<PAGE>

                       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, 2004

                                       OR

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

                          COMMISSION FILE NO. 0-30502

                            LIBERTY SELF-STOR, INC.
       (Exact name of Small Business Issuer as specified in its charter)

<Table>
<S>                                             <C>
                  MARYLAND                                       94-6542723
       (State or other jurisdiction of              (I.R.S. Employer Identification No.)
       incorporation or organization)
</Table>

               8500 STATION STREET, SUITE 100, MENTOR, OHIO 44060
                    (Address of principal executive office)

         ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE: (440) 974-3770

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act:  SHARES OF COMMON
STOCK

Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities 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 Issuer'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. Yes [X]

Issuer's revenues for its most recent fiscal year were $5,681,234

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. $1,341,024

The Issuer had 3,082,668 shares of common stock outstanding on March 10, 2005.

Transitional Small Business Disclosure Format. Yes [ ]  No [X]

DOCUMENTS INCORPORATED BY REFERENCE:  PORTIONS OF THE 2005 PROXY STATEMENT OF
LIBERTY SELF-STOR, INC. ARE INCORPORATED BY REFERENCE INTO PART III OF THIS
FORM.
<PAGE>

                            LIBERTY SELF-STOR, INC.

                             INDEX TO ANNUAL REPORT
                                 ON FORM 10-KSB

<Table>
<Caption>
                                                                           PAGE
                                                                           ----
<S>          <C>                                                           <C>
PART I
Item 1:      Description of Business.....................................    1
Item 2:      Description of Property.....................................    3
Item 3:      Legal Proceedings...........................................    8
Item 4:      Submission of Matters to a Vote of Security Holders.........    8

PART II
Item 5:      Market for Common Equity, Related Stockholder Matters and
             Registrant's Purchase of Equity Securities..................    8
Item 6:      Management's Discussion and Analysis or Plan of Operation...    9
Item 7:      Financial Statements........................................   16
Item 8:      Changes in and Disagreements with Accountants on Accounting
             and Financial Disclosure....................................   16
Item 8A:     Disclosure Controls and Procedures..........................   16
Item 8B:     Other Information...........................................   16

PART III
Item 9:      Directors and Executive Officers of the Registrant..........   16
Item 10:     Executive Compensation......................................   16
Item 11:     Security Ownership of Certain Beneficial Owners and
             Management and Related Stockholder Matters..................   16
Item 12:     Certain Relationships and Related Transactions..............   17
Item 13:     Exhibits, List, and Reports on Form 8-K.....................   17
Item 14:     Principal Accountant Fees and Services......................   18
</Table>

                                        i
<PAGE>

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

     History.  Liberty Self-Stor, Inc., a Maryland corporation, is a
self-managed real estate investment trust that manages, acquires, develops,
expands and operates self-storage facilities. On December 29, 1999, Liberty
succeeded to the business of Meridian Point Realty Trust '83. Meridian was a
business trust organized under the laws of the State of California pursuant to a
declaration of trust, dated June 24, 1982, and commenced operation on April 12,
1983. Meridian was originally known as "Sierra Real Estate Equity Trust '83." On
October 11, 1991, the company changed its name to "Meridian Point Realty Trust
'83."

     At a special meeting of Meridian's shareholders in lieu of an annual
meeting of shareholders on December 28, 1999, Meridian's shareholders approved
the re-incorporation in which Meridian was merged with and into Liberty with
Liberty as the surviving entity. Also, at the special meeting, Meridian's
shareholders approved the acquisition of Liberty Self-Stor, Ltd., an Ohio
limited liability company owned by Richard M. Osborne, Liberty's Chairman of the
Board and Chief Executive Officer, which then owned 15 self-storage facilities.
The acquisition was accomplished through the reorganization of the company as an
umbrella partnership real estate investment trust, or UPREIT. In an UPREIT
structure, the publicly-held REIT is the general partner of an operating
partnership which owns the properties of the REIT.

     Unless the context indicates otherwise, Liberty as used herein refers to
Liberty Self-Stor, Inc., as successor-in-interest to Meridian, the operating
partnership and the self-storage company.

     Operating Partnership.  The operating partnership is the entity through
which Liberty conducts substantially all of its business and owns substantially
all of its assets, either directly or through subsidiaries. Liberty manages the
affairs of the operating partnership by directing the affairs of Liberty as
general partner of the operating partnership. Liberty's general partnership
interests and Class B limited partnership interests entitle it to share in cash
distributions from, and in the profits and losses of, the operating partnership
in proportion to its percentage interest therein and entitle Liberty to vote on
all matters requiring a vote of the limited partners. Liberty plans to make all
future transactions of self-storage facilities through the operating partnership
or other partnerships or entities that may be formed as subsidiaries of Liberty
or the operating partnership.

     Business.  As of December 31, 2004, Liberty owned and operated 20
self-storage facilities consisting of 910,877 square feet of inside rentable
storage, situated in two states, Ohio and New York. The average occupancy at the
facilities increased to 75.31% as of December 31, 2004 from 74.10% as of
December 31, 2003. The average annual rental rate per occupied square foot
decreased $.05 to $7.71 as of December 31, 2004, from $7.76 as of December 31,
2003.

     Liberty seeks to increase cash flow and enhance shareholder value through
efficient management and selective acquisitions of new self-storage facilities
whenever feasible; as well as selling self-storage facilities. In addition,
Liberty manages its facilities by seeking to increase rents, where feasible, and
occupancy levels, strictly controlling costs, maximizing collections,
strategically expanding and improving existing facilities and developing new
facilities, if economic conditions warrant.

     Liberty's principal executive offices are located at 8500 Station Street,
Suite 100, Mentor, Ohio 44060 and its telephone number is 440-974-3770.

     Liberty and Industry Overview.  Liberty believes that self-storage
facilities offer inexpensive storage space to residential and commercial users.
To remain competitive, Liberty believes that its facilities continually need to
offer on-site managers and expanded services, such as truck rentals, box sales
and other storage type supply options. Liberty achieved slight increases in
occupancy and rental rates in 2004 compared to 2003. Liberty achieved these
slight increases even though over-building of self-storage facilities in some
markets and uncertain economic conditions have caused occupancy rates to
decrease throughout the self-storage industry. Liberty expects the demand for
self-storage to become strong again once the national economy shows signs of
improvement.

                                        1
<PAGE>

     Liberty believes that the ability to increase rental rates was negatively
impacted by the imposition of a new sales tax on tenants of self-storage
facilities by the State of Ohio in August 2003. Although this sales tax
continued to limit Liberty's ability to increase rates in 2004, Liberty believes
that they may increase rates later in 2005.

     Federal Income Tax.  Liberty intends to continue to be taxed as a REIT
under Sections 856 through 860 of the Internal Revenue Code of 1986. Liberty's
continued qualification as a REIT in current and future taxable years will
depend upon whether Liberty and the operating partnership continue to meet the
various qualification tests imposed under the Code.

     If Liberty continues to qualify for taxation as a REIT and distributes to
its stockholders at least 90% of its taxable income, excluding net capital
gains, it generally will not be subject to federal corporate income tax on the
portion of its ordinary income or capital gain that is timely distributed to its
stockholders. This treatment substantially eliminates the "double taxation" at
the corporate and stockholder levels that generally results from an investment
in a corporation. If Liberty were to fail to qualify as a REIT, it would be
taxed at rates applicable to corporations on all of its net income, whether or
not distributed to its stockholders. Even if Liberty continually qualifies as a
REIT, it may be subject to federal income or excise tax in some circumstances.

     Employees.  Liberty currently employs 33 full-time and 10 part-time
employees, including 21 on-site managers and 2 regional managers. None of
Liberty's employees is covered by a collective bargaining agreement. Liberty
considers its employee relations to be excellent.

     Recent Developments.  On September 4, 2004, Liberty entered into an asset
purchase agreement to sell substantially all of its assets to U-Store-It, L.P.
(f.k.a. Acquiport/Amsdell I Limited Partnership) ("U-Store-It"), the operating
partnership of U-Store-It Trust. See "Management's Discussion and Analysis or
Plan of Operation" for more information.

                                        2
<PAGE>

ITEM 2.  DESCRIPTION OF PROPERTY

THE SELF-STORAGE FACILITIES

     As of December 31, 2004, Liberty owned and operated 20 self-storage
facilities containing an aggregate of 910,877 square feet of inside storage
space. Additional space is available for parking vehicles outside, as well as,
commercial rental space at the Painesville, Ohio and Southold, New York sites.
Seventeen of the self-storage facilities are located in Ohio and the other three
are located in New York. Liberty owns 100% fee interest in each of the
self-storage facilities.

     The following table provides an overview of information regarding the
self-storage facilities with continuing facilities marked with ** :

<Table>
<Caption>
                         DATE      YEAR BUILT/        RENTABLE               INSIDE
LOCATION               ACQUIRED      EXPANDED      SQUARE FOOTAGE   ACRES    UNITS       CONSTRUCTION
--------               --------   --------------   --------------   ------   ------   -------------------
<S>                    <C>        <C>              <C>              <C>      <C>      <C>
OHIO:
Avon.................  10/31/97   1981-1986/1998*      67,423         6.12     495    Masonry & Steel
Canton...............   4/22/97          1979-87       41,175        11.15     388    Concrete
Catawba..............   6/30/97        1988/1998*      49,500         7.57     300    Steel
Cleveland............   12/3/96        1997/1999*      46,400         3.68     353    Steel
Dayton...............   5/22/97        1989/2000*      47,250         5.00     367    Concrete
East Canton..........   5/30/97             1997       26,700        12.63     176    Steel
East Liverpool.......  10/31/96        1986-1996       30,180        11.49     211    Steel
GAHANNA**............   2/24/04             1988       30,525         2.29     258    Steel
Leuer Avenue.........   5/22/00             2000       58,600         1.80     591    Steel
Louisville...........   5/30/97        1988-1990       54,000         6.83     358    Masonry
Mentor...............   3/20/98        1983/1999*      60,099         6.00     442    Masonry
PAINESVILLE (1)**....  10/01/00        1940/2000*      30,340         3.20     362    Steel
Perry................   1/10/97        1992/1997*      63,900         6.19     398    Steel
Ravenna..............   3/31/97             1988       16,950         1.79     151    Steel
Springfield..........   5/24/00        1986-1999       58,900         4.60     647    Steel
Westlake.............    6/1/00             2001       62,800         4.40     461    Masonry/Steel
Willoughby...........   10/4/96             1997       33,639         2.37     275    Masonry

NEW YORK:
Endicott.............  11/20/96             1989       35,723         4.99     286    Concrete/Steel Roof
Southold (2).........    6/1/97             1989       54,973         6.95     585    Steel
Riverhead............   5/26/99   1985-1986/1999*      41,800         3.05     345    Steel
                                                      -------       ------   -----
TOTAL...........................................      910,877       112.10   7,449
                                                      =======       ======   =====
</Table>

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

*  Year additional units were added by Liberty.

(1) In addition, Painesville has 22,685 square feet of office and retail space,
    with an occupancy rate of 96.9% and an annual rental rate of $9.80 per
    square foot at December 31, 2004.

(2) In addition, Southold has 4,800 square feet of office and retail space, with
    a 100% occupancy rate and an annual rental rate of $5.43 per square foot at
    December 31, 2004.

                                        3
<PAGE>

     The following tables show the occupancy rates and annual rental rates per
square foot for inside storage at each of the 20 self-storage facilities for the
year ended December 31, 2004:

DISCONTINUED OPERATION FACILITIES

<Table>
<Caption>
                                                                       ANNUAL RENTAL RATE
                                                           OCCUPANCY      PER OCCUPIED
LOCATION                                                    RATE %       SQUARE FOOT $
--------                                                   ---------   ------------------
<S>                                                        <C>         <C>
OHIO FACILITIES:
Avon.....................................................    88.88            6.14
Canton...................................................    66.34            4.94
Catawba..................................................    68.69            5.50
Cleveland................................................    84.48            9.86
Dayton...................................................    71.07            7.59
East Canton..............................................    81.09            5.07
East Liverpool...........................................    90.14            5.06
Leuer Avenue.............................................    48.68            9.74
Louisville...............................................    87.83            5.11
Mentor...................................................    61.23            7.14
Perry....................................................    61.89            5.66
Ravenna..................................................    85.25            6.24
Springfield..............................................    75.76            5.96
Westlake.................................................    91.08            8.81
Willoughby...............................................    76.21            8.24
NEW YORK FACILITIES:
Endicott.................................................    86.32            7.78
Southold.................................................    90.04           13.84
Riverhead................................................    78.50           12.70
                                                             -----           -----
TOTAL....................................................    76.50            7.69
                                                             =====           =====
</Table>

CONTINUING OPERATION FACILITIES

<Table>
<Caption>
                                                                       ANNUAL RENTAL RATE
                                                           OCCUPANCY      PER OCCUPIED
LOCATION                                                    RATE %       SQUARE FOOT $
--------                                                   ---------   ------------------
<S>                                                        <C>         <C>
OHIO FACILITIES:
Painesville..............................................    33.53           10.34
Gahanna..................................................    83.87            7.26
                                                             -----           -----
TOTAL....................................................    58.78            8.14
                                                             =====           =====
</Table>

     Environmental and Other Regulations.  Liberty is subject to federal, state
and local environmental regulations that apply generally to the ownership of
real property and the operation of self-storage facilities. Liberty has not
received any notice from any governmental authority or private party of any
material environmental noncompliance, claim or liability in connection with any
of the self-storage facilities. Liberty is not aware of any environmental
condition with respect to any of the self-storage facilities that could have a
material adverse effect on Liberty's financial condition, liquidity or results
of operations.

