<PAGE>

================================================================================

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

[X]      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
         OF 1934    For the fiscal year ended December 31, 2003

[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
                 For the transition period from ______ to ______

                             LARK TECHNOLOGIES, INC.
        (Exact name of small business issuer as specified in its charter)

           DELAWARE                                       73-1461841
(State or other jurisdiction of                      (IRS Employer
incorporation or organization)                       Identification No.)

9441 W. SAM HOUSTON PKWY. SOUTH, SUITE 103           (713) 779-3663
HOUSTON, TX 77099                                    (Issuer's telephone number)
(Address of principal executive offices)

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

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

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

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

Revenues for the fiscal year ending December 31, 2003 were $9,028,382.

The aggregate market value of the voting stock held by non-affiliates is
$21,261,263 based on a closing price of $5.75 on March 29, 2004

                APPLICABLE ONLY TO ISSUER INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [ ] No [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

As of March 29, 2004, there were 3,697,611 shares of Common Stock, par value
$0.001 per share, outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

None

Transitional Small Business Disclosure Format (Check one):   Yes [ ] No [X]
================================================================================

<PAGE>

                             LARK TECHNOLOGIES, INC.

                              INDEX TO FORM 10-KSB
                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003.

<TABLE>
<CAPTION>
                                                                                                         Page
                                                                                                         ----
<S>                                                                                                      <C>
Part I
     Item 1.   Description of Business ....................................................                1

     Item 2.   Description of Property ....................................................                7

     Item 3.   Legal Proceedings ..........................................................                7

     Item 4.   Submission of Matters to a Vote of Security Holders ........................                7

Part II
     Item 5.   Market for Registrant's Common Equity, Related Stockholder Matters and
               Small Business Issuer Purchases of Equity Securities .......................                8

     Item 6.   Management's Discussion and Analysis or Plan of Operations .................                8

     Item 7.   Financial Statements .......................................................               11

                        Balance Sheet .....................................................               13

                        Statements of Operations ..........................................               14

                        Statements of Cash Flows ..........................................               16

                        Notes to Financial Statements .....................................               18

     Item 8.   Changes in and Disagreements with Accountants on Accounting and Financial
               Disclosure .................................................................               27

     Item 8A.  Controls and Procedures ....................................................               27

Part III
     Item 9.   Directors, Executive Officers, Promoters and Control Persons;
               Compliance with Section 16(a) of the Exchange Act ..........................               27

     Item 10.  Executive Compensation .....................................................               29

     Item 11.  Security Ownership of Certain Beneficial Owners and Management
               and Related Stockholder Matters ............................................               31

     Item 12.  Certain Relationships and Related Transactions .............................               32

     Item 13.  Exhibits and Reports on Form 8-K ...........................................               32

     Item 14.  Principal Accountant Fees and Services .....................................               33

Signatures ................................................................................               34
</TABLE>

                                        i
<PAGE>

                                     PART I

         FORWARD LOOKING INFORMATION. This Annual Report contains various
forward-looking statements and information that are based on management's
beliefs as well as assumptions made by and information currently available to
management. When used in this document, the words "plan", "anticipate",
"estimate", "project", "expect" and similar expressions are intended to identify
forward-looking statements. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable; it can give no
assurance that expectations will prove to have been correct. Such statements are
subject to certain risks, uncertainties and assumptions. Should one or more of
these risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those anticipated, estimated
projected or expected.

ITEM 1. DESCRIPTION OF BUSINESS

         COMPANY HISTORY. Lark Technologies, Inc. ("Lark" or the "Company") is
successor by merger to the business of a company organized in 1989 for the
purposes of (i) marketing standard gene sequencing technologies used by
scientists at Baylor College of Medicine in Houston, Texas and (ii) marketing
software developed at Baylor College of Medicine used for sequencing.

         In December 2003, the Company entered into an Agreement and Plan of
Merger with Genaissance Pharmaceuticals, Inc. ("Genaissance") under which Lark
would be acquired by Genaissance in a stock-for-stock exchange. Each Lark
shareholder will receive 1.81 shares of Genaissance common stock for each share
held of Lark. A joint proxy statement/prospectus describing the proposed merger
has been sent to the shareholders of both companies. The shareholder meetings to
approve the proposed merger are scheduled to take place on April 1, 2004. Upon
approval of the merger by the shareholders of both companies, the merger will be
consummated and Lark will become a wholly owned subsidiary of Genaissance.
Reference is made to the joint proxy statement/prospectus for a full description
of the background, reasons for and terms of the proposed merger with
Genaissance.

         BUSINESS OF LARK. Lark is a leader in providing contract molecular
biology services to the pharmaceutical, biotechnology and agbio industries.
Research organizations and drug development institutions worldwide use Lark's
services to accelerate their efforts in bringing products to the market. Lark's
contract research service portfolio consists of over a hundred different
molecular biology services in the areas of Nucleic Acid Extraction Services, DNA
Sequencing Services, Genetic Stability Testing Services, Gene Expression and
Detection Services, and Custom Molecular Biology Services. A highly trained and
educated scientific staff working in a facility that is compliant with the Food
and Drug Administration's ("FDA") Good Laboratory Practices ("GLP") performs all
of these services.

         The Company's principal executive offices are located at 9441 W. Sam
Houston Pkwy South, Suite 103, Houston, Texas 77099. The Company's telephone
number at that address is (713) 779-3663 and the Company's website address is
http://www.lark.com. The Company's stock is traded on the OTC Bulletin Board
under the symbol LRKT. Periodic SEC filings, including the Company's annual
reports on form 10-KSB, quarterly reports on Form 10-Q, current reports on Form
8-K, and if applicable, amendments to those reports filed or furnished pursuant
to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934 are
available through the Company's web site free of charge as soon as reasonably
practicable after such material is electronically filed with, or furnished to,
the SEC.

CUSTOM DNA SEQUENCING SERVICES

         The foundation of the Company is based upon a broad breadth of DNA
sequencing services. Approximately 75% of projects currently booked by the
Company are for Custom DNA Sequencing Services. The Company has extensive
expertise in DNA sequencing and has incorporated multiple sequencing
technologies into its laboratory to accommodate both high throughput and highly
complex projects. Depending upon the nature of a project, Lark will develop an
optimal sequencing strategy to generate consistent, high quality sequence data
for use in applications spanning basic research to FDA submissions.

     -   FDA SUBMISSION QUALITY SEQUENCING. Projects completed by Lark for FDA
         submission are guaranteed to be 100% accurate with 100% four-fold
         coverage of the region of interest. Results are presented in a
         comprehensive report that can be incorporated into an application to be
         submitted to the FDA or other regulatory agency. With the increase in
         therapeutic targets resulting from the genomics effort combined with
         the increasing FDA requirements for sequence verification, the Company
         anticipates the growth for these services to exceed the industry
         average for all services.


                                       1
<PAGE>
     -   SINGLE PASS QUICK TURNAROUND ("QT") SEQUENCING. The single pass service
         is designed to give customers a "quick look" at high accuracy double or
         single strand sequence data from one or multiple clones in a short
         timeframe. Typically, these services have a 1 to 10 day turnaround
         depending upon the size of the clone to be sequenced. This service
         represents the bulk of the sequencing projects performed by Lark. The
         Company has divided this into two services, one of which will represent
         the "true" quick turnaround service or "express service", which
         typically has a 1 to 2 day turnaround, and a custom sequencing service
         which represents the remainder of the QT business. The keys to
         continued success in the quick turnaround market include penetration of
         the academic market, introduction of a LIMS (Laboratory Information
         Management System), the upgrade and automation of the other laboratory
         equipment, and streamlining of the sample processing steps in the
         laboratory. The Company anticipates experiencing the fastest growth for
         this service based on the available market share and increasing needs
         for this service.

     -   HIGH VOLUME SEQUENCING SERVICES. Lark's high volume sequencing services
         typically involve sequencing thousands of selected clones from a
         genomic or expressed sequence tag ("EST") library utilizing high
         throughput automated systems. The libraries are provided by the
         customers and usually consist of clones from a specific genome of
         interest. Capacity and cost-effective analysis are the key components
         to successfully growing this service. The Company believes that the
         need for this type of service will continue through the next decade as
         efforts to complete the genomes of model organisms continues and
         additional plant, animal and microbial genomes are targeted. The
         introduction of fully automated instrumentation is essential to
         remaining competitive in this market segment and Lark believes this
         service has become fully commoditized.

     -   LARGE SCALE GENOMIC SEQUENCING SERVICES. Lark has developed the
         capability to construct libraries from a variety of genomic constructs
         and assemble them into full-length sequences, allowing for the
         sequencing of very large pieces of DNA, which can represent hundreds or
         thousands of genes. Lark applies a shotgun strategy to randomly produce
         plasmid clones from cosmids, bacterial artificial chromosomes ("BACs")
         and phage artificial chromosomes ("PACs") to sequence using automated
         sequencing technology. The Company assembles these random fragments
         into a single large consensus sequence and closes any missing sequence
         applying gap closure strategies. The need for genomic sequencing
         services is expected to grow significantly as clients seek to obtain
         more information surrounding the gene of interest.

GENETIC STABILITY TESTING ("GST") SERVICES

         Lark introduced genetic stability testing as a product offering in 1996
to assist clients in meeting the regulatory guidelines established for
development and maintenance of specific genetically engineered biotechnology
products. Lark analyzes and provides a comprehensive report on the genetic
integrity of cell banks used to produce recombinant proteins, monoclonal
antibodies, gene therapy, and vaccine products, which is essential to creating a
reliable process, producing a pure biologic product in high yield. The Company
believes the need for these services is growing rapidly with the number of
biotechnology products entering the clinical development pipeline. The FDA is
requiring this work be performed according to GLP guidelines, a key
differentiating feature of Lark's services. True GLP guidelines are not commonly
followed in research laboratories and many service laboratories due to the
rigorous demands of documentation and adhesion to the quality assurance
regulations. Lark's entire laboratory operates according to GLPs but it is
particularly important for performing each of the genetic stability testing
services described below. Lark is currently transitioning from a strictly GLP
compliance level to the additional requirements of a GMP compliance level in
accordance with the regulations and guidelines provided by the FDA and the
International Conference on Harmonization (ICH Q7A). This increased level of
compliance is a result of increased demand by Lark clientele and a commitment to
the continuous improvement of the Company's quality and testing systems.

     -   DNA SEQUENCING. Direct sequencing of the plasmid isolated from the cell
         bank used to produce recombinant products would be the ideal template.
         However, the quantity of plasmid required makes this strategy
         impractical, as it would sacrifice a large number of valuable vials of
         cell banks. Lark has developed a number of alternative strategies to
         circumvent this issue and provide clients with complete sequence data.

     -   COPY NUMBER. Copy number is a service to monitor the number of gene
         expression constructs contained in a cell throughout the production
         cycle of a product. The FDA looks for consistency in copy number to
         ascertain the stability of the manufacturing process. Clients also
         monitor copy number to evaluate the production efficiencies of their
         cell banks in order to mitigate additional costs. Demonstrating that
         cells experience predictable changes in expression system copy number
         during production scale-up assures regulatory authorities that the
         process is well controlled.


                                       2
<PAGE>
     -   INSERTION NUMBER. Insertion number is similar to copy number but is an
         additional analysis that is utilized to measure a eucaryotic cell
         bank's stability. During cell line construction, the essentially random
         process of DNA integration can lead to several types of products. As
         with prokaryotic copy number analysis, companies also monitor to ensure
         optimal production efficiencies.

     -   PLASMID LOSS OR REARRANGEMENT. For plasmid-based gene expression
         systems, the loss or rearrangement of the plasmid can be a major
         practical problem in high yielding strains. The accumulation of cells
         lacking the expression system, or with damaged plasmids, can severely
         affect the productivity of a fermentation run. Lark has developed a
         number of assays to detect the percentage of cells missing or with a
         loss or rearrangement of the plasmid.

     -   PHAGE DETECTION. Phages are bacterial viruses, which can kill or alter
         the bacterium's growth cycle or expression levels. Lark's phage
         detection service is designed to detect contamination of a prokaryotic
         cell bank by either lysogenic or lytic phage. Phage contamination can
         be extremely detrimental to the production process by interfering with
         production efficiencies and purification steps of the end product.
         Phages are difficult to eliminate from a manufacturing environment
         making upfront analysis imperative.

