonable basis for our opinion.

In our opinion,  the 1999 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, 1999 and the
consolidated  results of their operations and cash flows for the year then ended
in conformity with generally accepted accounting principles.


Robnett & Company, LLP
Austin, Texas

September 7, 2004




                                       19
<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,  1998,  and the related
consolidated statements of operations,  changes in stockholders' equity and cash
flows for the year then ended. 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 audit 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.  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 audit provides 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  at  December  31,  1998,  and the
consolidated  results  of its  operations  and its cash  flows for the year then
ended in conformity with generally accepted accounting principles.


                                                  /s/ Ernst & Young LL

Austin, Texas
March 31, 1999



                                       20
<PAGE>

                   Saratoga Resources, Inc. and Subsidiaries
                           CONSOLIDATED BALANCE SHEET
                                December 31, 1999

                                     ASSETS

Current assets:
   Cash and cash equivalents                                     $     8,884
   Marketable securities                                              27,436
   Due from affiliates                                                50,698
                                                                 -----------
                                                                      87,018
Fixed assets:
   Furniture and equipment                                            57,176
   Accumulated depreciation                                          (28,073)
                                                                 -----------
                                                                      29,103
Other assets:
   Prepaid lease operating expenditures                                2,800
                                                                 -----------

Total assets                                                     $   118,921
                                                                 ===========

                      LIABILITIES AND STOCKHOLDERS' CAPITAL

Current liabilities:
   Accounts payable & other accrued liabilities                  $    60,051
   Long-term debt - current portion                                    5,863
                                                                 -----------
                                                                      65,914
Long-term debt:
   Long-term debt, net of current portion                             10,349
   Due to related parties                                             10,000
                                                                 -----------
                                                                      20,349
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                                            (2,507,917)
   Accumulated other comprehensive gain (loss)                        47,611
                                                                 -----------
                                                                      32,658

Total liabilities and stockholders' capital                      $   118,921
                                                                 ===========

                       See notes to financial statements.



                                       21
<PAGE>

                    Saratoga Resources, Inc. and Subsidiaries
         CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
                 For the Years Ended December 31, 1999 and 1998


                                                   1999              1998
                                                -----------       -----------
REVENUES:
   Interest and dividend income                 $       734       $    18,664
   Other                                               --              19,151
                                                -----------       -----------
                                                        734            37,815

COSTS AND EXPENSES:
   Loss from participation agreement                  7,862             6,878
   Depreciation                                       7,916            11,127
   General and administrative                       286,845           341,641
   Interest expense                                   1,948             1,449
   Realized losses on available for
     sale securities                                 35,679              --
   Loss from securitization of debt                  20,000              --
                                                -----------       -----------
                                                    360,250           361,095
                                                -----------       -----------

Loss before provision for income taxes             (359,516)         (323,280)

   Provision for income taxes                          --                --
                                                -----------       -----------

Net loss                                        $  (359,516)      $  (323,280)
                                                -----------       -----------

OTHER COMPREHENSIVE INCOME:
   Unrealized holding gains (losses)
     arising during the period                       47,611           (27,148)
                                                -----------       -----------

Comprehensive income                            $  (311,905)      $  (350,428)
                                                ===========       ===========

Basic and diluted loss per share:               $   (0.0103)      $   (0.0093)
                                                ===========       ===========

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


                       See notes to financial statements.


                                       22
<PAGE>
<TABLE>
<CAPTION>

                    Saratoga Resources, Inc. and Subsidiaries
      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' CAPITAL (DEFICIT)
                 For the Years Ended December 31, 1999 and 1998



                                                                                                        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, 1998                                $     1,000       100,000   $ 2,491,964   $(1,825,121)  $        --     $   667,843

   Net loss                                           --            --            --        (323,280)           --            --

   Unrealized loss on marketable securities           --            --            --            --           (27,148)         --
                                                                                                       -------------

   Comprehensive loss                                 --            --            --            --              --        (350,428)
                                               -----------   -----------   -----------   -----------   -------------   -----------

December 31, 1998                                    1,000       100,000     2,491,964    (2,148,401)        (27,148)      317,415

   34.65292 to 1 stock split, Par $0001              2,465     3,365,292        (2,465)         --              --            --

   Net loss                                           --            --            --        (359,516)           --            --

   Unrealized gains on securities, net of
      reclassification adjustment for gains
      included in net loss                            --            --            --            --            47,611          --
                                                                                                       -------------

   Comprehensive loss                                 --            --            --            --              --        (311,905)

   Reclassification adjustment for losses
     included in net loss                             --            --            --            --            27,148        27,148
                                               -----------   -----------   -----------   -----------   -------------   -----------

December 31, 1999                              $     3,465     3,465,292   $ 2,489,499   $(2,507,917)  $      47,611   $    32,658
                                               ===========   ===========   ===========   ===========   =============   ===========
</TABLE>

                       See notes to financial statements.