     Under various federal, state, and local environmental laws, a current or
previous owner or operator of real property may be liable for the costs of
removal or remediation of hazardous or toxic substances on, under or in the
property. These laws often impose liability whether or not the owner or operator
caused or knew of the presence of hazardous or toxic substances and whether or
not the storage of such substances violated a tenant's

                                        4
<PAGE>

lease. Liberty prohibits the storage of hazardous or toxic substances in its
lease agreements with its tenants; however, Liberty is not in a position to know
what a tenant stores at its self-storage facility. In addition, the presence of
hazardous or toxic substances, or the failure to remediate such property, may
adversely affect the owner or operator's ability to use the contaminated
property as collateral in connection with borrowing money. In connection with
the ownership of the self-storage facilities, Liberty may be potentially liable
for any cleanup costs.

     Liberty conducts Phase I environmental audits for each facility it acquires
or constructs. None of these audits revealed any need for remediation.

     Liberty's self-storage facilities are also generally subject to the same
types of local regulations governing other real property, including zoning
ordinances. Liberty believes that the self-storage facilities are in substantial
compliance with all such regulations.

     Property Management.  All 20 self-storage facilities are operated under the
"Liberty Self-Stor, Ltd." trade name and have on-site managers, ten of whom are
resident managers. All managers report to Liberty's Vice President of
Operations. The facilities are staffed six to nine hours per day, seven days a
week, with access from 6 a.m. to 10 p.m. The facilities are located in a mix of
urban, suburban and rural locations.

     Recent Expansions.  In the first quarter of 2004, Liberty purchased a new
site in Gahanna, Ohio, just east of Columbus, Ohio which adds 30,525 square feet
of storage space, or 258 units. Liberty borrowed $1,037,500 to fund this
acquisition.

     Competition.  The facilities compete with a variety of other self-storage
companies, including national, regional and local companies. Each facility has
at least two other self-storage facilities within a five mile radius. Many of
Liberty's competitors are larger and have substantially greater financial
resources than Liberty. Local competition has the effect of keeping both
occupancy and rental rates down. Competition may also reduce the number of
suitable acquisition opportunities offered to Liberty and increase the
bargaining power of facility owners seeking to sell. If competition increases,
Liberty could experience a decrease in its existing occupancy levels and rental
rates, which could decrease the cash available for distribution. In addition, as
has happened recently in markets across the country, the self-storage industry
has at times experienced overbuilding in response to perceived increases in
demand. Continued overbuilding might cause Liberty to experience a decrease in
occupancy levels, limit Liberty's ability to increase rents, and compel Liberty
to offer discounted rents.

     Leases.  Space at each facility is leased on a monthly basis using a
standard form lease agreement. Attached to each lease agreement is a lease
addendum notifying lessees that they store goods at their own risk.

     Insurance.  In the opinion of Liberty's management, the facilities are
adequately covered by insurance. Each facility has a limit on coverage
determined by management and Liberty's insurance company, and each policy
carries a $1,000 deductible. Liberty's responsibility for losses extends only to
the actual property owned by Liberty and not the property of tenants. Tenants
are responsible for insuring their own belongings stored at the facility.
Liberty's management uses its discretion in determining amounts, coverage limits
and deductibility provisions of insurance, with a view to acquiring appropriate
insurance on Liberty's investments at a reasonable cost and on suitable terms.

     In addition, Liberty maintains title insurance insuring fee title to the
self-storage facilities in an aggregate amount believed to be adequate.

     Mortgages.  The Willoughby, Perry, Canton, Catawba, East Canton,
Louisville, Ravenna, East Liverpool, Dayton, and Endicott facilities are all
encumbered by mortgages which secure a $9,845,000 loan. The loan had a fixed
interest rate for the initial three years equal to 2.25% over the average yield
on U.S. Treasury Securities adjusted to a constant maturity of three years. On
December 9, 2002, the loan was modified. The interest rate was adjusted to the
30-day London Interbank Offered Rate or LIBOR plus 2.50%, currently 4.81%, and
the loan maturity date was extended to June 1, 2006. The loan is being amortized
over a 20-year period and is personally guaranteed by Mr. Osborne. The principal
amount of the loan as of December 31, 2004, was $8,219,258. In the second
quarter of 2003, Liberty entered into an interest swap agreement in connection
with this loan. The swap expires concurrently with the mortgage notes on June 1,
2006. The terms of the interest rate swap consist of

                                        5
<PAGE>

calculating the difference between a fixed rate of 1.95% per year and the
current 30-day LIBOR rate. In the event that the fixed rate of 1.95% exceeds the
30-day LIBOR rate, Liberty pays the bank the difference. In the event that the
30-day LIBOR rate exceeds the fixed rate of 1.95%, the bank pays Liberty the
difference. Currently, the 30-day LIBOR rate exceeds the fixed rate by 0.33%.

     The Dayton facility is further encumbered by a mortgage securing an
$802,000 construction and development loan. The loan had a variable interest
rate equal to 2.25% above the weekly average yield on U.S. Treasury Securities
adjusted to the constant maturity of two years. On December 9, 2002, the loan
was modified. The interest rate was adjusted to 30-day LIBOR plus 2.50%,
currently 4.81%, and the loan maturity date was extended to June 1, 2006.
Monthly principal payments are being amortized over a fifteen-year period.
Current payments are $3,007 plus interest per month. This note is personally
guaranteed by Mr. Osborne. The principal amount of the loan as of December 31,
2004, was $654,158.

     The Catawba facility is further encumbered by a mortgage securing a
$265,087 construction and development loan. The interest rate on the loan was
equal to 2.25% over the average yield on U.S. Treasury Securities adjusted to a
constant maturity of two years. On December 9, 2002, the loan was modified. The
interest rate was adjusted to 30-day LIBOR plus 2.50%, currently 4.81%, and the
loan maturity date was extended to June 1, 2006. Principal payments are being
amortized over a nineteen-year period. Current payments are $706 plus interest
per month. This note is personally guaranteed by Mr. Osborne. The principal
amount of the loan as of December 31, 2004, was $231,071.

     The Avon facility is encumbered by a mortgage in the amount of $1,750,000,
which is guaranteed by Mr. Osborne and matures on February 1, 2007. The interest
rate is the lending bank's prime rate, plus 0.75%, currently 6.00%. Monthly
principal and interest payments are currently $11,923, amortized over a 22-year
period. The principal amount of the loan as of December 31, 2004, was
$1,616,683.

     The Mentor facility is encumbered by a mortgage securing a $1,884,000
construction and development loan, maturing June 4, 2009. The interest rate on
the loan is 2.75% above the current weekly average yield on U.S. Treasury
Securities adjusted to the constant maturity of three years. Currently, the
interest rate is 5.50%. Principal and interest payments are $13,694 per month,
amortized over a 20-year period. This note is personally guaranteed by Mr.
Osborne. The principal amount of the loan as of December 31, 2004, was
$1,624,905.

     The Southold facility is encumbered by a mortgage in the amount of
$3,300,000, which matures on April 1, 2006. Current monthly principal and
interest payments are amortized over a 20-year period. The interest rate is
30-day LIBOR plus 2.25%, currently 4.53%. This note is guaranteed by Mr.
Osborne. The principal amount of the loan as of December 31, 2004, was
$3,086,001. Liberty entered into an interest rate swap agreement in connection
with the Southold facility mortgage note. This interest rate swap transaction
had an original notional amount of $1,650,000 and is equivalent to 50% of the
mortgage principal. The terms of the interest rate swap consist of calculating
the difference between a fixed rate of 5.44% per year and the current 30-day
LIBOR rate. In the event that the fixed rate of 5.44% per year exceeds the
30-day LIBOR rate, Liberty pays the bank the difference. In the event that the
30-day LIBOR rate exceeds the fixed rate of 5.44%, the bank pays Liberty the
difference. At December 31, 2004, the fixed rate exceeded the 30-day LIBOR by
3.16%.

     The Cleveland and Leuer Avenue facilities are encumbered by a mortgage in
the amount of $3,652,000, maturing on March 25, 2013 and amortized over a
20-year period. Current monthly principal and interest payments are $22,587. The
interest rate on the loan is 2.75% above the index of the U.S. Treasury
Securities, adjusted to a constant maturity of 5 years. Currently, the interest
rate is 5.50%. This note is guaranteed by Mr. Osborne. The principal amount of
the loan as of December 31, 2004 was $3,630,111.

     The Riverhead facility is encumbered by a mortgage in the amount of
$1,174,000, maturing June 1, 2006 after the original loan was amended February
2003. Current monthly principal and interest payments are $10,781, with the
interest rate at the 30-day LIBOR plus 2.50%, using a 15-year amortization. The
current rate is 4.81%. This note is guaranteed by Mr. Osborne. The principal
amount of the loan as of December 31, 2004, was $1,032,077.

     The Springfield facility is encumbered by a mortgage in the amount of
$1,600,000, maturing on June 1, 2005. Current payments are $3,501 plus interest
at a fixed rate of 9.10%, using a 20-year amortization. This note

                                        6
<PAGE>

is personally guaranteed by Mr. Osborne. The principal amount of the loan as of
December 31, 2004, was $1,439,422. The Springfield facility is encumbered by a
second mortgage in the amount of $500,000, maturing on June 30, 2025. Current
monthly principal and interest payments are $3,777, with a fixed interest rate
of 7.75%, using a 25-year amortization. This note is guaranteed by Mr. Osborne.
The principal amount of the loan as of December 31, 2004, was $464,760.

     The Westlake facility is encumbered by a mortgage securing a $2,532,200
construction and development loan. The loan had an initial interest rate of
9.25%. On October 24, 2001, a loan modification agreement was signed and the
interest rate was adjusted to 6.25%. In May 2003, the interest rate was adjusted
to a rate equal to .75% over the lending bank's prime rate. Payments were
interest only through November 18, 2000. Current monthly principal and interest
payments are $17,141, using a ten-year amortization period. The current rate is
5.00%. The loan matures on August 1, 2011. This note is personally guaranteed by
Mr. Osborne. The principal amount of the loan as of December 31, 2004, was
$2,305,524.

     The Painesville facility is encumbered by a mortgage in the amount of
$2,062,128, maturing on March 30, 2009. Monthly principal and interest payments
are $16,612, with an interest rate of 4.92%, using a 20-year amortization
period. On April 30, 2005, the interest rate converts to 2.25% over the average
yield on U.S. Treasury Securities adjusted to a constant maturity of five years.
This note is personally guaranteed by Mr. Osborne. The principal amount of the
loan as of December 31, 2004, was $1,661,340. A second loan in the amount of
$1,300,000 also finances the Painesville facility. The loan is a personal loan
by a bank to Mr. Osborne. Liberty entered into a loan agreement with Mr. Osborne
with terms that are identical to the bank loan. The loan has an interest rate
equal to the lending bank's prime rate, originally maturing on October 1, 2003.
The maturity date was extended to October 30, 2005. The loan is an interest only
loan, and current monthly interest payments are $5,688. The current rate is
5.25%. The principal amount of the loan as of December 31, 2004 was $1,300,000.

     The Gahanna facility is encumbered by a mortgage in the amount of $787,500,
maturing on March 1, 2009. The loan had an initial interest rate of 4.00%, the
lending bank's prime rate. Monthly principal and interest payments are $5,859,
with a current rate of 5.25% and a balloon payment at the end of 59 months
estimated at $619,823. The principal amount of the loan as of December 31, 2004
was $760,910.