GENETICALLY MODIFIED ORGANISM ("GMO") TESTING SERVICES

         Lark provides services for identification and characterization of
genetically modified ("GM") crops and plants. Several effective services have
been developed for genetic testing of food and agricultural products. These
laboratory services offer a broad range of genetics-based assays for qualitative
and quantitative analysis of biotech modifications in plants such as corn, soy
and other grain products. Companies are requiring GMO testing of ingredients for
labeling requirements and to ensure the presence or absence of genetically
enhanced characteristics. This area clearly has the potential for tremendous
growth as a result of the increasing pressures to label and certify all
agricultural products.

     -   PCR ANALYSIS. This method is recognized as the "gold standard" for GMO
         testing. The Polymerase Chain Reaction ("PCR") is a sophisticated
         DNA-based technology that is internationally recognized as the fastest,
         most accurate method for detecting and quantifying products of
         agricultural biotechnology.

     -   SOUTHERN BLOT ANALYSIS. Lark will use standard Southern blot analysis
         for restriction enzyme fragment analysis or mapping of known insertion
         and gene expression analysis. While PCR analysis is certainly the
         fastest and most accurate method for detecting the presence of a GMO
         event, only the Southern blot method can provide information regarding
         quality and quantity of these events.

     -   SEQUENCE VERIFICATION OF THE EXPRESSION CASSETTE. Direct sequencing of
         the GMO event can provide a level of detail of the GMO event, which
         cannot be achieved by either PCR analysis or Southern Blot Analysis.
         Sequence verification can ensure that the quality of the expression
         cassette has been maintained at the DNA level guaranteed to be 100%
         accurate with 100% double stranded coverage for that region.

GENE EXPRESSION AND DETECTION SERVICES

     The genomics initiative continues to provide an abundance of gene sequence
information albeit little information regarding the function of genes in their
biochemical pathways. Lark continues to identify services it can offer to assist
clients in ascertaining the biological role of a gene by determining if, when,
and at what level a gene is being expressed in any number of samples of
interest. These services can be important in identifying novel genes, confirming
the validity of a gene as a drug target, and monitoring a target gene through
the product development process. These services are highly complementary to
genomic research and will continue to be of growing importance to companies
applying genomics to their product development efforts. Lark will continue to
expand the number of services it offers for gene expression and detection
purposes by actively seeking technologies, which meet the growing needs of its
client base.

     -   QUANTITATIVE POLYMERASE CHAIN REACTION ("QPCR"). Lark's QPCR service
         provides highly accurate gene sequence detection. The method is a
         powerful tool for analyzing the distribution and expression of target
         DNA or RNA in a high throughput format. This service has a broad number
         of applications in biotechnology product development including gene
         therapy distribution and expression analysis, drug response studies,
         mutation detection, and expression system development. The ability to
         specifically and accurately track target sequences of interest will
         have a significant impact on the monitoring requirements established by
         the regulatory agencies for a variety of biotechnology-based products.


                                       3
<PAGE>
CUSTOM CORE MOLECULAR BIOLOGY SERVICES

         Many of the custom projects Lark performs require the application of
molecular biology techniques either upstream or downstream from the main service
provided. As a result, Lark has developed the ability to perform a breadth of
molecular biology techniques, which can be offered as a complement to another
service, or as a stand-alone service. The Company envisions an expanding list of
custom services as new technologies and advances occur in the field of molecular
biology. Some of the more frequently requested services offered by the Company
are described below.

     -   NUCLEIC ACID EXTRACTION SERVICES. All of Lark's services involve
         manipulation of nucleic acids, the starting material for molecular
         biology research and development. Nucleic acids are the DNA and RNA
         contained in the cells of organisms. Lark both extracts and purifies
         the nucleic acids from its clients' samples or receives them already
         prepared by its clients. Lark has developed a variety of extraction
         procedures to analyze DNA and/or RNA from blood, tissue, and other
         fluids as well as, bacterial, plant and cell culture samples. The
         Company has established the facilities and personnel training necessary
         to extract nucleic acids from human, animal and plant origin. The
         ability to process these samples in a high throughput format has been
         established for numerous sample sources such as blood and continues to
         develop processes for other sample types.

         The quality of the nucleic acid preparation can significantly influence
         the outcome of a particular assay. To ensure high quality results, the
         Company strongly encourages its clients to use its standardized GLP
         extraction services. Lark believes the requests for these services will
         continue to expand as the pharmacogenomics revolution fuels the need to
         analyze the genetic make up of large patient populations involved in
         clinical trials.

     -   SUBCLONING. Subcloning is a procedure used to transfer a DNA region of
         interest into a vector that is more suitable for procedures such as DNA
         sequencing and gene expression. Although subcloning is a common method
         used in genetic research, it can be a less than obvious process. Lark
         can provide a strategy for subcloning a variety of different sequence
         fragments, including PCR products, into standard vector systems. Once
         in a standard vector system, the customer can more readily manipulate
         the clone for specific applications of interest.

     -   LIBRARY SCREENING. During the gene discovery process, customers may
         find only a portion of a gene of interest. Lark can use such a gene
         fragment to screen a library of clones and isolate the full-length cDNA
         of interest. Lark can also search a library to find homologous genes in
         related species or isolate the genomic equivalent of a DNA.

     -   POLYMERASE CHAIN REACTION (PCR). PCR can be used to amplify a specific
         sequence of interest from plasmid, viral, or genomic DNA. The amplified
         fragment can be used as a probe, part of a plasmid construction, or for
         direct DNA sequencing identification. Lark also has the expertise to
         provide reverse transcription PCR ("RT-PCR") for amplification of an
         RNA product.

     -   DNA PREPARATION. Many of Lark's customers need large amounts of DNA for
         sequencing or probe generation. Lark has the ability to prepare plasmid
         DNA or phage DNA on a large-scale basis for its customers.

         BUSINESS STRATEGY. The Company plans to expand its leadership position
as a high quality molecular biology Contract Research Organization ("CRO") on a
global basis by:

     -   refining sales efforts to target new customers

     -   developing its current customer base and leveraging high level of
         repeat business

     -   continued expansion into continental Europe by focusing its sales
         efforts on countries outside of the UK

     -   growing existing molecular biology service business to support the high
         growth genomics industry

     -   applying molecular biology expertise to new and expanding market
         opportunities

     -   updating instrumentation and automation capabilities to compete with
         other state of the art CROs

REFINING SALES EFFORTS TO TARGET NEW CUSTOMERS

         Lark has always relied heavily on its existing relationships to fuel
its growth and provide direction for the development of new services. The sales
team has been focused on, and rewarded by, maintaining existing relationships.
The continued approach of focusing the sales team's efforts on securing new
accounts and expanding

                                       4
<PAGE>
the level of business within existing large accounts is a necessity and will
provide opportunities to significantly increase revenue.

EXPLOITING CURRENT CUSTOMER BASE AND LEVERAGE HIGH LEVEL OF REPEAT BUSINESS

         The Company has significant relationships with a number of leading
biotechnology companies and has served 18 of the 20 largest pharmaceutical
companies. Worldwide, the Company has also attained greater than an 80% repeat
business while growing at an annual compounded growth rate of greater than 14%
since 1998. Lark will continue to capitalize on its commercial relationships
through its direct sales force. Often smaller service contracts lead to larger
follow-on work once Lark has demonstrated its ability to provide high quality
data in an agreed upon timeframe to a new customer.

         Over the years Lark's customers have looked to the Company for advice
and direction in achieving aggressive corporate milestones. The Company believes
our technically competent sales team can enhance the opportunities for Lark to
develop long-term service relationships with its clients based on a
comprehensive understanding of each account's specific needs. The breadth of
services offered by Lark allows the Company to leverage its relationship with
investigators in one department of a company into further relationships with
other investigators in adjoining departments of the Company.

CONTINUED EXPANSION INTO CONTINENTAL EUROPE BY FOCUSING ITS SALES EFFORTS ON
COUNTRIES OUTSIDE OF THE UK

         In June 1998, the Company completed a unique service operation on
behalf of Pfizer Ltd. at its facility in Sandwich, England. Following this
initial collaboration Lark moved its operations offsite and established a
sequencing laboratory and sales office in Saffron-Walden, just outside of
Cambridge, UK. Lark used its existing client relationship to catapult into the
European market. Lark has been extremely successful in securing and maintaining
new business in the UK, but relatively unsuccessful in expanding into
continental Europe. While the UK represents a significant percentage of the
total European market there is still a tremendous opportunity to secure new
business outside of the UK. The Company has recently expanded its highly
competent sales team to continue to target key opportunities throughout Europe.
The Company has identified a number of potential key accounts and is focusing on
securing new business from these accounts, which should result in a significant
opportunity for new business and revenue source.

GROWING EXISTING SERVICE BUSINESS TO SUPPORT HIGH GROWTH GENOMICS INDUSTRY

         The Company has established five product lines, which support
genomics-based research and development efforts: 1) Custom DNA Sequencing
Services, 2) Genetic Stability Testing (GST) Services, 3) Genetically Modified
Organism (GMO) Testing Services, 4) Gene Expression and Detection Services, and
5) Custom Core Molecular Biology Services. Within each of these product lines
are specific services designed to meet specific project needs. Through the
Company's interactions with clients and awareness of the industry, Lark has
identified additional services to supplement these product lines to further
support its clients' genomics programs.

         Lark's technology development group evaluates an ongoing list of new
services to bring to market at an average rate of two per year. The Company
prioritizes these service opportunities based upon a number of criteria
including requests from clients, competitive advantages, regulatory
requirements, emerging market opportunities, market size and time to market.

         The Company's technology development group is particularly interested
in identifying service opportunities where Lark can further its competitive
position through collaboration with companies or researchers who have already
developed the technology. The Company has already identified a number of
services in the genomics and proteomics (study of the structure and function of
proteins) fields, which it is analyzing as possible additions to its existing
service platform.

APPLYING MOLECULAR BIOLOGY EXPERTISE TO NEW AND EXPANDING MARKET OPPORTUNITIES

         The Company believes the power of molecular biology has far reaching
applications extending beyond the classical biopharmaceutical industry. It has
identified the agricultural biotechnology markets as a new and expanding
opportunity for its molecular biology services. Lark will direct the sales team
to penetrate the fast-growing agbio sector of the biotechnology industry. Lark
believes additional market opportunities are emerging in the field of food
testing. As the Company expands its selling capabilities it will initiate sales
programs to exploit the opportunities in that new market.


                                       5
<PAGE>
MARKET OVERVIEW AND COMPETITION

         The Company was established to provide contract research services to
biotechnology researchers. With the advent of the Human Genome Project (an
initiative to map and sequence the human genome) and revolutionary advances in
the field of molecular biology, the Company has developed quality services to
capitalize upon these market opportunities. Today, the Company's services are
used worldwide by commercial, government and academic institutions. The Company
has earned a reputation as a leading provider of high quality DNA sequencing.
This reputation has allowed the Company to obtain key contracts with major
pharmaceutical and biotechnology companies throughout the world. The Company is
a fee for service contractor and typically takes no ownership position in the
intellectual property rights of the services it performs under contract.

         Several factors influence the current competitive business conditions
faced by the Company. First, the total amount of DNA sequencing is increasing
due to genome sequencing initiatives, and competitive pressures in the
pharmaceutical industry. Major pharmaceutical companies have made significant
financial commitments to gene therapy approaches. These approaches are maturing
and may require demonstration of genetic stability before or during clinical
trials. For example, there are currently over 60 biotech products in the
marketplace and over 2,000 in clinical trials, and a significantly higher number
in preclinical development, all of which potentially require FDA submission
sequencing in support of a demonstration of genetic stability. Additionally,
companies in both the pharmaceutical and biotechnology sectors are facing
increasing competitive pressures to reduce fixed expenditures. Pharmaceutical
companies are increasingly outsourcing routine procedures to maximize the
innovative aspects of their internal efforts. The biotechnology sector has
accepted the virtual company model, which supports further outsourcing of
routine development efforts.

         The Company has many attributes which have enabled it to compete in
this complex environment. The Company is recognized as a quality leader among
contract molecular biology service providers and has operated under the
direction of industry professionals for more than seven years. The Company's
technical team follows standard operating procedures, which help to produce
consistent, high quality results. Because services are performed in compliance
with GLPs as specified by the FDA, Lark can undertake projects that support
applications to the FDA. Finally, the Company provides a breadth of molecular
biology services with flexible protocols to meet project specific objectives.