                                       23
<PAGE>

                    Saratoga Resources, Inc. and Subsidiaries
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 For the Years Ended December 31, 1999 and 1998


                                                          1999         1998
                                                        ---------    ---------
Cash flows from operating activities:
   Net loss                                             $(359,516)   $(323,280)
   Adjustments to reconcile net loss to net
     cash provided by operating activities:
       Realized holding (gains) losses in
         securities, net                                   35,679      (18,000)
       Depreciation                                         7,916       11,127
       Increase in prepaid expense                         (2,800)        --
       Increase (decrease) in accounts payable             50,148       (8,000)
                                                        ---------    ---------
                                                         (268,573)    (338,153)
                                                        ---------    ---------
Cash flows from investing activities:
    Cash paid for securities                               (1,958)     (61,607)
    Cash from sale of securities                           25,320       41,696
    Cash loaned to related parties                        (39,398)     (11,300)
    Cash payments for the purchase of property               (460)      (3,000)
                                                        ---------    ---------
                                                          (16,496)     (34,211)
                                                        ---------    ---------
Cash flows from financing activities:
    Principal payments on long-term debt                   (4,879)      (4,000)
    Cash borrowed from related parties                     10,000         --
                                                        ---------    ---------
                                                            5,121       (4,000)
                                                        ---------    ---------

Net decrease in cash and equivalents                     (279,948)    (376,364)
Cash and equivalents, beginning of year                   288,832      665,196
                                                        ---------    ---------
Cash and equivalents, end of year                       $   8,884    $ 288,832
                                                        =========    =========

Supplemental disclosures of cash flow information:
    Cash paid during the year for:
    Interest expense                                    $   1,948    $   1,000
                                                        =========    =========


                       See notes to financial statements.



                                       24
<PAGE>

                    Saratoga Resources, Inc. and Subsidiaries
                          Notes to Financial Statements
                                December 31, 1999

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
August 9, 1999.

The  Predecessor's  financial  position and results of activities and cash flows
were solely those of the Predecessor's  wholly owned subsidiaries.  Accordingly,
upon the  distribution  of the  Predecessor's  wholly owned  subsidiaries to the
Company, the Company's consolidated financial position and results of activities
and cash flows are  essentially  identical to those reported by the  Predecessor
prior to August 9, 1999.

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.


                                       25
<PAGE>

                    Saratoga Resources, Inc. and Subsidiaries
                          Notes to Financial Statements
                                December 31, 1999


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.  The
marketable  securities  are  pledged as security  for a debt of the  Predecessor
incurred  during the Spin-Off.  (See Note 5). The exposure to loss in the surety
is limited to the value of 8,039 shares of the  Predecessor's  stock held in the
Company's brokerage accounts, valued at $27,436, as of December 31, 1999.

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.



                                       26
<PAGE>

                    Saratoga Resources, Inc. and Subsidiaries
                          Notes to Financial Statements
                                December 31, 1999

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.   Long-Term Debt

As of December 31, 1999,  long-term  debt  consisted of a note payable to a bank
due in monthly installments of $564, including interest at 10%. The note payable
is due August 27, 2002 and is collateralized by an automobile, which is included
in  the  accompanying  consolidated  balance  sheet.  Future  maturities  of the
long-term debt as of December 31,1999 are as follows:  $5,434 in 2000; $6,004 in
2001;  and $4,345 in 2002.  Subsequent to December 31, 1999,  the automobile was
distributed  to, and the  outstanding  debt assumed by, the Company's  principle
shareholder.

3.   Related Parties

Due from Affiliates

As of December  31, 1999 the Company  had loaned  funds  aggregating  $50,698 to
Holdings.  Subsequent  to December 31, 1999,  these loans have been  forgiven in
exchange for the operations and assets of Holdings. (See Note 6)



                                       27
<PAGE>

                    Saratoga Resources, Inc. and Subsidiaries
                          Notes to Financial Statements
                                December 31, 1999

3.   Related Parties - Continued

Due to Related Parties

As of December 31, 1999 the company was indebted to the principal shareholder in
the amount of $10,000.  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 $98 is included in the interest expense
recognized in the Consolidated  Statement of Operations and Comprehensive Income
for the  year  ended  December  31,  1999.  Subsequent  to  December  31,  1999,
operations of the Company have been funded by loans from the Company's principal
shareholder.  As of the  date of  report,  principal  and  accrued  interest  of
$174,963 and $86,258 remain outstanding to the principle shareholder.

4.   Income Taxes

As  of  December  31,  1999,   the  Company  had  federal  net  operating   loss
carry-forwards  approximating  $702,000.  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 year ended December 31 1999 and 1998 are as
follows:

Deferred tax asset (liabilities)                     1999         1998
                                                   ---------    ---------

   Depreciable assets                              $  (1,579)   $    (717)
   Tax carry-forwards                                267,330      155,414
   Accrual to cash adjustment                          2,363        3,700
                                                   ---------    ---------
Total deferred tax assets                            268,114      158,397
Valuation allowance for deferred tax assets         (268,114)    (158,397)
                                                   ---------    ---------
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  $130,000 during the year ended December 31, 1999 due
primarily to current year net operating losses, which were aggregated with prior
year un-utilized net operating losses.



                                       28
<PAGE>

                    Saratoga Resources, Inc. and Subsidiaries
                          Notes to Financial Statements
                                December 31, 1999

4.   Income Taxes - Continued

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

                                                  1999           1998
                                               ----------     ----------
            GAAP Net Loss                      $ (359,516)    $ (323,280)
              Cash to accrual adjustments          62,984          8,360
                                               ----------     ----------
            Taxable Net Loss                   $ (296,532)    $ (331,640)
                                               ==========     ==========

5.   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.

Pending Litigation

The Company was plaintiff to a lawsuit, which was dismissed in a court of law in
November of 2000. No gain from this lawsuit was realized.

6.   Subsequent Events

On April 29, 2002, the Company acquired 100% of the outstanding common shares of
SH2, Inc., a Texas  Corporation  ("SH2"),  from Holdings,  to liquidate  related
party debt owed to the Company by Holdings.  SH2 had no  identifiable  assets or
operations  as of April 29,  2002 and did not  materially  affect the  Company's
financial position, results of operations, or cash flows.




                                       29
<PAGE>