     Liberty intends to pay off the above described mortgages after the
completion of the sale of substantially all of its assets to U-Store-It as more
fully described in "Management's Discussion and Analysis or Plan of Operation."

     Depreciation.  Depreciation on the self-storage facilities is computed
using the straight-line method and is based upon useful lives of 25 years for
buildings and improvements and 5 years for personal property.

INVESTMENT POLICY

     Liberty was organized to acquire, succeed to, continue and expand the
business of Meridian. Liberty intends to operate and be taxed as a REIT. The
Board of Directors, in its sole discretion, may change or modify Liberty's
investment objective.

     Activities of Liberty.  Subject to Maryland law, Liberty has the ability
to:

          1. issue senior securities;

          2. borrow money;

          3. make loans;

          4. underwrite securities of other issuers;

          5. engage in the purchase or sale of investments;

          6. offer securities in exchange for property;

          7. repurchase or otherwise reacquire its shares or other securities;
             and

                                        7
<PAGE>

          8. furnish annual reports and other reports to stockholders which
             contain annual audited financial statements.

     Liberty could borrow money necessary to acquire properties, could offer
interests of the operating partnership in exchange for properties, and will make
annual reports with audited financial statements. Liberty has no current plans
to engage in any of the other listed activities. During each of the last three
years, the Company filed annual and quarterly reports with the SEC. Liberty's
ability to engage in any of the above activities is subject to change without
the approval of stockholders.

     Self-Storage Investment Strategy.  Liberty focuses on the acquisition,
expansion and development of a portfolio of self-storage facilities. Liberty
seeks to capitalize on several types of opportunities.

     - ACQUISITIONS OF PROPERTIES -- Liberty seeks properties in locations with
       desirable supply and demand characteristics, with the potential for
       higher occupancy and rental rates and that currently have non-
       professional management/ownership. Liberty seeks to acquire properties at
       an attractive price where appropriate and expand the property to add
       additional rental units. Liberty seeks to acquire properties based on
       rents and expenses in place and then undertake a program of cost control
       and revenue enhancement. To reduce competition for its acquisitions,
       Liberty primarily seeks individual properties, versus bulk acquisitions,
       and facilities that do not meet the typical size requirements of the
       major national self-storage companies. Generally, Liberty will seek
       facilities with 45,000-50,000 square feet of storage capacity. Liberty
       believes opportunities exist to acquire such facilities, and is engaged
       from time to time in discussions with potential sellers.

     - DEVELOPMENT -- Liberty's management, Thomas J. Smith and Jeffrey J.
       Heidnik, have collectively 25 years of experience in the self-storage
       industry and real estate industries. In addition to the acquisition of 13
       facilities and the development of three facilities in the last four
       years, the self-storage company has expanded approximately seven of its
       facilities in that period. Through these individuals, Liberty has in-
       house development and expansion expertise and will selectively develop
       facilities in attractive markets.

     Liberty focuses in geographic areas where it has existing real estate
relationships or its management has previously conducted business and owned
self-storage facilities, including Ohio, New York, North Carolina, New Jersey,
Florida, Indiana, Pennsylvania and Michigan. Management efficiency is sought by
concentrating acquisitions into "regional clusters" where regional managers will
be responsible for more than one facility and the individual location managers
will report to the regional manager. These "regional clusters" promote economies
of scale. Liberty plans to pay for acquisitions with cash, debt, the issuance of
equity securities or funds from operations. Liberty will acquire additional
self-storage facilities primarily for income.

ITEM 3.  LEGAL PROCEEDINGS

     There are no material pending legal proceedings to which Liberty is a party
or to which any of its assets are subject. Therefore, Liberty does not believe
that any pending proceedings will have a material adverse effect on Liberty's
financial condition, liquidity or results of operation.

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

     None.

                                    PART II

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

     Market Information.  Liberty's shares of common stock, $0.001 par value per
share, trade on the Over-the-Counter Bulletin Board Market of Nasdaq, or OTCBB,
under the symbol "LSSI".

                                        8
<PAGE>

     The following table sets forth the high and low closing sale prices as
reported on the OTCBB for Liberty's common stock for each quarter within
Liberty's last two fiscal years. Because Liberty's common stock is traded on the
OTCBB, these quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commission, and may not represent actual transactions.

<Table>
<Caption>
                                                              HIGH     LOW
                                                              -----   -----
<S>                                                           <C>     <C>
2004
First Quarter...............................................  $0.85   $0.49
Second Quarter..............................................   0.87    0.49
Third Quarter...............................................   0.87    0.55
Fourth Quarter..............................................   0.55    0.49
2003
First Quarter...............................................  $0.34   $0.30
Second Quarter..............................................   0.60    0.31
Third Quarter...............................................   0.45    0.36
Fourth Quarter..............................................   0.75    0.37
</Table>

     Record Holders.  As of March 1, 2005, Liberty's shares of common stock were
held of record by approximately 1,976 shareholders. This number does not include
the number of persons who hold stock in nominee or "street name" accounts
through brokers or banks.

     Dividends.  No dividends were paid to Liberty's stockholders in 2004 or
2003. Under the REIT tax rules, Liberty is required to make annual distributions
to stockholders of at least 90% of its taxable income. Liberty did not have any
taxable income in 2004 or 2003 and, thus, Liberty remains in compliance with
this rule. In accordance with Liberty's organizational documents, dividend
distributions are at the discretion of Liberty's directors. In addition, under
the terms of the partnership agreement of the operating partnership, the
operating partnership is required to make distributions to enable Liberty to
comply with the REIT dividend rules, unless Liberty, acting as general partner
of the operating partnership, determines that such a distribution would not be
in the best interests of the operating partnership. There can be no assurance
when or if dividends will be paid.

     Issuance of Common Stock.  Liberty did not issue any shares of its common
stock in 2004 or 2003.

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

     On September 7, 2004, Liberty entered into an asset purchase agreement with
U-Store-It to sell all of its self-storage facilities to U-Store-It except its
Painesville, Ohio and Gahanna, Ohio facilities for a cash purchase price of
$33.7 million. The estimated pretax gain would be approximately $1.6 million,
net of minority interest. After the payment of Liberty's debt and expenses,
Liberty will have approximately $8.6 million available from the purchase price
which will be distributed to the owners of its operating partnership, LSS I
Limited Partnership. Liberty has a 29.9% equity interest in the operating
partnership, and Mr. Osborne, Liberty's Chairman of the Board and Chief
Executive Officer, Thomas J. Smith, Liberty's President and Chief Operating
Officer, and Retirement Management Company, of which Mr. Osborne is the sole
stockholder, have the remaining 70.1% equity interest in the operating
partnership. Liberty estimates that the consideration allocated to it for the
sale of the facilities will be approximately $2.6 million with the remaining
$6.0 million being allocated to Mr. Osborne, Mr. Smith and Retirement Management
Company for their 70.1% equity interest.

     At this time, Liberty's Board of Directors has not determined its future
business plans. Going forward, Liberty intends to investigate and evaluate
available business opportunities. Although Liberty has no current plans to
liquidate, Liberty may determine it is in the best interest of its stockholders
to do so. In the event of a liquidation, Liberty would incur additional costs
related to the disposal of its Painesville and Gahanna facilities which would
reduce the cash available to distribute to its stockholders. Following
completion of the sale to U-Store-It, Liberty may also pursue a business
combination with a private business that wishes to take advantage of Liberty's
public company status. Any combination transaction is likely to have a dilutive
effect on the interests

                                        9
<PAGE>

of our stockholders, reducing each stockholder's proportionate ownership and
voting power. Alternatively, Liberty may determine to use its remaining cash
proceeds to invest in other business opportunities.

     The sale is contingent upon final approval by Liberty's stockholders and
other customary terms and conditions. Liberty cannot guaranty that the sale will
be completed on the proposed terms or at all. Liberty's description of the
proposed sale to U-Store-It and the asset purchase agreement with U-Store-It is
qualified in its entirety by reference to the asset purchase agreement, a copy
of which was filed as Exhibit 10.1 to Liberty's current report on Form 8-K dated
September 7, 2004 and the definitive proxy statement filed with the Securities
and Exchange Commission on February 7, 2005.

     The following discussion should be read in conjunction with the
accompanying Consolidated Balance Sheets, Statements of Operations and
Comprehensive Loss, and Cash Flows and the notes thereto. Unless otherwise
defined in this report, or unless the context otherwise requires, the
capitalized words or phrases referred to in this section either: (a) describe
accounting terms that are used as line items in such financial statements, or
(b) have the meanings ascribed to them in the financial statements and the notes
thereto.

ACCOUNTING POLICIES

     Liberty's discussion and analysis of its financial condition and results of
operations are based upon its consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these consolidated financial
statements requires Liberty to make estimates and assumptions that affect the
reported amounts in the financial statements and disclosures of contingent
assets and liabilities. On an on-going basis, Liberty evaluates all of these
estimates and assumptions. Actual results could differ from these estimates.
Liberty believes the following reflect the most significant accounting policies,
judgments and estimates used in the preparation of its financial statements.

     Revenue recognition:  Liberty's revenue from real estate operations is
derived primarily from monthly rentals of self-storage units. Liberty recognizes
revenues monthly when they are earned, based on the rental rates of the occupied
self-storage units. For long-term leases of commercial space, revenue is
recognized on a straight-line basis over the respective lease terms.

     Property and equipment:  Property and equipment acquired in connection with
Liberty's reorganization were valued based upon an appraisal performed in 1999,
while assets acquired since the reorganization are stated at cost. The assets
are depreciated using the straight-line method over their estimated useful lives
of 25 years for buildings and improvements and 5 years for furniture and
equipment. Liberty believes that the assigned useful lives are reasonable given
the nature of the assets and management's experience with similar assets in this
industry.

     Fair Value of Financial Instruments and Derivatives:  Financial instruments
such as cash accounts receivable, notes payable, and interest rate swaps are
carried at fair value as determined by using available market information and
appropriate valuation methodologies. Liberty periodically reviews and adjusts
the carrying values of its financial instruments to ensure the instruments
approximate fair value. Derivatives are recognized on the balance sheet as
assets and liabilities, measured at fair value. Gains or losses resulting from
changes in the values of these derivatives are accounted for depending on the
use of the derivative and whether it qualifies for hedge accounting.

     Impairment of long-lived assets:  Long-lived assets are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. If the sum of the expected future
undiscounted cash flows from operations as well as ultimate disposition of the
asset is less than the carrying amount of the asset, a loss is recognized for
the difference between the fair value and the carrying value of the asset. Fair
values would be determined based upon market prices for similar properties, or
discounted future cash flow analysis. Liberty has reviewed the carrying values
of its self-storage facilities for impairment, and has determined that the
projected undiscounted cash flows over the remaining useful lives of the assets
exceed the respective carrying values of the assets at December 31, 2004.

     Reclassification:  As a result of the proposed sale of all but two of
Liberty's self-storage facilities to U-Store-It, certain amounts in the December
31, 2003 financial statements have been reclassified to conform to

                                        10
<PAGE>

the December 31, 2004 presentation. These reclassifications had no effect on net
loss or shareholder's equity as previously reported.

LIQUIDITY AND CAPITAL RESOURCES

     Liquidity represents Liberty's ability to generate sufficient amounts of
cash to meet its financial commitments. The primary source of liquidity for
Liberty is cash generated from rental charges at its self-storage facilities.
Liberty showed net income equal to $3,401 for the year ended December 31, 2004
compared to a net loss of $68,382 for the year ended December 31, 2003. Cash and
cash equivalents were $396,918 at December 31, 2004, as compared to $534,346 at
December 31, 2003. The items affecting operating cash flow and cash and cash
equivalents are discussed more fully in the "Material Changes in Results of
Operations" section.

     Liberty uses cash primarily to operate and maintain its self-storage
facilities and to service the principal and interest on its existing debt.
Sources of liquidity over the next 12-month period include available cash and
cash generated from rental charges at its self-storage facilities. As an
additional source of liquidity, Liberty may attempt to refinance some of its
maturing long-term debt in order to satisfy its obligations and to generate
additional cash to meet its financial commitments. Upon the completion of the
proposed sale of its eighteen self-storage facilities, Liberty is not
anticipating refinancing any of its debt. The proposed sale, if consummated,
would provide liquidity to Liberty. Currently, Liberty's management estimates
that the consideration allocated to Liberty for the sale of the properties would
be approximately $2.6 million. However, Liberty cannot guarantee that the sale
will be completed on the proposed terms or at all.