         The Company faces several types of competition. The first is individual
researchers capable of performing the work themselves rather than contracting it
out. A similar type of competition is that of the core lab, either in an
academic setting or within a large company, which can provide services at a
much-reduced rate due to subsidies of its overhead expenses. These first types
of competition are difficult to overcome due to the perception of significantly
lower costs. There are several smaller companies attempting to copy Lark's
footprint for success, which offer DNA sequencing, and/or related molecular
biology services. Finally, new entrants in the genomics sequencing market have
arisen. These companies typically focus on high throughput, high volume
sequencing services, whereas Lark offers a wide breadth of custom sequencing
services.

         The Company markets its services mainly through direct contact with
potential clients, attendance at trade shows and scientific conferences, and
client referrals. The Company's sales staff in the United States and in its
European branch office is compensated with base salaries and commissions based
on performance.

         RAW MATERIALS. The principal suppliers of raw materials for the
Company's services are laboratory supply companies. The Company believes that
there are sufficient alternate suppliers available such that raw materials will
be available in sufficient quantities and at reasonable cost for the foreseeable
future.

         CUSTOMERS. The Company provides services to researchers at a large
number of public and private institutions and business entities. One single
client represented more than 10% of the Company's business in 2003.

         PATENTS AND PROPRIETARY TECHNOLOGY. The Company actively seeks patent
protection in the U.S. and in significant foreign countries for inventions and
technologies for which it deems such protection commercially advisable. In
connection with its senescence gene discovery program, the Company currently has
licensed rights to one issued U.S. patent and shared ownership in another patent
application. The Company believes that this patent protection is important to
its senescence technology, but not essential to the overall success of the
Company. The Company can make no assurances that these applications will be
approved, that similar patents have not been or will not be issued, or that any
patent issued to the Company will not be circumvented or infringed. In
connection with its senescence gene discovery program, the Company is subject to
certain performance and royalty arrangements as described in Note 8 of the
financial statements. Lark does not believe that additional patents will be
approved or that there is significant commercial value in the senescence gene
program.

                                       6
<PAGE>

         The Company relies on trade secrets and technical know-how in order to
maintain its competitive advantage and scientific expertise. It is the practice
of the Company to enter into confidentiality agreements with employees,
consultants, members of its scientific advisory board, and any third party to
whom it discloses confidential information. There can be no assurance that such
confidential information will not be disclosed or that similar trade secrets or
expertise will not be independently developed, or that access to such
information could not be gained inadvertently.

         The Company is, by nature of its work, privy to certain confidential
information of its customers. In order to attract and maintain clients the
Company enters into confidentiality agreements with its customers, as both
parties deem appropriate. There can be no assurance that such confidential
information will not be disclosed or that similar trade secrets or expertise
will not be independently developed, or that access to such information could
not be gained inadvertently, which could result in Company liability if a client
is damaged in violation of a confidentiality agreement with the Company.

         GOVERNMENTAL APPROVAL. The Company is not dependent upon governmental
approval of its current services. However, many of its clients will submit
applications for new drugs or devices to the FDA. A significant portion of the
projects undertaken by the Company are in support of such applications and thus
are subject to compliance with standards established by the FDA and its foreign
counterparts. The Company employs personnel and utilizes procedures which it
deems necessary to comply with these regulatory standards. Although the Company
and its services are not themselves subject to FDA approval, the Company
complies with these regulatory standards in order to undertake this type of
project for its clients.

         By virtue of its work in support of its client's submissions to the FDA
and other regulatory bodies, the Company is subject to inspections by the FDA
and other federal, state and local agencies regarding specific FDA submission
projects it has worked on. Regulatory affairs audit teams from its
pharmaceutical and biotech clients frequently inspect the Company's facilities
and procedures to ascertain whether the Company complies with applicable
regulations. To date, the Company has not been found in material noncompliance
with the FDA or customer requirements of a GLP compliance level. If significant
violations were discovered during a client or governmental inspection, the
Company might be restricted from undertaking additional submission projects
until the violations were remedied. In the event that remedying such violations
required significant time or financial resources, such violations could have a
material adverse impact upon the Company.

         GOVERNMENTAL REGULATIONS AND ENVIRONMENTAL LAWS. The Company is subject
to regulations concerning laboratory and occupational safety practices, the use
and handling of hazardous chemicals and radioisotopes, and environmental
protection. The Company believes that it is in general compliance with such
applicable federal, state and local regulations and estimates the costs to
comply with these regulations will not be material.

         EMPLOYEES. As of December 31, 2003, the Company had a total of 53 full
time employees of which 38 were based in the US and 15 were based in the UK. The
Company believes that its employee relations are good, but can make no
assurances that it will continue to be able to attract and retain qualified
employees. The Company also has engaged the services of consultants when
appropriate.

ITEM 2. DESCRIPTION OF PROPERTY

         The Company leases 15,544 square feet of office and laboratory space
for its corporate headquarters in Houston, Texas pursuant to a lease, which
expires December 31, 2009. The Company has the first right of refusal to lease
approximately 10,000 contiguous additional square feet. The Company also leases
office space for its European branch office in Saffron Walden, England pursuant
to a lease which expires March 31, 2004. The Company carries commercial
insurance, which it deems sufficient to cover loss of lab equipment or occupancy
privileges.

ITEM 3. LEGAL PROCEEDINGS

         Not Applicable.

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

         There were no matters submitted to a vote of security holders during
the fourth quarter of the year ended December 31, 2003.

                                       7
<PAGE>

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
        SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES

         The Common Stock of the Company has been quoted on the OTC Bulletin
Board under the symbol LRKT (formerly LDNA) since the fourth quarter of 1995. As
reported on the Over-the-Counter Bulletin Board, the high and low bid
information for each quarter of 2002 and 2003 are shown in the following table.
These bid quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commission, and may not represent actual transactions.

STOCK PRICES

<TABLE>
<CAPTION>
                                          2002                      2003
                                    ----------------          ----------------
                                     High       Low           High        Low
                                    -----      -----          -----      -----
<S>                                 <C>        <C>            <C>        <C>
Quarter Ending March 31,            $2.05      $0.96          $1.96      $1.40
Quarter Ending June 30,             $2.00      $1.24          $5.35      $1.85
Quarter Ending September 30,        $1.59      $0.75          $5.25      $3.80
Quarter Ending December 31,         $1.70      $1.01          $5.60      $4.20
</TABLE>

         As of December 31, 2003, there were approximately 160 holders of record
of the Common Stock.

         The Company has never paid dividends on its Common Stock, and does not
anticipate paying any cash dividends in the foreseeable future. The Company
currently intends to retain future earnings, if any, for use in its business.

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

         The following discussion and analysis should be read in conjunction
with the Financial Statements and the accompanying Notes herein, and is
qualified entirely by the foregoing and by other more detailed financial
information appearing elsewhere.

         OVERVIEW. The Company's revenues are derived through provision of DNA
sequencing and related molecular biology services to researchers in the
pharmaceutical, biotechnology, agri-technology and related industries. Quarterly
fluctuations in revenues arise primarily from variations in contract status with
customers. In addition, the majority of customer projects are individual orders
for specific projects ranging in value from $6,000 to $140,000. Engagement for
successive work is highly dependent upon the customer's satisfaction with the
services provided to date. The Company is unable to predict for more than a few
months in advance the number and size of future projects in any given period.
Thus, timing of new projects could have a significant impact on financial
results in any given period. The impact of the unpredictable project
fluctuations from customers can result in very large fluctuations in financial
performance from quarter to quarter.

         The Company believes that its expansion efforts discussed in Part I
will compensate for some of these sales fluctuations. In addition, the Company
has initiated several steps to mitigate the effects of these fluctuations where
possible.

Critical Accounting Policies and Estimates--The Company's discussion and
analysis of its financial condition and results of operations are based upon its
financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States. The preparation of these
financial statements requires the Company to make estimates and judgments that
affect the amounts reported in our financial statements and accompanying notes.
On an on-going basis, the Company evaluates these estimates, including those
related to customer bad debts, estimated useful lives of property and equipment,
and income taxes. The Company bases its estimates on historical experience and
on various other assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates.

         The Company believes the following critical accounting policies reflect
the more significant judgments and estimates used in the preparation of the
financial statements:

                                       8
<PAGE>

Allowance for doubtful accounts--The Company maintains an allowance for doubtful
accounts for estimated losses resulting from the inability of our customers to
pay for laboratory service fees. The Company generally requires a deposit of
approximately 50% of the total anticipated billings prior to commencing work on
larger laboratory service projects. Historically, the Company has not
experienced significant bad debts and losses have been within management's
estimates. However, if the financial condition of the Company's customers were
to deteriorate rapidly, resulting in nonpayment, the Company could be required
to provide additional allowances for doubtful accounts which would decrease net
income in the period that this determination was made.

Property and equipment--Property and equipment relate primarily to laboratory
equipment and computer equipment. These costs are depreciated or amortized over
the estimated useful lives of the assets. If technology related to the
laboratory equipment or computer equipment was to rapidly change, the estimated
useful lives of existing equipment may be shortened. This would result in
accelerating depreciation and amortization expense, which would decrease net
income in the periods following such a determination. Additionally, the Company
periodically evaluates the costs of property and equipment for impairment in
accordance with Statement of Accounting Standards No. 144, "Accounting for
Impairment or Disposal of Long-Lived Assets and Long-Lived Assets to be Disposed
Of." If events or circumstances were to indicate that any of the long-lived
assets might be impaired, the Company would be required to analyze the estimated
undiscounted future cash flows from the applicable assets. If the carrying value
of the asset were less than the undiscounted cash flows, the Company would be
required to record an impairment loss, which would reduce net income, to the
extent that the carrying value of the asset exceeded fair value.

Deferred Taxes -- At December 31, 2002, the Company had a valuation allowance of
$289,586 recorded against its net deferred tax asset. At December 31, 2003, the
Company released the valuation allowance because management believes, based on
the weight of available evidence, that it is more likely than not that the
Company's net deferred tax asset will be realized in the future. Consequently,
the adjustment to reduce the valuation allowance increased net income.

RESULTS OF OPERATIONS

         Revenues. Revenues increased 35% from $6,692,305 to $9,028,382 for the
years ended December 31, 2002 and 2003, respectively. The growth came from
increases in most product lines, including areas relating to genomic DNA
sequencing, with the fastest growth occurring in the UK custom sequencing.

         Costs of Services. Costs of services consist primarily of labor and
laboratory supplies. Costs of services increased 21% from $3,662,096 to
$4,424,400 for the years ended December 31, 2002 and 2003, respectively. The
majority of the increase in cost of services can be attributed to increased
revenues. Increases in costs included labor, equipment maintenance and repair,
equipment rent, and depreciation. Costs of services as a percentage of revenue
were 55% and 49% for the years ended December 31, 2002 and 2003, respectively.
This decrease in cost of services as a percentage of revenue is attributable to
the increased revenues.

         Sales, General and Administrative Expenses. Sales, general and
administrative expenses consist primarily of salaries and related costs,
depreciation, amortization, legal and professional costs, rent, travel, and
advertising. Sales, general and administrative expenses increased 26% from
$2,209,890 to $2,794,228 for the years ended December 31, 2002 and 2003,
respectively. The increase is mostly a result of increased sales personnel
salaries both in the US and Europe. Sales, general and administrative expenses
as a percentage of revenue were 33% and 31% for the years ended December 31,
2002 and 2003, respectively. This decrease is attributable to the increased
revenues.

         Other Income (Expenses). Other income and (expense) consists primarily
of interest income, interest expense and other income and was within
management's expectations for the year ended December 31, 2003, increasing 34%
from ($60,725) expense to ($81,438) expense for the years ended December 31,
2002 and 2003, respectively. The increase in expense was attributable to
additional interest expense for a new capital lease for a new sequencer.

         Provision for Income Taxes. The Company recorded an income tax expense
of $34,645 in 2002 and $285,973 in 2003. The effective tax rate was 5% for
fiscal year 2002 and 17% for fiscal year 2003. The increase in effective tax
rate in 2003 is due to the fact that the Company is now paying federal income
taxes and with the $717,394 increase in net income, the effective tax rate was
higher in 2003 than in 2002. As of the end of the second quarter of 2003 the
Company has fully utilized its federal income tax loss carryforward as a result
of sustained profitability over the past few years.

         As of December 31, 2003, the Company had net deferred tax assets of
approximately $164,237. Net deferred tax assets primarily relate to revenue that
has been recognized for income tax purposes but deferred for financial

                                       9
<PAGE>

reporting purposes together with reserves and accruals that have been recognized
for financial reporting purposes but not for income tax purposes. At December
31, 2003, the Company had no federal net operating loss carryforwards remaining.

VARIABILITY OF FUTURE OPERATING RESULTS

         The growth in annual revenues was largely attributable to increased
revenues in each quarter over respective quarters in 2003. Although the Company
expects higher and less variable revenue streams resulting from the
implementation of our business strategies, the ultimate success of these changes
cannot be reasonably predicted.

         LIQUIDITY AND CAPITAL RESOURCES. Operating cash flow provided was
$1,042,591 and $1,919,521 for the years ended December 31, 2002 and 2003,
respectively. The operating cash flow was due largely to the increase in net
income, accounts payable, and customer deposits in 2003 for projects both in the
U.S. and the U.K.

         During 2003, net cash used in investing activities was $469,689 for
property and equipment additions in order to support the current and expected
increase in revenues made possible by the addition of the new services and
receipt of a large contract.

         The Company had no bank debt at December 31, 2003. The Company had a
line of credit with its principal bank, which expired December 31, 2003 and
which the Company determined not to extend or replace because of its strong cash
position and the expectation that the merger with Genaissance would be completed
early in 2004.

         Management anticipates that additional capital expenditures necessary
to support the Company's operating growth can be funded through operating
profits, and that new credit facilities could be obtained if the need arose.
Upon approval of the proposed merger with Genaissance on April 1, 2004, Lark
will become a wholly owned subsidiary of Genaissance and have the resources of
that company to support its operating growth. The Company's planned operating
growth will occur through a higher degree of automation made possible by
equipment additions and upgrades.

Contractual Obligations and Commercial Commitment--The following table
summarizes the Company's contractual obligations and commercial commitments as
of December 31, 2003 and the effect they are expected to have on its future
liquidity and capital resources:

<TABLE>
<CAPTION>
          Contractual                                  Less than                           After
          Obligations                    Total           1 Year         1-3 Years         3 Years
-------------------------------       ----------       ----------       ----------       ----------
<S>                                   <C>              <C>              <C>              <C>
Capital lease obligations             $  960,709       $  502,813       $  457,896       $        -
Non-cancelable operating leases          984,737          179,287          338,143          467,307
                                      ----------       ----------       ----------       ----------
Total contractual obligations         $1,945,446       $  682,100       $  796,039       $  467,307
                                      ==========       ==========       ==========       ==========
</TABLE>

         The Company anticipates moving its European operations from the current
location toward the middle of the second quarter of 2004 as the lease expired
March 31, 2003 and a long-term renewal cannot be secured at the current
location. The Company estimates that it will incur expenses associated with
relocation of approximately $170,000 and an increase in the cost of lease space
of approximately $51,000 per year.

MATERIAL COMMITMENTS

         The Company currently has no other undisclosed outstanding material
commitments.

                                       11
<PAGE>

ITEM 7. FINANCIAL STATEMENTS

                             LARK TECHNOLOGIES, INC.

                          Index to Financial Statements
                     Years ended December 31, 2002 and 2003

                                    Contents

<TABLE>
<CAPTION>
                                                                                    Page
                                                                                    ----
<S>                                                                                 <C>
Report of Independent Auditors.............................................          12

Financial Statements

              Balance Sheet as of December 31, 2003........................          13

              Statements of Operations for
                  Years Ended December 31, 2002 and 2003 ..................          14

              Statements of Stockholders' Equity for
                  Years Ended December 31, 2002 and 2003 ..................          15

              Statements of Cash Flows for
                  Years Ended December 31, 2002 and 2003 ..................          16

Notes to Financial Statements..............................................          18
</TABLE>
                                       11
<PAGE>

                         REPORT OF INDEPENDENT AUDITORS

Lark Technologies, Inc.
Board of Directors and Stockholders

We have audited the accompanying balance sheet of Lark Technologies, Inc. (the
"Company") as of December 31, 2003, and the related statements of operations,
stockholders' equity, and cash flows for each of the two years in the period
ended December 31, 2003. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Lark Technologies, Inc. at
December 31, 2003, and the results of its operations and cash flows for each of
the two years in the period ended December 31, 2003, in conformity with
accounting principles generally accepted in the United States.

                                                     ERNST & YOUNG LLP

Houston, Texas
March 1, 2004

                                       12
<PAGE>

                             LARK TECHNOLOGIES, INC.

                                  BALANCE SHEET

                             AS OF DECEMBER 31, 2003

<TABLE>
<S>                                                                                      <C>
ASSETS

Current assets:

               Cash and cash equivalents                                                  1,459,052
               Accounts receivable (net of allowance for doubtful accounts of$37,922)     1,519,727
               Due from related parties                                                       8,749
               Inventory                                                                    160,371
               Deferred taxes                                                               378,375
               Prepaid expenses                                                             136,883
                                                                                         ----------
Total current assets                                                                      3,663,157

Property and equipment, net                                                               2,047,424
Other assets, net                                                                            51,772
                                                                                         ----------
Total assets                                                                              5,762,353
                                                                                         ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

               Accounts payable                                                             588,877
               Capital lease obligation, current portion                                    458,161
               Accrued expenses                                                             216,639
               Customer deposits                                                            303,114
               Taxes Payable                                                                154,107
                                                                                         ----------
Total current liabilities                                                                 1,720,898

Capital lease obligation, less current portion                                              442,399
Deferred rent expense                                                                        37,224
Deferred taxes                                                                              214,138
                                                                                         ----------
Total long term liabilities                                                                 693,761
                                                                                         ----------
Total liabilities                                                                         2,414,659

COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
               Preferred stock, $0.001 par value:
                   Authorized shares - 2,000,000
                   None issued or outstanding                                                     -

               Common stock, $0.001 par value:
                   Authorized shares - 8,000,000
                   Issued shares - 3,909,639
                   Outstanding shares - 3,678,759                                             3,910
               Additional paid-in capital                                                 3,132,282
               Treasury stock at cost -230,880 shares                                      (412,988)
               Deferred compensation                                                         (8,850)
               Accumulated comprehensive income, net of taxes                                58,649
               Retained earnings                                                            574,691
                                                                                         ----------
Total stockholders' equity                                                                3,347,694
                                                                                         ----------
Total liabilities and stockholders' equity                                                5,762,353
                                                                                         ----------
</TABLE>

See accompanying notes.

                                       13
<PAGE>

                            LARK TECHNOLOGIES, INC.

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                   Years ended December 31,
                                              -----------------------------------
                                                 2002                    2003
                                              -----------             -----------
<S>                                           <C>                     <C>
Revenue:
               Laboratory Services            $ 6,692,305             $ 9,028,382

Costs and expenses:
               Costs of services                3,662,096               4,424,400
               Sales, general and
               administrative                   2,209,890               2,794,228
                                              -----------             -----------
Total costs and expenses                        5,871,986               7,218,628
                                              -----------             -----------
Operating income (loss)                           820,319               1,809,754

Other income and (expense):
               Interest income                      4,771                   7,990
               Other income                             -                   6,229
               Interest expense                   (65,496)                (83,329)
               Other expense                            -                 (12,328)
                                              -----------             -----------
Total other income (expense)                      (60,725)                (81,438)
                                              -----------             -----------
Income before income taxes                        759,594               1,728,316

Provision for income taxes                         34,645                 285,973
                                              -----------             -----------
Net income                                    $   724,949             $ 1,442,343
                                              ===========             ===========

Net Income per share:
               Basic                          $      0.20             $      0.39
                                              ===========             ===========
               Diluted                        $      0.20             $      0.34
                                              ===========             ===========
</TABLE>

See accompanying notes.

                                       14
<PAGE>

                             LARK TECHNOLOGIES, INC.

                       STATEMENTS OF STOCKHOLDERS' EQUITY

                 FOR THE YEARS ENDED DECEMBER 31, 2001 THRU 2003

<TABLE>
<CAPTION>
                                                             Common Stock       Additional
                                                            Shares     At Par    Paid-in          Treasury Stock
                                                         Outstanding   Value     Capital      Shares       At Cost
                                                         --------------------   -----------------------------------
<S>                                                      <C>           <C>      <C>           <C>         <C>
BALANCE AT DECEMBER 31, 2001                               3,521,398   $3,521   $2,670,344      4,500     ($  4,946)
                                                         ====================   ===================================

  Warrants exercised                                          62,500       63       15,562
  Treasury Stock                                                                                3,478       (11,277)
  Deferred compensation                                                              5,949
  Amortized deferred compensation
  Currency translation gain
  Net Income

  Comprehensive income

                                                         --------------------   -----------------------------------
BALANCE AT DECEMBER 31, 2002                               3,583,898   $3,584   $2,691,855      7,978     ($ 16,223)
                                                         ====================   ===================================

  Options exercised                                          343,450      344      460,689
  Fractional shares cancelled                                (17,709)     (18)     (76,321)
  Treasury Stock                                                                              222,902      (396,765)
  Amortized deferred compensation
  Deferred compensation                                                             36,559
  Compensation expense for non-employee options                                     19,500
  Currency translation gain
  Net Income
  Comprehensive income

                                                         --------------------   -----------------------------------
BALANCE AT DECEMBER 31, 2003                               3,909,639   $3,910   $3,132,282    230,880     ($412,988)
                                                         ====================   ===================================

<CAPTION>
                                                                          Accumulated
                                                           Deferred      Comprehensive        Retained
                                                         Compensation     Gain/(Loss)    Earnings (Deficit)    Total
                                                         --------------------------------------------------------------
<S>                                                      <C>             <C>             <C>                 <C>
BALANCE AT DECEMBER 31, 2001                                     -         ($ 6,012)        ($1,592,601)     $1,070,306
                                                         ==============================================================

  Warrants exercised                                                                                             15,625
  Treasury Stock                                                                                                (11,277)
  Deferred compensation                                     (5,949)                                                   -
  Amortized deferred compensation                            1,168                                                1,168
  Currency translation gain                                                  28,220                              28,220
  Net Income                                                                                    724,949         724,949
                                                                                                             ----------
  Comprehensive income                                                                                          753,169

                                                         --------------------------------------------------------------
BALANCE AT DECEMBER 31, 2002                               ($4,781)         $22,208         ($  867,652)     $1,828,991
                                                         ==============================================================

  Options exercised                                                                                             461,033
  Fractional shares cancelled                                                                                   (76,339)
  Treasury Stock                                                                                               (396,765)
  Amortized deferred compensation                            1,275                                                1,275
  Deferred compensation                                     (5,344)                                              31,215
  Compensation expense for non-employee options                                                                  19,500
  Currency translation gain, net of taxes                                    36,441                              36,441
  Net Income                                                                                  1,442,343       1,442,343
                                                                                                             ----------
  Comprehensive income                                                                                        1,478,784

                                                         --------------------------------------------------------------
BALANCE AT DECEMBER 31, 2003                               ($8,850)         $58,649             574,691      $3,347,694
                                                         ==============================================================
</TABLE>

See accompanying notes.

                                       15
<PAGE>

                             LARK TECHNOLOGIES, INC.

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                     Years ended December 31,
                                                                ---------------------------------
                                                                    2002                 2003
                                                                -----------           -----------
<S>                                                             <C>                   <C>
OPERATING ACTIVITIES
Net income                                                      $   724,949             1,442,343
Adjustments to reconcile net income
   to net cash provided by operating activities
          Depreciation and amortization                             472,308               572,430
          Amortization of deferred compensation                       1,168                 1,275
          Non-employee compensation                                       -                19,500
          Employee compensation expense                                   -                31,215
          Provision for losses on accounts receivables               19,104                 2,415
          Gain/loss on disposal of fixed assets                           -                12,328
          Changes in operating assets and liabilities:
               Accounts receivable                                 (247,022)             (175,714)
               Inventory                                             36,998              (112,529)
               Prepaid expenses                                      (1,082)              (10,010)
               Other assets                                               -                  (728)
               Due from related parties                             (36,567)               21,949
               Accounts payable                                      85,754               147,320
               Accrued expenses                                      80,648               (68,693)
               Taxes payable                                              -               154,107
               Deferred rent                                          9,324                    36
               Deferred taxes                                             -              (164,237)
               Deposits                                            (102,991)               46,514
                                                                -----------           -----------
Net cash provided by (used in) operating activities             $ 1,042,591             1,919,521

INVESTING ACTIVITIES
Purchases of property and equipment                                (272,500)             (529,689)
Proceeds from sale of fixed assets                                                         60,000
                                                                -----------           -----------
Net cash used in investing activities                              (272,500)             (469,689)

FINANCING ACTIVITIES
Principal payments on notes payable                                (420,929)                    -
Repayment on capital lease obligations                             (296,841)             (564,369)
Proceeds from exercised options                                      15,625               461,033
Payments for cancelled shares of common stock                             -               (24,709)
Treasury stock                                                      (11,277)             (396,765)
                                                                -----------           -----------
Net cash used in financing activities                              (713,422)             (524,810)
Effect of currency translation on cash                               28,220                34,899
                                                                -----------           -----------
Net increase in cash and cash equivalents                            84,889               959,921
Cash and cash equivalents at beginning of year                      414,242               499,131
                                                                -----------           -----------
Cash and cash equivalents at end of year                        $   499,131             1,459,052
                                                                ===========           ===========
</TABLE>

See accompanying Notes

                                       16
<PAGE>

                             LARK TECHNOLOGIES, INC.