     Liberty's current maturities of long-term debt increased $2,726,561, or
277.2%, to $3,709,908 at December 31, 2004, from $983,347 at December 31, 2003.
The increase is largely the result of reclassifying a Springfield facility loan
maturing on September 1, 2005 and a Painesville facility loan maturing on
October 30, 2005 to current maturities.

     The following table, assuming no sale occurs, sets forth the maturity dates
and the total of Liberty's long-term debt, as well as future commitments under
Liberty's office space lease. Liberty has no other long-term obligations or
commitments.

<Table>
<Caption>
                                               PAYMENTS DUE BY PERIOD
                                 --------------------------------------------------
                                 LESS THAN                                 AFTER
CONTRACTUAL OBLIGATIONS            1 YEAR      1-3 YEARS    4-5 YEARS     5 YEARS        TOTAL
-----------------------          ----------   -----------   ----------   ----------   -----------
<S>                              <C>          <C>           <C>          <C>          <C>
Long-Term Debt.................  $3,709,908   $15,194,306   $3,785,577   $5,066,429   $27,756,220
Operating Lease*...............      60,000       120,000      120,000           --       300,000
                                 ----------   -----------   ----------   ----------   -----------
Total Contractual Cash
  Obligations..................  $3,769,908   $15,314,306   $3,905,577   $5,066,429   $28,056,220
                                 ==========   ===========   ==========   ==========   ===========
</Table>

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

* The operating lease for office space renewed for five years beginning January
  2005 through January 2009, at a rental of $5,000 per month, which is reflected
  in the above table.

     Liberty believes that cash flow from operating and refinancing activities
will be sufficient to meet its anticipated operating and capital expenditure
requirements on a short-term and long-term basis. Liberty has benefited
significantly from the current low interest rate market. Although Liberty has
interest rates swaps in place, a rising interest rate environment may have a
material adverse effect on Liberty's financial position and results of
operations.

     If Liberty determines to refinance or retire any of its maturing debt,
there can be no assurance that Liberty will be able to do so. If adequate funds
are not available or not available on acceptable terms, Liberty's business and
results of operations would be materially and adversely affected and Liberty may
be unable to continue to fund its operations or growth or acquire additional
properties or to meet its obligations. Liberty may also determine to issue
additional shares of preferred or common stock to reduce its debt to equity
leverage, incur additional debt or sell assets. Given the low trading price of
shares of Liberty's common stock, any additional issuance of stock will be
dilutive to existing stockholders and would likely be significantly dilutive.
There can be no assurance that Liberty will be able to issue any additional
shares of stock, sell its properties at prices that

                                        11
<PAGE>

Liberty believes are reasonable or obtain additional debt on favorable terms.
Notwithstanding the proposed sale of 18 of Liberty's properties, long-term
liquidity will depend upon Liberty's ability to obtain financing and attain
profitable operations. Because most of Liberty's debt is variable, Liberty's
liquidity will also depend on interest rate fluctuations. Refinancing of
existing debt or issuance of any new debt will likely require a personal
guarantee of Richard M. Osborne, who currently personally guarantees
substantially all of Liberty's debt. Mr. Osborne is under no legal obligation,
requirement or agreement to guarantee any of refinanced or future debt. If Mr.
Osborne determines not to guarantee refinanced or future debt, our business and
results of operations would be materially and adversely affected and Liberty may
be unable to continue to fund its operations.

MATERIAL CHANGES IN RESULTS OF OPERATIONS

     During the third quarter of 2004, Liberty reached an agreement to sell all
of its self-storage facilities to U-Store-It except its Painesville, Ohio and
Gahanna, Ohio facilities. Liberty's results of operations have been restated to
reclassify the net earnings, assets, and liabilities of the self-storage
facilities to be sold as discontinued operations for all periods presented. See
Notes 2 and 3 of the Notes to Consolidated Financial Statements for additional
details. The discussion for the material changes in results of continuing
operations includes only those properties remaining after the proposed sale of
the discontinued operations.

  REVENUES FROM CONTINUING OPERATIONS

     Total revenues from continuing operations real estate operations and
interest income increased $168,109 or 50.5%, to $500,878, for the year ended
December 31, 2004, from $332,769 for the year ended December 31, 2003. Revenues
increased largely due to the addition of the Gahanna facility in February 2004.

  EXPENSES FROM CONTINUING OPERATIONS

     Interest expense from continuing operations increased $28,065, or 21.5%, to
$158,432 for the year ended December 31, 2004 compared to $130,367 for the year
ended December 31, 2003. The expense was largely increased by the debt service
for the Gahanna property purchase and the rise in interest rates on Liberty's
debt service.

     Property taxes and insurance expenses from continuing operations increased
$70,236 or 104.4%, to $137,521 for the year ended December 31, 2004 compared to
$67,285 for the year ended December 31, 2003. Property taxes and property
insurance increased largely due to the purchase of the Gahanna storage facility
and annual real estate property evaluations. Medical insurance increased due to
higher medical insurance premiums.

     Property operating expenses from continuing operations increased $54,760 or
38.5%, to $196,931 for the year ended December 31, 2004 compared to $142,171 for
the year ended December 31, 2003. The increase in property operating expenses
was largely attributable to the purchase of the Gahanna facility in February
2004.

     Legal and professional fees increased $133,183 or 102.7% to $262,814 for
the year ended December 31, 2004 compared to $129,631 for the year ended
December 31, 2003. The increase is largely due to additional fees incurred
relating to the proposed sale of Liberty's eighteen self-storage facilities to
U-Store-It. Since these fees are expenses of Liberty and not the individual
sites they are included in continuing operations.

     General and administrative expenses from continuing operations increased
$45,680, or 7.8%, to $635,458 for the year ended December 31, 2004 compared to
$589,778 for the year ended December 31, 2003, largely due to the Gahanna
property purchase.

     Depreciation expenses from continuing operations increased $32,046, or
19.8%, to $193,994 for the year ended December 31, 2004 compared to $161,948 for
the year ended December 31, 2003, largely due to the Gahanna property purchase.

                                        12
<PAGE>

  LOSS FROM CONTINUING OPERATIONS

     As a result of the factors noted above, Liberty's loss from continuing
operations increased $58,759, or 22.1%, to $325,282 for the year ended December
31, 2004 from a loss of $266,523 for the year ended December 31, 2003.

  INCOME FROM DISCONTINUED OPERATIONS

     Liberty's income from discontinued operations net of minority interest
increased $130,542, or 65.9%, to $328,683 for the year ended December 31, 2004
from $198,141 for the year ended December 31, 2003. The increase is partially
due to the discontinuance of fixed asset depreciation after September 7, 2004,
which is the date Liberty entered into an asset purchase agreement with
U-Store-It for the sale of eighteen of its self-storage facilities. Also prior
to September 7, 2004, most properties were improved where necessary with roof
repairs, gutters, painting and some new gates.

  NET INCOME (LOSS)

     As a result of the factors noted above, Liberty had net income of $3,401
for the year ended December 31, 2004 compared to a net loss of $68,382 for the
year ended December 31, 2003.

  FUNDS FROM OPERATIONS

     Liberty uses Funds from Operations "FFO" as a measure of its profit or
loss. Liberty defines FFO as net income (computed in accordance with accounting
principles generally accepted in the United States of America "GAAP"), excluding
gains (or losses) from sales of property, the effects of any changes in
accounting principles, plus depreciation and amortization, and after adjustments
for unconsolidated partnerships and joint ventures. Adjustments for
unconsolidated partnerships and joint ventures are calculated to reflect funds
from operations on the same basis. FFO should not be considered

     - a substitute for net income (determined in accordance with GAAP);

     - an indication of Liberty's financial performance;

     - a substitute for cash flows from operating activities (determined in
       accordance with GAAP); or

     - a measure of Liberty's liquidity.

Liberty's definition of FFO may not be comparable to similarly-titled measures
of other real estate investment trusts, or REITs. The National Association of
Real Estate Investment Trusts developed FFO as a relative measure of performance
and liquidity of an equity REIT to recognize that income-producing real estate
historically has not depreciated on the basis determined under GAAP. Liberty
believes that FFO is helpful to investors as a measure of performance of an
equity REIT because, when considered in conjunction with cash flows from
operating activities, financing activities, and investing activities, FFO
provides investors with an understanding of Liberty's ability to incur and
service debt and to make capital expenditures.

     The following table sets forth the calculation of FFO for continuing
operations:

<Table>
<Caption>
                                                               FOR THE YEAR ENDED
                                                                  DECEMBER 31,
                                                              ---------------------
                                                                2004        2003
                                                              ---------   ---------
<S>                                                           <C>         <C>
Net Income (Loss)...........................................  $(325,282)  $(266,523)
Adjustments:
Depreciation of real estate and amortization of deferred
  fees......................................................    193,994     161,948
Minority Interest...........................................   (758,990)   (621,888)
                                                              ---------   ---------
FFO.........................................................  $(890,278)  $(726,463)
                                                              =========   =========
</Table>

     Interest rate risk is the risk that interest rates will increase, which
will effect Liberty's interest expense on its variable rate loans to increase.

                                        13
<PAGE>

     The variable portion of Liberty's debt is approximately $25.9 million. If
Liberty's interest rates on the variable rate loans were to increase by 1% per
year, Liberty's interest expense would increase approximately $259,000 on an
annual basis. Liberty's debt includes both fixed and variable interest rates;
therefore, if interest rates increase, Liberty's results of operations may be
materially and adversely affected.

  OFF-BALANCE SHEET ARRANGEMENTS

     Liberty entered into an interest rate swap agreement in connection with the
Southold facility mortgage note during 2002. This interest rate swap
transaction, which had an original notional amount of $1,650,000 (notional
amount of $1,544,227 at December 31, 2004) is equivalent to 50% of the
outstanding mortgage principal, and expires concurrently with the mortgage note
on April 1, 2006. The terms of the interest rate swap consist of calculating the
difference between a fixed rate of 5.44% per year and the current 30-day LIBOR
rate. In the event that the fixed rate of 5.44% per year exceeds the 30-day
LIBOR rate, Liberty pays the bank the difference. In the event that the 30-day
LIBOR rate exceeds the fixed rate of 5.44%, the bank pays Liberty the
difference. At December 31, 2004, the fixed rate exceeded the 30-day LIBOR by
3.16%.

     In the second quarter of 2003, Liberty entered into an interest rate swap
agreement in connection with various sites for mortgage notes which had an
original notional amount of $10,598,000 (notional amount of $10,237,859 at
December 31, 2004). The swap expires concurrently with the mortgage notes on
September 1, 2006. The terms of the interest rate swap consist of calculating
the difference between a fixed rate of 1.95% per year and the current 30-day
LIBOR rate. In the event that the fixed rate of 1.95% exceeds the 30-day LIBOR
rate, Liberty pays the bank the difference. In the event that the 30-day LIBOR
rate exceeds the fixed rate of 1.95%, the bank pays Liberty the difference.
Currently, the 30-day LIBOR fixed rate exceeds the fixed rate by 0.33%. This
interest rate swap will effectively cap the Company's interest rate on the debt
at 4.45% for the life of the loan. Both of these interest rate swap agreements
have been accounted for as cash flow hedges pursuant to SFAS No. 133.

     The fair market values of the swaps at December 31, 2004 and December 31,
2003 were $159,457 and $10,107, respectively. The swaps are included in Assets
Related to Discontinued Operations, net in the accompanying consolidated balance
sheet, while the change in their aggregate fair value, net of minority interest,
is reflected in the determination of comprehensive income for the reporting
periods.

     Liberty has no other off-balance sheet arrangements.

  FORWARD-LOOKING STATEMENTS

     Statements that are not historical facts, including statements about
Liberty's confidence in its prospects and strategies and its expectations about
growth, are forward-looking statements that involve risks and uncertainties.
These risks and uncertainties include, but are not limited to:

     - approval by Liberty's stockholders of the proposed sale of eighteen of
       its self-storage facilities to U-Store-It;

     - whether or not the proposed sale will be completed on the proposed terms
       or at all;

     - Liberty's continued tax status as a REIT;

     - Liberty's future business plans upon the completion of the sale of
       eighteen of its self-storage facilities to U-Store-It;

     - the interest rate market, which, when interest rates increase, will cause
       Liberty's expenses on its variable-rate mortgages to increase;

     - Liberty's ability to increase occupancy and rental rates at its
       self-storage facilities;

     - the failure to successfully integrate acquired and newly-constructed
       facilities into Liberty, including the land acquisition in Ravenna, Ohio
       and the acquisition in Gahanna, Ohio;

                                        14
<PAGE>

     - the ability of Liberty to issue additional shares, sell its assets or
       properties or obtain debt financing on satisfactory terms;

     - the ability to refinance Liberty's debts as they come due, including,
       without limitation, Liberty's maturing long-term debt;

     - changes in local real estate conditions;

     - the inability to generate sufficient revenues to meet operating expenses,
       including, but not limited to, possible rising property insurance costs;
       and

     - decreases in occupancy rates.

     Any investor or potential investor in Liberty must consider these risks and
others that are detailed in other filings by Liberty with the Securities and
Exchange Commission. These risks and others could cause actual results to differ
materially from those in the forward-looking statements.

  ELECTION OF REIT STATUS

     Liberty intends to be taxed as a REIT under Section 856(c)(1) of the
Internal Revenue Code for the fiscal year ending December 31, 2004. The REIT
provisions of the Code generally allow a REIT to deduct dividends paid to
stockholders in computing the REIT's taxable income. No provisions for federal
or state income taxes have been made in the accompanying Consolidated Statements
of Operations.

     To qualify for REIT status, Liberty must meet a number of highly technical
organizational and operational requirements on a continuing basis. Those
requirements seek to ensure, among other things, that the gross income and
investments of a REIT are largely real estate related, with other permitted
assets; that a REIT distributes substantially all its ordinary taxable income to
shareholders on a current basis and that the REIT's ownership is not overly
concentrated. Due to the complex nature of these rules, the limited available
guidance concerning interpretation of the rules, the importance of ongoing
factual determinations and the possibility of adverse changes in or
interpretations of the law, administrative interpretations of the law and
developments at Liberty, no assurance can be given regarding Liberty's
qualification as a REIT for any particular year. If Liberty failed to qualify as
a REIT, distributions to stockholders would no longer be required. In addition,
distributions originally treated as capital gain distributions could be
re-characterized as ordinary dividend distributions to stockholders. Moreover,
Liberty might not be able to elect to be treated as a REIT for the four taxable
years after the year during which Liberty ceased to qualify as a REIT. If
Liberty later re-qualified as a REIT, it might be required to pay a full
corporate-level tax on any unrealized gain associated with its assets as of the
date of re-qualification and to make distributions equal to any earnings
accumulated during the period of non-REIT status.

     The Growth Tax Relief Reconciliation Act of 2003, signed into law by
President Bush on May 28, 2003, reduced the tax rate on both dividends and
long-term capital gains for most non-corporate taxpayers to 15% until 2008. This
reduced maximum tax rate generally does not apply to ordinary REIT dividends,
which continue to be subject to tax at the higher tax rates applicable to
ordinary income (maximum rate of 35% under the new legislation). However, the
new 15% maximum tax rate does apply to some limited REIT distributions. This
legislation may cause shares in non-REIT corporations to be a more attractive
investment to individual investors than shares in REITS and may adversely affect
the market price of our common stock.

  RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

     In January 2003, the FASB issued FASB Interpretation No. 46 (revised
December 2003) ("FIN 46R"), "Consolidation of Variable Interest Entities." FIN
46R revised the requirements for consolidation by business enterprises of
variable interest entities having specific characteristics. FIN 46R applies
immediately to variable interests created after December 31, 2003, and to all
other variable interest entities no later than the beginning of the first
reporting period after December 15, 2004. Liberty does not believe that it has
any variable interests, and as such, believes that the adoption of this
statement will not materially effect its financial position or results of
operations.

                                        15
<PAGE>

     In December 2004, the FASB issued Summary of Statement No. 123(revised
2004). This Statement is a revision of FASB Statement No. 123, Accounting for
Stock-Based Compensation. This Statement supersedes APB Opinion No. 25,
Accounting for Stock Issued to Employees, and its related implementation
guidance. This Statement establishes standards for the accounting for
transactions in which an entity exchanges its equity instruments for goods or
services. Liberty does not believe that the adoption of this statement will
materially effect its financial position or results of operations.

ITEM 7.  FINANCIAL STATEMENTS

     Liberty's Report of Independent Registered Public Accounting Firm and
Consolidated Financial Statements are filed as part of this report.

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

     None.

ITEM 8A.  DISCLOSURE CONTROLS AND PROCEDURES

     As of December 31, 2004, Liberty carried out an evaluation under the
supervision and with the participation of Liberty's management, including
Liberty's Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of Liberty's disclosure controls and
procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation,
Liberty's Chief Executive Officer and Chief Financial Officer concluded that
Liberty's disclosure controls and procedures are effective in timely alerting
them to material information relating to Liberty required to be included in
Liberty's periodic SEC filings.

ITEM 8B.  OTHER INFORMATION

     None.

                                    PART III

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The information required by this Item 9 is incorporated herein by reference
to the Registrant's definitive Proxy Statement, relating to its 2005 Annual
Meeting ("Proxy Statement"), under the captions "Board of Directors," "Executive
Officers," "Section 16(a) Beneficial Ownership Reporting Compliance" and "Code
of Ethics." The Proxy Statement will be filed with the SEC no later than May 2,
2005.

ITEM 10.  EXECUTIVE COMPENSATION

     The information required by Item 10 is contained under the caption
"Executive Compensation and Other Information" in the Proxy Statement and is
incorporated herein by reference.

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

     The information required by Item 11 is contained under the caption
"Principal Stockholders" in the Proxy Statement and is incorporated herein by
reference.

                                        16
<PAGE>

                      EQUITY COMPENSATION PLAN INFORMATION

<Table>
<Caption>
                                                                                      NUMBER OF SECURITIES
                                       NUMBER OF SECURITIES    WEIGHTED-AVERAGE      REMAINING AVAILABLE FOR
                                        TO BE ISSUED UPON      EXERCISE PRICE OF      FUTURE ISSUANCE UNDER
                                           EXERCISE OF            OUTSTANDING       EQUITY COMPENSATION PLANS
                                       OUTSTANDING OPTIONS,    OPTIONS, WARRANTS      (EXCLUDING SECURITIES
                                       WARRANTS AND RIGHTS        AND RIGHTS        REFLECTED IN COLUMN (a))
                                               (a)                    (b)                      (c)
                                       --------------------   -------------------   -------------------------
<S>                                    <C>                    <C>                   <C>
Equity compensation plans approved by
  security holders...................        135,000                $0.5625                  165,000
Equity compensation plans not
  approved by security holders.......             --                     --                       --
                                             -------                -------                  -------
  Total..............................        135,000                $0.5625                  165,000
                                             =======                =======                  =======
</Table>

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information required by Item 12 is contained under the caption "Certain
Relationships and Related Transactions" in the Proxy Statement and is
incorporated herein by reference.

ITEM 13.  EXHIBITS, LIST, AND REPORTS ON FORM 8-K

(a) INDEX TO EXHIBITS

NO. DESCRIPTION
(In accordance with Item 601 of Regulation S-B)

<Table>
<Caption>
EXHIBIT NO.                           DESCRIPTION
-----------                           -----------
<S>           <C>
    2.1       Purchase and Sale Agreement entered into August 4, 1997,
              together with First Amendment to Purchase and Sale Agreement
              effective August 7, 1997 and Second Amendment to Purchase
              and Sale Agreement effective August 15, 1997, between
              Meridian Point Realty Trust '83 and 2400 Charleston
              Associates, LLC (successor to Rubin-Pachulski Properties,
              Inc.) (Filed as Exhibit 10.1 to Registrant's Form 8-K dated
              September 5, 1997 and incorporated herein by reference.)
    2.2       Agreement and Plan of Merger, dated as of December 28, 1999,
              by and among Meridian Point Realty Trust '83, Liberty
              Self-Stor, Inc. and Liberty Self-Stor Limited Partnership
              (Exhibits A and B to the Agreement and Plan of Merger are
              Exhibits 3.1 and 3.2, respectively) (Filed as Exhibit 2.1 to
              Registrant's Form 8-K dated January 12, 2000 and
              incorporated herein by reference.)
    3.1       Articles of Incorporation of Liberty Self-Stor, Inc. (Filed
              as Exhibit 3.1 to Registrant's Form 8-K dated January 12,
              2000 and incorporated herein by reference.)
    3.2       Bylaws of Liberty Self-Stor, Inc. (Filed as Exhibit 3.2 to
              Registrant's Form 8-K dated January 12, 2000 and
              incorporated herein by reference.)
   10.1       Agreement between Meridian Point Realty Trust '83 and E&L
              Associates, dated February 23, 1996 (Filed as part of
              Registrant's Form 8-K dated February 10, 1995 and
              incorporated herein by reference.)
   10.2       Indemnity Trust Agreement, dated as of September 2, 1998, by
              and between Meridian Point Realty Trust '83 and U.S. Trust
              Company, N.A. (Filed as Exhibit 10.2 to Registrant's Form
              10-KSB dated March 31, 1999 and incorporated herein by
              reference.)
   10.3       1999 Stock Option and Award Plan of Liberty Self-Stor, Inc.
              (Filed as Exhibit 10.1 to Registrant's Form 8-K dated
              January 12, 2000 and incorporated herein by reference.)
   10.4       Lease between OsAir, Inc. and Liberty Self-Stor, Inc. (Filed
              as Exhibit 10.2 to Registrant's Form 8-K dated January 12,
              2000 and incorporated herein by reference.)
   10.5       Agreement of Limited Partnership of LSS I Limited
              Partnership, dated December 29, 1999. (Filed as Exhibit 10.3
              to Registrant's Form 8-K dated January 12, 2000 and
              incorporated herein by reference.)
</Table>

                                        17
<PAGE>

<Table>
<Caption>
EXHIBIT NO.                           DESCRIPTION
-----------                           -----------
<S>           <C>
   10.6       Employment Agreement, dated December 28, 1999, by and
              between Liberty Self-Stor, Inc. and Thomas J. Smith (Filed
              as Exhibit 10.4 to Registrant's Form 8-K dated January 12,
              2000 and incorporated herein by reference.)
   10.7       Cost Sharing Agreement, by and between Liberty Self-Stor,
              Ltd. and Liberty Self-Stor II, Ltd. dated December 28, 1999
              (Filed as Exhibit 10.7 to Registrant's Form 10-KSB, dated
              March 15, 2000 and incorporated herein by reference.)
   10.8       Contract among Acquiport/Amsdell I Limited Partnership
              and/or its nominee, Liberty Self-Stor, Ltd. and Liberty
              Self-Stor II, Ltd (Filed as Exhibit 10.1 to Registrant's
              Form 8K; dated September 7, 2004 and incorporated herein by
              reference.)
   31.1*      Section 302 Certification of Chairman of the Board and Chief
              Executive Officer (principal executive officer) pursuant to
              the Sarbanes-Oxley Act of 2002
   31.2*      Section 302 Certification of Chief Financial Officer
              (principal financial officer) pursuant to the Sarbanes-Oxley
              Act of 2002
   32.1*      Certification of Chairman of the Board and Chief Executive
              Officer (principal executive officer) and Chief Financial
              Officer (principal financial officer) pursuant to 18 U.S.C.
              Section 1350, as adopted pursuant to Section 906 of the
              Sarbanes-Oxley Act of 2002
</Table>

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

* Filed herewith

(B) REPORTS ON FORM 8-K

     None.

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

     The information required by Item 14 is contained under the caption
"Principal Accountant Fees and Services" in the Proxy Statement and is
incorporated herein by reference.

                                        18
<PAGE>

                                   SIGNATURES

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

<Table>
<S>                                            <C>
Dated: March 16, 2005                          LIBERTY SELF-STOR, INC.