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                         Years ended December 31,
                                                                      -----------------------------
                                                                        2002                 2003
                                                                      --------              -------
<S>                                                                   <C>                   <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for:
    Interest                                                          $ 65,496               83,329
    Income taxes                                                        16,544              345,699
Noncash investing activities:
    Capital leases to acquire property and equipment                  $914,457              300,605
    Prepaid maintenance contract on equipment under lease             $ 51,066               33,774
</TABLE>

See accompanying notes.

                                       17
<PAGE>

                             LARK TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION

         Lark Technologies, Inc., a Delaware corporation (the "Company" or
"Lark"), was formed on November 16, 1994, as a wholly-owned subsidiary of
SuperCorp Inc. ("SuperCorp"), for the purpose of merging with Lark Sequencing
Technologies, Inc., a Delaware corporation ("Sequencing"), as outlined in a
merger agreement ("Merger Agreement") entered into by SuperCorp and Sequencing
on October 28, 1994. SuperCorp approved the Merger Agreement on September 5,
1995 and the stockholders of Sequencing approved it on September 12, 1995.
Because of the merger, all of the shares of common and preferred stock of
Sequencing were exchanged for 1,800,000 shares of Common Stock of the Company
with a par value of $0.001 per share, and the 200,000 shares of Common Stock of
the Company held by SuperCorp were distributed to the shareholders of SuperCorp.
The Company has succeeded to all of the business previously undertaken by
Sequencing. The Company provides contract molecular biology services to the
pharmaceutical, biotechnology and agbio industries. The Company has operations
in the United States and the United Kingdom.

In September 2003, as a result of a reverse / forward common stock split, 17,709
shares of common stock were cancelled and the shareholders will be paid off at a
rate of $4.31 per share. A liability account for $76,339 was established for
this repayment process.

2. SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

         The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
judgments, estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ from
those estimates.

Inventory

         Work in process inventory includes the direct and indirect costs
associated with projects that were started but not completed as of December 31,
2003. Direct costs include such items as the cost of labor, reagents and
supplies directly associated with each project. Indirect costs include such
items as general supplies, laboratory management, depreciation, and costs to
operate the lab. These costs are applied to each project based on direct labor
hours incurred for the project up to the point of measurement such as the end of
an accounting period. At December 31, 2003, work in process inventory was
$160,371.

Revenue Recognition

         The Company submits the results of its laboratory services to its
customers by electronic mail or by overnight delivery services. Upon the
completion of the laboratory services and the submission of the results, the
Company has no further obligation to perform services other than those that are
perfunctory and inconsequential, and the submission of the report is essentially
the same as delivery. Therefore, the Company recognizes revenue upon the
submission of its laboratory results report to the customer by overnight or
electronic delivery methods. From time to time, the Company enters into long
term service contracts that are similar to open supply contracts. Revenues under
such contracts are recognized as each project is completed and the submission
sent. Revenue includes shipping costs billed to customers and the related costs
are recorded as cost of sales. Costs incurred on partially completed projects
are recorded as work-in-process.

Cash and Cash Equivalents

         The Company considers all highly liquid debt instruments purchased with
an original maturity of three months or less to be cash equivalents.

                                       18
<PAGE>

                             LARK TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS

Property and Equipment

         Property and equipment are recorded at cost. Depreciation and
amortization expense is recorded over the estimated useful lives of the assets
on a straight-line basis. Leasehold improvements are amortized on a
straight-line basis over the shorter of the asset's useful life or remaining
lease term. The cost of repairs and maintenance is expensed as incurred. The
estimated useful lives of assets are as follows:

<TABLE>
<S>                                  <C>
Laboratory equipment                 4-5 years
Furniture and fixtures               5 years
Computer
     Equipment                       3-5 years
     Software                        3-5 years
Leasehold improvements               Lease or asset life
</TABLE>

Long-Lived Assets

         The Company routinely evaluates the carrying value of its long-lived
assets. The Company records impairment losses on long-lived assets used in
operations when events and circumstances indicate that assets may be impaired
and the undiscounted cash flows estimated to be generated by the assets are less
than the carrying amount of those assets. To date, no impairment charges have
been recognized.

Stock Options

         The Company generally grants stock options to its employees for a fixed
number of shares with an exercise price equal to the fair value of the shares on
the date of grant. As allowed under the Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation" (SFAS 123), the
Company has elected to follow Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" (APB 25) and related interpretations
in accounting for stock awards to employees. Accordingly, no compensation
expense is recognized in the Company's financial statements in connection with
stock options granted to employees with exercise prices not less than fair
value. Deferred compensation for options granted to employees is determined as
the difference between the deemed fair market value of the Company's common
stock on the date options were granted and the exercise price. For purposes of
this pro-forma disclosure, the estimated fair value of the options is assumed to
be amortized to expense over the options' vesting period. Compensation expense
for options granted to non-employees has been determined in accordance with FAS
123 as the fair value of the consideration received or the fair value of the
equity instruments issued.

<TABLE>
<CAPTION>
                                         Year Ended December 31,
                                          2002             2003
                                          ----             ----
<S>                                   <C>             <C>
Net income, as reported               $   724,949     $   1,442,343
Add: stock based compensation
    expense included in net income
    as reported                             4,100            50,715
Deduct: Total compensation
    expense for options determined
    under fair value based methods
    for all awards                       (163,125)         (383,742)
                                      -----------     -------------
    Pro forma net income (loss)       $   565,924     $   1,109,816

Net income per common share
         As reported:
         Basic                        $      0.20     $        0.39
         Diluted                      $      0.20     $        0.34
         Proforma:
         Basic                        $      0.16     $        0.30
         Diluted                      $      0.16     $        0.26
</TABLE>

                                       19
<PAGE>

                             LARK TECHNOLOGIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Foreign Currency Translation

         The financial statements of the Company's U.K. division are measured
using the local currency as the functional currency. Assets and liabilities of
the U.K. division are translated at the rates of exchange at the balance sheet
date. The resultant translation adjustments are recorded as a separate component
of stockholders' equity as other comprehensive income and have not been
significant to date. Income and expense items are translated at average monthly
rates of exchange.

Net Income Per Share

         Basic net income per share has been computed using the weighted-average
number of shares of common stock outstanding during the period, less shares
subject to repurchase. Diluted net income per share has been calculated based on
the shares used in the calculation of basic net income per share plus the
dilutive effect of stock options and shares subject to repurchase by the
Company.

Advertising Costs

         The Company expenses all advertising costs as incurred. Total
advertising expense for 2002 and 2003 was $41,666 and $75,296, respectively.

Income Tax

         The Company follows the liability method of accounting for income taxes
in accordance with FASB Statement 109, "Accounting for Income Taxes". Under this
method, deferred tax assets and liabilities are determined based on differences
between the financial statements and tax bases of assets and liabilities as
measured by enacted tax rates in effect for the year in which the differences
are expected to reverse. The Company provides a valuation allowance against
deferred tax assets.

New Issued Accounting Standard

         In January 2003, the Financial Accounting Standards Board (FASB) issued
Interpretation (FIN) 46, Consolidation of Variable Interest Entities. FIN 46
requires that unconsolidated variable interest entities be consolidated by their
primary beneficiaries. A primary beneficiary is the party that absorbs a
majority of the entity's expected losses or residual benefits. FIN 46 applies
immediately to variable interest entities created after January 31, 2003, and to
existing variable interest entities in the fiscal year beginning after March 15,
2004. The Company's adoption of the guidance did not have a significant impact
on the Company's financial position and results of operations.

3. CONCENTRATION OF RISK

         The Company provides laboratory services primarily to major researchers
in the United States and Europe. The Company generally requires a deposit of
approximately 50% of total anticipated billings prior to commencing work on
laboratory service projects. The Company performs ongoing credit evaluations of
its customers and generally does not require additional collateral on its
laboratory services. The Company maintains an allowance for doubtful accounts by
accruing bad debt expense of one-half of one percent of the new U.S. accounts
receivable each month. Accounts identified as uncollectible are written off when
they are determined to be uncollectible.

         The Company primarily invests its excess cash in deposits with local
banks and, at times, these deposits may exceed federally insured limits. The
Company selects depository institutions based upon management's review of the
financial stability of the institutions.

4. PROPERTY AND EQUIPMENT

                                       20
<PAGE>

                             LARK TECHNOLOGIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

         Property and equipment consisted of the following at December 31, 2003:

<TABLE>
<S>                                               <C>
Laboratory equipment                              $ 3,211,346
Furniture and fixtures                                116,791
Computer equipment                                    792,169
Leasehold improvements                                161,348
Computer Software                                      14,132
UK Vehicles                                            12,388
                                                  -----------
                                                    4,308,174

Less accumulated depreciation and amortization     (2,260,750)
                                                  -----------
Property and equipment, net                       $ 2,047,424
                                                  ===========
</TABLE>

5. ACCRUED EXPENSES

         Accrued expenses consisted of the following at December 31, 2003:

<TABLE>
<S>                                                  <C>
Accrued audit and tax preparation fees               $ 35,600
Accrued salary costs, payroll taxes and insurance     101,776
Accrued UK VAT tax payable                             24,886
Cancelled fractional shares payable                    51,629
Other accrued expenses                                  2,748
                                                     --------
                                                     $216,639
                                                     ========
</TABLE>

6. NOTES PAYABLE

         At December 31, 2002, the Company had a revolving line of credit with a
bank that provided for maximum borrowings of $600,000. Under the terms of the
line, borrowings were to bear interest at the bank's prime rate (4.25% at
December 31, 2002) plus 1.5%. The line of credit expired December 31, 2002 and
was renewed through December 31, 2003 with the same terms as the expiring line
of credit. The Company did not renew the line of credit as of December 31, 2003.

7. FEDERAL INCOME TAX

         The components of the provision for income taxes for the years ended
December 31 are as follows:

<TABLE>
<CAPTION>
                          2002        2003
<S>                      <C>        <C>
Current:
   Federal                    -      29,334
   Foreign                    -     388,677
   State                 34,645      52,679
                         ------------------
Total                    34,645     470,690
</TABLE>

                                       21
<PAGE>

                             LARK TECHNOLOGIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

<TABLE>
<S>                              <C>       <C>
Deferred:
   Federal                            -    (196,278)
   Foreign                            -           -
   State                              -      11,561
                                 ------------------
Total                                 -    (184,717)

Total income tax provision       34,645     285,973
</TABLE>

A reconciliation of the actual tax rate to the statutory U.S. tax rate for the
years ended December 31 is as follows:

<TABLE>
<CAPTION>
                                              2002                          2003
                                   Amount            Percent     Amount            Percent
                                   ------            -------     ------            -------
<S>                              <C>                 <C>       <C>                 <C>
Tax at U.S. statutory rates      $ 258,262             34%     $ 587,627             34%
State income taxes                  35,937              5%        42,398              3%
Change in valuation allowance     (273,755)           (36%)     (289,586)           (17%)
Deferred compensation                                            (30,388)            (2%)
Other                               14,201              2%       (24,078)            (1%)
                                 ------------------------      ------------------------
                                 $  34,645              5%     $ 285,973             17%
                                 ========================      ========================
</TABLE>

The components of deferred taxes as of December 31 are as follows:

<TABLE>
<CAPTION>
                                         2002         2003
<S>                                    <C>          <C>
Deferred tax liabilities:
   Depreciation                         (47,175)    (193,658)
   Currency translation gain                         (20,480)
                                       ---------------------
Total deferred tax liabilities          (47,175)    (214,138)

Deferred tax assets:
   Deferred rent                         12,644       13,393
   Bad debt allowance                    12,072       13,644
   Vacation accrual                       6,939        6,483
   Deferred compensation                      -       19,126
   Accrued expenses                           -        2,315
   Net operation loss carryovers        305,106            -
   Tax credit carryovers                      -      323,414
                                       ---------------------
Total deferred tax assets               336,761      378,375

                                       ---------------------
   Valuation allowance                 (289,586)           -
                                       ---------------------
Net deferred tax assets                       -      164,237
</TABLE>

The allocation of deferred tax expense (benefit) involving items charged to
current year income and items charged directly to stockholder's equity for the
years ended December 31 is as follows:

<TABLE>
<CAPTION>
                                                          2002         2003
<S>                                                     <C>          <C>
Deferred tax expense (benefit) allocated to equity:
   Federal                                                     -       18,773
   Foreign                                                     -            -
   State                                                       -        1,707
                                                        ---------------------
                                                               -       20,480
                                                        ---------------------
Deferred tax expense (benefit) allocated to income:
   Federal                                                     -     (196,278)
   Foreign                                                     -            -
   State                                                       -       11,561
                                                        ---------------------
                                                               -     (184,717)
                                                        ---------------------
Total deferred tax (benefit):                                  -     (164,237)
                                                        ---------------------
</TABLE>

                                       22
<PAGE>

                             LARK TECHNOLOGIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

At December 31, 2002, the Company had a valuation allowance of $289,586 recorded
against its net deferred tax asset. At December 31, 2003, the Company released
the valuation allowance because management believes, based on the weight of
available evidence, that it is more likely than not that the Company's net
deferred tax asset will be realized in the future. Consequently, the adjustment
to reduce the valuation allowance increased net income.

At December 31, 2003, the Company has U.S. federal research and experimental tax
credit carryovers of $35,215 and foreign tax credit carryovers of $258,864 that
expire beginning in 2007 and alternative minimum tax credit carryovers of
$29,335 with no expiration period.

8. COMMITMENTS AND CONTINGENCIES

         The Company is involved in various legal proceedings that have arisen
in the ordinary course of business. While it is not possible to predict the
outcome of such proceedings with certainty, in the opinion of the Company, all
such proceedings are either adequately covered by insurance or, if not so
covered, should not ultimately result in any liability which would have a
material adverse effect on the financial position, liquidity or results of
operations of the Company.

Leases

         The Company leases certain real estate for its corporate office in
Houston, Texas and branch office in the United Kingdom, as well as certain
equipment under non-cancelable lease agreements, which expire at various dates.
Leases with escalating lease payments are recorded on a straight-line basis over
the lease term. Total rent expense for all operating leases for 2002 and 2003
was $372,880 and $242,088 respectively.

         At December 31, 2003, future minimum payments under these operating
leases are as follows:

<TABLE>
<S>                 <C>
2004                 179,287
2005                 169,313
2006                 168,830
2007                 155,769
2008                 155,769
Thereafter           155,769
                    --------
Total               $984,737
</TABLE>

         The gross amount of assets recorded under capital leases at December
31, 2002 was $1,547,696. The related accumulated amortization was $431,724 at
December 31, 2003. Under the terms of the capital leases, the Company is
obligated to make payments as set forth in the table below and, subject to
certain conditions, may purchase the equipment at the end of the lease for a
nominal amount.

         At December 31, 2003, future minimum payments under these capital
leases are as follows:

<TABLE>
<S>                                                  <C>
       2004                                          $ 502,813
       2005                                            429,342
       2006                                             28,554
                                                     ---------
Total minimum lease payments                         $ 960,709
Less amounts representing interest                      60,149
                                                     ---------
Total present value of minimum lease payments          900,560
Less current portion                                  (458,161)
                                                     ---------
Capital lease obligation less current portion        $ 442,399
                                                     =========
</TABLE>

Amortizations of capital lease assets are included in depreciation expense.

9. STOCKHOLDERS' EQUITY AND STOCK OPTIONS

Stock Options and Warrants

         The Company has a 2002 Stock Option Plan (2002 Plan). The 2002 Plan
permits the board of directors to grant awards to non-employee directors,
certain key employees, and others as determined by the board of directors.
Awards under the 2002 Plan may be Incentive Stock Options intended to qualify as
"incentive stock options" within the

                                       23
<PAGE>

                             LARK TECHNOLOGIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

meaning of Section 422 of the Internal Revenue Code, non-qualified stock
options, stock awards, or performance shares. The Company has reserved a total
of 2,000,000 shares of its common stock for issuance under the 2002 Plan.
Options granted under the 2002 Plan are generally exercisable immediately by
non-employee directors and subject to a four year vesting schedule for
employees.

         The Company applies APB 25 in accounting for the Plan. Since the
exercise price of the options granted, is the weighted average of the preceding
thirty active trading days of close prices, and was sometimes below the market
value of the stock at the date of grant, compensation cost has been recognized
for its fixed stock option plan as discussed below. The fair value of these
options was estimated at the date of grant using the Black-Scholes option
pricing ("Black-Scholes") model. For options granted during 2002 and 2003 the
following assumptions were used: volatility ranging from 91% to 96%, expected
life of five years risk free interest rate ranging from 1.3% to 3.7% with no
expected dividend yield.

         The Black-Scholes model was developed for use in estimating the fair
value of traded options that have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions, including the expected volatility. Because the Company's
employee stock options have characteristics significantly different from those
of traded options and because changes in the subjective input assumptions can
materially affect the fair value estimate, in management's opinion, the existing
models do not necessarily provide a reliable single measure of the fair value of
its employee's stock options.

         During 2002 and 2003, the Company issued stock options under the 2002
Plan, at exercise prices calculated as the weighted average of the preceding
thirty active trading days of close prices of the common stock on the date of
grant. During 2002 and 2003, some stock options were granted at an exercise
price below the fair market value. Deferred compensation expense was recorded in
stockholders' equity for the difference between the option exercise price and
the fair value of common stock. The deferred compensation is being expensed on a
straight-line basis over the vesting period. A summary of the Company's stock
options activity and related information follows:

<TABLE>
<CAPTION>
                                                           Year Ended December 31,
                                                          2002                             2003
                                                        Weighted                         Weighted
                                                         Average                          Average
                                          Options    Exercise Price      Options      Exercise Price
                                          -------------------------     ----------------------------
<S>                                       <C>        <C>                <C>           <C>
Outstanding-
  beginning of year                        63,289        $ 0.85          927,729         $    1.29
    Granted                               864,440        $ 1.32          262,947         $    2.00
    Exercised                                   -             -         (343,450)        $    1.34
    Forfeited                                   -             -          (19,125)        $    1.58
                                          -------        ------         --------         ---------

Outstanding - end of year                 927,729        $ 1.29          828,101         $    1.49

Options exercisable at year-end           740,229                        657,110

Weighted average fair value
of options granted during the year                       $ 0.17                          $    1.46
</TABLE>

         The following summarizes information related to stock options
outstanding at December 31, 2003:

                                       24
<PAGE>

                             LARK TECHNOLOGIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

<TABLE>
<CAPTION>
                                Options outstanding             Options exercisable
                       ------------------------------------     --------------------
                                                  Weighted
                                   Weighted       Average                   Weighted
   Range of                        Average       Remaining                   Average
   Exercise                        Exercise     Contractual                 exercise
    Prices             Options      Price           Life        Options       price
-------------          -------     --------     -----------     -------     --------
                                 (in thousands, except per share amounts)
<S>                    <C>         <C>          <C>             <C>         <C>
$0.15 - $1.34          603,404      $1.24        7.39 yrs.      504,310       $1.25
$1.42 - $5.08          224,697      $2.17        8.34 yrs       152,800       $2.44
                       -------                                  -------
                       828,101      $1.49        7.65 yrs.      657,110       $1.53
                       =======                                  =======
</TABLE>

At December 31, 2003, there are 891,738 options available for future grants
under the Plan.

         The Company records the fair value of options issued to non-employee
consultants at the fair value of the options issued. Any expense is recognized
over the service period or at the date of issuance if the options are fully
vested and no performance obligation exists.

10. 401(k) PLAN

         The Company has an employee 401(k) retirement plan. Qualified employees
may contribute up to 15% of their gross pay to the plan. Employee contributions
are limited to amounts established by law. The Company may make matching
contributions to the plan as determined by the Board of Directors subject to the
limitations under the Internal Revenue Code. The Company made no contributions
to the plan in either 2002 or 2003.

11. RELATED PARTY TRANSACTIONS

         The Company provided laboratory services, at rates normally charged to
third parties, to affiliates of the Company totaling $61,195 and $116,355 in
2002 and 2003, respectively.

         The due from related parties at December 31, 2003 is comprised
primarily of amounts due from affiliates of the Company for laboratory services
provided by the Company.

12. MAJOR CUSTOMERS

         During 2002, one customer provided approximately 11% and 15% of the
Company's revenue and accounts receivable, respectively. During 2003, a
different customer provided approximately 17% and 9% of the Company's revenues
and accounts receivable, respectively.

13. SEGMENT INFORMATION

         The Company operates in two segments determined by geographic location.
The proportion of the Company's sales generated from contract molecular services
by location is as follows:

<TABLE>
<CAPTION>
                                                                  2002                  2003
                                                               ----------            ----------
<S>                                                            <C>                   <C>
Sales - US                                                     $4,838,911            $6,016,817
        UK                                                      1,853,394             3,011,565
                                                               ----------            ----------
                                                               $6,692,305            $9,028,382
                                                               ----------            ----------
        Total Identifiable gross property and equipment

        US                                                     $2,915,058            $3,490,532
        UK                                                        750,908               817,642
                                                               ----------            ----------
            Total                                              $3,665,966            $4,308,174
</TABLE>

                                       25
<PAGE>

                             LARK TECHNOLOGIES, INC.
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

14. FAIR VALUE OF FINANCIAL INSTRUMENTS

         The Company has determined, based on available market information and
appropriate valuation methodologies, that the value of its financial instruments
approximates carrying value. The carrying amounts of cash and cash equivalents,
accounts receivable and accounts payable approximate fair value due to the
short-term maturity of the instruments. The carrying amount of the capital lease
obligation approximates fair value based on rates currently available to the
Company.

15. EARNINGS PER SHARE

         The following table sets forth the weighted average shares outstanding
for the computation of basic and diluted earnings per share:

<TABLE>
<CAPTION>
                                                For the year ending December 31,
                                                --------------------------------
                                                   2002                   2003
                                                --------------------------------
<S>                                             <C>                    <C>
Weighted average common shares outstanding      3,537,548              3,660,983
Dilutive securities - employee stock options       84,189                574,513
                                                --------------------------------
Weighted average common shares outstanding
   assuming full dilution                       3,621,737              4,235,496
                                                ================================
</TABLE>

         In 2002 and 2003, options to purchase 76,500 and 33,000 shares of
common stock were not included in the computation of diluted EPS, because the
option exercise price was greater than the average market price of the common
shares.

16. COMPREHENSIVE INCOME

         Accumulated other comprehensive income presented on the accompanying
balance sheet consists of foreign currency translation adjustments. Total
comprehensive income for the years ended December 31, 2002 and 2003, was
$753,169 and $1,478,784, respectively.

17. SUBSEQUENT EVENT

On December 18, 2003, the Company signed a merger agreement with Genaissance
Pharmaceuticals Inc., (Genaissance) a pharmaceutical company located in New
Haven, CT, where the Company will merge with Genaissance. The merger is expected
to be completed in April 2004.

                                       26
<PAGE>

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

         None.

ITEM 8A. CONTROLS AND PROCEDURES

         The Company's management, with the participation of the Company's Chief
Executive Officer and Controller, has evaluated the effectiveness of the
Company's disclosure controls and procedures as of December 31, 2003. Based on
that evaluation, the Company's Chief Executive Officer and Controller concluded
that the Company's disclosure controls and procedures were effective as of
December 31, 2003. There were no material changes in the Company's internal
control over financial reporting during the fourth quarter of 2003.

                                    PART III

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

         DIRECTORS AND EXECUTIVE OFFICERS

         Set forth below are the names, ages, and terms of office of each of the
directors and executive officers of the Company and a description of the
business experience of each.