                                               By: /s/ RICHARD M. OSBORNE
                                               -------------------------------------------------------
                                                  Richard M. Osborne
                                                  Chairman and Chief Executive Officer
                                                  (Principal Executive Officer)
</Table>

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<Table>
<Caption>
                    SIGNATURE                                      TITLE                       DATE
                    ---------                                      -----                       ----
<C>     <C>                                         <S>                                   <C>

              /s/ RICHARD M. OSBORNE                Chairman, Chief Executive Officer     March 16, 2005
 ------------------------------------------------   and Director (Principal Executive
                Richard M. Osborne                  Officer)


               /s/ THOMAS J. SMITH                  President, Chief Operating Officer    March 16, 2005
 ------------------------------------------------   and Director
                 Thomas J. Smith


                /s/ MARC C. KRANTZ                  Secretary and Director                March 16, 2005
 ------------------------------------------------
                  Marc C. Krantz


               /s/ C. JEAN MIHITSCH                 Chief Financial Officer (Principal    March 16, 2005
 ------------------------------------------------   Financial and Accounting Officer)
                 C. Jean Mihitsch


                /s/ MARK D GROSSI                   Director                              March 16, 2005
 ------------------------------------------------
                  Mark D Grossi


             /s/ STEVEN A. CALABRESE                Director                              March 16, 2005
 ------------------------------------------------
               Steven A. Calabrese


              /s/ RICHARD T. FLENNER                Director                              March 16, 2005
 ------------------------------------------------
                Richard T. Flenner
</Table>

                                        19
<PAGE>

            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors
Liberty Self-Stor, Inc.:

     We have audited the accompanying consolidated balance sheets of Liberty
Self-Stor, Inc. (a Maryland corporation) and Subsidiary as of December 31, 2004
and 2003, and the related consolidated statements of operations and
comprehensive income (loss), stockholders' equity, and cash flows for the years
then ended. 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 the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Liberty
Self-Stor, Inc. and Subsidiary as of December 31, 2004 and 2003, and the results
of their operations and their cash flows for the years then ended, in conformity
with accounting principles generally accepted in the United States of America.

/s/ GRANT THORNTON LLP

Cleveland, Ohio
January 28, 2005

                                        20
<PAGE>

                     LIBERTY SELF-STOR, INC. AND SUBSIDIARY

                          CONSOLIDATED BALANCE SHEETS

                           DECEMBER 31, 2004 AND 2003

<Table>
<Caption>
                                                                     DECEMBER 31,
                                                              ---------------------------
                                                                  2004           2003
                                                              ------------   ------------
<S>                                                           <C>            <C>
                           ASSETS
CURRENT ASSETS:
  Cash......................................................  $    396,918   $    534,346
  Accounts Receivable.......................................           922         35,535
  Accounts Receivable from related parties..................       271,758         82,748
  Assets Related to Discontinued Operations, net............    27,012,322     27,688,686
  Other current assets......................................         2,862         22,858
                                                              ------------   ------------
Total Current Assets........................................    27,684,782     28,364,173
PROPERTY AND EQUIPMENT:
  Land......................................................       685,926        410,780
  Buildings and Improvement.................................     3,935,928      3,089,405
  Furniture and Equipment...................................       168,042        133,328
                                                              ------------   ------------
                                                                 4,789,896      3,633,513
  Less -- Accumulated Depreciation..........................       680,811        493,176
                                                              ------------   ------------
                                                                 4,109,085      3,140,337
OTHER ASSETS................................................        38,293         30,468
                                                              ------------   ------------
  TOTAL ASSETS..............................................  $ 31,832,160   $ 31,534,978
                                                              ============   ============
            LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
  Current maturities of long-term debt......................  $    151,406   $    135,446
  Note Payable to related party.............................     1,300,000             --
  Accounts Payable..........................................        91,526        131,389
  Accounts Payable to related parties.......................       464,854        377,881
  Liabilities Related to Discontinued Operations, net.......    24,830,802     25,444,103
  Accrued expenses..........................................       475,530        398,586
                                                              ------------   ------------
Total Current Liabilities...................................    27,314,118     26,487,405
LONG TERM DEBT, net of current maturities:
  Related party.............................................            --      1,300,000
  Third party...............................................     2,270,844      1,656,253
OTHER LONG-TERM LIABILITIES.................................        12,561         17,370
MINORITY INTEREST LIABILITY.................................     1,561,405      1,448,924
COMMITMENTS AND CONTINGENCIES...............................            --             --
SHAREHOLDERS' EQUITY:
  Serial preferred stock -- $.001 par value: 2,000,000
     shares authorized, no shares issued and outstanding....            --             --
  Common Stock -- $.001 par value: 50,000,000 shares
     authorized; 3,082,668 shares issued and outstanding,
     stated at..............................................         3,083          3,083
  Paid-in capital...........................................    25,799,229     25,799,229
  Retained earnings -- prior year...........................   (25,180,319)   (25,111,937)
  Retained earnings -- current year income (loss)...........         3,401        (68,382)
  Accumulated other comprehensive income....................        47,838          3,033
                                                              ------------   ------------
       Total Shareholders' Equity...........................       673,232        625,026
       TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY...........  $ 31,832,160   $ 31,534,978
                                                              ============   ============
</Table>

The accompanying notes to consolidated financial statements are an integral part
                              of these statements.

                                        21
<PAGE>

                     LIBERTY SELF-STOR, INC. AND SUBSIDIARY

     CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

<Table>
<Caption>
                                                                 2004          2003
                                                              -----------   ----------
<S>                                                           <C>           <C>
REVENUES:
  Revenues from real estate operations......................  $   494,753   $  330,793
  Interest and other........................................        6,125        1,976
                                                              -----------   ----------
Total revenues..............................................      500,878      332,769
OPERATING EXPENSES:
  Interest expense..........................................      158,432      130,367
  Property taxes and insurance..............................      137,521       67,285
  Property operating expense................................      196,931      142,171
  Legal and professional fees...............................      262,814      129,631
  General and administrative, including amounts paid to a
     related party of $48,000...............................      635,458      589,778
  Depreciation and amortization.............................      193,994      161,948
                                                              -----------   ----------
Total expenses..............................................    1,585,150    1,221,180
                                                              -----------   ----------
Loss from continuing operations before minority interest....   (1,084,272)    (888,411)
Minority interest...........................................     (758,990)    (621,888)
                                                              -----------   ----------
Loss from continuing operations.............................     (325,282)    (266,523)
Income from discontinued operations net of minority interest
  of $766,926 and $462,331..................................      328,683      198,141
                                                              -----------   ----------
Net Income (Loss)...........................................  $     3,401   $  (68,382)
                                                              ===========   ==========
Other comprehensive income (loss):
Changes in fair values of cash flow hedges, net of minority
  interest of $104,545 and $95,237..........................       44,805       40,817
                                                              -----------   ----------
Comprehensive Income (Loss).................................  $    48,206   $  (27,565)
                                                              ===========   ==========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING........    3,082,668    3,082,668
                                                              ===========   ==========
NET LOSS PER COMMON SHARE BEFORE DISCONTINUED
  OPERATIONS -- BASIC AND DILUTED...........................         (.11)        (.09)
DISCONTINUED OPERATIONS PER COMMON SHARE -- BASIC AND
  DILUTED...................................................          .11          .06
                                                              -----------   ----------
NET INCOME (LOSS) PER COMMON SHARE -- BASIC AND DILUTED(a)..  $      0.00   $    (0.02)
                                                              ===========   ==========
</Table>

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

(a) per share amounts may not add due to rounding.

The accompanying notes to consolidated financial statements are an integral part
                              of these statements.
                                        22
<PAGE>

                     LIBERTY SELF-STOR, INC. AND SUBSIDIARY

                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

<Table>
<Caption>
                                                                         COMPREHENSIVE
                                                            RETAINED      ACCUMULATED
                                   COMMON     PAID-IN       EARNINGS         OTHER
                                   STOCK      CAPITAL        (LOSS)      INCOME (LOSS)    TOTAL
                                   ------   -----------   ------------   -------------   --------
<S>                                <C>      <C>           <C>            <C>             <C>
Balance at December 31, 2002.....  $3,083   $25,799,229   $(25,111,937)    $(37,784)     $652,591
Net (Loss).......................     --             --        (68,382)          --       (68,382)
Change in fair value of cash flow
  hedges.........................     --             --             --       40,817        40,817
                                   ------   -----------   ------------     --------      --------
Balance at December 31, 2003.....  $3,083   $25,799,229   $(25,180,319)    $  3,033      $625,026
Net Income.......................     --             --          3,401           --         3,401
Change in fair value of cash flow
  hedges.........................     --             --             --       44,805        44,805
                                   ------   -----------   ------------     --------      --------
Balance at December 31, 2004.....  $3,083   $25,799,229   $(25,176,918)    $ 47,838      $673,232
                                   ======   ===========   ============     ========      ========
</Table>

The accompanying notes to consolidated financial statements are an integral part
                              of these statements.

                                        23
<PAGE>

                     LIBERTY SELF-STOR, INC. AND SUBSIDIARY

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

<Table>
<Caption>
                                                                 2004         2003
                                                              -----------   ---------
<S>                                                           <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)...........................................  $     3,401   $ (68,382)
Adjustments to reconcile net loss to net cash from operating
  activities
  Depreciation and amortization.............................      193,994     161,948
  Loss on disposal of property..............................           --       3,019
  Gain on sale of security..................................       (5,002)         --
  Minority interest.........................................        7,936    (159,557)
Changes in operating assets and liabilities:
  Accounts receivable.......................................     (154,397)    (98,924)
  Other current assets......................................       12,396      (8,915)
  Other assets..............................................      (14,184)    (25,349)
  Accounts payable..........................................       47,110      54,308
  Accrued expenses..........................................       76,944     119,771
  Other liabilities.........................................       (4,809)     16,470
                                                              -----------   ---------
  Net cash provided by (used in) operating activities.......      163,389      (5,611)
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property equipment, net......................   (1,169,367)    (18,933)
  Proceeds from sale of equipment...........................       12,984       9,500
  Proceeds from sale of security............................       12,602          --
                                                              -----------   ---------
  Net cash used in investing activities.....................   (1,143,781)     (9,433)
CASH FLOWS FROM FINANCING ACTIVITIES:
  Principal payments on notes payable.......................     (406,949)   (123,045)
  Borrowings from related party.............................      250,000          --
  Borrowings from third party...............................      787,500          --
                                                              -----------   ---------
  Net cash provided by (used in) financing activities.......      630,551    (123,045)
                                                              -----------   ---------
Net change provided by Discontinued Operations..............      212,413     408,640
NET (DECREASE) INCREASE IN CASH.............................     (137,428)    270,551
CASH, beginning of period...................................      534,346     263,795
                                                              -----------   ---------
CASH, end of period.........................................  $   396,918   $ 534,346
                                                              ===========   =========
</Table>

The accompanying notes to consolidated financial statements are an integral part
                              of these statements.
                                        24
<PAGE>

                     LIBERTY SELF-STOR, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

1. GENERAL

     Liberty Self-Stor, Inc. (the "Company" or "Liberty") is a corporation
organized under the laws of the State of Maryland for the purpose of operating,
managing, developing, expanding and investing in self-storage facilities. The
Company was formerly known as Meridian Point Realty Trust '83 ("Meridian"). On
December 29, 1999, Meridian was merged with and reincorporated into Liberty.

     On December 28, 1999, a special meeting of shareholders was held for the
purpose of electing trustees and approving and adopting certain proposals
including, but not limited to, approval of the reincorporation of Meridian into
Liberty and the formation of an operating partnership, LSS I Limited Partnership
("LSS"), a Delaware limited partnership, with the members of Liberty Self-Stor,
Ltd., an Ohio limited liability company (the "Ohio LLC"). The members of the
Ohio LLC were Richard M. Osborne, Chairman and Chief Executive Officer of
Liberty, Thomas J. Smith, Liberty's President and Chief Operating Officer, and
Retirement Management Company, an Ohio corporation owned by Mr. Osborne.

     All of the proposals were approved by the shareholders and adopted on
December 28, 1999. As a result, Meridian was merged with and reincorporated into
Liberty Self-Stor, Inc., a perpetual-life REIT. As a perpetual-life REIT,
Liberty is now able to invest proceeds from sales and refinancings in additional
properties. In addition, each member of the Ohio LLC exchanged their membership
interests for Class A limited partnership interests in LSS, resulting in LSS
being the sole member of the Ohio LLC. Liberty contributed its net assets,
primarily cash and investments, to LSS in exchange for the sole general partner
interest therein and Class B limited partnership interests. The Class A limited
partnership interests are redeemable for cash or, at the election of Liberty,
convertible into shares of Liberty stock on a one-for-one basis. The Class B
limited partnership interests are not entitled to redemption, conversion or a
preferred return. At December 31, 2004, Liberty and the former members of the
Ohio LLC have 30% and 70% equity interests in LSS, respectively. The minority
interest liability of $1,561,405 at December 31, 2004, represents the 70%
interest in the net assets of LSS held by the former members of the Ohio LCC.
After completion of the formation transactions, LSS owned and operated 15 self-
storage facilities. At December 31, 2004, Liberty owned and operated 20
self-storage facilities. However, Liberty has entered into an agreement to sell
all but two of its facilities. See Note 2.