<TABLE>
<CAPTION>
                                                                        Office Held
       Person                                Office                        Since
       ------                                ------                        -----
<S>                                 <C>                                 <C>
George M. Britton, 56               Director                               1989
                                    Co-Chairman of the Board               2000

David A. Lawson, 56                 Director                               1989
                                    Co-Chairman of the Board               2000

E.J. (Jere) Pederson, 56            Director                               2000

Peter Boatright, 65                 Director                               2003

Tim McGrath, 55                     Director                               2003

Carl W. Balezentis, Ph.D., 46       Director                               2001
                                    Chief Executive Officer                2001
                                    Secretary                              2001

David Buck, 43                      Sr. V.P. Operations,                   2002
                                    Scientific Director
</TABLE>

         The directors are elected at the annual meeting of stockholders, and
each director elected holds office until his successor is elected and qualified.
The officers are elected annually by the Board of Directors at its first regular
meeting held after the annual meeting of stockholders or as soon thereafter as
conveniently possible. Each officer holds office until his successor has been
chosen and qualified.

         George M. Britton is a director of Britton Capital Services, a closely
held investment and financial consulting firm. Since 1989 approximately 80
percent of his activities have been related to real estate acquisitions,
syndications, development, leasing and management, primarily in commercial
properties in the Houston, Texas area, and approximately 20 percent of his
activities have been related to assisting start up and early-stage companies in
their business plans and in contacting venture capitalists. Mr. Britton holds an
MBA degree from the University of Texas and a BA degree from Vanderbilt
University.

         David A. Lawson is an independent real estate investor, consultant and
broker in Houston, Texas. He has been involved with Lark since its inception as
an investor and advisor. In Mr. Lawson's real estate capacity, he has been
actively involved in the acquisition, syndication, ownership and management of
medical office buildings and

                                       28
<PAGE>

other income producing real estate in Houston area. To a lesser extent he has
been involved in other various entrepreneurial enterprises. Mr. Lawson received
a Bachelor of Science degree from Trinity University in San Antonio, Texas in
1970 and later attended the University of Texas Graduate School of Business in
Austin from 1970 to 1972.

         E.J. (Jere) Pederson has served as Executive Vice President of The
University of Texas Medical Branch at Galveston since 1989 and in other
executive positions with the University since 1984. Prior to joining The
University of Texas, Mr. Pederson was vice president of business affairs for the
University of Texas at Dallas. He received his Bachelor of Science degree from
Trinity University; San Antonio, Texas in 1969 and later attended the University
of Texas at Austin for graduate studies in Public Administration.

         Peter Boatright is a semi-retired Attorney and Certified Public
Accountant. Currently Mr. Boatright serves on the Board of the Oklahoma United
Methodist Foundation and is Chairman of its Investment Committee. Mr. Boatright
also serves on the Board of Guaranty Credit Card, Inc. and Americrest Bank in
Oklahoma City, where he is Chairman of the Audit Committee. Previously Mr.
Boatright was employed with Goldman Investments for over 25 years in various
positions, including President, Chief Operating Officer and Chief Financial
Officer. Goldman Investments was a national firm with business interests from
Puerto Rico to Hawaii.

         Tim McGrath is currently the Chief Executive Officer for Xeotron, a
Houston based microarray tools company that utilizes a proprietary platform
technology. Mr. McGrath is the former president of Sigma-Genosys, a global
leader in DNA and peptide synthesis. Sales and earnings growth at Sigma-Genosys
was fueled by new product development, global expansion of production
facilities, acquisition, and process improvement. Prior to Genosys, Tim held
various sales and marketing positions at Millipore, Zymark and Beckman
Instruments.

         Carl W. Balezentis, Ph.D., received his Doctor of Philosophy degree in
Genetics from The University of Arizona, and conducted a postdoctoral fellowship
at M.D. Anderson Cancer Center. On June 8, 2001 Dr. Balezentis was appointed as
Chief Executive Officer. From 1997 to 2000 Dr. Balezentis served in various
positions with Sigma-Aldrich Corporation, a multi-national company that
develops, manufactures and distributes a broad range of biochemicals, organic
chemicals, chromatography products and diagnostic reagents. He served as the
vice president of sales and marketing for the Sigma-Genosys subsidiary where he
was responsible for developing strategic marketing programs which helped
stimulate strong revenue growth, and as director of business development for the
Sigma-Aldrich Life Sciences Division.

         David Buck, Ph.D. joined Lark in June 1998 as the Laboratory Manager
for Europe. He had previously been the Group Leader at the world-renowned Sanger
Centre from 1993 to 2000 where he was responsible for establishing the
institution's first human genome sequencing team. Dr. Buck coordinated the human
chromosome 22 and 20 sequencing projects and completed over 11 megabases of
finished sequence during his tenure at the Sanger Centre. Prior to this Dr. Buck
worked for Schering Agrochemicals on cloning plant, fungal and bacterial genes
encoding enzymes from key target pathways. Dr. Buck received his B.Sc. in
Biophysics and Genetics from the University of Leeds in 1983 and his Ph.D. in
Microbiology from the University of Sheffield in 1987.

         SIGNIFICANT EMPLOYEES

         Set forth below are the names, ages, and dates of service of each of
the significant employees of the Company and a description of the business
experience of each.

<TABLE>
<CAPTION>
                                                                              Employee
          Person                                     Office                     Since
          ------                                     ------                     -----
<S>                                       <C>                                 <C>
David Alan Wall, Ph.D., 41                Director, Quality Control
                                          and Compliance                        1994

Heidi B. Nelson, Ph.D., 40                Manager,
                                          Gene Quantitation                     1997

Li Li, Ph.D., 44                          Senior Scientist, Manager of
                                          Genotyping Service                    1998

Jon H. Luksich, CPA, 43                   Controller                            1998
</TABLE>

                                       28
<PAGE>

         David A. Wall, Ph.D., has served as Director, Quality Control and
Compliance since January 2000. Previously, Dr. Wall was Associate Director of
GenTest Laboratories in New Orleans, Louisiana, in charge of the Paternity
Testing Laboratories. He was also Director of Research and Genetic Testing at
ImmGen, Inc., College Station, Texas. Dr. Wall received his Bachelor of Science
degree in animal science and his Ph.D. in genetics from Texas A&M University in
College Station, Texas.

         Heidi Nelson, Ph.D., has served as Manager of Gene Quantitation since
November 1998. Prior to joining Lark she worked as a Scientist at Zonagen
Pharmaceuticals, Inc. in the Molecular Biology Division. Dr. Nelson graduated
with Bachelor of Science degrees in Biology and Russian from Duke University in
May of 1985 and obtained her Ph.D. in Cellular and Molecular Biology from the
University of Wisconsin-Madison in 1993.

         Li Li, Ph.D., joined Lark in 1998 as the Senior Scientist and Manager
of Genoytping Service. Prior to joining Lark, Dr. Li worked as a Post-Doctor
fellow and senior research associate in the Human Genetics Center, University of
Texas, in charge of various throughput genotyping, sequencing, Single Nucleotide
Polymorphism (SNP) discovery and large scale DNA extraction between 1992 and
1998. She also worked as a research scientist with the United States Department
of Agriculture (USDA) for three years. Dr. Li received her Bachelor of Science
degree in plant biology from South China University of Tropcalcrops and her
Ph.D. in Zoology from Reading University, England.

         Jon H. Luksich, CPA, joined Lark in July of 1998 as a Financial
Accountant and was named Controller in 2001. Prior to joining the Company he
worked as a financial accountant, from 1990 to 1998, in charge of accounting for
three divisions of Encon Safety Products, Inc., a division of Vallen
Corporation. Encon is a leading manufacturer of emergency showers and eyewashes
as well as safety eyewear and other safety supplies. He received his BS degree
in Accounting from Indiana University in 1985 and his Texas CPA license in 1994.

AUDIT COMMITTEE COMPOSITION

         Mr. Boatright, who serves as the chair of the audit committee of the
Board, is an independent audit committee financial expert. Mr. E.J. Pederson and
Mr. Tim McGrath serve as members of the audit committee of the Board. Dr.
Balezentis, the Chief Executive Officer and Jon Luksich, the Company's
controller, attends meetings of the audit committee to advise its members.

CODE OF ETHICS

         The Company has not adopted a formal code of ethics that applies to the
CEO, CFO, and controller. Upon approval of the proposed merger with Genaissance
on April 1, 2004 Lark will become a wholly owned subsidiary of Genaissance and
will become subject to their code of ethics.

ITEM 10. EXECUTIVE COMPENSATION

<TABLE>
<CAPTION>
                                                                                         Long Term Compensation
                                                                                  -----------------------------------
                                                                                           Awards             Payouts
                                                  Annual Compensation             ------------------------    -------
                                          ------------------------------------    Restricted    Securities
           Name and                                               Other annual       stock      Underlying     LTIP       All other
          principal                       Salary     Bonus        compensation     award(s)      Options      Payouts   compensation
           position               Year      ($)       ($)              ($)            ($)           (#)         ($)          ($)
------------------------------------------------------------------------------------------------------------------------------------
<S>                               <C>     <C>        <C>          <C>             <C>           <C>           <C>       <C>
Carl Balezentis, PhD. - C.E.O.    2003    165,417    67,000(1)                                         -
                                  2002    163,438    34,076(2)                                    60,000
Sr. VP- Corp. Development         2001    135,000    13,500                                       60,000

David Buck -Sr. VP-Operations     2003    136,500    15,150                                            -
                                  2002    135,810    10,000                                            -
VP - European Operations          2001     85,058    18,591          12,217                       10,000                   4,253
</TABLE>

(1) Amount awarded. Manner of payout not yet determined.

(2) Paid as $17,038 in cash and options for 32,147 shares of common stock, that
vest over 4 years.

                                       30
<PAGE>

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
                          Number of      Percent of total
                         Securities           options
                         Underlying         granted to     Exercise or
                          Options          employees in    base price     Expiration
     Name                 granted           fiscal year     ($/Share)        date
     ----                 -------           -----------     ---------        ----
<S>                      <C>             <C>               <C>            <C>
David Lawson               50,000               19%           $1.45        01/06/13
David Lawson               15,000                6%           $1.45        01/06/13
George Britton             50,000               19%           $1.45        01/06/13
George Britton             15,000                6%           $1.45        01/06/13
Jere Pederson              15,000                6%           $1.45        01/06/13
Peter Boatright             3,900                1%           $3.09        05/29/13
Peter Boatright            15,000                6%           $4.74        09/01/13
Peter Boatright             3,000                1%           $5.08        12/18/13
Timothy McGrath             3,900                1%           $3.09        05/29/13
Timothy McGrath            15,000                6%           $4.74        09/01/13
Carl Balezentis            32,147               12%           $1.59        03/03/13
</TABLE>

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES

<TABLE>
<CAPTION>
                                                                                                   Value of Unexercised
                       Shares                             Number of Unexercised Options            in-the-money Options
                     acquired on     Value realized           at December 31, 2003                 at December 31, 2003
     Name           exercise (#)           ($)         (#) Exercisable    (#) Unexercisable   Exercisable     Unexercisable
     ----           ------------           ---         ---------------    -----------------   -----------     -------------
<S>                 <C>              <C>               <C>                <C>                 <C>             <C>
Carl Balezentis        35,000           $124,600            54,375             107,772          $196,294        $376,198
David Buck                  -                  -            25,000               5,000          $100,050        $ 18,450
</TABLE>

LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR:

         None

DIRECTOR COMPENSATION

         The sole form of compensation for the directors of the company is the
grant of stock options as enumerated in the table above.

EMPLOYMENT AGREEMENTS

         Carl W. Balezentis is currently subject to an employment agreement with
the Company effective July 31, 2000 (the "Employment Agreement"), which provided
for payment to him of an annual compensation of $135,000, subject to annual
increases at the Board's discretion, and an annual bonus of between 25 and 50%
of salary if revenue and profitability goals for the Company met targeted
amounts. Effective February 26, 2003, Dr. Balezentis' salary was increased to
$167,500 per year, and he was awarded a bonus of $34,076, 50% of which was
awarded in cash and 50% was awarded as incentive stock options, for his
performance in 2002. Dr. Balezentis' bonus arrangement for 2003 was between 25%
and 40% of his annual base salary in effect at the time such bonus was
determined, based on Lark's meeting specified targeted amounts. Dr. Balezentis
will be awarded a bonus of $67,000 for his performance in 2003. The annual bonus
may be paid in all cash, or in a combination of cash and restricted stock or
incentive stock options, at his option. If the employment of Dr. Balezentis is
terminated by the Company for any reason other than for cause (as defined in the
Employment Agreement), he will continue to receive employee benefits and his
annual salary for twelve

                                       30
<PAGE>

months. If his employment is terminated by the Company within six months after a
change in control, all stock options held by him will immediately vest as of his
termination date.

         Upon consummation of the merger of the Company and Genaissance, Dr.
Balezentis will become an executive officer of Genaissance. Dr. Balezentis has
entered into an employment agreement with Genaissance, contingent upon the
consummation of the merger, to serve as senior vice president of the combined
company and president of Lark, which will become a wholly owned subsidiary of
Genaissance.

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

         The following table describes the security ownership of beneficial
owners of more than 5% of the Common Stock of the Company, its directors,
executive officers, and all directors and officers as a group, as of December
31, 2003. The SEC defines beneficial ownership to include voting power o
investment power with respect to securities. Unless indicated by footnote, each
person has sole voting power with respect to the shares of common stock
indicated directly opposite his or its name.

<TABLE>
<CAPTION>
                             Name, address                                Amount and nature         Percent of
Title of Class               and position                              of beneficial ownership(1)    class(1)
--------------------------------------------------------------------------------------------------------------
<S>                  <C>                                               <C>                          <C>
Common               David Lawson - Director                                   603,048(2)              15.3%
                     2039 Dryden
                     Houston, Texas 77024

Common               George Britton - Director                                 520,075                 13.4%
                     3272 Westheimer, Suite 3
                     Houston, Texas 77098

Common               Baylor College of Medicine -                              268,040                  7.3%
                     More than 5% beneficial owner
                     One Baylor Plaza
                     Houston, Texas 77030

Common               Peter Boatright - Director                                216,393(3)               5.9%
                     4932 NW 31st Street
                     Oklahoma City, OK 73122

Common               E.J. Pederson - Director                                  105,000(4)               2.9%
                     UTMB Box 55153
                     Galveston, TX 77555

Common               Tim McGrath - Director                                     26,400                    *
                     8275 El Rio, Ste 130
                     Houston, TX 77054

Common               Carl W. Balezentis, Ph.D. - Director and                   61,250                  1.6%
                     Executive Officer
                     9441 W Sam Houston Pkwy So., Ste 103
                     Houston, TX 77099

Common               David Buck, Ph.D. - Executive Officer                      25,000                    *
                     9441 W Sam Houston Pkwy So., Ste 103
                     Houston, TX 77099

Common               Directors and Officers as a group (7 persons)           1,557,166                36.44%
</TABLE>

(1)  Includes options exercisable currently or within 60 days after December 31,
     2003 in the following amounts: Mr. Lawson - 264,470; Mr. Britton - 195,970;
     Mr. Boatright - 21,900; Mr. McGrath - 26,400; Dr. Balezentis - 61,250; and
     Dr. Buck - 25,000. The calculation of the percentage of class is based on
     the number of shares

                                       31
<PAGE>

     outstanding and assumes the exercise of the number of stock options listed
     for that person that are exercisable within 60 days.

(2)  Includes 100,517 shares held by D.C. Lawson trust and 100,517 held by S.R.
     Lawson trust, of which Mr. Lawson is the trustee. Mr. Lawson disclaims
     beneficial ownership of the shares held by the trusts.

(3)  Includes 85,318 shares held by Boatright Family LLC and 8,110 shares held
     by the Heiman Irrevocable Trust.

(4)  Includes 10,000 shares held by Bevo Investments, Inc., a corporation of
     which Mr. Pederson owns 50% of the shares. Mr. Pederson shares voting and
     investment power with respect to those shares.

*    Indicates less than 1% ownership.

EQUITY COMPENSATION PLANS

         The following table reflects the information described as of December
31, 2003 with respect to compensation plans under which the Company's stock is
authorized for issuance.

<TABLE>
<CAPTION>
                            No. of Shares to be issued     Weighted average exercise
                                 upon exercise of             price of outstanding        Number of securities remaining
                           outstanding option, warrants      options, warrants and         available for future issuance
   Plan Category                    and rights                       rights               under equity compensation plans
------------------------------------------------------------------------------------------------------------------------
<S>                        <C>                             <C>                            <C>
Equity compensation
plans approved by
security holders(1)                  828,101                         $1.49                           891,738
</TABLE>

(1)      Includes 46,339 shares of common stock issuable upon the exercise of
         stock options granted under the Company's 1990 Stock Option Plan and
         781,762 shares of common stock issuable upon the exercise of stock
         options granted under the Company's 2002 Stock Option Plan. Pursuant to
         the merger agreement, Genaissance will assume all outstanding options
         to purchase shares of Company common stock.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         In the fiscal year ended December 31, 2002, the Company provided
laboratory services totaling $61,195 to two companies which are related to
Baylor College of Medicine, a 7.3% shareholder. In the fiscal year ended
December 31, 2003, the Company provided laboratory services totaling $116,355 to
the same companies. In both instances, the services were purchased or provided
at standard rates normally charged to unaffiliated third parties.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

         (A) Exhibits

Index of Exhibits

<TABLE>
<CAPTION>
Index of Exhibits
-----------------
<S>                      <C>
     2.1(1)              The Agreement of Merger of November 18, 1994, between Lark Technologies, Inc. and
                         Lark Sequencing Technologies, Inc. providing for the merger of Lark Sequencing
                         Technologies, Inc. into the Company.

     2.2(2)              Agreement and Plan of Merger among the Company, Genaissance Pharmaceuticals, Inc.
                         and Brown Acquisition Corp. dated as of December 18, 2003, filed by Genaissance as
                         Exhibit 2.1 to its Form 8-K filed with the SEC on December 19, 2003.

     3.1(1)              Bylaws of Lark Technologies, Inc., as amended.

     3.2(1)              The Certificate of Incorporation of Lark Technologies, Inc., as amended.

     3.3(3)              Certificate of Amendment to Certificate of Incorporation of the Company effecting
                         the Reverse Split.
</TABLE>

                                       32
<PAGE>

<TABLE>
<S>                      <C>
     3.4(3)              Certificate of Amendment to Certificate of Incorporation of the Company effecting
                         the Forward Split

     4.1(4)              Lark Technologies, Inc. 2000 Stock Option Plan adopted by the Company.

     4.2(5)              Lark Technologies, Inc. 2002 Stock Option Plan adopted by the Company.

     23.1                Consent of independent auditors.

     31.1                Certification of Carl W. Balezentis, President and Chief Executive Officer of the
                         Company, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

     31.2                Certification of Jon H. Luksich, Principle Financial Officer of the Company, as
                         required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

     32                  Certification of Chief Executive Officer and Chief Financial Officer, as required
                         pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
</TABLE>

(1) Incorporated by reference from the Company's Registration Statement on Form
S-4 dated August 14, 1995, Commission File No. 33-90424. The exhibit numbering
system used in Form S-4 differed from that used in this Form 10-QSB (8a, 2d, 2c,
6b, and 6f, respectively).

(2) Incorporated by reference from Annex A to the Company's joint proxy
statement/prospectus with Genaissance Pharmaceuticals, Inc. contained in the
Registration Statement on Form S-4 dated February 17, 2004, Commission File No.
333-112737.

(3) Incorporated by reference from the Company's Quarterly Report on Form 10-QSB
for the quarter ending September 30, 2003 filed November 14, 2003.

(4) Incorporated by reference from the Company's Registration Statement on Form
S-8 dated September 21, 2000, Commission File No. 333-46280.

(5) Incorporated by reference from the Company's Quarterly Report on Form 10-QSB
for the quarter ending September 30, 2002 filed November 5, 2002.

         (B) Reports on Form 8-K

         A Form 8-K was filed on December 19, 2003 reporting the execution of
         the Agreement and Plan of Merger with Genaissance.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

         AUDIT FEES. The aggregate fees billed by Ernst & Young LLP ("EY"), our
         independent auditors, for professional services rendered for the audit
         of our annual consolidated financials included in our annual reports on
         Form 10-KSB and the reviews of the financial reports included in the
         quarterly reports on Form 10-QSB, in each case, for the years ended
         December 31, 2003 and 2002 amounted to $68,500 and $57,900.

         AUDIT-RELATED FEES. For each of the last two fiscal years, the Company
         incurred no fees related to services that are reasonably related to the
         performance of the audit and review of the Company's financial
         statements.

         TAX FEES. For each of the last two fiscal years, the Company incurred
         $14,490 and $8,825 in fees to EY for tax compliance, tax advice, and
         tax planning, composed principally of tax preparation services.

         ALL OTHER FEES. For each of the last two fiscal years, the Company
         incurred $194 and $0 for products and services provided by EY other
         than those reported above.

         The Audit Committee considered whether the provision of these services
         was compatible with maintaining the independence of EY as the Company's
         principal independent accounting firm. All of the non-audit services
         described above were approved by the Audit Committee in accordance with
         its policies and procedures.

                                       33
<PAGE>

                                   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.

                                       Lark Technologies, Inc.
                                       (Registrant)

         Date: March 30, 2004          /s/ Carl W. Balezentis
                                       -----------------------------------------
                                           Carl W. Balezentis
                                           President and Chief Executive Officer

         Date: March 30, 2004          /s/ Jon H. Luksich
                                       -----------------------------------------
                                           Jon H. Luksich
                                           Controller and principal financial
                                           officer

         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.

Date: March 30, 2004                   /s/ George M. Britton
                                       -----------------------------------------
                                           George M. Britton, Director
                                           Co-chairman of the Board

Date: March 30, 2004                   /s/ David Lawson
                                       -----------------------------------------
                                           David Lawson, Director
                                           Co-chairman of the Board

Date: March 30, 2004                   /s/ E.J. (Jere) Pederson
                                       -----------------------------------------
                                           E.J. (Jere) Pederson,
                                            Director

Date: March 30, 2004                   /s/ Carl W. Balezentis
                                       -----------------------------------------
                                            Carl W. Balezentis
                                            Director

Date: March 30, 2004                   /s/ Peter Boatright
                                       -----------------------------------------
                                            Peter Boatright
                                            Director

Date: March 30, 2004                   /s/ Tim McGrath
                                       -----------------------------------------
                                           Tim McGrath
                                            Director

                                      34
<PAGE>

                                  EXHIBIT INDEX

2.1(1)            The Agreement of Merger of November 18, 1994, between Lark
                  Technologies, Inc. and Lark Sequencing Technologies, Inc.
                  providing for the merger of Lark Sequencing Technologies, Inc.
                  into the Company.

2.2(2)            Agreement and Plan of Merger among the Company, Genaissance
                  Pharmaceuticals, Inc. and Brown Acquisition Corp. dated as of
                  December 18, 2003, filed by Genaissance as Exhibit 2.1 to its
                  Form 8-K filed with the SEC on December 19, 2003.

3.1(1)            Bylaws of Lark Technologies, Inc., as amended.

3.2(1)            The Certificate of Incorporation of Lark Technologies, Inc.,
                  as amended.

3.3(3)            Certificate of Amendment to Certificate of Incorporation of
                  the Company effecting the Reverse Split.

3.4(3)            Certificate of Amendment to Certificate of Incorporation of
                  the Company effecting the Forward Split

4.1(4)            Lark Technologies, Inc. 2000 Stock Option Plan adopted by the
                  Company.

4.2(5)            Lark Technologies, Inc. 2002 Stock Option Plan adopted by the
                  Company.

23.1              Consent of independent auditors.

31.1              Certification of Carl W. Balezentis, President and Chief
                  Executive Officer of the Company, as required pursuant to
                  Section 302 of the Sarbanes-Oxley Act of 2002.

31.2              Certification of Jon H. Luksich, Principle Financial Officer
                  of the Company, as required pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 2002.

32                Certification of Chief Executive Officer and Chief Financial
                  Officer, as required pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.

(1) Incorporated by reference from the Company's Registration Statement on Form
S-4 dated August 14, 1995, Commission File No. 33-90424. The exhibit numbering
system used in Form S-4 differed from that used in this Form 10-QSB (8a, 2d, 2c,
6b, and 6f, respectively).

(2) Incorporated by reference from Annex A to the Company's joint proxy
statement/prospectus with Genaissance Pharmaceuticals, Inc. contained in the
Registration Statement on Form S-4 dated February 17, 2004, Commission File No.
333-112737.

(3) Incorporated by reference from the Company's Quarterly Report on Form 10-QSB
for the quarter ending September 30, 2003 filed November 14, 2003.

(4) Incorporated by reference from the Company's Registration Statement on Form
S-8 dated September 21, 2000, Commission File No. 333-46280.

(5) Incorporated by reference from the Company's Quarterly Report on Form 10-QSB
for the quarter ending September 30, 2002 filed November 5, 2002.