2. MATERIAL DEFINITIVE AGREEMENT

     On September 7, 2004, Liberty entered into an asset purchase agreement with
U-Store-It to sell all of its self-storage facilities to U-Store-It except its
Painesville, Ohio and Gahanna, Ohio facilities for a cash purchase price of
$33.7 million. The estimated pretax gain would be approximately $1.6 million,
net of minority interest. After the payment of Liberty's debt and expenses,
Liberty will have approximately $8.6 million available from the purchase price
which will be distributed to the owners of its operating partnership, LSS I
Limited Partnership. Liberty has a 29.9% equity interest in the operating
partnership, and Mr. Osborne, Liberty's Chairman of the Board and Chief
Executive Officer, Thomas J. Smith, Liberty's President and Chief Operating
Officer, and Retirement Management Company, of which Mr. Osborne is the sole
stockholder, have the remaining 70.1% equity interest in the operating
partnership. Liberty estimates that the consideration allocated to it for the
sale of the facilities will be approximately $2.6 million with the remaining
$6.0 million being allocated to Mr. Osborne, Mr. Smith and Retirement Management
Company for their 70.1% equity interest.

     At this time, Liberty's Board of Directors has not determined its future
business plans. Going forward, Liberty intends to investigate and evaluate
available business opportunities. Although Liberty has no current plans to
liquidate, Liberty may determine it is in the best interest of its stockholders
to do so. In the event of a liquidation, Liberty would incur additional costs
related to the disposal of its Painesville and Gahanna facilities which would
reduce the cash available to distribute to its stockholders. Following
completion of the sale to U-Store-It, Liberty may also pursue a business
combination with a private business that wishes to take advantage of

                                        25
<PAGE>
                     LIBERTY SELF-STOR, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003 -- (CONTINUED)

Liberty's public company status. Any combination transaction is likely to have a
dilutive effect on the interests of our stockholders, reducing each
stockholder's proportionate ownership and voting power. Alternatively, Liberty
may determine to use its remaining cash proceeds to invest in other business
opportunities.

     The sale is contingent upon final approval by Liberty's stockholders and
other customary terms and conditions. Liberty cannot guaranty that the sale will
be completed on the proposed terms or at all. Liberty's description of the
proposed sale to U-Store-It and the asset purchase agreement with U-Store-It is
qualified in its entirety by reference to the asset purchase agreement, a copy
of which was filed as Exhibit 10.1 to Liberty's current report on Form 8-K dated
September 7, 2004 and the definitive proxy statement filed with the Securities
and Exchange Commission on February 7, 2005.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  Principles of Consolidation

     Pursuant to the terms of the partnership agreement of LSS, Liberty, as sole
general partner, controls LSS. Accordingly, Liberty accounts for its investment
in LSS utilizing the consolidation method, recognizing minority interest to the
extent of the Class A limited partnership interests issued to the former members
of the Ohio LLC.

  Accounts Receivable

     Liberty's accounts receivable are due from individuals as well as business
entities. Tenants are required to pay their rent on the first of each month.
Past due amounts are those that are outstanding longer than the contractual
payment terms. If an account is more than 75 days past due, Liberty generally
writes off the balance directly to expense. For such past due accounts, Liberty
has the right to auction the contents of the rented space, which allows for
recovery of written-off balances. Any such recoveries are credited to income
when received. Total bad debt expense in 2004 was $122,547 compared to $120,461
in 2003, while recoveries were $98,087 in 2004 compared to $99,908 in 2003.
Based upon management's specific review of past due accounts at year-end and
favorable collection history, Liberty concluded that no allowance for doubtful
accounts was required at December 31, 2004 and 2003.

  Property and Equipment

     Property and equipment acquired in connection with Liberty's acquisition of
the Ohio LLC were valued based upon an appraisal performed in 1999, while assets
acquired since the reorganization are valued at cost. All property and equipment
are depreciated using the straight-line method over estimated useful lives of 25
years for buildings and improvements and 5 years for furniture and equipment.

  Asset Impairment

     Liberty reviews its properties for impairment when events or changes in
circumstances indicate the carrying amounts of the properties may not be
recoverable. When such conditions exist, management estimates future cash flows
from operations and ultimate disposition of the individual properties. If the
estimated undiscounted future cash flows are less than the carrying amount of
the asset, an adjustment to reduce the carrying amount to the related property's
estimated fair market value would be recorded and an impairment loss would be
recognized. Liberty does not believe that there are any factors or circumstances
indicating impairment of any of its investment in its properties.

                                        26
<PAGE>
                     LIBERTY SELF-STOR, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003 -- (CONTINUED)

  Revenue Recognition

     Liberty's revenue from real estate operations is derived primarily from
monthly rentals of self-storage units. Rental revenue is recognized in the
period the rent is earned which is typically on a monthly basis.

     Liberty also leases certain commercial space in its Painesville and
Southold properties under long-term lease agreements. Total lease revenue
related to these leases was $246,979 and $260,081, a portion of which is
recorded as discontinued operations for the years ended December 31, 2004 and
2003, respectively. Revenue under these long-term lease agreements is recognized
on a straight-line basis over the respective lease terms.

     Future minimum lease revenue for continuing operations under non-cancelable
leases for each of the five succeeding annual periods ending December 31 and
thereafter are as follows:

<Table>
<S>                                                        <C>
2005....................................................   $  223,758
2006....................................................      225,750
2007....................................................      214,576
2008....................................................      170,076
2009....................................................      164,676
Thereafter..............................................      132,504
                                                           ----------
                                                           $1,131,340
                                                           ==========
</Table>

     Discontinued operations has one lease expiring August 30, 2005 whose
revenue for 2005 will be $12,000.

  Comprehensive Income

     "SFAS" No. 130, "Reporting Comprehensive Income" requires disclosure of
comprehensive income and its components in a full set of financial statements.
Comprehensive income is defined as changes in shareholders' equity from
non-owner sources and, for Liberty, includes gains and losses recognized on
derivative instruments accounted for as cash flow hedges in compliance with SFAS
No. 133, as amended.

  Reclassifications

     As a result of the proposed sale of all but two of Liberty's self-storage
facilities, certain amounts in the December 31, 2003 financial statements have
been reclassified to conform to the December 31, 2004 presentation. These
reclassifications had no effect on net loss or shareholder's equity as
previously reported.

  Advertising and Promotion Costs

     Liberty expenses advertising and promotion costs when incurred. Amounts
expensed for advertising and promotion totaled $138,737 for the year ended
December 31, 2004 compared to $166,237 for the year ended December 31, 2003.

  Employee Benefits

     The 1999 Stock Option Plan ("the Plan"), which was approved by
stockholders, permits the grant of non-statutory stock options ("NSSOs"),
incentive stock options ("ISOs" and together with NSSOs, "options") and
restricted shares. The Plan was adopted to attract and retain qualified and
competent persons who are key to Liberty, including key employees, officers, and
directors. The Plan provides for the grant to employees of ISOs within the
meaning of Section 422 of the Code, for grant of NSSOs to eligible employees
(including officers and directors) and non-employee directors and for the grant
of restricted share awards. Liberty may grant up to

                                        27
<PAGE>
                     LIBERTY SELF-STOR, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003 -- (CONTINUED)

300,000 options or restricted shares pursuant to the Plan. As of December 31,
2004 and 2003, 135,000 and 170,000 options were outstanding. No additional
options were granted or exercised during the years ended December 31, 2004 and
2003.

     Liberty follows the disclosure provisions of Statement of Financial
Accounting Standard ("SFAS") No. 123, "Accounting for Stock-Based Compensation,"
and accordingly, no expense was recognized for options granted. The pro forma
effect on compensation expense for the year ended December 31, 2004 and 2003
related to the stock options granted is not presented, since the options were
fully vested on January 31, 2003.

     The following table presents the stock options outstanding at December 31:

<Table>
<Caption>
                                                        2004                 2003
                                                 ------------------   ------------------
                                                           WEIGHTED             WEIGHTED
                                                           AVERAGE              AVERAGE
                                                 SHARES     PRICE     SHARES     PRICE
                                                 -------   --------   -------   --------
<S>                                              <C>       <C>        <C>       <C>
Outstanding at beginning of year...............  170,000    $0.55     170,000    $0.55
Granted........................................       --                   --
Exercised......................................       --                   --
Forfeited......................................  (35,000)   $0.48          --
                                                 -------    -----     -------    -----
Outstanding at end of year.....................  135,000    $0.56     170,000    $0.55
                                                 =======    =====     =======    =====
Options available for grant....................  165,000              130,000
Exercisable at end of year.....................  135,000    $0.56     170,000    $0.55
                                                 =======    =====     =======    =====
</Table>

  Estimates, Risks and Uncertainties

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

  Fair Value of Financial Instruments

     The Fair value of the Company's financial instruments are determined by
using available market information and appropriate valuation methodologies.
Liberty's principal financial instruments are cash, accounts receivable,
accounts payable, notes payable, and interest rate swaps. Cash, accounts
receivable and accounts payable, due to their short maturities, and liquidity,
are carried at amounts which reasonably approximate fair value. Based upon rates
available for similar borrowings, Liberty estimates that the fair value of its
long-term debt at December 31, 2004 was $27,901,435 as compared to a carrying
value of $27,756,220. At December 31, 2003, the fair value of long-term debt was
$28,065,398 as compared to a carrying value of $27,759,690. The interest rate
swaps are carried at market value in accordance with SFAS No. 133, "Accounting
for Derivative Instruments and Hedging Activities."

  Derivative Instruments

     SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended, establishes accounting and reporting standards for
derivative instruments and for hedging activities. It requires the recognition
of all derivative instruments on the balance sheet as assets or liabilities,
measured at fair value. Gains or losses resulting from changes in the values of
those derivatives are accounted for depending on the use of the

                                        28
<PAGE>
                     LIBERTY SELF-STOR, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003 -- (CONTINUED)

derivative and whether it qualifies for hedge accounting. Liberty is party to
two interest rate swap agreements with commercial banks that qualify for hedge
accounting under SFAS No. 133. The fair market values of the swaps at December
31, 2004 and December 31, 2003 were $159,457 and $10,107, respectively. The
swaps are included in Assets Related to Discontinued Operations, net in the
accompanying consolidated balance sheets, while the change in their aggregate
fair value, net of minority interest, is reflected in the determination of
accumulated other comprehensive income for the reporting periods. The gains or
losses on the interest swaps are recorded in interest expense.

  Recently Issued Accounting Pronouncements

     In January 2003, the FASB issued FASB Interpretation No. 46 (revised
December 2003) ("FIN 46R"), "Consolidation of Variable Interest Entities." FIN
46R revised the requirements for consolidation by business enterprises of
variable interest entities having specific characteristics. FIN 46R applies
immediately to variable interests created after December 31, 2003, and to all
other variable interest entities no later than the beginning of the first
reporting period after December 15, 2004. Liberty does not believe that it has
any variable interests, and as such, believes that the adoption of this
statement will not materially effect their financial position or results of
operations.

     In December 2004, the FASB issued Summary of Statement No. 123(revised
2004). This Statement is a revision of FASB Statement No. 123, Accounting for
Stock-Based Compensation. This Statement supersedes APB Opinion No. 25,
Accounting for Stock Issued to Employees, and its related implementation
guidance. This Statement establishes standards for the accounting for
transactions in which an entity exchanges its equity instruments for goods or
services. Liberty does not believe that the adoption of this statement will
materially effect their financial position or results of operations.

4. DISCONTINUED OPERATIONS

     Liberty's results of operations have been restated to reclassify the net
earnings, assets, and liabilities of the self-storage facilities to be sold as
discontinued operations for all periods presented. The following table
summarizes income from discontinued operations:

<Table>
<Caption>
                                                                FOR THE YEARS ENDED
                                                                   DECEMBER 31,
                                                              -----------------------
                                                                 2004         2003
                                                              ----------   ----------
<S>                                                           <C>          <C>
Revenues
  Revenues from real estate operations......................  $5,180,356   $5,130,240
Operating expenses
  Interest expense..........................................   1,298,368    1,333,888
  Property taxes and insurance..............................     649,058      596,805
  Property operating expense................................   1,082,346    1,142,539
  Legal and professional fees...............................      22,174       33,385
  General and administrative................................     186,062      164,700
  Depreciation and amortization.............................     846,739    1,198,451
                                                              ----------   ----------
Total expenses..............................................   4,084,747    4,469,768
                                                              ----------   ----------
Income from discontinued operations before minority
  interest..................................................   1,095,609      660,472
Minority interest...........................................    (766,926)    (462,331)
                                                              ----------   ----------
Income from discontinued operations.........................  $  328,683   $  198,141
                                                              ==========   ==========
</Table>

                                        29
<PAGE>
                     LIBERTY SELF-STOR, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003 -- (CONTINUED)

5. LONG-TERM DEBT

     Long-term debt consists of the following:

<Table>
<Caption>
                                                                           OUTSTANDING BALANCES AT
                                                               CURRENT          DECEMBER 31,
   SITE                                             MATURITY   INTEREST   -------------------------
 REFERENCE            INTEREST RATE INDEX             DATE       RATE        2004          2003
 ---------    -----------------------------------   --------   --------   -----------   -----------
<S>           <C>                                   <C>        <C>        <C>           <C>
Gahanna       Prime..............................    3-01-09    5.25%     $   760,910   $        --
Painesville   30 day LIBOR plus 2.50% Converts to
              5 yr US Treasury
              Plus 2.25% on April, 2005..........    3-30-09    4.92%       1,661,340     1,791,699
Painesville   Prime..............................   10-30-05    5.25%       1,300,000     1,300,000
                                                                          -----------   -----------
Continuing Operations Total                                                 3,722,250     3,091,699

Catawba       30 day LIBOR plus 2.50%............    6-01-06    4.81%         231,071       239,537
Mentor        3 yr US Treasury plus 2.75%........    6-04-09    5.50%       1,624,905     1,701,117
Springfield   Fixed..............................    6-01-05    9.10%       1,439,422     1,479,598
              Fixed..............................    6-30-25    7.75%         464,760       473,682
Riverhead     30 day LIBOR plus 2.50%............    6-01-06    4.81%       1,032,077     1,116,358
Westlake      3 yr adj Prime plus 0.75%..........    8-01-11    5.00%       2,305,524     2,388,246
Dayton        30 day LIBOR plus 2.50%............    6-01-06    4.81%         654,158       690,242
Southold      30 day LIBOR plus 2.25%............    4-01-06    4.53%       3,086,001     3,169,731
Avon          Prime plus 0.75%...................    2-01-07    6.00%       1,616,683     1,665,476
Cleveland/    5 yr US Treasury plus
Leuer Ave     2.75%..............................    3-25-13    5.50%       3,360,111     3,433,967
Various (a)   30 day LIBOR plus 2.50%............    6-01-06    4.81%       8,219,258     8,310,037
                                                                          -----------   -----------
Discontinued Operations Total                                              24,033,970    24,667,991

Long-Term Debt Total                                                       27,756,220    27,759,690
Less Continuing current maturities                                            151,406       135,446
Less Discontinued current maturities                                        2,258,502       847,901
Less related party notes                                                    1,300,000     1,300,000
                                                                          -----------   -----------
Long-Term debt, net of current maturities and
  related party notes payable                                             $24,046,312   $25,476,343
                                                                          ===========   ===========
</Table>

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

(a) 10 sites secure this loan including, Willoughby, Perry, Canton, Catawba,
    East Canton, Louisville, Ravenna, East Liverpool, Dayton and Endicott.

     All of the above facility loans are secured by real property and personally
guaranteed by a stockholder of Liberty. Additionally, each loan agreement
contains certain financial covenants of which Liberty was in compliance with
during 2003 and 2004.

                                        30
<PAGE>
                     LIBERTY SELF-STOR, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003 -- (CONTINUED)

     Future maturities of debt, based on stated maturities, inclusive of related
party notes payable discussed further in Note 6, for each of the succeeding
annual periods ending December 31 and thereafter are as follows:

<Table>
<S>                                                       <C>
2005...................................................   $ 3,709,908
2006...................................................    13,210,046
2007...................................................     1,984,260
2008...................................................       490,301
2009...................................................     3,295,276
Thereafter.............................................     5,066,429
                                                          -----------
                                                          $27,756,220
                                                          ===========
</Table>

     Liberty entered into an interest rate swap agreement in connection with the
Southold facility mortgage note during 2002. This interest rate swap
transaction, which had an original notional amount of $1,650,000 (notional
amount of $1,544,227 at December 31, 2004) is equivalent to 50% of the
outstanding mortgage principal, and expires concurrently with the mortgage note
on April 1, 2006. The terms of the interest rate swap consist of calculating the
difference between a fixed rate of 5.44% per year and the current 30-day LIBOR
rate. In the event that the fixed rate of 5.44% per year exceeds the 30-day
LIBOR rate, Liberty pays the bank the difference. In the event that the 30-day
LIBOR rate exceeds the fixed rate of 5.44%, the bank pays Liberty the
difference. At December 31, 2004, the fixed rate exceeded the 30-day LIBOR by
3.16%.

     In the second quarter of 2003, Liberty entered into an interest rate swap
agreement in connection with various sites for mortgage notes which had an
original notional amount of $10,598,000 (notional amount of $10,237,859 at
December 31, 2004). The swap expires concurrently with the mortgage notes on
September 1, 2006. The terms of the interest rate swap consist of calculating
the difference between a fixed rate of 1.95% per year and the current 30-day
LIBOR rate. In the event that the fixed rate of 1.95% exceeds the 30-day LIBOR
rate, Liberty pays the bank the difference. In the event that the 30-day LIBOR
rate exceeds the fixed rate of 1.95%, the bank pays Liberty the difference.
Currently, the 30-day LIBOR fixed rate exceeds the fixed rate by 0.33%. This
interest rate swap will effectively cap the Company's interest rate on the debt
at 4.45% for the life of the loan. Both of these interest rate swap agreements
have been accounted for as cash flow hedges pursuant to SFAS No. 133.

     During the years ended December 31, 2004 and 2003, respectively, Liberty
paid $1,426,081 and $1,490,518 in interest on its debt instruments.

6. NOTES PAYABLE TO RELATED PARTY

     Liberty has an unsecured note payable to Richard M. Osborne, its Chairman
and Chief Executive Officer in the amount of $1,300,000 at December 31, 2004 and
2003. The note bears interest at 5.25% and requires monthly interest payments of
$5,688 with the principal due in full on October 30, 2005.

7. EARNINGS/LOSS PER SHARE

     Basic income (loss) per share of common stock for 2004 and 2003 is
determined by dividing net income (loss) by the weighted average number of
shares of common stock outstanding during the period. Weighted average number of
shares outstanding was 3,082,668 for both 2004 and 2003. Liberty had no dilutive
securities outstanding during 2004 and 2003.

                                        31
<PAGE>
                     LIBERTY SELF-STOR, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003 -- (CONTINUED)

     At December 31, 2004 and 2003, options to purchase 135,000 and 170,000
shares of common stock were outstanding, but were not included in the
calculations of diluted earnings per share because their inclusion would have
been anti-dilutive.

     During the years ended December 31, 2004 and 2003, Liberty paid no cash
distributions to its shareholders.

8. INCOME TAXES

     Liberty elected to be taxed as a REIT pursuant to Section 856 (c) (1) of
the Internal Revenue Code of 1986, as amended (the "Code"). The REIT provisions
of the Code generally allow a REIT to deduct dividends paid to stockholders in
computing the Company's taxable income. In addition, Liberty has net operating
loss carry-forwards for future years of approximately $5,440,831. These net
operating loss carry-forwards will expire at various dates through 2019.
Utilization of the loss carry-forwards could be limited if there is a
substantial change in ownership of Liberty. No provisions for federal or state
income taxes have been made in the accompanying consolidated statements of
operations.

     To qualify for REIT status, Liberty must meet a number of highly technical
organizational and operational requirements on a continuing basis. Those
requirements seek to ensure, among other things, that the gross income and
investments of a REIT are largely real estate related, with certain other
permitted assets, that a REIT distributes substantially all its ordinary taxable
income to shareholders on a current basis and that the REIT's ownership is not
overly concentrated. Due to the complex nature of these rules, the limited
available guidance concerning interpretation of the rules, the importance of
ongoing factual determinations and the possibility of adverse changes in or
interpretations of the law, administrative interpretations of the law and
developments at Liberty, no assurance can be given regarding Liberty's
qualification as a REIT for any particular year.

     If Liberty failed to qualify as a REIT, it would be taxed as a regular
corporation, and distributions to stockholders (of which there were none) would
not be deductible in computing Liberty's taxable income. However, no current or
deferred federal provision for income tax would be needed because Liberty's net
operating loss carry-forwards could be used to offset any financial statement
tax liability resulting from loss of REIT status. Moreover, Liberty might not be
able to elect to be treated as a REIT for the four taxable years after the year
during which Liberty ceased to qualify as a REIT. If Liberty later re-qualified
as a REIT, it might be required to pay a full corporate-level tax on any
unrealized gain associated with its assets as of the date of re-qualification
and to make distributions equal to any earnings accumulated during the period of
non-REIT status.

9. OTHER RELATED PARTY TRANSACTIONS

     In connection with the proxy solicitation by Meridian '83 Shareholders'
Committee for Growth, Turkey Vulture Fund XIII, Ltd. (the "Fund"), incurred
expenses of $102,613. Liberty's board subsequently authorized the expense
reimbursement because of the benefit to Liberty of the proxy solicitation. The
reimbursement was conditioned upon the authorization by the shareholders of the
conversion to a perpetual-life REIT through an amendment to the Declaration of
Trust. Richard M. Osborne, Liberty's Chairman of the Board and Chief Executive
Officer, is the sole manager of the Fund. The $102,613 is included in accounts
payable to related parties on Liberty's consolidated balance sheet because Mr.
Osborne has informed Liberty's management that he is not requiring payment at
this time.

     Mr. Osborne is the sole manager of Liberty Self-Stor II, Ltd., an Ohio
limited liability company, which is the owner of a truck rental business, which
makes trucks available for short-term rental to the general public, including
tenants of the self-storage facilities, and provides for the retail sale of
locks, boxes, packing materials, propane gas and related merchandise at the
self-storage facilities. Liberty has entered into a cost sharing agreement with
Liberty Self-Stor II, Ltd. with respect to the sharing of employees and space at
the offices of the self-storage facilities for the benefit of both companies. As
of December 31, 2004 and December 31, 2003,

                                        32
<PAGE>
                     LIBERTY SELF-STOR, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003 -- (CONTINUED)

Liberty owed Liberty Self-Stor II, Ltd. $362,241 and $264,992, respectively,
associated with these transactions, as well as for cash advances between the
companies, which are included in accounts payable to related parties in the
accompanying consolidated balance sheet.

     Interest expenses on related party notes payable was $57,299 and $54,338 in
2004 and 2003.

     On December 28, 1999, the shareholders approved Liberty's lease of its
executive offices from OsAir, Inc., a company owned by Mr. Osborne. The rent for
the initial term was $4,000 per month. The lease has a five-year term which
expired in December 2004, with a five-year renewal option at $5,000 per month.
For the years ended December 31, 2004 and 2003, $48,000 of this related party
expense is included in general and administrative expenses.

     OsAir, Inc. employs a maintenance person from Liberty. The payroll and
related benefits for a maintenance person are shown in the accounts receivable
from related parties. As of December 31, 2004 and December 31, 2003, OsAir owed
Liberty $13,427 and $32,729, respectively, associated with these transactions.

     Liberty is due $59,624 at December 31, 2004 and $50,019 at December 31,
2003 from various entities affiliated with Mr. Osborne for administrative and
accounting services rendered by Liberty on behalf of those other entities. This
amount is included in accounts receivable from related parties in the
accompanying balance sheet.

     At December 31, 2004, Liberty had $198,707 net included in accounts
receivable from related parties. The balance represents amounts owed by various
companies of Mr. Osborne to Liberty.

     Additionally, Liberty has $10,276, net included in related party payables
at December 31, 2003. The balances originated in 2000 and 2001 as amounts owed
to various companies of Mr. Osborne. He has not requested payment of these
amounts at this time.

     Marc C. Krantz, a director and secretary of Liberty, is the managing
partner of the law firm of Kohrman Jackson & Krantz P.L.L., which provides legal
services to Liberty.

10. COMMITMENTS AND CONTINGENCIES

     There are no material pending commitments or contingencies to which Liberty
is a party or to which any of its assets are subject. Therefore, Liberty does
not believe that any pending commitments or contingencies will have a material
adverse effect on Liberty's financial condition, liquidity or results of
operation.

                                        33